Las Vegas businessman convicted in $24 million 'AI supercomputer' crypto Ponzi scheme
A Las Vegas businessman has been convicted of 15 federal charges, including wire fraud and money laundering, for operating a $24 million crypto Ponzi scheme. The defendant, Kovar, falsely claimed his company used AI-powered supercomputers to generate high, fixed returns for investors while actually misappropriating funds for personal use.
Why it matters
This case highlights the ongoing regulatory crackdown on fraudulent investment schemes that exploit the hype surrounding artificial intelligence and cryptocurrency to deceive retail investors.
Kovar was found guilty of 11 counts of wire fraud, two counts of mail fraud and two counts of money laundering following a nine-day trial. Sentencing is scheduled for Nov. 30, when Kovar faces a statutory maximum penalty of up to 280 years in prison.
Kovar’s case first made the headlines in July 2021 , when the U.S. Securities and Exchange Commission (SEC) charged Kovar and his mother, Joy Kovar, with fraudulently raising $12 million from at least 277 investors.
The pair lured investors into their Ponzi scheme, saying their crypto business, Profit Connect, invested in forex, stocks and other assets "to diversify its income stream from the company's main income source of blockchain mining,” the SEC said.
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