‘Smart ring’ CEO convicted of $2m Ponzi scheme that funded luxury lifestyle

‘Smart ring’ CEO convicted of $2m Ponzi scheme that funded luxury lifestyle Michelle Bisnoff was found guilty on multiple fraud charges following a trial based on a 22-count indictment - Bookmark Become an Independent member to bookmark this article Already a member? Log in A federal jury in Santa Ana convicted the chief executive of a financial transaction "smart ring" enterprise on Thursday for her role in an extensive fraud and Ponzi scheme. Michelle Bisnoff was found guilty on multiple fraud charges following a trial based on a 22-count indictment. According to a trial brief filed by federal prosecutors, Bisnoff was hired in March 2016 to handle marketing and branding for John McLear, the inventor of a device designed to embed credit card information inside a wearable ring. After prosecutors dismissed her in October 2016, she "devised a scheme to claim McLear US's patent and start her own company, called Esos Rings," prosecutors stated. Bisnoff formally incorporated Esos Rings on Feb. 1, 2017, and falsely claimed rights to the invention by forging the signature of the man who originally hired her. She subsequently misled prospective investors to secure more than $2 million in capital for the venture, according to prosecutors. Although Bisnoff transferred payouts to certain investors, prosecutors noted that "these were Ponzi payments funded by money obtained from other investors, not by a capital investment from Virgin Mobile/Sprint," despite her fictitious claims that the telecom firm planned to invest in her startup. She also fabricated business ties to Apple and Roc Nation. When expected investment returns failed to arrive for her friends and acquaintances, she "offered a series of excuses for the delays" before escalating her actions. Prosecutors stated that in early August 2022, "she attempted to embezzle ... from an employer she had started working for as an executive assistant, which she was arranging to use to repay investors who were threatening to take legal action against her," prosecutors said. When that embezzlement attempt failed, she issued checks to three investors, all of which bounced. An FBI forensic accounting analyst later determined that "essentially all money defendant repaid to Esos investors came from Ponzi payments or loans," according to court filings. Prosecutors noted that investor funds were also diverted to her personal living expenses, including renting a Pacific Palisades residence for $13,500 to $16,409 per month. In March 2020, Bisnoff further submitted fraudulent information to secure a $150,000 COVID-19 relief loan. She ultimately made only a "handful of payments" before the debt was written off for $165,813. [Image text:] FBI FBI FBI