Yossi Engel, who spent $56,880 at casinos and flew on private jets, fled to Israel after admitting his fraud to investors, the agency says.
A 35-year-old man who allegedly bilked Orthodox Jewish investors in Los Angeles and New Jersey out of $47 million and then fled to Israel has been charged by the U.S. Securities and Exchange Commission with using the proceeds to fund a lavish lifestyle.
“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. “Most iWitness investors did not question this flow of funds, but the ones who did were told that they needed to send money via the third party because the third party was capable of changing money in Israel at lower rates than the banks,” the suit says. “This was another falsehood.”
Beginning in December 2018, Engel allegedly represented to existing and potential investors that he needed capital to purchase cameras and other equipment for iWitness, and would pay their investment returns from installation fees. The SEC alleges Engel also created an illusion of profitability by using investor funds to pay for office rent, cars and payroll.
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