Say what you will about the Kovars, but they like to keep things in the family. Specifically fraud, according to the Securities and Exchange Commission. A dozen years ago, Brent Kovar was accused of running a pump-and-dump scheme with his old man. Well, he wasn’t going to make that mistake again. So when he came up with an alleged cryptocurrency Ponzi scheme, he didn’t enlist his father as a co-conspirator. Instead, this time, he allegedly went with his mom.
The defendants have raised investor funds through Profit Connect while assuring investors that their money would be invested in securities trading and cryptocurrencies based on recommendations made by an “artificial intelligence supercomputer.”
Even before you get to the claims about guaranteed returns of 20% to 30% with compounding monthly interest, the words “artificial intelligence supercomputer” should serve as a sufficient red flag, even when it’s not coming from a person permanently barred from the securities industry. Alas, for at least 277 people, it was not.
The complaint further alleges that the defendants did not use funds received from investors to trade securities, buy cryptocurrencies, or do any of the things that Profit Connect promised its investors it would do with their money. Instead, the complaint alleges that the defendants misused investor money by, among other things, transferring millions of dollars to Joy Kovar’s personal bank account, paying millions of dollars to promoters, and making Ponzi-like payments to other investors…. “Investors should be wary of individuals and firms who guarantee double-digit returns with no risk of loss,” [SEC Los Angeles regional director Michele Wein Layne said.]
Indeed. And yet.
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