The US government continues to drag its feet on any meaningful cryptocurrency regulations, even as the industry remains overrun by fraud, theft, and money laundering schemes. The digital tokens are being used for human trafficking, extortion, and for-hire harassment.
The extent of some of these crimes is astonishing. Look no further than Nevada, where the state’s US Attorney’s Office alleged this week that Las Vegas native crypto bro Brent Kovar had fraudulently obtained $24 million from his victims through an extensive Ponzi scheme.
He now faces a maximum penalty of 280 years — quite a few lifetimes — in prison. He’s being charged with 11 counts of wire fraud, two counts of mail fraud, and two counts of money laundering.
Kovar promised his victims a fixed return rate that paid out anywhere from 15 to 30 percent annually — a literally too-good-to-be-true return on their investments — with a 100 percent money-back guarantee. But as in any Ponzi scheme, the money being paid out came from further investors, who dug deep into their pockets to buy into the ruse.
In all, Kovar allegedly managed to convince 400 investors that his fraudulent scheme — a company that “purportedly used artificial intelligence software on a supercomputer to mine cryptocurrency and verify other cryptocurrency transactions,” per the attorney’s office — was worth hundreds of millions of dollars. In reality, Kovar wasn’t even able to pay his victims back their interest earnings, let alone honor his money-back guarantee.
“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 Las Vegas FBI special agent Christopher Delzotto in a statement.
While Kovar allegedly broke the law in a startling number of ways, his promises of an AI-fueled technological revolution sure sound familiar, considering the astronomical amounts of money industry-leading tech firms are raising these days.
More on crypto crimes: Colorado Has a Massive Home-Grown Crypto Crime Problem
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