Founder of Artificial Intelligence Startup Pleads Guilty to Securities Fraud
The founder and former executive of the AI startup Joonko Diversity pleaded guilty to securities fraud for raising $27 million by lying to investors.
Ilit Raz, the founder and former CEO of the artificial intelligence startup Joonko Diversity, Inc., pleaded guilty to securities fraud, admitting that she obtained $27 million in investments by deceiving investors and forging documents.
Guilty Plea for Fraud in Artificial Intelligence Startup
Ilit Raz, the founder and former CEO of Joonko Diversity, Inc., pleaded guilty to securities fraud, admitting that investors were lied to and forged documents were prepared. During this process, the startup company was driven into bankruptcy with millions of dollars in losses.
Misleading Statements Made to Investors
Raz, the founder of the company, made false claims regarding Joonko's customer count and identities in order to attract funding during the 2021 and 2022 funding rounds. It was falsely claimed that some of the world's leading major companies were Joonko customers.
Fake Customer and Revenue Claims
Raz also made misleading statements regarding the company's actual and projected revenues. It turned out that none of the named major companies were ever Joonko's customers and that there was no commercial relationship with these firms.
Multi-Million Dollar Investment Rounds
As a result of the false statements, many investors, including venture capital firms, were persuaded. Joonko received approximately $10 million in Series A funding on June 1, 2021, and approximately $17 million in Series B funding on June 2, 2022.
Forged Documents Sent to Suspicious Investors
In 2023, when an investor became suspicious of the company's performance and requested bank statements, Raz took action. It was determined that the bank statements and purchase orders sent to the investor were forged.