A Patent She Didn't Own and Partners That Didn't Exist: Smart-Ring CEO Convicted in $2 Million Ponzi Scheme

Published Oct. 6, 2026. Case statuses are current as of that date.

A federal jury in Santa Ana, California, on Thursday, Sept. 24, 2026, found Michelle Bisnoff, 59, the former CEO of Esos Rings Inc., guilty of running a nearly $2 million Ponzi scheme built on smart-ring technology she falsely claimed to own, and of fraudulently obtaining a pandemic relief loan [1][2].

The jury convicted her of six counts of securities fraud, six counts of wire fraud, two counts of money laundering, one count of wire fraud connected to a COVID-19-related loan, and one count of aggravated identity theft, according to federal prosecutors as reported by KEYT [1]. Sentencing is scheduled for Jan. 21, 2027 [1][3]. The Los Angeles Times reported that Bisnoff now lives in Boca Raton, Florida, and previously lived in Pacific Palisades and Santa Barbara, and that her attorney had no comment [2]. She has also used the names Michelle Angeline Silverstein and Shelly Silverstein [1].

A jury verdict is a conviction. Bisnoff has not been sentenced and may challenge the verdict.

How the scheme worked

According to evidence presented during the seven-day trial, as described by prosecutors:

1. A borrowed invention. Bisnoff was hired by a United Kingdom-based company to create a U.S. market for its patented near-field communication payment rings. By early 2017, she was claiming she owned the patent and used a fabricated patent assignment to market rings through her own company, Esos Rings Inc. [1]
2. Big-name claims. She told investors that Esos was profitable, that their money would boost manufacturing to meet demand from retailers including Target and Walmart, and that the company was receiving large infusions of capital from Apple Inc. and Roc Nation [1]. She also said Esos would buy back investors' shares above what they paid and was close to a licensing deal with Middle Earth Enterprises, which holds rights tied to The Lord of the Rings [1].
3. The reality. Esos had little to no revenue, no agreements with Target, and sold six rings in total on Walmart.com, three of which were returned. It never received investment from Apple or Roc Nation and never finalized the branding deal [1].
4. Fake paperwork. Prosecutors said financial statements, a corporate tax return and a patent valuation given to investors were not prepared or signed by the professionals listed on them [1].
5. Ponzi payments. Most of the money went to personal expenses, including rent on her home, and to Ponzi-style payments to earlier investors. When returns did not arrive, she offered what one witness called "dog-ate-my-homework" excuses, tried to embezzle about $550,000 from an employer, and sent checks that could not be processed [1].

In total, prosecutors said, Bisnoff fraudulently obtained almost $2 million from investors, with estimated losses of about $1.4 million [1].

The pandemic loan. In March 2020, using the name "Michelle Silverstein" and calling herself the chief operating officer of Esos Rings, she applied for an Economic Injury Disaster Loan with fabricated revenue figures. She received $150,000 and used at least some of it for personal expenses, including lease payments on her Pacific Palisades home [1]. FOX 11 reported the monthly rent was $15,600 [3].

The earlier SEC case. In 2023, the SEC sued Bisnoff and Esos Rings for fraudulently raising $1.95 million, and a September 2023 judgment required $836,548 to be paid within 30 days. According to court documents in the criminal case, neither has paid any of it [1].

Status and potential penalties

Bisnoff faces a statutory maximum of 20 years for each securities fraud and wire fraud count, up to 10 years for each money laundering count, and a mandatory two-year consecutive term for aggravated identity theft [1]. Those are maximums; the judge will decide the actual sentence. FOX 11 reported that the FBI and the Small Business Administration's Office of Inspector General investigated [3].

Red flags

• Celebrity or big-brand backing you can't verify. Claims of investment from Apple or Roc Nation, or deals with Target, were false in this case [1].
• Promised buybacks at a profit. A startup promising to repurchase your shares above your cost is promising a return it may not be able to pay.
• Documents you can't confirm. Call the accountant or appraiser named on a financial statement yourself.
• Excuses instead of payments. The SEC lists "difficulty receiving payments" among classic Ponzi warning signs [4].
• High returns with little risk and unregistered offerings, two more red flags the SEC highlights [4].

What to do if you're targeted

1. Verify ownership claims. Patent assignments are public records at the U.S. Patent and Trademark Office; check them before relying on a founder's word.
2. Contact the named partners. Ask the retailer or investor directly whether a deal exists.
3. Search court records for the company and its founder, including prior SEC actions.
4. Report concerns to the SEC at sec.gov/tcr and to the FBI at ic3.gov.

Case status (as of Oct. 6, 2026)

Defendant	Court	Status as of Oct. 6, 2026	Source
Michelle Bisnoff (aka Michelle Angeline Silverstein, Shelly Silverstein), 59, Boca Raton, FL	Federal, C.D. Cal. (Santa Ana)	Convicted by jury Sept. 24, 2026, on 16 counts (securities fraud, wire fraud, money laundering, COVID-loan wire fraud, aggravated identity theft); sentencing set Jan. 21, 2027	[1], [2], [3]
Michelle Bisnoff; Esos Rings Inc. (SEC civil, 2023)	Federal civil	September 2023 judgment for $836,548; unpaid per criminal court records	[1]

Statuses can change, including after sentencing or on appeal.

Sources

1. Andrew Gillies, "Esos Rings CEO Michelle Bisnoff Convicted of Nearly $2 Million Ponzi Scheme," KEYT News Channel 3-12, Sept. 25, 2026 (reporting a U.S. Attorney's Office, Central District of California, release). https://keyt.com/news/crime/2026/09/25/esos-rings-ceo-michelle-bisnoff-convicted-of-nearly-2-million-ponzi-scheme/
2. Melody Petersen, "Former Palisades resident misled smart ring investors in $2-million Ponzi scheme," Los Angeles Times, Sept. 27, 2026. https://www.latimes.com/california/story/2026-09-27/palisades-resident-misled-smart-ring-investors-in-ponzi-scheme
3. Alexa Mae Asperin, "Tech CEO convicted in $2M Ponzi scheme, COVID loan fraud," FOX 11 Los Angeles, Sept. 26, 2026. https://www.foxla.com/news/smart-ring-ceo-convicted-ponzi-scheme-covid-fraud
4. U.S. Securities and Exchange Commission, Investor.gov, "Ponzi Scheme," accessed Oct. 6, 2026. https://www.investor.gov/protect-your-investments/fraud/types-fraud/ponzi-scheme

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