The SEC shattered a $12 million crypto Ponzi scheme Profit Connect masterminded by mother-son duo
The U.S Securities and Exchange Commission (SEC) has busted a crypto Ponzi scheme Profit Connect in which a mother and her son stole $12 million from over 270 investors.
Profit Connect allegedly scammed victims on the promise of guaranteed returns
The SEC has obtained a temporary restraining order against a mother-son duo who embezzled more than $12 million from at least 277 investors since 2018. Over the years, women Joy Kovar (86) and her son Brent Kovar (54) have promised to generate income for their clients through investing in stocks and cryptocurrencies but instead swindled the funds for themselves.
The family used their Las Vegas-based company Profit Connect Wealth Services to lure people into a typical Ponzi scheme. They assured investors that they would allocate their money in securities trading and digital assets based on recommendations calculated by an artificial intelligence supercomputer.
“As we allege, the defendants targeted investors who were looking for safe products for their retirements and their children’s educations, offering a money-back guarantee on top of the phenomenal results they promised to achieve using a purported supercomputer. Investors should be wary of individuals and firms who guarantee double-digit returns with no risk of loss”, Michele Wein Layne – Director of the SEC’s Los Angeles Regional Office, commented.
The company allegedly asserts that the supercomputer will guarantee a fixed profit of at least 20% – 30% annually with monthly compounding interest. However, according to the SEC, the Kovar family did not use the funds coming from investors to trade stocks or buy cryptocurrencies.
Instead, they transfer millions of dollars to Joy Kovar’s personal bank account, pay huge sums to promoters, and make Ponzi-like payments to other investors. Additionally, more than 90% of Profit Connet’s funds came from investors.
According to the allegations, Joy Kovar opened eight accounts at three different banks. In turn, Brent Kovar received more than $350,000 from investors, money he used to buy a house for himself. A hearing on July 26, 2021, will determine the legal consequences of the mother-son duo’s illegal actions.
As AZCoin News reported, 47-year-old Swedish man Roger Nils-Jonas Karlsson cheating to 15 years in prison on accounts of wire fraud, securities, and money laundering after scamming over 3,500 victims for $16 million in cryptocurrency.
Swedish residents skimmed thousands of people in a Ponzi scheme between 2012 and 2019. During that period, the criminal convinced more than 3,575 people to send him funds in Bitcoin and other cryptocurrencies, which he later used for personal enrichment, acquired a resort in Thailand, luxurious condos, and even a racehorse.
After a successful investigation, the Department of Justice (DoJ) halted his criminal activities. In addition to the 180 months behind bars, he also had to lose his resort in Thailand along with other properties he had purchased over the years.
- SEC Shuts Down Two Multi-Million Dollar Companies Using Cryptocurrencies To Commit Fraud
- 15 Years In Prison For A Swedish Man For Stealing $16 Million In A Gold-Backed Cryptocurrency Scam