Sunday, March 12, 2023

FBI Arrests Yossi Engel For Allegedly Defrauding Chareidi Investors Of $47M In Ponzi Scheme


An Israeli man charged by US authorities with defrauding investors, mainly chareidi Jews, of at least $47 million before fleeing the country in 2021 was arrested this week in Los Angeles, federal prosecutors announced Friday.

35-year-old Yossi Engel was indicted in January in absentia for allegedly using his company iWitness Tech to target potential investors from Orthodox Jewish communities in Los Angeles and New Jersey. The alleged offenses occurred between 2018 and 2021, when he fled to Israel.

In a statement, the US Attorney’s Office for the Central District of California said Engel temporarily returned to the Los Angeles area last month and was arrested Wednesday at Los Angeles International Airport while trying to leave the US.

The attorney’s office said he faces one count of wire fraud and if convicted would face up to 20 years in prison.

According to the indictment filed by the US Securities and Exchange Commission, Engel defrauded at least 29 investors by presenting himself as a businessman seeking capital to purchase and install security cameras in Los Angeles as antisemitic incidents climbed in the US. He also allegedly bilked investors by telling them he would use their funds to purchase property in Israel, which he promised to then renovate and sell for profit.

“Both of these claims were false,” the SEC said in the suit seeking sanctions and undisclosed civil penalties against Engel. “Rather than use investor money to purchase cameras or develop property, Engel misappropriated the funds by spending investor money for his personal benefit and making Ponzi-like payments to earlier investors in an attempt to keep the scheme going.”

When investors asked Engel why he didn’t obtain bank loans for iWitness at a lower interest rate, he allegedly replied that because he was from Israel, he did not have sufficient credit in the United States. However this claim was also false, as the reason Engel could not obtain bank financing was because his businesses were not real.

The indictment claimed that he used the money to fund a lavish lifestyle, spending $56,880 at casinos and flying on private jets at least twice. He also wired more than $2.5 million to currency exchangers in Israel and withdrew over $861,000 in cash.

A member of an Orthodox synagogue in Los Angeles, Engel met his victims at the synagogue or through introductions from other members of the community.

The indictment said he gradually developed a reputation as a serious Torah scholar and a generous donor and even opened a small synagogue adjacent to his business.

This allowed Engel to exploit “the goodwill he engendered through his community activities to engage in a fraudulent securities offering scheme,” the indictment said.

Toward the end of 2020, Engel was unable to find enough new investors to cover his expenses and began to run short on cash. Realizing that his scheme was about to collapse, he fled to Israel, the indictment said.

During his time in Israel, he apologized to investors in a number of emails for ruining their lives and blamed “sickness” for his actions. He then returned to the US for a short period, during which he met with some of the defrauded investors, confessed to running a Ponzi scheme and promised to pay back the stolen money.

However, he then fled to Israel again in March 2021, where he had apparently been living prior to the trip during which he was arrested.


Anonymous said...

Are you investing in real estate in Lakewood and getting no legal paperwork that can be presented in court? How stupid can you be? Just because he is a serious learner , you trust him?

Anonymous said...

He'll be able to learn 3 cycles of the Daf in peace and quite.

David Schick said...

The question is can this guy SING?

Frankels Shul Felon said...

Well, Otisville prison, snif Vayelepol, doubles as snif of SING SING prison

Anonymous said...

I read about this guy some time ago. And the story was he stole 22m it doubled or we just got more info now?

Anonymous said...

March 12, 2023 at 2:12 PM

He'll finish Shas a few times and you'll keep on free fressing in your yetzer horah prison.