A Las Vegas jury needed nine days of testimony to reach a conclusion federal investigators had been building toward for years: Brent Kovar’s cryptocurrency company was never going to make good on the $24 million he had collected from hundreds of ordinary investors. On August 24, jurors found Kovar guilty of wire fraud, mail fraud and money laundering, closing a case built on a promise that should have raised alarms from the start — a guaranteed return supposedly backed by federal deposit insurance that never covered a cent of it.
Inside Profit Connect: How the $24 Million Scheme Actually Worked
From late 2017 through July 2021, Kovar owned Profit Connect, a Las Vegas company he told investors was running artificial intelligence software on a supercomputer to mine cryptocurrency and verify transactions on other networks. He promised a fixed annual return of 15% to 30%, backed that promise with a 100% money-back guarantee, and told investors the company held hundreds of millions of dollars in cryptocurrency reserves. None of it was true. Kovar knew Profit Connect was not profitable, held no reserves, and had no way to pay the returns he advertised or honor the guarantee he offered, prosecutors say — he simply told at least 400 people otherwise and collected $24 million from them over roughly four years.
The money did not disappear into a mining operation. According to the U.S. Attorney’s Office for the District of Nevada, Kovar used new investor money to fund the operation, buy gifts for employees, purchase a house for himself, and pay off earlier investors in a way designed to look like real mining profits. That last part is the mechanical core of a Ponzi scheme: money moving in a circle, made to look like it came from somewhere else, for exactly as long as new deposits keep arriving to cover the old ones.
Free retirement updates: Keep more of your Social Security and savings with plain-English updates on the changes, deadlines, and costly mistakes retirees miss. Subscribe free.
An Investment Is Never “FDIC Insured” — Here’s the Actual Rule
The claim that made Profit Connect sound safe was also the easiest one to disprove. FDIC deposit insurance covers money sitting in a checking or savings account, or a CD, at an insured bank — up to $250,000 per depositor, per bank, per ownership category. It has never covered stocks, cryptocurrency mining contracts, or any other investment, even one purchased through an insured bank, according to the FDIC’s own guidance on what deposit insurance does not cover. There is no version of a private company’s crypto-mining returns that the FDIC backs, no matter how the pitch is worded.
That combination — a guaranteed high return with no real risk, wrapped in the borrowed authority of a federal insurance program — is close to a textbook description of investment fraud. The SEC’s own investor-education arm lists guaranteed high returns and overly consistent payouts among the clearest warning signs of a Ponzi scheme, precisely because no legitimate investment can promise both, and a real bank or brokerage will never describe an investment product as FDIC-insured.
This Wasn’t Kovar’s First Brush With Federal Regulators
Profit Connect’s collapse did not come as a surprise to regulators. Five years before the criminal conviction, the Securities and Exchange Commission had already sued Kovar and his mother, Joy Kovar, in a civil emergency action, freezing the company’s assets after finding it had raised more than $12 million from at least 277 investors using the same pitch — a supercomputer that supposedly generated 20% to 30% annual returns through AI-directed trading. The SEC’s 2021 complaint alleged the pair diverted millions of dollars to Joy Kovar’s personal bank account and made Ponzi-style payments to earlier investors rather than trading anything at all. That the scheme kept running, and kept adding victims, for years after a federal regulator had already gone to court over it illustrates how difficult these operations are to fully shut down once they gain momentum, and how much damage can accumulate in the gap between a civil freeze and a criminal conviction.
Eleven Counts, One Verdict: What Conviction After a Trial Means
After the nine-day trial, the jury convicted Kovar on 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering. That verdict — a jury’s finding after a trial, not a plea deal or an indictment — means every element of those charges was proven to the jury’s satisfaction beyond a reasonable doubt, a materially higher bar than the probable-cause standard that supports an arrest or an indictment. Kovar is scheduled to be sentenced on November 30, 2026, and faces a statutory maximum of 280 years in prison, though an actual sentence will be determined by a federal judge applying sentencing guidelines rather than the maximum ceiling.
What Happens to the $24 Million Now
A conviction resolves guilt; it does not by itself return money to the roughly 400 investors who put funds into Profit Connect. Restitution, when a judge orders it, is typically set at sentencing rather than at a verdict, which is why no dollar figure for repayment exists yet in Kovar’s case. Recovery from a scheme where funds were spent on a house, employee gifts and years of Ponzi-style payouts tends to be partial at best, since money spent on consumption rather than parked in a seizable asset is generally gone by the time investigators catch up to it.
For investors evaluating any pitch that sounds similar — a fixed high return, a guarantee, and a claim of insurance or federal backing — the case is a reminder to verify independently rather than take a pitch at its word. Anyone who believes they have been approached with a similar offer, or who has already sent money to one, can file a report with the FBI’s Internet Crime Complaint Center, which feeds directly into federal investigations like the one that produced this verdict.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
More Financial Reading
