86 years old Joy Kovar and her 54 years old son Brent Kovar are facing Ponzi scheme charges by the SEC. The mother-son duo was running a crypto mining-related scam in Las Vegas since 2018. The name of the company they were operating is known as Profit Connect Wealth Services. As per the criminal filing, the SEC prosecution claims that they have doped more than 277 investors.
The scammers told their victims that they were making money from forex, securities, and crypto markets. They also claimed that the crypto mining venture was a way to diversify the income stream of their organization. The main sale pitch of their scam contained the use of a supercomputer that is dedicated to crypto mining service solutions.
Crypto Mining Scammers Transferred all their Money into their Bank Accounts
The cryptocurrency scammers used to trick their potential victims by telling them about an elaborate mining service. They showed several of their victims a mining card and claimed that it was the main focus of their company. He told the investors that his company was using AI programming to decode these cards where all the transactions take place.
SEC investigators found that the scammers send all the money to the personal bank accounts of Joy Kovar. The investigation also reveals that the scammers were able to rake in $12 million, which they used at their leisure. SEC claims that more than 89% of their revenue was dependent on the money of the new buyers. For now, the Profit Connect Wealth Services has been sealed by the federal regulator.
One of the biggest red flags of a scam is that the threat actors promise their victims a massive return. This is a type of psychological manipulation technique to lure in more prey with greed. Kovas purportedly also promised their victims a high return for their investment. They convinced investors that with the help of supercomputers and AI, it is possible to generate as high as 20%-30% return.
SEC investigators also found many Ponzi-related payments to certain investors. A Ponzi scheme is a way of generating income without offering any real product or services. The people who introduce more victims to the scheme are incentivized by getting commissions. The regulatory agency unveiled that Brent Kovar bought a house with the money, and Joy Kovar opened as many as eight accounts in 3 different banks.