A former Pacific Palisades resident who founded a smart ring company was found guilty of multiple federal charges after prosecutors accused her of defrauding investors and making extravagant claims about her product's capabilities and business connections, the U.S. Department of Justice announced Friday.
A jury in federal court in Santa Ana found Michelle Bisnoff, 59, guilty Thursday of securities fraud, wire fraud, money laundering, identity theft and COVID-relief fraud.
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Bisnoff, whose aliases also included Michelle Angeline Silverstein and Shelly Silverstein, was accused of falsifying a legal document claiming she owned the patent behind smart rings, wearable devices embedded with credit card information, according to the DOJ.
Prosecutors alleged Bisnoff, who once lived in Pacific Palisades and Santa Barbara, lied to investors by claiming that her smart ring company, Esos Rings, was profitable. They also said she attracted investments by falsely claiming that major companies, including Apple and Roc Nation, provided resources and funding to help meet retail demand from Walmart and Target.
In reality, Bisnoff never received investments from Apple or Roc Nation, according to the DOJ. While she sold six smart rings to Walmart, three were returned. She also never had a retail agreement with Target.
"When Bisnoff failed to provide the promised investment returns, she offered a series of bogus explanations described by one victim who testified at trial as 'dog-ate-my-homework' excuses, attempted to embezzle approximately $550,000 from an employer to send to investors, and then sent checks that bounced," the Justice Department said.
Of the nearly $2 million she received from investors, approximately $1.4 million was never recovered, prosecutors said.
Bisnoff also used one of her aliases to apply for a federal loan, claiming she suffered financially during the COVID-19 pandemic. She used much of the $150,000 loan for personal expenses, including paying $15,600 a month to rent a large home in Pacific Palisades.
Bisnoff, who is scheduled to be sentenced Jan. 21, 2027, faces a statutory maximum sentence of 20 years in federal prison for each count of securities fraud and wire fraud, 10 years for each count of money laundering, and a mandatory consecutive two-year sentence for the aggravated identity theft convictions, the DOJ said.