CEO of ESOS Rings Faces Securities and Wire Fraud Charges
A Boca Raton woman was arrested today on charges of defrauding a staggering amount of over $2 million from investors, which she allegedly used for personal expenses and Ponzi payments to sustain the scheme.
Michelle Bisnoff, also known as “Michelle Angeline Silverstein” and “Shelly Silverstein,” 57, formerly of Brentwood, Pacific Palisades, and Santa Barbara, currently residing in Boca Raton, Florida, faces charges of securities fraud and wire fraud. Bisnoff has been released on bond and is scheduled to appear in United States District Court in downtown Los Angeles on August 7.
According to the affidavit supporting the criminal complaint, Bisnoff is the founder and CEO of ESOS Rings, Inc. From 2017 through the end of 2023, she allegedly solicited investments in ESOS by falsely representing the company’s business activities, profitability, and the returns investors would receive. Bisnoff purportedly claimed that ESOS owned patents for “smart rings,” a wearable device encoded with financial information for contactless payments. She further asserted that ESOS earned transaction fees each time a ring was used, generating profits for the company. Additionally, Bisnoff allegedly told investors that ESOS was manufacturing and selling these smart rings and that the company was on the verge of being acquired by Apple or another major firm, which would result in a significant buyback of investors’ shares at higher prices.
The affidavit states that neither Bisnoff nor ESOS owned the patents in question. Most of the investor funds were allegedly used to make Ponzi payments to earlier investors and for Bisnoff’s personal benefit. The purported acquirers of ESOS were unaware of the company or had no plans to invest in it. ESOS reportedly had minimal business operations and no profits.
A criminal complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. If convicted, Bisnoff faces a statutory maximum sentence of 40 years.
The U.S. Securities and Exchange Commission (SEC) has also sued Bisnoff and ESOS for allegedly raising $1.95 million fraudulently from investors. On September 19, 2023, United States District Judge Consuelo B. Marshall ordered Bisnoff and ESOS to pay $836,548 to the SEC, including $566,483 in disgorgement of net profits, $46,836 in pre-judgment interest, and a $223,229 civil penalty. To date, neither Bisnoff nor ESOS has paid any of the amounts due.
The Federal Bureau of Investigation is investigating the case, with substantial assistance provided by the SEC and the United States Attorney’s Office for the Southern District of Florida. Assistant United States Attorney Ranee A. Katzenstein of the Criminal Appeals Section is prosecuting the case.
