A prominent Orange County philanthropist and well-connected jeweler is now accused of bilking wealthy investors out of millions of dollars and then fleeing the country, according to a series of civil lawsuits filed over the past few months in both state and federal court.
Moti Ferder, the co-founder and until recently CEO of Newport Beach-based Lugano Diamonds, is alleged to have defrauded more than 40 creditors out of “hundreds of millions of dollars,” according to more than a half-dozen lawsuits filed by multiple investors.
The allegations follow Ferder’s resignation as CEO of Lugano Diamonds, which the lawsuits contend was spurred by an internal investigation into accounting, financing and inventory irregularities within the business, which runs high-end jewelry “salons” in Newport Beach and seven other cities, including Aspen Palm Beach and Houston.
Neither Ferder nor an attorney listed as representing him in court records could be reached for comment. At least one of the lawsuits claims there is a related federal criminal investigation, though FBI officials declined to comment.
Ferder drew far more positive headlines in 2022 when Lugano Diamonds, then under his control, made a $2.5 million donation to the Orange County Museum of Art. That donation covered a decade worth of admission to the museum, allowing patrons to visit for free.
Speaking to a Southern California News Group reporter at the time of the donation, Ferder said he was passionate about art since it “opens the mind for opportunities.”
A second-generation diamond dealer who followed in the footsteps of his father, Ferder moved to the United States from Israel in 2005 to create a retail jewelry brand meant to give customers a memorable personal experience.
In the years following the opening of Lugano’s flagship Newport Beach location, the company was prolific with philanthropic donations, providing financial support to Irvine public schools, the Lupus Foundation and a variety of arts and cultural organizations. Ferder at one time sat on the Segerstrom Center for the Arts’ board of directors, while his wife, Idit, was on the Orange County Museum of Art board.
A Forbes profile of Ferder, released a month before his abrupt departure from Lugano, described Ferder’s “unique magic trick of convincing his ultrarich clientele that he is not just in it for the money.”
During his time running Lugano, the lawsuits allege, Ferder was “intimately involved in all customer relations and transactions” and “controlled the movement of gems to and from the company, including consignment inventory.”
The allegations outlined in more than a half-dozen state and federal civil lawsuits repeatedly describe investors being approached by Ferder for a “unique business opportunity.”
Ferder convinced the investors to pay half the purchase price for unique diamonds, the lawsuits allege. He pledged to use the diamonds to create unique jewelry, according to the lawsuits, and to pay the investors half the profits when the jewelry was sold.
Believing that they were being offered a simple, straightforward business opportunity with little financial downside by an expert jeweler with a reputation for philanthropy, investors readily agreed, according to the lawsuits. Ferder provided the investors with specific information for the diamonds he claimed he was going to purchase, including their Gemological Institute of America or European Gemological Laboratory certificate numbers.
When the promised profits allegedly didn’t materialize and their demands for the actual diamonds went unanswered, the lawsuits began.
One lawsuit, filed by Woodland Hills-based Avina and Global Innovations, alleges that 40 creditors “fell victim” to Ferder and that they were collectively bilked out of “hundreds of millions of dollars.”
“Plaintiffs later discovered that Moti’s and Lugano’s push to create a plethora of new joint ventures starting in late-2024 was part of a plan … to betray and defraud Avina and others out of tens of millions of dollars, burn their business relationships and flee the country with other people’s money,” the lawsuit states.
In 2021, Compass Diversified, a private equity firm, purchased a 60% stake in Lugano in a reported $256 million deal, though Ferder stayed on as CEO. The lawsuits allege that in May 2024, Ferder spoke to some of the investors about his plans to sell even more of his stake in Lugano, allegedly eying an up to $2.5 billion valuation for the company. Investors allege that Ferder misrepresented the company’s revenue, claiming it had doubled over the previous two years.
When investors asked for their financial share of the proposed diamond deals, attorneys for the plaintiffs allege that Ferder told them that while Lugano was experiencing “tremendous sales growth,” it also needed to fund a business expansion to obtain a higher valuation, and therefore didn’t immediately have the funds available to repay them.
But the lawsuits allege that Ferder was actually planning to “betray and defraud” the investors and “burn their business relationships and flee the country with other people’s money.”
“Moti (Ferder) has been executing a similar scheme for many years with various other wealthy individuals, all while using his role as Lugano Diamonds’ CEO to lend an air of credibility to his scheme,” attorneys alleged in one of the lawsuits.
According to the lawsuits, the investors learned in May that Compass — the company that had purchased the 60% stake in Lugano — was investigating “irregularities” in Lugano’s finances. Ferder quickly resigned, the lawsuits add.
“Both Moti (Ferder) and his civil counsel have refused to guarantee or pay or refund the stolen funds, as well as have refused to provide diamonds or replacement diamonds, despite demands by plaintiff and their counsel,” attorneys wrote in one of the lawsuits.
Another lawsuit alleges that Lugano now “admits that it does not possess” the diamonds Ferder allegedly promised to buy with the investor funds.
“It appears that Mr. Ferder and Lugano had intentionally misrepresented their intent to purchase the diamond(s) and concealed the fact that (investor) funds would not be used as agreed, but perhaps instead to pay other investors with whom Mr. Ferder and Lugano had similar agreements,” attorneys wrote in one of the lawsuits.
At least some of the investor funds were alleged to have been sent to a family trust tied to Ferder, one of the lawsuits contends.
In another lawsuit, a diamond and fine jewelry manufacturer — Champion Force Industrial Limited — alleges that Ferder, before leaving Lugano, racked up more than $50 million in unpaid goods.
Several of the lawsuits allege that Ferder traveled to Israel after leaving the United States in the wake of the allegations.