Brent Kovar was convicted on August 24 of running a $24 million cryptocurrency Ponzi scheme, a verdict that comes as the digital-asset industry grapples with record illicit activity and tries to keep fraud cases from undermining investor trust.
The Las Vegas businessman ran Profit Connect, which presented itself as an artificial-intelligence company mining cryptocurrency on a supercomputer. That technology did not exist.
Although the number is relatively small in comparison to the overall industry, it comes at a delicate time. TRM Labs estimates that the illegal crypto market attracted record investments of $158 billion in 2025, up by nearly 145% from the previous year. Chainalysis, on its part, found at least $14 billion received on-chain by crypto scams in 2025, a figure that may rise above $17 billion when additional illicit addresses are uncovered.
How Profit Connect dressed fraud in AI language
From late 2017 until July 2021, Kovar told investors that the software of Profit Connect was capable of running on a supercomputer that mined cryptocurrency and verified transactions, as reported by the U.S. Attorney’s Office for the District of Nevada. He offered a guaranteed return ranging from 15% to 30% with a full refund guarantee.
According to prosecutors, the firm did not have any profits or reserves to meet its promises. Instead, Kovar spent the investors’ money on running the business, buying gifts for employees, and purchasing his house.
The earlier investors received payments in the form of proceeds from mining but were funded by money from new investors, which is the very essence of how a Ponzi scheme works. A minimum of 400 investors gave in excess of $24 million.
The FDIC guarantee that never existed
According to Kovar, the depositors’ money was also protected through the Federal Deposit Insurance Corporation (FDIC) and Profit Connect had crypto reserves valued in the hundreds of millions of dollars. Both were false. Ryan Korner, the FDIC Office of Inspector General special agent who worked the case, stated:
“Mr. Kovar defrauded investors to enrich himself, luring victims with false claims that his investment was insured by the FDIC”
FBI Las Vegas special agent Christopher Delzotto said the victims “thought they were engaged in revolutionary technological advancement” when the operation was “merely a deception.” First Assistant U.S. Attorney Sigal Chattah framed the stakes bluntly, saying that “financial fraud undermines the foundational trust of our economic system.”
Kovar was found guilty of 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering after a nine-day trial.
A conviction five years in the making
Years before, regulators had acted against Profit Connect. The US Securities and Exchange Commission (SEC) was able to secure an emergency order of asset freeze against the company in July 2021, and against Kovar and his mother, Joy Kovar, who was said to be a control person.
According to the SEC, at that time, Profit Connect had raised over $12 million from more than 277 retail investors, with over 90% of the money raised coming from investors and not through trade. Regulators also claimed that the company encouraged people to take money out of their retirement savings and home equity and targeted individuals saving money for their children’s education.
On February 14, 2025, a federal indictment was handed down.
Kovar’s sentencing has been scheduled for November 30, 2026. Even though the law states that he could spend a maximum of 280 years behind bars, the judge must determine the final sentence according to federal guidelines and various other requirements.
Why a Vegas fraud case matters to the wider market
Even though Profit Connect is just a part of the illegal activity in the crypto field, the fact that it is using AI and crypto terminology points to a pattern in the industry as a whole.
In March 2026, INTERPOL raised red flags about the “industrialization of fraud,” claiming that schemes boosted by artificial intelligence made 4.5 times more money for each fraud committed than scams that do not involve AI vendors. The Financial Action Task Force echoed this in July, stating that organized crime groups are taking advantage of gaps in regulation to transfer illegal profits through virtual assets.
That matters as crypto pushes further into mainstream finance. A January 2026 Coinbase and EY-Parthenon survey of 351 institutional investors found that 66% considered an uncertain regulatory environment their biggest concern when investing in digital assets.
Profit Connect serves as a prime example of that concern. At the same time, successful prosecutions demonstrate the importance of enforcement as widespread adoption is not only tied to whether companies can gain access to crypto markets but also to whether people are confident enough to believe that fraud disguised as technological innovation will be caught and punished.