SHERMAN OAKS—Brothers Motty Mizrahi, 46, of Encino and Sassi Mizrahi, 53, of Sherman Oaks were arrested for alleged federal wire fraud charges and made their first appearance in the United States District Court on Friday, March 29.

Both men allegedly operated an unlicensed investment advisory business out of their parents’ Encino home. They created a scheme where they used false account statements to hide multi-million-dollar losses of their investor funds.

In a criminal complaint filed, Motty Mizrahi fallaciously portrayed himself as a certified public accountant, a licensed broker, and an experienced trader who employed sophisticated financial option and insurance hedging strategies through Sassi Mizrahi’s business MBIG Company.

Motty obtained millions of dollars from investors between November 2012 through March 2019. He promised the investors a guarantee of returns between 2 and 3 percent each month and assured them that their money could be withdrawn on demand after an initial holding period.

Motty Mizrahi allegedly submitted false monthly account statements that showed consistent monthly gains and falsely showed MBIG account balances to be between 6 to 9 million dollars. According to court documents, he lost investors money and Motty and his brother Sassi denied the losses when confronted by victims of who unsuccessfully demanded their money back.

The complaint filed alleges that Motty had given investors a financial prospectus that contained false and fraudulent representations regarding MBIG investment performances. The brothers allegedly misled investors about their company’s E*Trade brokerage account. The E*Trade brokerage account was supposed to be used for the investors money, but the brokerage account did not exist. Motty routed all the victim-investor funds into his own account according to the affidavit.

This case is being investigated by the Federal Bureau of Investigations. If the two are convicted on wire fraud charges they could face up to 20 years in federal prison.