Israeli AI startup founder pleads guilty to $27 million fraud scheme in New York
Ilit Razt, the founder and former Chief Executive Officer of Joonko, made false claims about the company’s customers and revenue to raise around $27 million in funding from investors.
Ilit Raz, an Israeli citizen, has pleaded guilty in New York to a $27 million fraud scheme, according to the US Attorney for the Southern District of New York. The alleged fraud involved the company Joonko Diversity, Inc., which Raz founded and served as CEO. The company had claimed to provide AI-based services to aid employers in identifying and hiring candidates.
Raz misled investors by making false claims about the company's customers and revenue. She reportedly told investors that Joonko's clients included major global corporations, such as fashion brands, a credit company, and a travel company. Additionally, she claimed that Joonko had over 100 customers and had worked with more than 100,000 job candidates.
The SEC complaint detailed that Raz provided investors with fabricated positive testimonials from supposed customers praising Joonko's effectiveness. The US Attorney's Office claimed that Raz knowingly misled investors, despite the companies never being customers of her company.
Several victims suffered significant financial losses when Joonko went bankrupt, following the scheme's discovery in 2023. The fraud was uncovered when an investor became suspicious of Raz's claims and asked for information about Joonko's performance. Raz subsequently forged a bank statement showing the company maintained an average balance of over $5 million, while its actual balance was far lower.
Raz faces a maximum sentence of 20 years in prison for her involvement in the fraud scheme, as reported by the US Attorney.
Written by urgent.news from Jerusalem Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
