SEC Charges Two Former Officers With $8.7 Million Veteran Fraud Scheme
The charges affect investors in the Beyond Alpha Ventures fund, including veterans, and take effect immediately upon filing on Sept. 30, 2026.
The Securities and Exchange Commission filed a complaint in the U.S. District Court for the Southern District of New York on Sept. 30, 2026, charging Christopher Kenji Dinelli and Jacob David "Kobe" Frankel with orchestrating a fraud scheme that raised more than $8.7 million from 35 investors through Beyond Alpha Ventures LLC and its advisory firm, Beyond Equity LLC.
According to the complaint, Dinelli, a former naval officer, targeted veterans and providers of medical services to veterans, claiming the fund employed an options-trading strategy and held pre-IPO securities in two private companies. The defendants allegedly misrepresented past performance, assets under management, client base, and holdings, touting returns of up to 153% in a document titled "Trading Fund Overview 2024." The complaint further alleges that, without investors' knowledge, the defendants diverted money from pre-IPO investors to brokerage accounts where the majority was lost in failed options trades, and that Dinelli misappropriated over $1 million while Frankel misappropriated over $340,000.
The SEC alleges violations of the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and, for Frankel, the Investment Advisers Act of 1940. The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against both defendants. A parallel criminal action was announced by the U.S. Attorney's Office for the Southern District of New York concerning the same conduct.
"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. We will hold them accountable for their actions."
Investors are directed to the SEC's Investor Alert on the risks of investing in pre-IPO offerings for further guidance.
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