An Israeli man charged by US authorities with defrauding investors, primarily Orthodox Jews, of at least $47 million before fleeing the country in 2021 was arrested this week in Los Angeles, federal prosecutors announced Friday.
Yossi Engel, 35, was indicted in January in absentia for allegedly using his company iWitness Tech to target potential investors from Orthodox Jewish communities in Los Angeles and New Jersey. The alleged offenses occurred between 2018 and 2021, when he fled to Israel.
In a statement, the US Attorney’s Office for the Central District of California said Engel temporarily returned to the Los Angeles area last month and was arrested Wednesday at Los Angeles International Airport while trying to leave the US.
The attorney’s office said he faces one count of wire fraud and if convicted would face up to 20 years in prison.
According to the indictment filed by the US Securities and Exchange Commission, Engel defrauded investors by presenting himself as a businessman seeking capital to purchase and install security cameras in Los Angeles as antisemitic incidents climbed in the US. He also allegedly bilked investors by telling them he would use their funds to purchase property in Israel, which he promised to then renovate and sell for profit.
The indictment says he used the money to fund a lavish lifestyle, spending $56,880 at casinos and flying on private jets at least twice. He also wired more than $2.5 million to currency exchangers in Israel and withdrew over $861,000 in cash.
A member of an Orthodox synagogue in Los Angeles, Engel met his victims at the synagogue or through introductions from other members of the community.
The indictment said he gradually developed a reputation as a serious Torah scholar and a generous donor and even opened a small synagogue adjacent to his business.
This allowed Engel to exploit “the goodwill he engendered through his community activities to engage in a fraudulent securities offering scheme,” the indictment said.
Toward the end of 2020, Engel was unable to find enough new investors to cover his expenses and began to run short on cash. Realizing that his scheme was about to collapse, he fled to Israel, the indictment said.
During his time in Israel, he apologized to investors in a number of emails for ruining their lives and blamed “sickness” for his actions. He then returned to the US for a short period, during which he met with some of the defrauded investors, confessed to running a Ponzi scheme and promised to pay back the stolen money.
However, he then fled to Israel again in March 2021, where he had apparently been living prior to the trip during which he was arrested.