Crypto Ponzi Schemer Faces 280 Years After Conviction

The company had no way to pay those returns or honor the guarantee, prosecutors said. Instead, Kovar used investor funds for daily operations, employee gifts, and a house he bought for himself. He repaid earlier investors with money from newer ones, presenting those payments as crypto mining profits.

The FBI said victims believed they were investing in new technology. The FDIC said Kovar falsely claimed his product was insured by the government agency.

Kovar was convicted on 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering. The 280-year maximum reflects the combined penalty for all counts. Federal sentencing guidelines typically produce far shorter terms, especially for first-time offenders. The judge will weigh the number of victims, the loss amount, and Kovar's criminal history.

The case is part of a broader Justice Department effort against crypto fraud. Convictions in recent years include operators of similar Ponzi schemes that wrapped fake AI or mining claims around traditional fraud. The FBI asked anyone with information about similar schemes to report it through its Internet Crime Complaint Center.