SEC Charges Dinelli and Frankel in Alleged $8.7 Million Veterans Fraud
SEC charges Christopher Dinelli and Jacob Frankel over an alleged $8.7 million fraud targeting veterans, with civil and parallel criminal cases in New York.
Summary
The SEC on Sept. 30, 2026 charged Christopher Kenji Dinelli and Jacob David “Kobe” Frankel with allegedly raising more than $8.7 million from 35 investors through Beyond Alpha Ventures LLC and advisory firm Beyond Equity LLC. Former naval officer Dinelli allegedly targeted veterans and medical providers serving veterans, claiming money would enter BAV’s options fund or affiliated special purpose vehicles holding pre-IPO securities in two private companies. The defendants allegedly misstated performance, assets under management, clients, and current and past holdings. Despite consistent fund losses, they advertised returns up to 153%, including a “153% Net Return on Investment” claim in “Trading Fund Overview 2024.”
The complaint alleges they secretly transferred pre-IPO investors’ money into fund brokerage accounts, where failed options trades lost most of it. Dinelli allegedly misappropriated more than $1 million, while Frankel allegedly took more than $340,000. Filed in the U.S. District Court for the Southern District of New York, the case alleges violations of the Securities Act of 1933 and Exchange Act of 1934 by both defendants, plus Investment Advisers Act of 1940 violations by Frankel. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties. The U.S. Attorney’s Office for the Southern District of New York also announced parallel criminal charges that week.
Positives
- The SEC seeks disgorgement with prejudgment interest, civil penalties, and permanent injunctions against both defendants.
- The U.S. Attorney’s Office for the Southern District of New York announced parallel criminal charges concerning the same alleged conduct.
- The SEC complaint identifies more than $8.7 million raised from 35 investors, providing a defined scope for the civil case.
Risks & concerns
- More than $8.7 million was allegedly raised from 35 investors using material misrepresentations about performance, assets, clients, and holdings.
- Most diverted pre-IPO investment money was allegedly lost after being transferred into brokerage accounts for failed options trades.
- Dinelli allegedly misappropriated more than $1 million, while Frankel allegedly misappropriated more than $340,000.
- BAV allegedly promoted returns as high as 153% despite consistent losses in the fund.
- Veterans and medical providers serving veterans were specifically targeted through relationships linked to Dinelli’s former naval service.
