Ex-LA Resident Arrested in Fraud Scheme Targeting Orthodox Jewish Community

Fraud Investigation, Detective Files

Photo: Getty Images

LOS ANGELES (CNS) - A former resident of the Fairfax district has been arrested on a federal criminal complaint alleging he defrauded investors, primarily members of the Orthodox Jewish community, by luring them into investing millions of dollars in his security camera business and purported real estate ventures in Israel, officials announced Friday.

Yossi Engel, 35, who moved to Israel in March 2021 but temporarily returned to the Los Angeles area last month, is charged with one count of wire fraud, according to the U.S. Attorney's Office.

Engel was arrested Wednesday night at Los Angeles International Airport as he was attempting to leave the country. He is expected to make his initial federal court appearance Friday.

According to an affidavit filed with the complaint, Engel orchestrated a scheme in which he made false representations and used forged documents to induce victims to make investments in and provide loans for iWitness Tech Inc., a Hancock Park-based security camera company and for properties Engel falsely claimed to own and be developing in Israel.

From September 2018 to January 2021, Engel allegedly used his community relationships to defraud victims, who primarily came from the Orthodox Jewish communities in the Los Angeles and New York areas. Engel allegedly claimed to need money in the form of short-term loans with high rates of return for iWitness' business operations, namely the purported purchase and installation of security cameras for its customers.

Engel told victims that iWitness was a large business with many clients, but in fact it did not have as much business as he claimed, and work was so slack that at times iWitness employees sat around waiting for work while Engel slept on a couch, the affidavit states.

In another part of the scheme, Engel allegedly also falsely claimed to own and be developing real estate in Israel, telling victims that he needed money for redevelopment work, and falsely promising he would sell the properties and share the profits with investors.

Engel showed victims a video depicting himself socializing with the mayor of Bnei Brak, Israel, and claimed to have met with the mayor concerning Engel's purported real estate deals in the city, the affidavit states. But Engel did not have a close relationship with the mayor, and he did not discuss with the mayor these real estate ventures in the city, according to the affidavit.

Engel allegedly used fraudulent Israel land documents to dupe victims into thinking he owned these properties. Through these fake documents and his own trusted position in the Orthodox Jewish community, Engel allegedly lulled existing victims and encouraged new victims to send him money, court papers show.

Engel lied to investors that he needed private investments for both iWitness and the Israeli real estate projects because he was from Israel and did not have sufficient credit in the United States to obtain the lower interest rates available through U.S. banks, the affidavit states.

But, the affidavit alleges, Engel did not use the victims' money as promised, and instead used it for his personal expenses -- including trips via private jets and casino visits -- and to make Ponzi payments to investors to perpetuate the scheme.

Once the alleged scheme fell apart in early 2021, Engel fled the United States for Israel.

At this time, the FBI has identified losses of about $5 million.

If convicted, Engel would face up to 20 years in federal prison.

In January, the U.S. Securities and Exchange Commission sued Engel, alleging he used his ties in the Orthodox Jewish community to perpetuate a multimillion-dollar million affinity fraud.

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