A federal jury in Las Vegas has convicted Brent C. Kovar of running a $24 million cryptocurrency Ponzi scheme through Profit Connect. Prosecutors said the business took money from at least 400 investors between late 2017 and July 2021. The verdict follows a nine-day trial and adds a fresh case to growing concerns over crypto scams built around new technology.
The case centers on claims that Profit Connect used artificial intelligence software on a supercomputer to mine cryptocurrency and verify transactions. Kovar also marketed fixed annual returns and a full refund promise. Court findings showed that investor money, not operating profit, funded the company and payments to earlier clients.
Profit Connect Used AI to Sell Fixed Returns
According to the Justice Department, Kovar promised returns ranging from 15% to 30% a year. He also claimed Profit Connect held hundreds of millions of dollars in cryptocurrency reserves. The jury found that the business had no such reserves and could not support its “100% money-back guarantee.” These claims helped attract investors seeking income from crypto mining.
Prosecutors said Kovar used the funds to run Profit Connect, buy gifts for employees, purchase a house and repay some investors. Those payments appeared to come from mining and transaction verification. Instead, new deposits funded earlier payouts, which is the central structure of a Ponzi scheme. The company’s “AI supercomputer” pitch gave an old fraud method a modern label.
Crypto Scams Add New Tools to Old Methods
The Kovar case comes amid a rise in AI-enabled crypto scams. Chainalysis estimated that scams received at least $14 billion on-chain in 2025. The firm projected that the total could exceed $17 billion as investigators identify more illicit wallet addresses. It also reported a 1,400% yearly increase in impersonation scam activity.
Chainalysis found that AI-enabled operations collected 4.5 times more money than traditional scams on average. Criminal groups now use deepfake video, cloned voices and automated messages to support fake investment offers. Other common methods include phishing pages, fake airdrops, rug pulls, malware, impersonation and long-term relationship scams. Each method seeks funds, credentials or wallet approvals.
The average known scam payment rose from $782 in 2024 to $2,764 in 2025, according to the report. Chainalysis linked that increase to more targeted fraud and a wider mix of social and technical tools. Fake platforms may display invented profits, while phishing sites seek login details, seed phrases or transaction approvals from wallet users before victims can verify the source or offer.
Federal Agencies Track Crypto Scam Funds
The SEC filed a civil complaint against Profit Connect, Kovar and Joy Kovar in July 2021. The regulator said more than 90% of the company’s funds came from investors. It also said the defendants did not use the money for the stated securities, foreign currency or cryptocurrency investments. The agency sought to stop the offering and freeze assets.
The criminal case involved the FBI, IRS Criminal Investigation and the Federal Deposit Insurance Corporation’s inspector general. The jury found Kovar guilty of 11 wire fraud counts, two mail fraud counts and two money laundering counts. He is due for sentencing on November 30, 2026, and faces a statutory maximum of 280 years. The judge will set the sentence after reviewing federal guidelines and other legal factors.
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