SEC Halts Company “Profit Connect” That Raised $12M for Fake AI-based Crypto Trading

Profit Connect Wealth Services Inc., a Las Vegas-based company that claims to deal with AI supercomputers, blockchain, stock, and forex trading, is currently facing charges by the United States Securities and Exchange Commission (SEC).

The SEC recently filed an emergency action in U.S. District Court for the District of Nevada and obtained a temporary restraining order and asset freeze to stop the alleged ongoing offering fraud, Profit Connect, masterminded by Joy I. Kovar and her son, Brent Kovar, who is known to be a repeat offender.

The offering, Profit Connect, has allegedly raised more than $12 million from at least 277 retail investors. Through its supposed “supercomputer,” the offering claims to regularly generate fixed returns of up to 20-30 percent per annum, with monthly compounding interest for investors.

However, according to the SEC’s complaint, a huge cut of Profit Connect’s funds came from investors and in contrast to the promise made to the investors, the funds they provided were not used to trade securities or cryptocurrencies.

The SEC complaints further claimed that the funds provided by investors were misused, some of the money, worth millions of dollars, were transferred to Joy Kovar’s personal bank account, some used for promotion and others for making Ponzi-like payments to other investors.  

Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office, said in today’s announcement:

[Profit Connect] targeted investors who were looking for safe products for their retirements and their children’s educations, offering a money-back guarantee on top of the phenomenal results they promised to achieve using a purported “supercomputer”… Investors should be wary of individuals and firms who guarantee double-digit returns with no risk of loss.” 

A hearing for the alleged fraud case between the SEC and Profit Connect is scheduled for July 26, 2021, where decisions will be taken on “whether to continue the asset freeze, issue a preliminary injunction, order an accounting, and appoint a receiver over Profit Connect.”

In a similar fraud case development, almost 200 Android apps, including 26 on the Google Play Store, accepted funds from customers worth over $350,000, claiming to offer cloud cryptocurrency mining services to interested people for a fee but failed to do so.

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