SEC Charges Trio in Alleged $47 Million Affinity Fraud Targeting Orthodox Communities

The US Securities and Exchange Commission has charged three residents of Toms River, New Jersey, in connection with an alleged $47 million affinity investment fraud that targeted members of Orthodox Jewish communities in New Jersey and New York. The complaint, filed in federal court in the District of New Jersey, alleges that the scheme operated between November 2019 and June 2023, misappropriating funds from more than 87 investors across seven states.

Leor Moshe is accused of orchestrating the scheme through his company, Capital Funding ASAP LLC. The SEC alleges that Moshe convinced investors to contribute capital under the guise of funding short-term business loans for small businesses, promising significant fixed returns, with some exceeding 30 per cent. Instead of deploying the funds as described, Moshe allegedly misappropriated more than $11 million for personal expenses and utilised over $850,000 for Ponzi-like payments to earlier investors.

Fellow defendants Jacob Goldman and Isaac Odes, who were not registered as broker-dealers, were paid to recruit investors and facilitate the collection of funds. The complaint states that Goldman and Odes solicited more than $23 million from at least 25 individuals, negotiating investment terms and managing the flow of capital. Investors from Arizona, Connecticut, Florida, Illinois, New Jersey, New York, and Ohio collectively lost more than $25 million.

Thomas P. Smith, Jr., Associate Director of the SEC’s New York Regional Office, noted that the defendants exploited relationships within Orthodox Jewish communities to raise money for Moshe’s scheme. He highlighted that the promised returns fell into the category of investments that sound too good to be true, warning investors to scrutinise such opportunities carefully.

The SEC’s complaint charges Moshe with violations of the antifraud provisions of federal securities laws, while Goldman and Odes face charges for violating the broker registration provisions of the Securities Exchange Act of 1934. The regulator is seeking permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. A conduct-based injunction is also sought against Moshe.

In a parallel action, the US Attorney’s Office for the District of New Jersey has filed criminal charges against Moshe for similar conduct. The SEC’s Office of Investor Education and Assistance has highlighted the case on its Investment Scams Targeting Groups webpage, encouraging investors to verify the background of anyone offering investments via Investor.gov.