A former resident of the Fairfax district has agreed to plead guilty to a federal charge 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, according to court papers obtained Monday.
Yossi Engel, 35, who moved to Israel in March 2021 but temporarily returned to the Los Angeles area last year, will enter his plea to one federal count of wire fraud on a date to be scheduled, according to the U.S. Attorney’s Office.
He was arrested two months ago at Los Angeles International Airport as he was attempting to leave the country.
Engel allegedly 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, federal prosecutors said.
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, according to his plea agreement filed last week in Los Angeles federal court.
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, prosecutors said.
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 the real estate ventures in the city, court papers show.
Engel allegedly used fraudulent Israel land documents to dupe victims into thinking he owned the properties. Through the 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, federal prosecutors said.
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, his plea agreement states.
But, prosecutors allege, 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 left the United States for Israel.
According to the FBI, it has identified losses of about $5 million.
Once he formally pleads guilty, 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 the fraud scheme.