CEO of “Smart Ring” Wearable Tech Company Arrested on Securities Fraud Charges

LOS ANGELES - A Boca Raton woman was arrested today on charges alleging she lied to investors to obtain over $2 million for her company ESOS Rings, Inc., which she then used for personal expenses and Ponzi payments to keep the scheme going.

Michelle Bisnoff, also known as "Michelle Angeline Silverstein" and "Shelly Silverstein," 57, previously of Pacific Palisades and Santa Barbara and currently living in Boca Raton, Florida, is charged in a criminal complaint with one count of securities fraud and one count of wire fraud. Bisnoff was released on bond and ordered to appear for further proceedings in United States District Court in downtown Los Angeles on August 7.

According to the affidavit in support of the criminal complaint, Bisnoff is the founder and CEO of ESOS. Allegedly, from 2017 through the end of 2023, Bisnoff fraudulently solicited investments in ESOS by falsely representing ESOS's business activities and profitability, and the returns that the investors would receive on their investments. Bisnoff allegedly told prospective investors that ESOS owned patents for "smart rings," a wearable device encoded with financial information, which could be used to make contactless payments. Bisnoff allegedly said ESOS earned transaction fees each time a ring was used, generating profits for ESOS. Bisnoff also allegedly told prospective investors that ESOS was already manufacturing and selling these smart rings, and that ESOS would soon be bought by Apple or another suitor, resulting in a buy back of the investors' shares at prices significantly above the share price she was offering to the investors.

According to the affidavit, neither Bisnoff nor ESOS owned the patents at issue; the majority of investor funds raised were used to allegedly make Ponzi payments to earlier investors and to benefit Bisnoff personally; the prospective acquirors of ESOS had no knowledge of ESOS and/or no plan to provide capital for it; and ESOS had virtually no business operations, let alone profits.

A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

If convicted of both charges, Bisnoff faces a statutory maximum sentence of 40years.

The U.S. Securities and Exchange Commission suedLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link. Bisnoff and ESOS for allegedly fraudulently raising $1.95 million from ESOS investors. On September 19, 2023, United States District Judge Consuelo B. Marshall imposed a judgment finding Bisnoff and ESOS jointly and severally liable for disgorgement of $566,483, representing net profits from the fraud, as well as $46,836 in pre-judgment interest and a civil penalty of $223,229, with the total amount due-$836,548-to be paid to the SEC within 30 days. According to the affidavit, to date neither Bisnoff nor ESOS has paid any of the amounts due.

The Federal Bureau of Investigation is investigating this matter. Substantial assistance was provided by the SEC and the United States Attorney's Office, Southern District of Florida

Assistant United States Attorney Ranee A. Katzenstein of the Criminal Appeals Section is prosecuting this case.

Public link

Please use the above public link if you want to share this noodl on another website.