LOS ANGELES (VINnews) — The Securities and Exchange Commission (SEC) has formally charged a man who allegedly cheated over 2 dozen Orthodox Jews out of $47 million.
The SEC claimed in a lawsuit Thursday that from December 2018 to January 2021, Yossi Engel allegedly persuaded at least 29 people in New Jersey and LA to invest in his company, iWitness Tech, under false pretenses.
He allegedly told investors that the money would be used to buy and install security camera equipment, as well as purchase property in Israel to be developed and sold. However allegedly, much of what he promised never happened, and he continued to get more investments for schemes and use the new money to repay older debts.
“Both of these claims were false,” the SEC said. “Rather than use investor money to purchase cameras or develop property, [he] 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.”
According to the LA Times, he built a reputation among the frum community of Los Angeles as a trustworthy businessman.
Beginning in 2018, he allegedly asked investors for funding for cameras and other equipment, with a promise of a handsome return. Investments ranged from $50,000 to $180,000, and rates of return of 10% to 20%. However, the suit claims that there were no actual returns on investment. It says that over five years he allegedly only did projects worth $10,000 to $20,000 for only 20 to 30 customers, which did not bring in profit.
In April 2020, he allegedly told investors he had a special relationship with the mayor of Bnei Brak that enabled him to fast-track the development of real estate units that would be sold slightly below market, to turn a quick profit.
He also allegedly sent investors pictures of an apartment building in Israel, and a video of him sitting in the office with the mayor.
However, he allegedly later confessed there were no properties and the scheme was based on lies. The videos were allegedly of apartments where he had once lived, and the video of Bnei Brak’s mayor was allegedly taken when he simply stopped by the mayor’s office to say hello.
When investors asked why he didn’t obtain bank loans for at a lower rate, he allegedly replied that because he was from Israel, he had not built enough credit to qualify. “This was false, and the reason [he] could not obtain bank financing was because his businesses were not real,” claims the suit.
In December 2020, his scheme collapsed, when he was unable to solicit additional investments to cover his past obligations, and he fled to Israel.
Source: VosIzNeias
