(HedgeCo.Net) The Securities and Exchange Commission has announced that it has filed charges against Yossi Engel for perpetrating a $47 million affinity fraud from December 2018 to January 2020, targeting at least 29 members of the Orthodox Jewish community. The SEC’s complaint alleges that Engel, through his company, iWitness Tech, LLC, initially induced members of the Orthodox community to invest by falsely telling them that he would use their funds to purchase and install security camera equipment. In the second iteration of his scheme, Engel allegedly promised to use investor funds to purchase a property in Israel that he would then develop and sell. As alleged, both of these claims were false: 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.
The SEC’s complaint, filed in federal district court in Los Angeles, California, charges Engel with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks a permanent injunction, disgorgement with prejudgment interest, and a civil penalty.