Profit Connect claimed to have “proprietary Ai and Machine Learning Algorithms” as part of their Ponzi scheme hoax.
Nothing like that existed.
Profit Connect also told investors that the company mined cryptocurrencies. Profit Connect stated as part of its efforts that it had “been mining for years and were quite successful.”
Profit Connect just began mining around June 2021, around a week before the SEC shut it down.
According to the Profit Connect Receiver’s November 1st First Interim Report;
Profit Connect only produced around $300 from mining operations up until the commencement of the permanent receivership, which lasted about three weeks before accounting for the cost of computers, labor, or power.
After accounting for the liabilities, the Receiver determined;
My team of computer specialists and in-house IT professionals were unable to build a proof-of-concept model capable of cooling the mining machines in such a way as to give a competitive edge, and the cryptocurrency mining firm was finally pronounced non-viable.
Brent Kovar once claimed that Profit Connect will join him as part of his marketing activities.
by putting cylinders in their pools with casinos These cylinders would hold the Supercomputer rigs, which would simultaneously heat the pool and mine cryptocurrencies.
Kovar’s other strategy was to dangle
Because Lake Mohave is deep and chilly, cylinders containing supercomputers were placed from houseboats.
Neither proposal came to fruition.
The Receiver’s report also verifies Eddie Kona’s death before the SEC’s litigation.
Brent Kovar has cited the late Eddie Kona (also known as Donald Edward Sabisch) and Eric Garrison as founders and, in the case of Eddie Kona, employees of Profit Connect.
Despite being the face of Profit Connect, ‘Brent Kovar was completely in charge of handling Profit Connect’s day-to-day operations.’
The Receiver reached this conclusion after reviewing Profit Connect’s business operations and interviewing the company’s twenty-one workers.
Because there was no sustainable business to continue functioning, the Receiver fired the staff and shuttered the offices, only keeping a handful on a contract basis to help with the wind-down of activities.
The Profit Connect Receiver has recovered $8.6 million so far, including frozen bitcoin.
Brent Kovar (right), according to Profit Connect’s accounting, loved to surround himself with unqualified ladies and pamper them with presents.
The Temporary Receiver assigned three Profit Connect employees the responsibility of overseeing Profit Connect’s financial and human operations: SW, a former pharmacy technician employed as the accounting manager, and, as she has indicated, Brent Kovar’s long-term lover, RU, a former pharmacy technician hired as an accountant, and JM, with no prior employment experience, hired as the warehouse’s junior accountant and receptionist.
These three women received other substantial assets paid for by Profit Connect in addition to being relatively overcompensated via payroll for their responsibilities as described below, including a fully-paid-for home totaling $387,786.94, a Dodge Ram 1500 truck costing $49,320.35, a 2021 Model Y Tesla lease costing $18,513.16, plastic surgery costing $21,461.24, and profits from the Wealth Services programs totaling at least $114,100.
The accounting staff was overcompensated for their skills and experience, the accounting staff received lavish non-cash gifts for their efforts, the accounting staff unquestionably followed Brent Kovar’s every request, and there were unusual and inappropriate relationships with the accounting staff.
Accounting was almost non-existent, as is common with MLM Ponzi scams.
During the Receiver’s interviews with Brent Kovar and the accounting staff, it was discovered that no record-keeping was being done for Profit Connect’s cash inflows or withdrawals.
The firm has no inventory of the items acquired using Profit Connect funding.
Profit Connect has never filed taxes or done any of the essential accounting.
No accounting staff members were competent to perform professional business accounting duties.
A complete list of Profit Connect victims is unlikely to be made public.
because of concern for their privacy and to keep them from being targeted for bogus investment schemes by third parties who may want to take advantage of them
To comply with procedural requirements, a list with only a first initial and last name will be generated.
Following the SEC’s Profit Connect case, opportunistic affiliates have pursued their legal action.
Jeffrey Nicholas filed a complaint against Troy Sutton on September 30, 2021, stating that Mr. Sutton, as a Profit Connect representative, negligently persuaded Mr. Nicholas and others to make Profit Connect investments.
The Receiver described Nicholas’ complaint in a separate November 8th filing demanding that the Texas case be halted and fines issued for breaking the injunction order.
Nothing more than the investor’s attempt to outrun the Receiver to the courts to recover bogus earnings and funds belonging to the receivership estate before the Receiver.
The Receiver then states that he wants to launch clawback proceedings against Profit Connect’s net winners.
The Receiver discovered several fraudulent transfers from Profit Connect to various people and businesses throughout his inquiry.
The Receiver discovered about 150 sales agents who received commission payments from Profit Connect ranging from $29 to $847,903 as a consequence of his assessment of Profit Connect’s books and records.
The Receiver plans to claw back and reverse such transactions, as well as to file litigation against the fraudulent transferees if warranted.
The Receiver wants to submit demand letters first and will only file a lawsuit if the problem cannot be settled amicably.
The Receiver wants to launch a lawsuit against a person that received at least $370,000 in illicit transactions shortly.
These monies are presently at issue in ongoing divorce proceedings, in which the Receiver plans to intervene to assert an interest and prevent Profit Connect assets from being dissipated.
Stay tuned as we keep an eye on the case docket.