Joonko Founder Admits to Defrauding Investors of $27 Million

Elite Raz, the 40-year-old founder and former CEO of Israeli AI startup Joonko, pleaded guilty to securities fraud in a New York federal court. The U.S. Department of Justice stated that Raz defrauded venture capital funds and private investors, raising approximately $27 million through the use of falsified bank statements and fabricated revenue figures. Her sentencing is scheduled to be determined later by Judge Alvin Hellerstein.

According to the indictment, Raz presented false information that enabled her to raise $10 million in June 2021 and an additional $17 million in June 2022. She falsely claimed to investors that the company had contracts with major global corporations, including a credit card company, a sports brand, an online travel company, and a luxury fashion brand. In reality, these companies were never clients of Joonko.

In April 2023, when a key investor began to suspect foul play and requested clarification, Raz sent him a forged bank document showing a balance of over $5 million, while the actual account balance was millions less. A week later, she provided the same investor with fictitious purchase orders bearing forged signatures of supposed clients, in an attempt to buy time.

The startup Joonko, founded in 2016, developed AI-based software to promote workplace diversity. The company raised $38 million over its years from prominent investors and employed around 50 people at its peak. The scheme was exposed in June 2023 following an internal board investigation that found a vast discrepancy between the reported 150 clients and the actual number.

Following the discovery, Raz resigned, most employees were laid off, and the company entered bankruptcy proceedings. "This kind of fraud harms investors and makes it harder for other entrepreneurial businesses to raise money," said Jamie McDonald, a New York State prosecutor. "Raz lied to investors about key aspects of her startup and forged documents to support those lies, in order to secure $27 million in investments. Her company left victim investors with millions of dollars in losses." Acting Assistant FBI Director James S. Barnacle Jr. added, "The guilty plea makes clear that investor fraud and misrepresentation will not be tolerated. By pleading guilty, Raz acknowledged the seriousness of her actions and the harm caused to investors. Victims deserve justice, and the FBI will continue to work to ensure they receive it."