Israeli Tech CEO Admits to Multi-Million Dollar Securities Fraud in US

Elite Raz, the Israeli founder and former CEO of the startup Joonko, has pleaded guilty in a New York federal court to securities fraud totaling tens of millions of dollars. The charges stem from systematically falsifying bank statements and client contracts to secure investments under false pretenses. This case represents one of the most embarrassing and high-profile fraud scandals in Israeli high-tech history.

Raz is accused of orchestrating a deliberate and systematic scheme that raised approximately $27 million from leading venture capital funds. The indictment was initially filed in 2024, and Raz remained in Israel while negotiating her return to the U.S. with prosecutors. Her appearance in New York to admit guilt is believed to be part of a plea agreement.

Joonko, founded in 2016 with offices in Tel Aviv and New York, marketed an AI platform designed to help employers recruit diverse talent, including women, minorities, and veterans. Raz falsely claimed that hundreds of major international brands, such as American Express and Adidas, used the platform. Investigations revealed that none of these companies had any business relationship with Joonko, and most of its approximately 30 actual clients did not even pay for the service.

While Raz reported millions in annual revenue and exponential growth to investors, the U.S. Securities and Exchange Commission (SEC) found that actual revenues did not exceed $100,000. The SEC also deemed claims about advanced algorithms to be hollow, describing the operation as an "old-fashioned fraud wrapped in new buzzwords."

The fraud began to unravel when an investor from Insight Partners, who led a $25 million funding round, became suspicious and requested direct financial documents. To conceal the truth, Raz submitted a forged bank statement showing a balance of over $5 million. She also created fictitious purchase orders using forged digital signatures. Raz eventually confessed to the board.

During the fraudulent fundraising, Raz personally profited significantly, taking cash and stock bonuses and selling over $2 million worth of stock in October 2022. Following the exposure, Joonko laid off its 50 employees and filed for bankruptcy in the U.S. without assets to repay investors. Federal Prosecutor Jamie McDonald stated the fraud damages investor trust and hinders legitimate entrepreneurs. Raz faces a maximum sentence of 20 years in prison and substantial fines.