Jury Convicts Las Vegas Business Owner of Cryptocurrency Ponzi Scheme

[zasad@]

Defendant Fraudulently Obtained $24 million From At Least 400 Investors
LAS VEGAS – A federal jury today convicted a Las Vegas business owner of fraudulently obtaining $24 million.
https://www.justice.gov/usao-nv/pr/jury-convicts-las-vegas-business-owner-cryptocurrency-ponzi-scheme
“Financial fraud undermines the foundational trust of our economic system,” said First Assistant U.S. Attorney Sigal Chattah for the District of Nevada. “This verdict demonstrates our absolute commitment to aggressively pursuing bad actors who manipulate records to steal millions and ensuring they face full accountability in a court of law.”

“Today’s verdict reflects the seriousness of Brent Kovar’s scheme and the impact it had on hundreds of investors,” said IRS Criminal Investigation’s San Francisco Field Office Acting Special Agent in Charge David Lowe. “Criminals who build operations on false guarantees, fabricated profits and nonexistent reserves, erode trust in our financial system, and leave victims facing real financial harm. IRS-CI special agents and professional staff are well suited and will continue to follow the money and hold accountable those who exploit emerging technologies to commit fraud.”

“The victims in this case thought they were engaged in revolutionary technological advancement, but it was merely a deception crafted by the falsehoods and trickery of Mr. Kovar,” said Special Agent in Charge Christopher S. Delzotto for the FBI Las Vegas Field Office. “The FBI, along with its partners, remain dedicated to thoroughly investigating and holding accountable those who misuse their authority; however, this effort cannot be achieved alone. If you believe you have information related to fraud or know someone who may be a victim, please submit a complaint to the FBI’s Internet Crime Complaint Center at ic3.gov.”

“Mr. Kovar defrauded investors to enrich himself, luring victims with false claims that his investment was insured by the FDIC,” said Special Agent in Charge Ryan Korner with the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG). “We will work tirelessly alongside our law enforcement partners to protect financial consumers and the Nation’s financial system, while ensuring fraudsters are caught and held accountable.”

[Z-tight]

I hope the authorities were able to confiscate and recover funds + physical assets from the scammer, so the victims can recover even a tiny part of their losses. Though with over 400 victims and up to $24m obtained, i doubt the victims would be get anything back, the government would simply take whatever is recovered, rather than going through any rigorous process of reimbursements.

Investment scam is so popular, some people do not even verify the company behind it, to understand where the supposed profit comes from. Just give them an attractive APR and promise they'd still get 100% of their principal, and watch as people hand over their money to scammers.

[MarryWithBTC]

If all ponzi schemes are brought to book just as it happened in this instance, crime would definitely reduce in the crypto space. These guys have done so bad in the industry and went away with it. It is good that they convicted.

I trust the judge will order that they should adequately compensate everyone who lost money because of them. I wish to read similar news in this board.

[Z-tight]

If all ponzi schemes are brought to book just as it happened in this instance, crime would definitely reduce in the crypto space.

This particular scam went on for over 4 years, from 2017-2021, and there are countless other similar scams still operating out there. It is not as easy as you think to reduce this kind of crime.

In this case, it took over 400 victims and $24m in losses for the authorities to crack down on this. So, in most occasions it takes a lot of complaints and huge money involved, before the authorities would go all-out to look for perpetrators of these ponzi scams.

[MarryWithBTC]

If all ponzi schemes are brought to book just as it happened in this instance, crime would definitely reduce in the crypto space.

This particular scam went on for over 4 years, from 2017-2021, and there are countless other similar scams still operating out there. It is not as easy as you think to reduce this kind of crime.

That is true, even with increased regulations, ponzi scheme is still in existence. I would even say it has reduced compared to 2017 - 2021 above. It was on rampage then. I don't know if it actually reduced or the became wise.

In this case, it took over 400 victims and $24m in losses for the authorities to crack down on this. So, in most occasions it takes a lot of complaints and huge money involved, before the authorities would go all-out to look for perpetrators of these ponzi scams.

This is a good observation, some ponzi scheme lasts longer by applying the selective scamming strategy. While some cry, some benefit, but when they become too greedy, they are about to be caught.

[hugeblack]

I can't believe that 400 investors believed the claims that their deposits were FDIC OIG-insured, and not one of them even visited the company's website or checked the link.

We're talking about an average investment of $60,000 per investor, which is no small amount.

[zasad@]

I can't believe that 400 investors believed the claims that their deposits were FDIC OIG-insured, and not one of them even visited the company's website or checked the link.

We're talking about an average investment of $60,000 per investor, which is no small amount.

In a gentleman's club it is customary to take someone's word for it

[Z-tight]

We're talking about an average investment of $60,000 per investor, which is no small amount.

It's crazy when you think about it. Many times people who have a lot of money to invest can be very gullible and cannot spend time to research a legitimate investment to put their money into. The APR the scammer used is not as high as other similar schemes i have seen, in this case it is 15%-30% APR. Many times, crazy investment scammers can even offer as high as a fixed 30% monthly return.