A federal jury has convicted Las Vegas businessman Brent C. Kovar on 15 counts connected to Profit Connect, a cryptocurrency operation that prosecutors said collected roughly $24 million from at least 400 people by making false claims about artificial intelligence, crypto-mining technology and guaranteed returns.
Kovar was found guilty of 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering, the U.S. Attorney’s Office for the District of Nevada said. The combined statutory maximum for the charges is 280 years in prison, although the final sentence will be decided by a federal judge at a hearing scheduled for Nov. 30.
The verdict places Profit Connect among a series of crypto-related fraud cases built around technical claims that customers may struggle to verify independently. Prosecutors said Kovar marketed sophisticated computing systems and AI-driven trading or mining capabilities while the company lacked the reserves and profitability needed to support its promises.
Prosecutors said Profit Connect made guarantees it could not meet
Profit Connect operated in Las Vegas from late 2017 through July 2021, according to the U.S. Attorney’s Office. Kovar owned the company and promoted it as a business using artificial intelligence software on a supercomputer to mine cryptocurrency and verify transactions.
Clients were offered annual returns ranging from 15% to 30%, federal prosecutors said. Kovar also promoted a 100% money-back guarantee, presenting the arrangement as a relatively predictable way to earn income from digital assets despite the volatility commonly associated with cryptocurrency markets.
The government said those assurances were false. Profit Connect was not profitable, had no cryptocurrency reserves and could not generate the funds necessary to pay the returns it advertised or honor its refund guarantee, according to the prosecution.
Kovar also told clients that Profit Connect held hundreds of millions of dollars in cryptocurrency reserves and that customer funds were insured by the Federal Deposit Insurance Corporation, the U.S. Attorney’s Office said. The FDIC generally insures eligible deposits at member banks, rather than balances held by crypto businesses or returns promised by private investment programs.
Those statements gave Profit Connect’s sales pitch a layer of institutional credibility that prosecutors said the business did not possess. In practice, the company’s financial position was far removed from the reserves, insurance protections and dependable returns described to customers.
Conviction covers fraud and money-laundering counts
The jury returned guilty verdicts on the wire-fraud, mail-fraud and money-laundering charges after federal prosecutors argued that Kovar used interstate communications and mail to advance the scheme and handled proceeds connected to the fraud.
Wire fraud cases often turn on communications such as online messages, electronic transfers, websites and other digital channels used to obtain money through allegedly false representations. Mail fraud similarly covers deceptive schemes carried out through the postal system or private delivery services. The money-laundering counts add allegations concerning the movement or handling of criminal proceeds.
The statutory maximum of 280 years reflects the maximum penalties attached to each individual count when added together. It does not establish the sentence Kovar will receive. Federal judges weigh sentencing guidelines, the scale of losses, the number of victims, the nature of the conduct and other legal factors before imposing a term.
The case was investigated by the FBI’s Las Vegas Field Office. Christopher S. Delzotto, special agent in charge of the FBI Las Vegas Field Office, said Profit Connect had been presented as a technological advancement but was driven by deception.
AI claims can obscure basic financial questions
Profit Connect’s marketing relied on terms that can sound difficult for non-specialists to challenge: artificial intelligence, supercomputers, crypto mining and transaction verification. Yet the allegations ultimately center on ordinary financial questions—whether the business had revenue, liquid reserves, insurance coverage and a credible basis for fixed returns.
Crypto mining involves using computing power to help secure certain blockchain networks in exchange for possible rewards. Mining revenue can fluctuate with token prices, network competition, hardware costs and electricity expenses. A firm claiming it can consistently deliver fixed annual returns while also guaranteeing principal would need substantial, verifiable resources to support that commitment.
The prosecution’s account suggests that Profit Connect used the language of advanced technology to answer those questions without providing the underlying financial reality. Claims of automated systems or proprietary code do not by themselves show that a company can produce steady returns or protect customer deposits.
The FBI has warned that crypto-related fraud increasingly uses professional websites, technical language and persuasive claims of sophisticated automated tools. In the materials cited in the case, Profit Connect’s alleged misrepresentations included both the supposed capabilities of its systems and the scale of assets it claimed to hold.
Warning signs centered on guarantees and claimed insurance
The case also illustrates why guaranteed profits and refund promises warrant close scrutiny in digital-asset markets. Cryptocurrency businesses may offer products involving lending, staking, mining or algorithmic trading, but none of those activities eliminates market losses, operational failures or counterparty risk.
A claim of FDIC insurance deserves particular care. The FDIC’s name is frequently invoked in financial marketing because it signals protection associated with the U.S. banking system. A business offering crypto-related services should be able to identify the insured bank, the account structure and the specific deposits covered, rather than simply stating that funds are insured.
Kovar’s sentencing will determine the legal consequences for the conduct described by prosecutors, while the guilty verdict closes a case that spanned Profit Connect’s operations between 2017 and 2021. For the people who put money into the company, the central promises—high fixed returns, a full guarantee, major crypto reserves and federal insurance—were, according to the jury’s verdict and the government’s case, the foundation of a scheme rather than protections that existed.
Worried about scams? Learn essential crypto safety tips to protect yourself before trusting any “too-good-to-be-true” investment promises.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
