A Nevada court has found a Las Vegas businessman guilty of 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering for defrauding over $24 million from hundreds of investors. According to the U.S. Attorney’s Office, Brent Kovar presented Profit Connect to investors as a crypto mining operation that used an artificial intelligence supercomputer for its operations. He promised a fixed rate of return that paid 15% to 30% APR and also came with a 100% money-back guarantee. However, it turned out that the “profits” that the earlier investors made only came from the influx of newer investors, and that the company wasn’t making any money.
Kovar victimized 400 investors, telling them that the company had cryptocurrency reserves worth hundreds of millions of dollars. In reality, it had zero holdings, couldn’t afford to pay investors their interest earnings, and had no way to return their cash despite the offered guarantee. “He used investor money to operate Profit Connect, to buy gifts for employees, to buy a house for himself, and to repay investors as if those repayments came from mining cryptocurrency and verifying cryptocurrency transactions,” the Department of Justice said in its press release.
