A former securities broker from Hewlett stole more than $700,000 from clients looking to invest in Facebook, the Manhattan district attorney said Thursday.
Ronen Zakai, 42, took $705,000 from five victims seeking to invest in the initial public offering of the social media company Facebook Inc., instead using the money on country club membership fees, car payments, travel and shopping trips, Manhattan District Attorney Cyrus R. Vance Jr. said in a news release.
Zakai is charged with two counts of second-degree grand larceny, three counts of third-degree grand larceny, five counts of securities fraud and one count of first-degree scheming to defraud.
According to documents filed in court Thursday, from December 2010 through January 2012 Zakai solicited and collected $705,000 from five investors, promising to use the funds to purchase shares of Facebook.
Facebook filed for its IPO in February 2012, and shares began trading publicly in May 2012.
"Zakai called the venture The Social Innovation Fund; however, instead of purchasing the securities, the defendant quickly depleted the funds for his personal use," the release said.
By the end of June 2012, Zakai had spent the investors' funds on various personal expenses, prosecutors said.
Zakai is being held on a bail of $250,000 cash or $350,000 bond. If bail is posted, he must surrender his passport, the court said. He is due back in court on Wednesday.