Targeting Veterans With Fake Returns: SEC Charges Dinelli and Frankel in $8.7 Million Fund Case

Published Oct. 1, 2026. Case statuses are current as of that date.

On Sept. 30, 2026, the Securities and Exchange Commission announced civil charges against Christopher Kenji Dinelli (also known as Kenji Dinelli) and Jacob David “Kobe” Frankel (also referred to as Kobi Frankel in the litigation release) for allegedly orchestrating a fraud that raised more than $8.7 million from 35 investors through Beyond Alpha Ventures LLC (BAV) and advisory firm Beyond Equity LLC [1][2]. The SEC says Dinelli, a former naval officer, targeted veterans and people who provide medical services to veterans [1].

Important: These are civil charges (with a parallel criminal action announced by the U.S. Attorney’s Office for the Southern District of New York). Neither man has been convicted in the matters described here; both are presumed innocent of criminal charges unless and until proven guilty, and civil allegations remain unproven until adjudicated.

How the alleged scheme worked

1. Affinity pitch. Dinelli allegedly leveraged military ties, soliciting veterans and veterans’ medical providers into BAV’s options-trading fund and/or affiliated special purpose vehicles that purported to hold pre-IPO securities in two private companies [1].
2. Inflated performance. Despite consistent losses, the SEC says the defendants touted returns of up to 153% and a sprawling client base, including in a “Trading Fund Overview 2024” document claiming a “153% Net Return on Investment” [1].
3. Misrepresentations. The complaint alleges false statements about past performance, assets under management, client base, and holdings [2].
4. Diverted pre-IPO money. Without investors’ knowledge, money meant for pre-IPO securities was allegedly diverted into the fund’s brokerage accounts, where most of it was lost on failed options trades [1].
5. Alleged misappropriation. The SEC alleges Dinelli misappropriated over $1 million and Frankel over $340,000 [1].

“The bonds between service members are as strong, if not stronger, than in any other profession,” said Thomas P. Smith, Jr., Associate Director of the SEC’s New York Regional Office. “Through their alleged actions, the defendants took advantage of those relationships for greedy and self-serving purposes.” [1]

The SEC complaint was filed in the U.S. District Court for the Southern District of New York (No. 26-cv-8564) and seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties. Frankel is also charged under the Investment Advisers Act [2]. The SEC stated that SDNY announced parallel criminal charges the same week [1].

Red flags

• Guaranteed or triple-digit “net returns” in options trading or private pre-IPO deals.
• Affinity pressure—“fellow veterans only”—without independent verification.
• Vague SPVs claiming stakes in famous private companies without audited proof.
• Advisers who cannot show current SEC/state registration on Investor.gov.
• Mixing “trading fund” money with purported pre-IPO subscriptions.

What to do if you're targeted

1. Check the person and firm on Investor.gov and ask for audited performance.
2. Be wary of pre-IPO offerings marketed through chats or informal veteran networks; read the SEC’s pre-IPO investor alert [1].
3. Never invest solely because of shared military service.
4. Report suspected securities fraud to the SEC and to the FBI at ic3.gov.
5. If you invested with BAV or Beyond Equity, preserve statements and consult a securities attorney.

Case status (as of Oct. 1, 2026)

Defendant	Court	Status as of Oct. 1, 2026	Source
Christopher Kenji Dinelli (aka Kenji Dinelli)	S.D.N.Y. civil 26-cv-8564; parallel SDNY criminal (announced)	SEC civil defendant; criminal charges announced by USAO SDNY	[1], [2]
Jacob David “Kobe”/Kobi Frankel	Same	SEC civil defendant; criminal charges announced by USAO SDNY	[1], [2]

Those not convicted are presumed innocent. Statuses can change.

Sources

1. U.S. Securities and Exchange Commission, Press Release 2026-97, “SEC Charges Two Individuals With Orchestrating Fraud Scheme That Targeted Veterans,” Sept. 30, 2026. https://www.sec.gov/newsroom/press-releases/2026-97-sec-charges-two-individuals-orchestrating-fraud-scheme-targeted-veterans
2. U.S. Securities and Exchange Commission, Litigation Release No. 26658, Christopher Kenji Dinelli and Jacob David Frankel, Sept. 30, 2026. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26658

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