AI diversity hiring firm’s CEO accused of ‘fraudulent’ scheme that duped investors out of millions

The CEO of an artificial intelligence diversity hiring firm agreed to step down after an internal investigation found that she conducted a “fraudulent” scheme that raised millions by misleading investors.

Joonko is a “diversity recruiting” company that aims to connect “high quality, underrepresented talent, with world-class companies that care about diversity, equity, and inclusion,” according to the firm’s website, which appears to have been taken offline Tuesday.

The company was founded by CEO Ilit Raz in 2016, who wanted to “improve the lives of women, minorities, and veterans in the workplace” following her own hiring experiences “in a male-dominated industry,” an archived version of Joonko’s website stated.

The company utilizes “AI-powered skills-based matching” to connect companies with “diverse and underrepresented” talent. Joonko’s website stated that it has partnered with companies including Adidas, Nike, Intuit, PayPal, and American Express.

The firm is now on the verge of collapse after an internal investigation discovered that Raz allegedly lied to investors about the size of the firm’s business to raise millions.

The probe found that Raz claimed Joonko worked with 150 companies, but in reality, “the number was significantly smaller,” the CTech reported.

In a January interview on “20 Minute Leaders” with Michael Matias, Raz claimed Joonko was working with “close to 200 companies across the U.S.”

Joonko’s board reported that Raz made “misstatements” regarding the company’s financial reporting.

“As a result, the board and other executive officers of the company carried out an extensive review of the CEO’s performance,” the board stated. “The CEO was found to have engaged in egregious, unethical and fraudulent conduct, which caused harm to the company and its shareholders. The CEO was confronted with the findings of the investigation, and she voluntarily resigned in response. The extent of the situation remains under investigation and next steps are under consideration.”

Raz raised $25 million in cash last fall after lying to investors by submitting fake invoices, wire transfers, and bank accounts, a source told the New York Post.

“It really is one bad actor. It’s staggering, the individual [wrongdoing] and the level of sophistication of the CEO,” the source told the Post.

In September, Raz told Insider, “I learned very early on that it’s important to pitch Joonko as a business.”

“Once you can prove that your message is able to stand up itself in terms of metrics, then you can raise from major players,” she added.

Investors for last fall’s fundraising round included Insight Partners, Target Global, Kapor Capital, and Vertex Ventures.

Insight Partners said in a statement, “Insight does not tolerate, and our investors expect us to take seriously, any findings of misconduct, deceit or unlawful activity at our firm or any of our portfolio companies.”

Raz and Joonko did not respond to a request for comment, CTech and the New York Post reported.

Ep987: Ilit Raz | CEO and Founder, Joonkoyoutu.be

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