SANTA ANA (CNS) - A Sherman Oaks man has been convicted of defrauding 40 investors out of $6 million in a business he ran with his brother out of their parents' home, federal prosecutors said Wednesday.
Sassi Mizrahi, 58, was convicted Tuesday of five counts of wire fraud, with jurors acquitting him of one wire fraud count. He was scheduled to be sentenced June 26 and faces up to 20 years for each wire fraud count.
Mizrahi's brother, 51-year-old Motty Mizrahi of Encino, pleaded guilty Jan. 6 to six counts of wire fraud and a count of aggravated identity theft. He is scheduled to be sentenced May 15.
The two ran their business, MBIG Company, out of their parents' home in Encino. They raised about $6 million from investors from June 2012 through March 2019 with guarantees of 2% to 3% returns monthly as well as annual returns on their investments from 30% to 102%, prosecutors said.
The two never invested the money under their company's name and instead Motty Mizrahi held the investments in his personal trading accounts and lost a substantial amount, prosecutors said. The losses were estimated to be at least $3.3 million.
Sassi Mizrahi took in hundreds of thousands of dollars from investors and helped cover up the scheme by producing bogus accounts for investors showing phony gains, prosecutors said.