18 Jan 2023; MEMO: An Israeli man fled to Israel in 2021 after being charged in the US for defrauding investors of a total sum of at least $47 million, reported The Times of Israel.
The indictment from earlier this month, filed by the US Securities and Exchange Commission (SEC) says Yossi Engel, 35, used his company, iWitness Tech, to draw investors from Orthodox Jewish communities in Los Angeles and New Jersey.
The investors were interested in purchasing security camera equipment and investing in real estate in Israel.
However, according to the indictment, which was filed in the federal court in California,
"Both of these claims were false".
"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," the indictment added.
He has been accused of violating several sections of the US Securities Exchange Act for which, if he is charged guilty, will be sentenced up to 10 years in prison.
Moreover, after duping the 30 investors, Engel sent more than $2.5 million to currency exchangers in Israel and withdrew $861,000 in cash. He also spent $56,880 at casinos and to fly on private jets at least twice.
It comes after Engel established a reputation in the Orthodox Jewish community as trustworthy and generous, explained the SEC, after he opened a small synagogue in a room next to his iWitness office, where he taught from the Torah.
"Engel, however, exploited the goodwill he engendered through his community activities to engage in a fraudulent securities offering scheme," says the suit.
By the end of 2020, Engel was unable to find enough new investors to cover his expenses and fled to Israel, realising that his scheme was about to collapse.
While in Israel, he emailed the investors to apologise for ruining their lives and blamed "sickness" for his crimes and returned to the US temporarily to meet the investors and confess to operating a Ponzi scheme, to which he promised he would pay back the stolen money.
However, he once again fled the US in March 2021, and appears to still remain in Israel, according to The Times of Israel.
