U.S. Attorney’s Office, C.D. Cal.: ‘Smart Rings’ CEO Found Guilty of Running $2 Million Ponzi Scheme (Sept. 25, 2026)

Summary

A September 25, 2026 U.S. Attorney's Office (C.D. Cal.) press release announcing that a jury found Michelle Bisnoff, 59, CEO of a wearable technology company, guilty of six counts of securities fraud, six counts of wire fraud, two counts of money laundering, one count of wire fraud in connection with a COVID-relief loan and one count of aggravated identity theft. The release describes a near-$2 million Ponzi scheme tied to claims about smart rings patents, and states that she fraudulently obtained a $150,000 Economic Injury Disaster Loan applied for in March 2020. It says United States District Judge Mónica Ramírez Almadani scheduled sentencing for January 21, 2027, with statutory maximums of 20 years per securities fraud and wire fraud count, 10 years per money laundering count and a mandatory two-year consecutive term for aggravated identity theft.

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 "body": "<p><em>SANTA ANA, California</em> – The CEO of a wearable technology company has been found guilty by a jury of running a near-$2 million Ponzi scheme by duping investors through lies that she owned “smart rings” patents that rightfully belonged to her former employer, and of fraudulently obtaining $150,000 in COVID-19 pandemic business-relief loans, the Justice Department announced today.</p><p>Michelle Bisnoff, 59, a.k.a. “Michelle Angeline Silverstein” and “Shelly Silverstein,” of Boca Raton and who formerly resided in Pacific Palisades and Santa Barbara, was found guilty late Thursday of six counts of securities fraud, six counts of wire fraud, two counts of money laundering, one count of wire fraud in connection with a COVID-relief loan, and one count of aggravated identity theft.</p><p>According to evidence presented at a seven-day trial, Bisnoff had been hired by McLear Ltd., a United Kingdom-based company, to develop a United States market for McLear’s patented near-field communication (NFC) payment rings. These products were designed to embed credit card information inside a wearable ring.&nbsp;</p><p>By no later than early 2017, Bisnoff falsely claimed she owned the key patent, including by using a falsified patent assignment, and formed Esos Rings Inc. to market “smart rings” based on that patent.</p><p>Among Bisnoff’s lies to investors was that Esos was profitable, used investors’ money to increase its manufacturing capabilities and inventory to meet demands from retailers such as Target and Walmart, and was receiving large infusions of capital from companies such as Apple Inc. and Roc Nation. She also falsely claimed to be on the cusp of a licensing arrangement with Middle Earth Enterprises (MEE), which controls <em>The Lord of the Rings</em> brand.</p><p>She further lied that Esos would fund buybacks of the investors’ shares at prices above what they paid for those shares, resulting in substantial profits.&nbsp;</p><p>In fact, Esos had little business revenue, no agreements with Target, had sold just six rings on Walmart.com, three of which were returned, never received any investment from Apple or Roc Nation, and never finalized any licensing agreement with MEE.</p><p>Bisnoff also knew the financial statements, a corporate tax return purportedly filed by Esos, and a patent valuation she provided to investors were neither prepared nor signed by the professionals who supposedly prepared the documents.&nbsp;</p><p>She used most of the victims’ investments to pay her personal expenses, including rent for her personal residence, and to make Ponzi-type payments to further her scheme.&nbsp;</p><p>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.</p><p>In total, Bisnoff fraudulently obtained nearly $2 million from investors and caused her victims to lose approximately $1.4 million.</p><p>In addition, in March 2020, Bisnoff fraudulently applied for an Economic Injury Disaster Loan (EIDL) through a federal program designed to provide emergency financial assistance to Americans suffering economic harm from the COVID-19 pandemic.&nbsp;</p><p>Using the name “Michelle Silverstein” and identifying herself as the chief operating officer of Esos, Bisnoff lied about the company’s gross revenue and the cost of goods it purportedly sold during the 12-month period preceding the pandemic.&nbsp;</p><p>She also certified that she would only use the EIDL loan proceeds for business expenses, but instead she used some of the $150,000 she received for personal expenses, including monthly rent of approximately $15,600 on a large house she leased in Pacific Palisades.</p><p>United States District Judge Mónica Ramírez Almadani scheduled a January 21, 2027, sentencing hearing, at which time Bisnoff will face a statutory maximum sentence of 20 years in federal prison for each count of securities fraud and wire fraud, a statutory maximum sentence of 10 years in federal prison for each money laundering count, and a mandatory two-year consecutive federal prison sentence for the aggravated identity theft counts.</p><p>Relatedly, in 2023, the United States Securities and Exchange Commission (SEC)&nbsp;<a href=\"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25826\">sued</a> Bisnoff and Esos for fraudulently raising $1.95 million from Esos investors. A September 2023 judgment held Bisnoff and Esos jointly and severally liable for disgorgement of $566,483, representing net profits from the fraud, as well as $46,836 in pre-judgment interest and a civil penalty of $223,229, with the total amount due – $836,548 – to be paid to the SEC within 30 days. According to court documents, Bisnoff’s criminal case, to date neither Bisnoff nor Esos has paid any of the amounts due.</p><p>The FBI and the U.S. Small Business Administration Office of Inspector General (SBA-OIG) investigated this matter. Substantial assistance was provided by the SEC and the United States Attorney’s Office for the Southern District of Florida.</p><p>Assistant United States Attorneys Ranee A. Katzenstein, Deputy Chief of the Criminal Division, Alexandra Sloan Kelly of the Environmental Crimes and Consumer Protection Section, and Diane Roldán of the Major Crimes Section are prosecuting this case.</p>",
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 "teaser": "<p>The CEO of a wearable technology company has been found guilty by a jury of running a near-$2 million Ponzi scheme by duping investors through lies that she owned “smart rings” patents that rightfully belonged to her former employer, and of fraudulently obtaining $150,000 in COVID-19 pandemic business-relief loans, the Justice Department announced today.</p>",
 "title": "‘Smart Rings’ CEO Found Guilty of Running $2 Million Ponzi Scheme",
 "topic": [
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   "name": "Fraud"
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   "uuid": "6827a162-b783-4ffa-a6c2-596fc9f07e39",
   "name": "COVID-Related Fraud"
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   "name": "Securities, Commodities, & Investment Fraud"
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 "url": "https://www.justice.gov/usao-cdca/pr/smart-rings-ceo-found-guilty-running-2-million-ponzi-scheme",
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