Federal jury convicts Las Vegas operator in $24 million crypto fraud case

Prosecutors said Kovar's company, Profit Connect, falsely claimed that artificial-intelligence software running on a supercomputer mined cryptocurrency and verified transactions. The business promised fixed annual returns of 15% to 30% and a 100% money-back guarantee, while representing that it held hundreds of millions of dollars in crypto reserves.

The reserves and returns did not exist

The Justice Department said Profit Connect was not profitable, had no cryptocurrency reserves and could not pay the promised returns or guarantee. It said investor money was used to operate the business, buy gifts and a house, and repay earlier investors in a way that made the payments appear to come from mining and transaction-verification activity.

Those findings describe the jury's verdict and the government's account of the scheme. They are not a general judgment about crypto mining, artificial intelligence or legitimate digital-asset investment products.

Sentencing is still ahead

Kovar is scheduled to be sentenced on Nov. 30, 2026. The Justice Department said he faces a statutory maximum of 280 years, but a federal judge will determine the actual sentence after considering the sentencing guidelines and other statutory factors.

The case is a useful warning about the difference between a claimed mechanism and verifiable operations. The relevant checks are not a technical label such as AI mining, but evidence of reserves, audited cash flows, realistic return claims and a credible path for investors to withdraw funds.