Profit Connect Owner Convicted in $24M AI Crypto Fraud

A federal jury convicted Profit Connect owner Brent C. Kovar on 15 counts of fraud and money laundering after prosecutors allege he obtained $24 million from at least 400 investors by promoting a false AI cryptocurrency business.

Jurors returned the verdict after a nine-day trial in federal court. The convictions include 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering. The Justice Department describes the conduct as occurring between late 2017 and July 2021.

Prosecutors described marketing materials and presentations that promoted Profit Connect as a profitable technology company that used AI on a supercomputer to mine cryptocurrency and verify transactions. Investors were offered fixed returns of 15% to 30% APR, a 100% money-back guarantee and were told the company held hundreds of millions of dollars in crypto reserves.

The government alleges Profit Connect was unprofitable, held no reserves and lacked any legitimate source for the promised returns or the guarantee. Prosecutors state Kovar used investor funds to cover company operations, buy gifts for employees, purchase a personal residence and repay some investors, with those repayments presented as proceeds from mining and transaction verification.

Sentencing is set for Nov. 30. A federal judge will determine Kovar’s punishment after considering the U.S. Sentencing Guidelines and other statutory factors. The combined statutory maximum across the counts is 280 years in prison.

A separate Securities and Exchange Commission civil complaint filed in 2021 accused Brent and Joy Kovar of raising more than $12 million from at least 277 retail investors through Profit Connect Wealth Services by promoting 20%–30% annual returns tied to a purported AI supercomputer. The civil and criminal cases cover different periods and use different methods for counting funds and investors, so their figures are not directly comparable.

Court filings or a receivership accounting will be needed to establish precise investor losses, recoveries and the final accounting of funds. The conviction moves the matter toward sentencing and potential civil actions to address investor claims and asset recovery.