In the world of crypto, where new technologies and investment opportunities are emerging every day, fraud incidents are also posing a major risk for investors. A recent case coming out of the United States serves as a reminder of this danger.
A federal jury has found Las Vegas businessman Brent C. Cowar guilty of defrauding approximately 24 million dollars from at least 400 investors through a crypto investment scheme.
Promise of 30% profit
Kovaar's company Profit Connect convinced investors from 2017 to 2021 that the company verifies crypto mining and transactions with the help of artificial intelligence and a supercomputer.
Investors were promised fixed returns of 15 to 30 percent per year. In addition, a guarantee to return 100% of the money was also stated.
The issue was that, according to the authorities, these claims were not based on reality.
Investigations found that the company was not profitable, did not have the crypto reserves it claimed, and was not in a position to consistently deliver the promised returns to investors.
Where did investors’ money go?
According to the prosecution, the money obtained from investors was also used for the company’s business expenses as well as other purposes. This included employee gifts and buying a house for Kovaar.
Some money was used to refund earlier investors so that it would give the impression that profits were actually coming from crypto mining and transaction verification.
This is the kind of method that is typically viewed as a fraud scheme where money from new investors is used to pay earlier investors.
Judgment of Justice
After a nine-day trial, the jury found Kovaar guilty on a total of 15 counts, including wire fraud, mail fraud, and money laundering.
Its sentence will be announced on 30 November 2026. It faces up to 280 years in prison.
It’s also important that, in a separate case, Jaffeet Dileman, a San Francisco resident, was also convicted of fraud in a crypto trading scheme. According to authorities, in this case, about $1 million was obtained from more than 20 investors.
A big lesson for crypto investors
This case is not just about one company or one person. It’s an important lesson for anyone who wants to invest in crypto.
If any company is offering extremely high profit, fixed returns, or a guarantee to return 100% of the money without any risk, you should immediately be cautious.
In the crypto market, profits are possible, but no real investment is completely risk-free.
Before investing, be sure to check the company's background, its legal standing, its financial claims, and how it uses funds.
The most important message from this case is this: as important as technology is in crypto, it’s equally necessary to understand the people and companies behind your money.