- Profit Connect Wealth Services, a crypto scam that claimed it used a supercomputer to beat the market, has been halted by the SEC
- Profit Connect Wealth Services allegedly took some $12 million from investors and never traded a cent
- The operation was run by mother and son Joy and Brent Kovar
A Las Vegas-based cryptocurrency scam involving a supercomputer that supposedly generated guaranteed returns has been hit with an emergency freeze by the Securities and Exchange Commission (SEC). Profit Connect Wealth Services, which is operated by Joy Kovar and her son, Brent, has raised more than $12 million from at least 277 investors according to the SEC, but has misappropriated much of the cash. As a result the SEC has successfully obtained a temporary restraining order and had the pair’s assets frozen.
Profit Connect Wealth Services Promised Guaranteed Results
Profit Connect Wealth Services, which has no license to run a financial operation, opened up shop in early 2018 offering no-lose securities and cryptocurrencies trading. Investors were guaranteed fixed returns of 20-30 percent per year with monthly compounding interest, with trades placed through a supercomputer that could, it was alleged, beat the market no matter the conditions. This is one of the key red flags for a cryptocurrency investment scam.
Profit Connect Wealth Services raised almost $12 million through the scheme, but rather than putting the money into the mystical supercomputer they instead misappropriated the funds by, among other things, transferring millions Joy Kovar’s personal bank account, paying promoters, and investing into what the SEC calls “Ponzi-like payments to other investors”. The SEC also alleges that Profit Connect Wealth Services actively targets retirees and those looking to build educational nest eggs for investment.
Decision to be Made Next Week
Profit Connect Wealth Services’ assets were frozen and a temporary restraining order placed on the Kovars on July 14, with a hearing on July 26 set to consider next steps. The SEC is seeking permanent injunctions, disgorgement, prejudgment interest, and civil penalties for the Kovars. Meanwhile, the Profit Connect Wealth Services website is still functional and investment still seems possible.