A federal jury has convicted the chief executive of a “smart rings” company of running a Ponzi scheme that took nearly $2 million from investors. Michelle Bisnoff, 59, of Boca Raton, Florida, was found guilty on September 24, and she is due to be sentenced in January.

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What the jury decided

The U.S. Attorney’s Office for the Central District of California says in its verdict announcement that Bisnoff ran Esos Rings as a Ponzi scheme and took nearly $2 million from investors. The scheme caused about $1.4 million in losses. Sentencing is set for January 21, 2027.

A Ponzi scheme is one where earlier investors are paid with money from newer investors instead of real earnings. The SEC’s Investor.gov says the promoter may not invest the money at all and may keep some of it, and that such schemes tend to collapse when recruiting slows or many investors try to withdraw.

Warning signs in a pitch like this

Investor.gov’s list of warning signs includes “guaranteed” or high returns with little risk, unregistered investments, unlicensed sellers and strategies that are secretive or complex. A pitch to buy shares in a private company, especially one that promises a sale to a famous name, deserves a look at who is selling and whether the offer is registered before any money moves.

It also helps to keep the pitches themselves from piling up. People who would rather not be on the contact lists that data brokers hold can have Incogni send removal requests to those brokers and keep re-sending them. Less personal data on broker lists can mean fewer scam calls, texts and emails.

What investors were told

Prosecutors laid out the pitch in a 2024 announcement of the original charges, which were then allegations. They said that from 2017 through the end of 2023, Bisnoff solicited investments by misrepresenting the company’s business, its profits and the returns investors could expect. The complaint alleges she told investors that Esos owned patents for smart rings, wearable devices encoded with financial information for contactless payments, and that the company earned a fee each time a ring was used and was already making and selling them.

She also allegedly said that Apple or another buyer would soon acquire the company and purchase investors’ shares at prices well above what they paid. According to the affidavit in the complaint, neither Bisnoff nor the company owned the patents, the possible buyers either had never heard of Esos or had no plan to fund it, and the company had almost no operations or profits. The affidavit alleges most investor money went to payments to earlier investors and to Bisnoff’s personal benefit.

Pandemic loan money and a Pacific Palisades rent bill

The verdict announcement adds a second thread. It says Bisnoff used money from a COVID Economic Injury Disaster Loan, a federal pandemic loan program for small businesses, to pay about $15,600 a month in rent on a house in Pacific Palisades. That detail sits apart from the Ponzi scheme itself, since the loan money came from the government rather than from private investors.

Regulators moved first

The Securities and Exchange Commission had already sued over the same company. The 2024 announcement says the SEC alleged that about $1.95 million was fraudulently raised from Esos investors. On September 19, 2023, U.S. District Judge Consuelo B. Marshall entered a judgment holding Bisnoff and the company jointly and severally liable for $566,483 in disgorgement, $46,836 in prejudgment interest and a $223,229 civil penalty, a total of $836,548 due within 30 days. The affidavit says neither paid any of it.

That history is a useful marker for investors. A civil judgment against a company is public, and a search of a seller’s name before investing can turn it up. The FBI investigated the criminal case with help from the SEC and the U.S. Attorney’s Office for the Southern District of Florida, and the 2024 announcement lists Assistant U.S. Attorney Ranee A. Katzenstein of the Criminal Appeals Section as the prosecutor.

Vetting an investment pitch before sending money

Investor.gov offers an Investment Professional Background Check tool that shows whether a person selling an investment is licensed or registered. A seller who is not registered, or who dodges the question, is a reason to stop. The same page says anyone who has trouble getting a payment or a withdrawal should treat it as a red flag, because promoters sometimes dangle even higher returns to keep people from cashing out.

Anyone who thinks they have been pitched a scheme like this can report it at ReportFraud.ftc.gov. A report goes best with the name of the company and seller, the dates and amounts of any payments, and copies of the emails, texts or documents that made the promises. Those papers are what investigators and a lawyer will ask for first.

For the Esos Rings case, the next public step is the January 21, 2027 sentencing, where the U.S. Attorney’s Office says a judge will set the penalty.

Nearly $2 million from people pitched one by one

A jury found Michelle Bisnoff ran a Ponzi scheme that took nearly $2 million from investors in Esos Rings. Investment pitches reach people through their phone numbers, email addresses and home addresses, and data brokers sell exactly those details. Incogni asks the brokers and people-search sites to delete a person’s information, keeps re-sending the requests, and shows the status of each one in the account.

Ask data brokers to drop your name and number with Incogni →

This article was produced with AI assistance and edited for accuracy against the sources linked above.