US Indicts Crypto Investor Over Alleged $20 Million Fraud Scheme

From late 2017 through July 2021, Las Vegas-based Profit Connect told investors that artificial intelligence software running on a supercomputer mined cryptocurrency and verified crypto transactions. Owner Brent C. Kovar promised fixed annual returns of 15% to 30%, a 100% money-back guarantee and backing from hundreds of millions of dollars in crypto reserves. Prosecutors said the company was not profitable and had no such reserves, making the pitch a technology-themed version of a traditional Ponzi scheme.

A federal jury convicted Kovar on Aug. 24, 2026, after a nine-day trial, finding him guilty of 11 wire-fraud counts, two mail-fraud counts and two money-laundering counts, the U.S. Justice Department said. He obtained $24 million from at least 400 investors and used the money to operate Profit Connect, buy employee gifts and a house, and make purported investment payouts. Sentencing is scheduled for Nov. 30, when he faces a combined statutory maximum of 280 years, though the judge will determine the actual term.

Florida-based Goliath Ventures and its founder and chief executive, Christopher A. Delgado, marketed investments in purported crypto asset liquidity pools from January 2023 through January 2026. Investors were promised monthly returns of 3% to 10% and repayment of principal. Regulators allege no customer money or crypto assets reached those pools; instead, funds from new and existing investors were used to pay earlier participants, making the case a major test of U.S. enforcement against crypto-linked investment fraud.

On August 11, 2026, the CFTC and SEC filed separate civil actions in the U.S. District Court for the Middle District of Florida. The CFTC said about 1,600 customers contributed at least $397 million and alleged Delgado diverted at least $48 million, while the SEC counted more than 1,300 investors, at least $425 million raised and at least $51 million used personally. Delgado pleaded guilty to federal criminal charges in June and is awaiting sentencing; regulators are seeking restitution, disgorgement, penalties and permanent market bans.

Cryptocurrency investment and romance scams typically use fake trading platforms, fabricated relationships or bogus recovery services to win victims’ trust, then route proceeds through layers of digital wallets. The five cases span victims in the United States and Canada and alleged laundering networks centered in Southeast Asia. They underscore both the cross-border reach of crypto-enabled fraud and authorities’ ability to trace blockchain transactions and freeze assets through civil forfeiture proceedings.

On July 21, 2026, the U.S. Attorney’s Office for the District of Columbia and the U.S. Secret Service’s Washington Field Office filed five civil forfeiture complaints seeking more than $25 million in seized cryptocurrency. The two largest claims cover about $12.09 million linked to romance scams affecting more than 200 victims and $10.40 million traced to more than 270 suspected victim transactions. Three other complaints seek about $2.39 million, $1.23 million and $285,000. The investigations remain open, and the recoveries lifted the Scam Center Strike Force’s total above $800 million.

Crypto mining investments are exposed to volatile token prices, power costs and rising network difficulty, making claims of guaranteed returns a regulatory red flag. The U.S. Securities and Exchange Commission says Mining Automatic, operated through Bright Vision Distribution LLC, presented itself as an experienced mining business able to produce steady monthly payouts. The case is significant because it highlights how technically complex crypto ventures can be used to market investment contracts while obscuring whether investor capital is actually funding revenue-generating operations.

On July 20, 2026, the SEC filed partially settled charges against Mining Automatic and founder Zan Shaikh in federal court in Massachusetts. The agency alleges they raised about $22 million from more than 380 investors between June 2023 and May 2025, while using only about 13% of the money for purported mining expenses. The operation generated roughly $1.1 million in mining revenue but paid about $1.8 million in investor returns, meaning some payouts allegedly came from other investors’ funds. The SEC says at least $20 million more was collected than repaid; the defendants consented to permanent injunctions, with financial remedies to be decided by the court.

The U.S. Commodity Futures Trading Commission regulates derivatives markets and can take action against commodities fraud involving crypto assets. The case centers on an unregistered pool, false profit claims and Ponzi-like fund flows, underscoring that digital-asset investments remain subject to established antifraud rules.

On July 7, 2026, the CFTC sued North Carolina resident Trevor L. Vernon and Argent Capital Management LLC, alleging that they raised more than $14 million from at least 60 people between March 2022 and February 2026. Despite persistent losses, they allegedly concealed the shortfalls with false performance figures and money from new investors.

Goliath Ventures, formerly known as Gen-Z Venture Firm, solicited funds from January 2023 to January 2026 by claiming to invest in cryptocurrency liquidity pools and promising fixed or low-risk monthly returns of 3% to 8%. In fact, only about $1.5 million flowed into Uniswap, while most of the money was used to pay earlier investors, fund withdrawals and cover lavish spending.

Christopher Alexander Delgado, 34, was arrested on February 24, 2026, when the scheme was valued at at least $328 million. He pleaded guilty on June 30 to conspiracy to commit wire fraud, wire fraud and money laundering. Prosecutors now say the operation raised at least $400 million and caused losses of at least $250 million. Sentencing is scheduled for October 8.