A Las Vegas businessman, Brent C. Kovar, has been convicted by a federal jury for defrauding over 400 investors of approximately $24 million through a cryptocurrency investment scheme operated by his company, Profit Connect. The scheme ran from late 2017 through July 2021.
According to the US Justice Department, Kovar misled investors with false claims about Profit Connect’s operations and financial health. He allegedly promised fixed annual returns of 15% to 30%, a 100% money-back may provide, and asserted that the company was backed by hundreds of millions of dollars in cryptocurrency reserves. Furthermore, Kovar falsely claimed that investments were insured by the Federal Deposit Insurance Corporation (FDIC).
Prosecutors demonstrated that Kovar was aware of these misrepresentations. Evidence revealed that Profit Connect was not profitable, lacked the purported crypto reserves, and was unable to fulfill the promised returns or may provide them. Instead, Kovar allegedly diverted investor funds for personal expenses, employee gifts, and the purchase of a house. He also reportedly used funds from new investors to repay earlier ones, creating a deceptive appearance of profitability and legitimacy.
Kovar was found guilty on 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering. “The victims in this case thought they were engaged in revolutionary technological advancement, but it was merely a deception crafted by the falsehoods and trickery of Mr. Kovar,” stated Special Agent in Charge Christopher S. Delzotto of the FBI Las Vegas Field Office. Special Agent in Charge Ryan Korner with the Federal Deposit Insurance Corporation Office of Inspector General reported that Kovar’s claim of FDIC insurance was also false.
Kovar is scheduled for sentencing on November 30, 2026, and faces a potential maximum penalty of 280 years in prison.
In a separate case, Japheth Dillman was convicted of wire fraud and conspiracy to commit wire fraud for defrauding more than 20 investors of nearly $1 million through a cryptocurrency trading fund, Block Bits Capital. This scheme operated from June 2017 to August 2018.
Dillman and a co-conspirator allegedly told investors that their fund used an automated trading software called “Autotrader” to generate profits. However, evidence presented at trial indicated that Dillman knew the trading algorithm was not functioning as claimed. Investor funds were reportedly used for personal payments and invested in other high-risk cryptocurrency ventures that suffered significant losses, rather than for the promised trading activities.
Dillman, 48, remains released on bond and is scheduled for sentencing on December 8, 2026. He faces up to 20 years in prison and a $250,000 fine for each count.
These convictions underscore a pattern of deceptive practices within the cryptocurrency investment sector, where misrepresentations regarding profitability, technology, and security are common tactics used to defraud investors. Regulatory bodies continue to pursue enforcement actions against such fraudulent schemes.
Broader Context
Source materials place the factual news in this context: The article discusses two separate but similar cryptocurrency investment fraud cases.
Why This Matters
These convictions highlight the persistent risks and deceptive practices within the cryptocurrency investment space. They serve as a cautionary tale for potential investors, demonstrating the significant financial losses that can result from fraudulent schemes and underscoring the ongoing enforcement actions by regulatory bodies against such activities.
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