Former CEO of AI recruiter Joonko charged with $27M fraud

AI Law

The former chief executive officer of an artificial intelligence (AI) recruitment startup that is now closed faces up to 40 years in prison and the potential of penalties levied by the Securities and Exchange Commission (SEC) for allegedly defrauding investors of more than $27 million.

Ilit Raz, an Israeli citizen, was indicted by a grand jury in New York for misleading investors about the success of Joonko, which she founded. Joonko told investors it used AI to recruit job candidates to fulfill diversity, equity, and inclusion hiring goals for its Fortune 500 clients.

Between 2021 and 2022, Raz falsely claimed the company’s customers included one of the world’s largest credit card companies, a sports apparel company, an online travel business, and a major fashion brand. But none of them were customers, the Southern District of New York (SDNY) alleged in a press release Tuesday.

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