Profit Connect founder convicted over $24M AI crypto fraud

A federal jury convicted Profit Connect founder Brent C. Kovar on 15 counts of wire fraud, mail fraud, and money laundering after prosecutors said he raised $24 million from at least 400 investors by claiming an AI-powered supercomputer was mining crypto.

The Justice Department said the verdict followed a nine-day trial. Kovar marketed Profit Connect between late 2017 and July 2021 as a profitable technology business, promising fixed returns of 15% to 30% APR with a 100% money-back guarantee, prosecutors said. He told investors the company used AI software on a supercomputer to mine crypto and verify blockchain transactions.

Kovar also claimed Profit Connect held hundreds of millions of dollars in crypto reserves. The Justice Department said the company was unprofitable, held no reserves, and had no legitimate source for the promised returns. Kovar instead used investor money to operate the business, buy employee gifts, purchase a house for himself, and repay earlier investors, with those repayments presented as mining proceeds.