SEC charges two ex-naval-linked men in $8.7 million fraud targeting veterans
The Securities and Exchange Commission charged Christopher Kenji Dinelli and Jacob David “Kobe” Frankel with orchestrating a fraud scheme that raised more than $8.7 million from 35 investors, many of them military veterans, through the fund Beyond Alpha Ventures LLC and the advisory firm Beyond Equity LLC, the agency announced on September 30, 2026.
Dinelli, a former naval officer, targeted veterans as well as people who provide medical services to veterans, according to the complaint filed in the U.S. District Court for the Southern District of New York. He told investors their money would go into the fund’s options trading strategy or into special purpose vehicles holding pre-IPO shares in two private companies, which the complaint does not name. The fund instead lost money consistently on options trades.
Despite those losses, the two men kept marketing returns of up to 153%, including in a document titled “Trading Fund Overview 2024” that claimed a “153% Net Return on Investment.” Without investors’ knowledge, money raised for pre-IPO investments was diverted to the fund’s brokerage accounts, where most of it was lost on failed options trades, the complaint states. Dinelli allegedly misappropriated more than $1 million and Frankel more than $340,000.
The SEC charged both men with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, and Frankel additionally under the Investment Advisers Act of 1940. The agency seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties. No court has ruled on the allegations; the case is not decided.
Separately, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against the two men the same week for the same conduct. The specific criminal charges are not detailed in the SEC’s release.
“The bonds between service members are as strong, if not stronger, than in any other profession. 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,” said Thomas P. Smith, Jr., associate director of the SEC’s New York Regional Office, in the announcement.
The SEC also published an investor alert on pre-IPO investment scams, the type of offering at the center of the case.
