SANTA ANA — A Santa Ana jury convicted Michelle Bisnoff of operating a Ponzi scheme through Esos Rings Inc. and defrauding the federal pandemic loan program. The verdict concluded a case in which prosecutors alleged Bisnoff ran a near-$2 million fraud and obtained $150,000 in pandemic relief funds under false pretenses.

The conviction stems from a pattern of deception that began in early 2017. By that time, Bisnoff falsely claimed she owned the key patent for near-field communication (NFC) rings, using a falsified patent assignment to support the claim. She formed Esos Rings Inc. to market smart rings based on the patent she did not own.

Bisnoff told investors that Esos was profitable and used their money to increase manufacturing capabilities and inventory to meet demands from retailers such as Target and Walmart. She also claimed the company was receiving large infusions of capital from companies such as Apple Inc. and Roc Nation. In reality, Esos had no agreements with Target, never received any investment from Apple or Roc Nation, and sold just six rings on Walmart.com, three of which were returned.

To further lure investors, Bisnoff falsely claimed to be on the cusp of a licensing arrangement with Middle Earth Enterprises, which controls The Lord of the Rings brand. She also lied that Esos would fund buybacks of investors’ shares at prices above what they paid. Bisnoff knew the financial statements, a corporate tax return, and a patent valuation she provided to investors were neither prepared nor signed by the professionals who supposedly prepared the documents.

Bisnoff 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. At one point, she attempted to embezzle approximately $550,000 from an employer to send to investors. When investors sought returns, Bisnoff sent checks that bounced.

In March 2020, Bisnoff fraudulently applied for an Economic Injury Disaster Loan (EIDL). She used the name Michelle Silverstein and identified herself as the chief operating officer of Esos on the application. Bisnoff lied about Esos’s gross revenue and the cost of goods it purportedly sold during the 12-month period preceding the pandemic. She received $150,000 from the EIDL program and used some of the proceeds for personal expenses, including monthly rent of approximately $15,600 on a house she leased in Pacific Palisades.

Bisnoff faces a statutory maximum sentence of 20 years in federal prison for each count of securities fraud and wire fraud. She faces a statutory maximum sentence of 10 years in federal prison for each money laundering count. Additionally, she faces a mandatory two-year consecutive federal prison sentence for aggravated identity theft. United States District Judge Mónica Ramírez Almadani scheduled a sentencing hearing for January 21, 2027.

Timeline

By early 2017, Bisnoff falsely claimed she owned the key patent for the NFC rings, including by using a falsified patent assignment. On that same application, she used the name 'Michelle Silverstein' and identified herself as the chief operating officer of Esos. She also lied about Esos’s gross revenue and the cost of goods it purportedly sold during the 12-month period preceding the pandemic.

In 2023, the United States Securities and Exchange Commission sued 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. A jury found Michelle Bisnoff guilty of running a near-$2 million Ponzi scheme and fraudulently obtaining $150,000 in pandemic loans. On that same date, she was convicted 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.

What's New

Additional reporting details the scope of prior regulatory actions. The United States Securities and Exchange Commission (SEC) sued 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 pre-judgment interest and a civil penalty. Michelle Bisnoff was previously barred from serving as an officer or director of any publicly traded company by the U.S. Securities and Exchange Commission (SEC) in 2023 as part of a separate enforcement action against Esos Rings, Inc.

Further details emerged regarding the pandemic loan fraud. In 2020, Bisnoff used the alias 'Michelle Silverstein' to apply for a $150,000 Economic Injury Disaster Loan (EIDL) while falsely claiming to be Esos Rings’ COO, a detail confirmed by the U.S. Attorney’s office in the 2026 trial brief. The SEC’s 2023 case against Bisnoff and Esos Rings Inc. marked the second enforcement action against her in five years, following a 2018 investigation into similar securities fraud allegations related to a different startup. Los Angeles city records show Michelle Bisnoff served as chair of the Brentwood Community Council in 2019 and 2020.

The SEC's 2023 complaint revealed Esos Rings Inc. raised $1.95 million from 16 investors between February 2017 and June 2022 through false claims about patent ownership and partnerships with Apple and Roc Nation. Bisnoff falsely claimed ownership of McLear’s NFC payment ring patent by using a falsified assignment document, which was later confirmed by the SEC’s 2023 complaint as a material misrepresentation. The SEC’s 2023 enforcement action against Esos Rings Inc. included a finding that Bisnoff’s financial statements, tax returns, and patent valuations for investors were not prepared by the professionals she claimed, violating securities laws.

How Sources Differ

Sources differ on specific details regarding Bisnoff's use of aliases and loan proceeds. The U.S. Department of Justice press release 26-176 states that Bisnoff used some of the $150,000 EIDL loan proceeds for personal expenses, including monthly rent of approximately $15,600 on a house she leased in Pacific Palisades.

The U.S. Department of Justice press release 26-176 states that Bisnoff used the name 'Michelle Silverstein' and identified herself as the chief operating officer of Esos on the EIDL application.

The U.S. Department of Justice press release 26-176 states that Bisnoff formed Esos Rings Inc. to market 'smart rings' based on the patent she falsely claimed to own.

Why It Matters

The conviction reflects the federal government's continued enforcement against fraud involving pandemic relief programs and securities markets. Bisnoff’s scheme resulted in approximately $1.4 million in losses for victims and involved false claims about partnerships with major corporations like Apple and Roc Nation. The case illustrates how fabricated intellectual property claims and falsified financial documents can be used to sustain a Ponzi scheme over several years.