Crypto Fraud Crackdown: FBI Targets $24M Ponzi Scheme

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A Las Vegas resident, Brent Kovar, has been charged by U.S. authorities for allegedly defrauding more than 400 investors out of $24 million through a misleading AI crypto mining scheme.

Kovar, the operator of Profit Connect, falsely claimed his company used artificial intelligence to mine and verify cryptocurrency transactions, promising investors lucrative fixed returns and a full money-back guarantee.

False Promises and Lavish Spending

According to the U.S. Attorney’s Office for the District of Nevada, Kovar convinced investors from late 2017 to July 2021 that Profit Connect could deliver an annual return of 15% to 30%. He assured customers that their funds were secure and even falsely suggested that investments were backed by the Federal Deposit Insurance Corporation (FDIC). However, authorities allege that instead of running a legitimate operation, Kovar was siphoning investor funds to bankroll his extravagant lifestyle.

Also read: Remote Job Scams: NY Attorney General Sues to Recover Over $2M in Crypto Stolen

“Kovar used investor money to operate Profit Connect, buy gifts for employees, buy a house for himself, and repay investors as if those repayments came from mining cryptocurrency and verifying cryptocurrency transactions,” the U.S. Attorney’s Office stated.

To lure investors, Kovar utilized a website, promotional YouTube videos, and PowerPoint presentations. He now faces serious legal consequences, including 12 counts of wire fraud, three counts of mail fraud, and three counts of money laundering. If convicted, he could face up to 330 years in prison and fines totaling $4.5 million.

Growing Crypto Ponzi Schemes Under Scrutiny

Kovar’s case is part of a broader crackdown on fraudulent digital asset schemes. In recent months, law enforcement agencies have intensified efforts to dismantle Ponzi-like operations in the cryptocurrency space.

Also read: Litecoin X Account Hacked to Promote Fraudulent Token

On January 27, Antonia Perez Hernandez, a promoter of the digital asset Ponzi scheme Forcount, was sentenced to over two years in prison after pleading guilty to conspiracy to commit wire fraud. Similarly, in October 2024, an 86-year-old former California attorney received five years probation and was ordered to pay nearly $14 million in restitution for running a multimillion-dollar crypto Ponzi scheme.

FBI’s Operation Level Up Saves Victims $285 Million

Authorities have been ramping up efforts to protect investors from fraudulent schemes. The FBI’s “Operation Level Up” reportedly prevented losses of approximately $285 million between January 2024 and January 2025 by identifying and disrupting various crypto fraud operations.

Also read: Huione Guarantee: Largest Illicit Crypto Marketplace Grows Rapidly

With AI-powered scams on the rise, regulatory bodies continue to urge investors to exercise caution and thoroughly verify investment opportunities before committing funds. The case against Kovar underscores the risks associated with high-return guarantees and misleading assurances in the volatile world of cryptocurrency investments.

Author

Steven Walgenbach

Steven's passion for cryptocurrency and blockchain technology began in 2014, inspiring him to immerse himself in the field. He notably secured a top 5 world ranking in robotics. While he initially pursued a computer science degree at the University of Texas at Arlington, he chose to pause his studies after two semesters to take a more hands-on approach in advancing cryptocurrency technology. During this period, he actively worked on multiple patents related to cryptocurrency and blockchain. Additionally, Steven has explored various areas of the financial sector, including banking and financial markets, developing prototypes such as fully autonomous trading bots and intuitive interfaces that streamline blockchain integration, among other innovations.

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