A former Pacific Palisades resident was found guilty by a federal jury in Orange County on Thursday of running a Ponzi scheme that stole nearly $2 million from investors in smart ring technology.
Michelle Bisnoff, 59, of Boca Raton, who previously lived in Pacific Palisades and Santa Barbara, was found guilty late Thursday of charges that included six counts of securities fraud, six counts of wire fraud and two counts of money laundering.
Bisnoff, who is also known as Michelle Angeline Silverstein and Shelly Silverstein, could not immediately be reached for comment. Michael Freedman, her attorney, said he had no comment.
According to the U.S. Attorney’s Office for the Central District of California, Bisnoff was hired by McLear Ltd., a British company, to develop a U.S. market for McLear’s patented smart rings. The devices were designed to embed credit card information inside a wearable ring.
Bisnoff falsely claimed she owned the key patent on the devices and formed a company called Esos Rings Inc. to market them, federal prosecutors said.
She told investors that Esos was profitable and she was using investors’ money to increase its manufacturing capabilities, according to federal authorities. She also told investors she was sending inventory to retailers such as Target and Walmart, and was receiving large infusions of money from companies such as Apple Inc. and Roc Nation. None of this was true, the U.S. Attorney’s Office said.
Bisnoff also falsely claimed that Esos would buy back investors’ shares at prices above what they had paid, resulting in substantial profits, officials said.
In fact, Esos had little revenue, no agreements with Target, and received no investment money from Apple or Roc Nation, officials said. The company sold six rings on Walmart.com, the Justice Department said, but three of those were returned.
Officials said Bisnoff used most of the victims’ investments to pay her personal expenses, including rent on her personal residence, and to make Ponzi-type payments to further the fraud.
A sentencing hearing has been scheduled for Jan. 21 in U.S. District Court in Santa Ana.
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