A Las Vegas man is accused of orchestrating a massive crypto and artificial intelligence (AI) Ponzi scheme, defrauding more than 400 investors out of $24 million. The case highlights the risks associated with promises of high returns in the cryptocurrency space, exacerbated by the use of complex technologies like AI. This article examines the details of the scam, the charges against the individual, and the efforts of the authorities to combat this type of fraud.
Profit Connect: Enticing promises and embezzled money
Brent Kovar is accused of setting up a Ponzi scheme between late 2017 and July 2021, posing as the head of Profit Connect, a company purportedly specializing in AI applied to mining and verifying crypto transactions. Kovar allegedly promised fixed annual returns of 15% to 30% and a 100% money-back guarantee to lure investors. He used a website, YouTube video, and PowerPoint presentations to convince his victims to invest in his company. However, instead of using the money for mining or verification, Kovar allegedly diverted it to fund his lavish lifestyle, give gifts to his employees, and repay early investors, creating a Ponzi scheme. He is also accused of lying to some victims by making them believe that their investments were insured by the Federal Deposit Insurance Corporation (FDIC).
According to authorities, Kovar used investor money to fund Profit Connect’s operations, buy gifts for his employees, purchase a home for himself, and repay early investors, making it appear that the refunds were actually from mining and verifying crypto transactions. Kovar faces 12 counts of wire fraud, three counts of mail fraud, and three counts of money laundering. If convicted, he faces a maximum sentence of 330 years in prison and a fine of up to $4.5 million.
Fighting Crypto Fraud: Increasing Efforts
The case comes amid a surge in cryptocurrency Ponzi schemes. On January 27, Antonia Perez Hernandez, a promoter of the Forcount Ponzi scheme, was sentenced to more than two years in prison for conspiracy to commit wire fraud. A few months earlier, in October 2024, an 86-year-old former California attorney was sentenced to five years of probation and ordered to pay nearly $14 million after admitting to orchestrating a multimillion-dollar crypto Ponzi scheme.
In response to this surge in fraud, the FBI launched Operation Level Up, which helped protect potential victims of crypto fraud worth approximately $285 million between January 2024 and January 2025. These efforts demonstrate the authorities’ determination to combat crypto fraud and protect investors. However, it is essential that investors exercise caution and due diligence before investing in crypto projects, especially those that promise high and guaranteed returns.
