Israeli citizen Ilit Raz pleaded guilty to securities fraud charges in the US after admitting she defrauded investors of around $27 million by misleading them about the core aspects of her startup, Joonko Diversity, Inc., according to the US Attorney for the Southern District of New York. Raz, who founded the AI-driven recruitment firm and served as its CEO, fabricated customer lists and revenue metrics between 2021 and 2022 to secure multi-million-dollar funding rounds from unsuspecting venture capitalists.
How the Joonko Diversity Fraud Scheme Unraveled
Joonko Diversity, Inc. pitched itself to investors as a high-growth platform utilizing artificial intelligence to help employers identify and hire prospective job candidates. To entice both prospective and existing backers, Raz claimed the enterprise boasted more than 100 enterprise clients—including major fashion brands, a credit company, and a travel organization—and had successfully placed over 100,000 job candidates, according to a 2024 US Securities and Exchange Commission (SEC) complaint. Investigators later confirmed that none of those prominent companies were ever customers of the startup.
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Raz provided investors with fabricated positive testimonials written to praise Joonko’s effectiveness, according to regulatory filings submitted by the SEC.
Forged Financial Documents and Bank Statements
The deceptive fundraising campaign collapsed in 2023 when a concerned investor grew suspicious of Raz’s grandiose claims and directly requested verified performance metrics. In an attempt to conceal the lack of operational revenue, Raz forged a bank statement showing an average balance exceeding $5,000,000, when the company’s actual bank accounts held millions less, according to federal prosecutors. Furthermore, Raz transmitted fictitious purchase orders containing forged signatures from entities that had zero business ties to Joonko.
When the startup eventually filed for bankruptcy, several victims of the fraud scheme were left holding millions of dollars in total losses, according to US Attorney Jamie McDonald.
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Sentencing and Legal Consequences
Following the discovery of the forged documents and the subsequent federal investigation, Raz entered a guilty plea in US federal court. For orchestrating the multi-million-dollar deception, Raz faces a maximum prison sentence of 20 years, according to the US Attorney’s Office for the Southern District of New York.
Frequently Asked Questions
What was Joonko Diversity, Inc.?
Joonko was a startup founded by Ilit Raz that claimed to offer AI-based services designed to help employers identify and hire prospective job candidates.
How much money did Ilit Raz raise through fraud?
According to the US Attorney for the Southern District of New York, Raz raised around $27 million in funding from investors between 2021 and 2022 using false claims about revenue and customers.
How was the fraud uncovered?
The scheme unraveled in 2023 when an investor requested performance details, prompting Raz to forge a bank statement and fake purchase orders with forged signatures.
What is the maximum prison sentence Ilit Raz faces?
Raz faces a maximum prison sentence of 20 years after pleading guilty to securities fraud charges.
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