Social Network Scammer Indicted

NEW YORK—A social media investment scam has ended in the indictment of the man who allegedly convinced five victims to put up over $705,000 before the Facebook IPO.

Manhattan District Attorney Cyrus R. Vance, Jr. announced on July 19 that 42 year-old Ronen Zakai has been indicted on several counts of grand larceny and securities fraud, as well as scheme to defraud.

A former securities broker, Zakai is accused of using his social network system, including people he personally knew, to invest in the largest technology IPO in the country. 

Using what he dubbed The Social Innovation Fund, Zakai is accused of taking all of the investment money and spending it on himself. Purchases included country club membership fees, travel, shopping, and car payments. He also withdrew large amounts of cash for personal use. 

The DA says court documents show that from late December through early January, Zakai drummed up the $705,000 with the promise of investing in the Facebook IPO. Zakai spent all of the money by the end of June, 2012, a month after the IPO. None of it was never invested.

The U.S. Securities and Exchange Commission partnered with the DA on the case.