A southern California man has been sentenced to more than seven years in federal prison after he and his younger brother scammed more than 40 people out of $7m in investments. Their fraud targeted victims from the San Fernando Valley’s Orthodox Jewish Israeli community.
From 2012 to 2019, Sassi and his brother and co-defendant Motty Mizrahi ran an investment and money management firm called MBIG Company that boasted risk-free investments and an annual return rate of 30% to double the original investment, according to court records. To add legitimacy to MBIG, Motty Mizrahi also passed himself off as a licensed broker, certified accountant and veteran trader.
But neither Mizrahi brother invested their clients’ money, instead Motty put the funds into his personal trading accounts at E*TRADE and TD Ameritrade, according to court records. He took more than $3m in losses from this trading. The brothers also submitted false reports that showed fake monthly gains in the MBIG account totaling between $6m to $9m.
“For years … Sassi Mizrahi and his brother, co-defendant Motty Mizrahi … operated a Ponzi scheme that targeted victims they knew had reason to trust them: fellow members of the close-knit, Orthodox Jewish Israeli community of the San Fernando Valley,” prosecutors argued in a sentencing memorandum. “Exploiting the goodwill engendered by such affinity, defendants scammed millions of dollars from their victims with false promises of risk-free investments and guaranteed returns.”
The pair was arrested in 2019, and at the beginning of 2023 Motty pleaded guilty to six counts of wire fraud. Sassi went to trial and was found guilty of five counts of wire fruad.
Sassi’s attorneys pleaded for a lenient sentence, arguing that the 58-year-old was minimally involved in his brother’s scheme and that Sassi was, “much-needed by family members”, according to a sentencing memorandum.
In addition to almost a decade in federal prison, a judge ordered Sassi to pay back nearly $4.5m in restitution to victims. Motty Mizrahi is set to be sentenced on 18 December.
