NEW YORK (VINnews) — An Israeli entrepreneur pleaded guilty Friday to federal securities fraud after prosecutors said she misled investors about customers and revenue at her artificial intelligence hiring startup and raised about $27 million.
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Ilit Raz, 40, the founder and former chief executive of Joonko Diversity Inc., entered the plea in U.S. District Court in Manhattan before Judge Alvin K. Hellerstein, according to court coverage and statements from the U.S. attorney’s office for the Southern District of New York. The charge carries a maximum prison term of 20 years. Sentencing has not been scheduled.
Joonko, founded in 2016, marketed an AI platform that it said helped employers find job candidates from diverse backgrounds. Raz told investors the company had more than 100 customers, including well-known global brands in fashion, travel, sports apparel and credit cards, and that it worked with more than 100,000 job candidates. Prosecutors and the Securities and Exchange Commission said those claims were false.
Investors, including venture firms, put about $10 million into a Series A round in June 2021 and about $17 million into a Series B round in June 2022, federal authorities said. To support the pitch, Raz provided fabricated customer testimonials and later sent forged bank statements and fictitious purchase orders with forged signatures after an investor raised questions, according to the 2024 SEC complaint and the criminal case.
The scheme unraveled in 2023 after the investor confronted her. Joonko filed for bankruptcy protection in Delaware in May 2024. The company later resolved some bankruptcy-court claims with Raz in a separate settlement that did not end the federal criminal or SEC cases.
Prosecutors said the now-defunct company left investors with millions of dollars in losses. Raz is an Israeli citizen. A parallel SEC civil case seeks penalties, disgorgement and an officer-and-director bar.
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