SEC v. Jacob Garfinkel; 5G Funding LLC; Five G Funding LLC — U.S. Securities and Exchange Commission Litigation Release No. 26651, dated September 28, 2026.
Named in the SEC’s action
- Jacob Garfinkel
- 5G Funding LLC
- Five G Funding LLC
The SEC charged Jacob Garfinkel and his companies, 5G Funding LLC and Five G Funding LLC, with operating an investment fraud. They allegedly raised $4.5 million from at least 23 investors, primarily within Orthodox Jewish communities, by misrepresenting the profitability and use of funds in their merchant cash advance business. Garfinkel allegedly diverted over $2 million for personal use and related parties, and misrepresented his experience and the portfolio's performance.
In Plain English
Imagine you give money to a friend to invest in a business. Your friend promises to split the profits with you. However, your friend actually uses some of your money for personal spending and lies about how well the business is doing. That's similar to what happened here, where a business owner allegedly took money from investors, promised profits, but instead used a large portion for himself and misled them about the investment's success.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- Targeting Investors From November 2021 through at least January 2023, Jacob Garfinkel allegedly targeted at least 23 investors, primarily within Orthodox Jewish communities in Illinois, New York, and New Jersey, raising approximately $4.5 million.
- Misrepresenting the Business Garfinkel claimed that 5G Funding's merchant cash advance business was highly profitable and that he and investors would split the net profits generated from investor-funded advances.
- Claiming False Experience Defendants falsely represented that Garfinkel had a track record of generating returns in the merchant cash advance industry, when in reality, he had no prior experience in the business before forming 5G Funding.
- Misrepresenting Portfolio Performance The merchant cash advance portfolio was allegedly unprofitable, collecting less than 60% of the total amount owed. Garfinkel hid these losses by issuing misleading reports indicating merchants were repaying on time and generating substantial returns.
- Collecting Unauthorized Fees While Garfinkel used some investor funds for the business, he collected $1.1 million in 'origination fees' out of the merchant cash advances, which were not fully disclosed or authorized as represented.
- Diverting Investor Funds Garfinkel allegedly diverted another approximately $1 million in merchant repayments and other funds, which were represented to benefit investors, for his personal spending and transfers to related parties.
- Executing Sham Refinancing Defendants entered into refinancing transactions that concealed the company's financial distress by making it appear initial advances were paid off. These transactions were conducted to generate fees for themselves, not for any legitimate business purpose.
- Enticing New and Existing Investors Through these alleged misrepresentations and fraudulent activities, Defendants enticed new investors and persuaded existing ones to keep their money invested, allowing the unprofitable business and fee generation to continue.
The Enforcement Action
SEC charges 5G Funding LLC, Five G Funding LLC, and their CEO Jacob Garfinkel with operating an investment fraud that raised approximately $4.5 million from at least 23 investors. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against all defendants, and a conduct-based injunction against Garfinkel prohibiting him from participating in securities offerings.