Sassi Mizrahi and his brother, co-defendant Motty Mizrahi, were sentenced to over seven years in federal prison after scamming more than 40 people, including the San Fernando Valley's orthodox Jewish Israeli community, out of a $7 Million investment.
Sassi and his brother ran an investment and money management firm called MBIG Company from 2012 to 2019, which promised risk-free investments and an annual return rate of 30% to double the original investment.
Mizrahi Brothers' Sentence to Over 7 Years
A view of the entrance to Allan B. Polunsky, where Texas' death row for men is housed, in Livingston, Texas, on May 25, 2022. - Hank Skinner, who has been on death row in Texas for nearly three decades, says he still remains hopeful. "I am optimistic I won't end up here. I should have never been here to start with. And it's been a long journey," he told AFP during an interview.
Motty labeled himself a licensed broker, certified accountant, and veteran trader to add legitimacy to MBIG. However, according to the court documents, the Mizrahi brothers never used their client's invested money. Instead, Motty put the funds into his personal trading accounts at E*TRADE and TD Ameritrade.
The brothers also took more than $3m in losses from the trading and submitted false reports that presented fake monthly gains in the MBIG account totaling between $6m and $9m.
The prosecutors claimed in a sentencing memorandum, "For years ... Sassi Mizrahi and his brother, co-defendant Motty Mizrahi ... operated a Ponzi scheme that targeted victims they knew had reason to trust them: fellow members of the close-knit, Orthodox Jewish Israeli community of the San Fernando Valley."
They added that when the victims asked for their money back, Sassi told them lies about the safety of their investments, made promises of repayment, and showed forged documents to corroborate his continuous excuses for why the money was unavailable.
They added that the brothers exploited the goodwill engendered by such affinity and scammed millions of dollars from their victims with false promises of risk-free investments and secured returns.
The brothers were first arrested in 2019, and Motty pleaded guilty to six counts of wire fraud at the beginning of 2023. Furthermore, Sassi also went to trial and was found guilty of five counts of wire fraud.
Sassi's attorneys requested a lenient sentence and explained that Sassi was minimally involved in his Motty's scheme. The sentencing memorandum also noted that family members needed Sassi more than Motty.
After a decade in federal prison, a judge required Sassi to pay back almost $4.5m in restitution to victims. While Motty was scheduled to be sentenced on December 18.
Most Notorious Ponzi Schemes in History
In the 1990s, Gerald Payne and leadership at his Greater Ministries International Church scammed nearly 20,000 investors into handing over millions in a program that claimed that investing could double your blessings.
Scott Rothstein convinced his investors to buy into bogus legal settlements and used his Fort Lauderdale law firm to run a $1.2 billion Ponzi scheme in 2010.
Ian Bick, an East Coast businessman, attracted more than two dozen investors with promises of lucrative profits but was using the invested money to pay back previous ones. Bick was convicted of defrauding his business investors of nearly $500,000 in 2013.
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