Profit Connect Owner Convicted for $24 Million AI Crypto Fraud

A federal jury has convicted Brent C. Kovar, the owner of Profit Connect, on 15 counts of fraud and money laundering. The verdict follows a nine-day trial where prosecutors revealed that Kovar deceived at least 400 investors, raising $24 million through false claims regarding an AI-powered cryptocurrency business.

According to the Justice Department, Kovar marketed Profit Connect as a profitable venture capable of generating returns between 15% and 30% APR, backed by AI software on a supercomputer for crypto mining and transaction verification. However, prosecutors argued that the company was unprofitable, held no reserves, and lacked a legitimate source for the promised returns.

Kovar allegedly misappropriated investor funds to operate the business, purchase gifts for employees, buy a house for himself, and repay other investors, disguising these repayments as profits from mining activities. The SEC had previously filed a civil action against Kovar in 2021, alleging he raised over $12 million from at least 277 investors.

The recent criminal case revealed a larger scope of the fraudulent scheme, with the total investor count and amount raised significantly higher than earlier estimates. Kovar's sentencing is scheduled for November 30, where he faces a maximum of 280 years in prison across the counts.