The Securities and Exchange Commission charged Christopher Kenji Dinelli and Jacob David Frankel with orchestrating a fraud scheme that raised $8.7 million from 35 investors through their fund, according to the SEC announcement.
Dinelli and Frankel allegedly misrepresented the fund's strategy and the credentials of its investment manager to attract investors. The pair targeted veterans and medical services providers among their investor base, the SEC said. The charges include allegations of wire fraud and other violations tied to the sale of unregistered securities.
The SEC did not disclose the fund's name in its initial announcement, but said the two men operated it as a pooled investment vehicle. Neither defendant has admitted wrongdoing. The agency said it is seeking permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties.
Dinelli was responsible for raising capital while Frankel managed the fund's operations, according to the enforcement action. Both men made material misstatements about how investor money would be deployed and about the qualifications of the person handling day-to-day investment decisions, the SEC alleged.
The amount raised from 35 investors places this scheme in the middle range of retail fraud cases the SEC has brought in recent years. In 2025, the commission charged several operators of Ponzi schemes that exceeded $20 million in investor funds. Smaller schemes in the $2 million to $5 million range have also drawn enforcement attention.
Veterans have been targeted in multiple enforcement actions. The SEC has stepped up filings against operators marketing pre-IPO investment vehicles and private placement funds to retail investors without proper registration.
If the SEC proves the allegations, the enforcement action would be the latest in a series of convictions and settlements involving unregistered fund offerings that rely on social networks or veteran communities to distribute securities. The number of such cases has remained steady even as enforcement priorities have shifted toward digital assets and market structure issues.
