CryptoSlate
A federal jury convicted Brent C. Kovar, owner of Profit Connect, 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.
Jurors found Kovar guilty of 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering. Kovar marketed Profit Connect as a profitable technology firm, telling investors the company used AI software on a supercomputer to mine crypto and verify crypto transactions. He promised fixed returns of 15% to 30% APR, a 100% money-back guarantee, and claimed the firm held hundreds of millions of dollars in crypto reserves. Prosecutors said the company held no reserves, generated no legitimate mining proceeds, and used new investor money to fund operations, buy employee gifts, purchase a house for Kovar, and repay earlier investors.
Why it matters
The verdict lands in a wave of federal cases where AI-themed marketing sits at the centre of the charge sheet rather than the periphery. Kovar's pitch hinged on a 'supercomputer' and 'AI software' as the source of the promised yield, framing the jury found to be fabricated across the 15 counts. The 280-year aggregate statutory maximum signals how aggressively DOJ is willing to stack charges when a scheme spans years, multiple wire transfers, and a victim count in the hundreds.
It also escalates the earlier SEC civil action. The regulator's 2021 case alleged more than $12 million from at least 277 investors; the criminal case now puts the floor at $24 million from at least 400 victims, reflecting the broader scope prosecutors were able to establish at trial.
Market impact
The case is unlikely to move token prices directly, but it tightens the lens on how AI branding is used to market crypto-adjacent products. Compliance teams at retail-facing platforms have already been flagging 'AI-yield' and 'AI-mining' language as elevated-risk disclosure territory, and a federal conviction built on those exact terms gives them a clean reference point.
Frequently asked questions
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What was Profit Connect and what did it promise investors?
Profit Connect was a company run by Brent C. Kovar that claimed to use AI software on a supercomputer to mine crypto and verify transactions. It promised investors fixed annual returns of 15-30%, a 100% money-back guarantee, and claimed to hold hundreds of millions in crypto reserves.
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How much money did the scheme take and how many investors were affected?
Federal prosecutors said Kovar obtained $24 million from at least 400 investors through the scheme. The DOJ criminal figure is roughly twice the $12 million-plus and 277-investor floor alleged in the SEC's 2021 civil case.
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What specific counts was Kovar convicted on?
A federal jury found him guilty of 15 counts: 11 wire fraud, 2 mail fraud, and 2 money laundering. Prosecutors said the conduct ran from late 2017 to July 2021.
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How does the criminal case compare to the earlier SEC civil action?
The SEC sued Kovar and his wife in 2021 alleging $12M+ from 277+ investors. The DOJ's criminal verdict puts the floor higher at $24M from 400+ victims and carries potential prison time, where the SEC case was a civil enforcement matter.
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When is Kovar's sentencing and what is the maximum penalty?
Sentencing is scheduled for November 30. The 15 counts carry an aggregate statutory maximum of 280 years in prison, though a federal judge will determine the actual sentence after applying US Sentencing Guidelines.
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