The Securities and Exchange Commission (SEC) has shuttered an alleged scam that promised to generate most of its income from bitcoin mining and invest in cryptocurrencies and other assets, the agency said Monday.
According to the SEC’s complaint, 86-year-old Joy Kovar and her son, 54-year-old Brent Kovar, have raised over $12 million from at least 277 retail investors through their Las Vegas-based company Profit Connect Wealth Services since May 2018.
The mother-son duo allegedly told investors that 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 Kovars touted the ability of a supercomputer and artificial intelligence to generate 20%-30% fixed returns per year with monthly compounding interest.
Instead, the SEC alleges that the Kovars transferred “millions of dollars to Joy Kovar’s personal bank account,” spent millions of dollars to promote Profit Connect, and made “Ponzi-like payments to other investors.” The SEC says over 90% of Profit Connect’s funds came from investors.
Brent Kovar used social media to market the firm’s offerings. In a YouTube video, he presents what he says is a mining card to show the audience “what they look like,” and says his company uses artificial intelligence “to only decode [those mining cards] off the blockchain that actually have transactions.”
The complaint alleges that Brent Kovar received almost $353,000 of investor funds, which he used to purchase a residential home. It also alleges that Joy Kovar opened eight accounts at three different banks.