Yossi Engel, a man who allegedly lured investors from L.A. to put money into real estate developments in Israel that did not exist, has been arrested on a fraud charge.
Engel, 35, has been charged with one count of wire fraud, for allegedly duping investors in both L.A. and New York and faking land documents to convince potential investors that he owned property in Israel, according to a release from the U.S. Department of Justice on Friday. He was arrested at Los Angeles International Airport, allegedly trying to leave the country on a one-way ticket.
Most of Engel’s victims were members of Orthodox Jewish communities, the Justice Department said.
From September 2018 to January 2021, Engel allegedly offered investors the opportunity to invest in and loan to iWitness Tech, his Hancock Park-based security camera firm, which he said owned property in Israel. However, federal authorities said the land documents Engel provided to prove ownership were fake.
He offered to pay between 10 and 60 percent annualized interest on the deals, according to the federal complaint. To potential investors, Engel claimed he did not have sufficient credit in the U.S. to obtain loans with lower interest rates from U.S. financial institutions.
Engel sent at least $4 million back to companies and people in Israel who were not affiliated with any real estate developments, according to the FBI. At least $5 million has already been lost, the agency said.
“Engel did not use the victims’ money as promised, and instead used it for his personal expenses,” the Justice Department said in its release.
If convicted of the federal allegations, Engel faces a maximum of 20 years in prison.
In January, the Securities & Exchange Commission filed a lawsuit against Engel, alleging he raised $47 million through the fraudulent scheme from at least 29 members of the Orthodox Jewish community. In its case, the SEC is seeking a civil penalty and an order that Engel repay any ill-gotten gains.
“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 alleged in a release.