Israeli entrepreneur pleads guilty to massive fraud in the US – and faces severe punishment

Eilit Raz, founder and CEO of Joonko, pleaded guilty in a federal court in New York to securities fraud totaling tens of millions of dollars. Raz forged bank statements and customer contracts to fraudulently raise $27 million from venture capital funds. She faces up to 20 years in prison.

Eilit Raz, founder and CEO of the Israeli startup Joonko, pleaded guilty in a federal court in Manhattan to securities fraud totaling tens of millions of dollars. Raz took responsibility for a systematic scheme through which she fraudulently raised approximately $27 million from leading venture capital funds. According to the indictment, Raz systematically forged bank statements and customer contracts, presenting investors with false presentations of annual revenues in the millions of dollars and partnerships with major brands such as American Express and Adidas – none of which had any business relationship with the company. Actual revenues did not exceed $100,000. The fraud was uncovered when investor Liad Agmon from Insight Partners demanded to see direct financial documents. Raz sent a forged bank statement and fictitious purchase orders. The company laid off all 50 employees and entered bankruptcy proceedings. Raz faces up to 20 years in prison.