Israeli Tech CEO Admits to Massive Securities Fraud in US

Elite Raz, the former head of the artificial intelligence company Joonko, has admitted to securities fraud in the United States. According to the prosecution, Raz falsely presented several major global companies, including a credit card firm, a sportswear brand, an online travel company, and a luxury fashion brand, as clients of her startup. In reality, these companies were never clients of Joonko, and Raz was aware of this deception.

These misrepresentations to investors helped Joonko secure two significant funding rounds. In June 2021, venture capital funds and other investors contributed approximately $10 million in Series A funding. The following year, Joonko raised an additional $17 million in Series B, bringing the total investment in the company to about $27 million.

Approximately two months ago, a bankruptcy court in Delaware approved a $500,000 settlement between the company and Raz. The situation escalated in 2023 when an investor, suspicious of the company's performance, requested additional information, including bank statements. Raz allegedly sent a document showing an average balance of over $5 million, which the prosecution claims was forged, with the actual balance being millions of dollars lower.

Shortly thereafter, Raz sent the investor documents purported to be purchase orders from company clients. The Department of Justice stated that many of these documents were fictitious, contained forged signatures, and were presented as if signed by companies that had no business relationship with Joonko. The company subsequently collapsed, leaving investors with multi-million dollar losses.