SEC Charges Two Over $8.7M Fraud That Targeted Veterans

The Securities and Exchange Commission on September 30 charged Christopher Kenji Dinelli and Jacob David "Kobe" Frankel with running a fraud scheme that raised more than $8.7 million from 35 investors, according to a complaint filed in the U.S. District Court for the Southern District of New York.

Per the SEC, Dinelli — a former naval officer — leaned on those ties, soliciting veterans and people who provide medical services to veterans. Money was supposed to flow into their fund, Beyond Alpha Ventures LLC (BAV), which was pitched as running an options trading strategy and/or affiliated special purpose vehicles said to hold pre-IPO stock in two private companies. Frankel is tied to the advisory firm Beyond Equity LLC.

The alleged misrepresentations, the SEC says, covered the fund's past performance, the pre-IPO investments, assets under management, and BAV's client base and holdings. Despite what the complaint calls "consistent losses," the two allegedly continued to tout returns of up to 153% — including in a document titled "Trading Fund Overview 2024" claiming a "153% Net Return on Investment."

The SEC further alleges the defendants diverted money from pre-IPO investors into the fund's brokerage accounts, where most of it was lost on failed options trades. It says Dinelli misappropriated over $1 million and Frankel over $340,000.

The civil complaint charges both with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, and charges Frankel additionally under the Investment Advisers Act of 1940. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties. In a parallel action over the same conduct, the U.S. Attorney's Office for the Southern District of New York announced criminal charges against both this week.

These are allegations. Neither defendant has answered the charges, and no findings have been made by a court.

Key facts

• Amount raised: over $8.7 million from 35 investors (SEC complaint, Sept. 30, 2026).
• Entities: Beyond Alpha Ventures LLC (fund); Beyond Equity LLC (advisory firm) (SEC).
• Claimed return: up to 153%, cited in a "Trading Fund Overview 2024" document, against actual "consistent losses" (SEC).
• Alleged misappropriation: over $1 million by Dinelli; over $340,000 by Frankel (SEC).
• Charges: antifraud provisions of the 1933 and 1934 Acts; Advisers Act as to Frankel; parallel criminal charges from SDNY prosecutors (SEC).

The real-world read

The tell here is the affinity angle: the SEC's Thomas P. Smith, Jr. framed the case around service-member bonds being "taken advantage of." Affinity fraud — trading on shared identity to lower a target's guard — is a recurring pattern, and a 153% "net return" printed on a marketing sheet is exactly the kind of number that should prompt scrutiny, not confidence. Note too that this document is the defendants' own marketing, cited by the SEC as evidence of the misrepresentation — not an independent performance figure. Pre-IPO and SPV pitches are hard for retail investors to verify, which is part of why they show up in fraud complaints; the SEC pointed readers to its pre-IPO Investor Alert alongside the charges. What the filing doesn't yet establish is any court finding — these remain allegations to be tested.

This is news reporting, not financial advice.

Sources

• SEC — Press Release, "SEC Charges Two Individuals With Orchestrating Fraud Scheme That Targeted Veterans" (Sept. 30, 2026) — primary source for all charges, figures, entities, quoted official, and the parallel criminal action. Includes a linked SEC complaint and pre-IPO Investor Alert. Not marketing; an enforcement announcement stating unproven allegations.