Michelle Bisnoff arrested for $2 million investor fraud

The CEO of ESOS Rings is accused of securities and wire fraud

A woman from Boca Raton was arrested today on charges of defrauding investors of a staggering amount of over $2 million. She allegedly used the money for personal expenses and Ponzi payments to keep the scheme going.

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, is charged with securities fraud and wire fraud. Bisnoff was released on bail and is scheduled to appear in U.S. 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 misrepresenting its business operations, profitability, and the returns investors would receive. Bisnoff allegedly claimed that ESOS owned patents for “smart rings,” a wearable device encoded with financial information for contactless payments. She further claimed that ESOS earned transaction fees every time a ring was used, generating profits for the company. In addition, 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 company, 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. The majority of investor funds were allegedly used for Ponzi payments to previous investors and for Bisnoff’s personal benefit. The alleged acquirers of ESOS knew nothing of the company or had no plans to invest in it. ESOS allegedly had minimal operations and no profits.

A criminal complaint is merely an accusation, 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 fraudulently collecting $1.95 million from investors. On September 19, 2023, U.S. 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 prejudgment interest, and a civil penalty of $223,229. To date, neither Bisnoff nor ESOS have paid the amounts due.

The Federal Bureau of Investigation is investigating the case with significant assistance from the SEC and the U.S. Attorney’s Office for the Southern District of Florida. Assistant U.S. Attorney Ranee A. Katzenstein of the Criminal Appeals Section is prosecuting the case.