Sherman Oaks man found guilty of participating in investment scheme

Daily News (Los Angeles, CA)

A jury has found a Sherman Oaks man guilty of being involved in a scheme to fraudulently obtain millions of dollars from dozens of investors through a sham investment company run with his brother out of their parents’ home, federal prosecutors announced Wednesday, Feb. 15.

Sassi Mizrahi, 58, was found guilty Tuesday of five counts of wire fraud. He was found not guilty of one count of wire fraud. His brother, Motty Mizrahi, 51, of Encino, pleaded guilty on Jan. 6 to six counts of wire fraud and one count of aggravated identity theft.

A U.S. Department of Justice investigation found that the Mizrahi brothers raised more than $6 million from investors through a fraudulent investment company they called “MBIG Company.” Motty portrayed himself as a reputable, licensed broker and accountant. From June 2012 to March 2019, the brothers promised investors “guaranteed” returns every month and told them that their money could be withdrawn later.

However, neither brother ever invested that money in any account under the MBIG name. They deposited the funds into their own personal trading accounts, and submitted fake monthly account statements stating that the MBIG account balances were upwards of $9 million. Investors preyed on by the brothers lost at least $3 million.

The brothers both have sentencing hearings later this year. Sassi’s hearing is set for June 26, when he will face a maximum of 20 years in federal prison for each count of wire fraud. Motty’s hearing will be on May 15; he faces a maximum of 20 years for each count of wire fraud and a mandatory two-year sentence for the count of aggravated identity theft.