The former chief executive officer of a wearable technology company in California has been convicted of running a nearly $2 million Ponzi scheme built around smart rings that she falsely claimed had the backing of Apple and Jay Z’s Roc Nation and retail agreements with Walmart and Target.
Michelle Bisnoff, 59, was found guilty Thursday on multiple counts of securities and wire fraud, money laundering, and aggravated identity theft by a jury in federal court in Santa Ana.
She was also convicted on a wire fraud charge connected to a $150,000 Covid-relief loan after prosecutors said she used some of the money for personal expenses, including about $15,600 in monthly rent on a home in Pacific Palisades.
Prosecutors said Bisnoff was hired in 2016 by London-based McLear Ltd. to develop the U.S. market for its patented smart rings, which use near-field communication technology to enable contactless payments. McLear is credited with pioneering the NFC smart ring in 2012.
But after she was fired, Bisnoff started her own company in 2017, Esos Rings Inc., and recruited investors by claiming she owned the smart ring patent.
Prosecutors said she promised investors that Esos would buy back their shares at prices above what they had paid, producing substantial profits. Instead, she used most of the investment money for personal expenses and to make Ponzi-style payments to other investors.
By 2022, Bisnoff had raised $1.95 million from investors while falsely claiming that Esos was profitable but needed money to increase its manufacturing capacity and inventory to meet demand from Walmart and Target.