A former resident of the Fairfax district was sentenced Friday to 80 months in prison for defrauding 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.
Yossi Engel, 36, was also ordered to pay restitution of $11.75 million, according to the U.S. Attorney’s Office.
Engel pleaded guilty in May to one federal count of wire fraud, two months after he was arrested at Los Angeles International Airport as he was attempting to leave the country.
Engel lied 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 be developing in Israel.
From September 2018 to January 2021, Engel used his relationships in the community to defraud victims, who primarily came from Los Angeles and New York. Engel 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 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 iWitness employees often sat around while Engel slept on a couch, prosecutors said.
In another part of the scheme, Engel falsely claimed to be developing real estate ventures in Israel, telling victims he needed money for redevelopment work and saying he would sell the properties and share the profits.
Engel used fake land documents to dupe victims into thinking he owned the properties. Through the phony documents and his own trusted position in the community, Engel lulled existing victims and encouraged new victims to send him money.
He 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 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 scheme fell apart in early 2021, Engel left the United States for Israel.
The U.S. Securities and Exchange Commission sued Engel in January, alleging he targeted at least 29 members of the Orthodox Jewish community in the fraud scheme.