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Israeli Man Arrested by FBI After Reportedly Swindling Chareidi Investors Out of $47 Million in Ponzi Scheme

By 03/12/2023 8:47 AMNo CommentsBy YidInfo Staff

According to federal prosecutors, the Israeli man was detained last week in Los Angeles, who are accusing him of defrauding investors—mostly chareidi Jews—of at least $47 million before fleeing the country in 2021.

Yossi Engel, 35, was charged in absentia in January with using his business, iWitness Tech, to allegedly pursue possible investors from Orthodox Jewish communities in New Jersey and Los Angeles. From 2018 and 2021, when he left for Israel, the alleged offenses reportedly occurred.

According to a statement from the US Attorney’s Office for the Central District of California, Engel temporarily returned to the Los Angeles region last month.

On Wednesday, she was detained at the Los Angeles International Airport as she attempted to depart the country.

According to the attorney’s office, he is charged with one count of wire fraud and could spend up to 20 years in prison if found guilty.

As antisemitic events increased in the US, according to the complaint submitted by the US Securities and Exchange Commission, Engel misled at least 29 investors by posing as a businessman looking for funding to buy and install security cameras in Los Angeles. Additionally, it is claimed that he defrauded investors by promising to use their money to purchase Israeli real estate, which he then promised to refurbish and resell for a profit.

In its lawsuit against Engel, the SEC said that “both of these representations were incorrect.” The Agency was requesting penalties and secret civil penalties. Engel misused the funds by using investor money for his expenses and making Ponzi-like payments to earlier investors to maintain the scheme instead of using investor money to buy cameras or develop the property.

Engel allegedly said that because he was from Israel, he did not have enough credit in the United States when investors questioned him about why he couldn’t get bank loans for iWitness at a cheaper interest rate. However, this assertion was also untrue because Engel’s enterprises were fictitious, so he could not secure bank financing.

According to the accusation, he utilized the funds to support an opulent lifestyle, spending $56,880 at casinos and taking at least two private jet flights.

Additionally, he withdrew over $861,000 in cash and sent more than $2.5 million to currency changers in Israel.

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

According to the indictment, he, over time, gained a reputation as a severe Torah scholar and a kind philanthropist and even opened a tiny synagogue next to his place of business.

Due to this, Engel was able to “engage in a fraudulent securities offering scheme” by taking advantage of the goodwill he had built up through his volunteer work, according to the indictment.

Engel ran out of money before the end of 2020 because he couldn’t attract enough new investors to pay his bills. He escaped to Israel after realizing that his plan was about to fail, according to the accusation.

He sent many emails to investors while he was in Israel, apologizing for wrecking their life and attributing his actions to “illness” as the cause.

He briefly went to the US after that, when he met with some of the investors who had been duped, admitted to conducting a Ponzi scheme, and pledged to restore the money that had been taken.

But in March 2021, he escaped to Israel once more, where he had reportedly been residing until the trip where he was apprehended.


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bobby bracros

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