Las Vegas businessman convicted in $24 million AI crypto Ponzi scheme

A federal jury in Las Vegas convicted businessman Brent C. Kovar for operating a $24 million cryptocurrency Ponzi scheme through his company, Profit Connect. Kovar falsely promised investors high returns using an AI supercomputer, but instead used the funds for personal expenses and Ponzi payments. He faces up to 280 years in prison at his November 30, 2026 sentencing. Separately, Block Bits Capital founder Japheth Dillman was convicted in San Francisco for a similar fraud involving a fake trading bot.

Brent Kovar Ponzi conviction

• ▪Brent C. Kovar defrauded at least 400 investors of $24 million through his Las Vegas-based company, Profit Connect, which operated from late 2017 to July 2021.
• ▪A federal jury in Las Vegas convicted Brent C. Kovar of 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering on August 24, 2026.
• ▪Brent C. Kovar faces a statutory maximum penalty of 280 years in prison and is scheduled to be sentenced on November 30, 2026.

Fraudulent AI mining claims

• ▪Brent C. Kovar promised Profit Connect investors fixed annual returns of 15% to 30% and a 100% money-back guarantee.
• ▪Brent C. Kovar falsely claimed that Profit Connect held hundreds of millions of dollars in cryptocurrency reserves and that investor funds were insured by the Federal Deposit Insurance Corporation.
• ▪Brent C. Kovar falsely told investors that Profit Connect used artificial intelligence software on a supercomputer to mine cryptocurrency and verify transactions.

Investor fund misuse

• ▪Brent C. Kovar operated Profit Connect with his mother, Joy Kovar, who received $1.2 million in her personal account and withdrew an additional $1.7 million for personal expenses.
• ▪Brent C. Kovar used Profit Connect investor funds to pay for company operations, buy gifts for employees, purchase a house for himself, and make Ponzi-like payments to earlier investors.

SEC 2021 shutdown

• ▪The U.S. Securities and Exchange Commission shut down Profit Connect in July 2021, obtaining a restraining order and asset freeze while initially estimating losses at $12 million.
• ▪Brent C. Kovar was previously targeted by the U.S. Securities and Exchange Commission in 2009 with a civil injunction over a $12 million pump-and-dump scheme involving Skyway Global.

Japheth Dillman fraud case

• ▪A federal jury in San Francisco convicted Japheth Dillman, founder of the cryptocurrency trading fund Block Bits Capital, of wire fraud and conspiracy on August 24, 2026.
• ▪Japheth Dillman raised nearly $1 million from more than 20 investors between June 2017 and August 2018 by falsely claiming Block Bits Capital used a working automated trading tool called Autotrader.
• ▪Japheth Dillman is scheduled to be sentenced on December 8, 2026, and faces up to 20 years in prison and a $250,000 fine on each count.
• ▪Japheth Dillman and an unnamed co-conspirator used Block Bits Capital investor funds to pay themselves and make speculative bets on other cryptocurrency ventures that lost heavily.

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