Profit Connect owner convicted over $24M AI crypto fraud scheme

A federal jury convicted Profit Connect owner Brent C. Kovar on 15 fraud and money-laundering counts after prosecutors said he obtained $24 million from at least 400 investors through false claims about an AI-powered crypto business.

The Justice Department said the verdict followed a nine-day trial, with jurors finding Kovar guilty of 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering.

The Justice Department placed the conduct between late 2017 and July 2021, when Kovar marketed Profit Connect as a profitable technology business capable of generating the promised returns.

Kovar told investors that Profit Connect used AI software on a supercomputer to mine crypto and verify crypto transactions, according to the Justice Department. He represented the company as profitable, promised fixed returns of 15% to 30% APR and offered a 100% money-back guarantee.

He also claimed Profit Connect held hundreds of millions of dollars in crypto reserves. Prosecutors said the company was unprofitable, held no reserves, and lacked a legitimate source for the promised returns or guarantee.

The Justice Department said Kovar instead used investor money to operate Profit Connect, buy gifts for employees, purchase a house for himself, and repay investors, with those repayments presented as proceeds from mining and transaction verification.