Mordechai Haim Ferder, 55, known as Moti Ferder, grew up in Tel Aviv’s diamond quarter where his father dealt in rough stones. He served four years as a captain in an Israeli Army combat unit, then apprenticed under master cutters while attending night school for gemology and business. After the Berlin Wall came down in 1989 he spent several years sourcing diamonds out of Russia and ran a cutting factory there. In 2004 he and his wife Idit founded what became Lugano Diamonds & Jewelry Inc., opening their first salon in Newport Beach, California in 2005 and expanding to Aspen, Palm Beach, Greenwich, Miami, Chicago, and London. In September 2021 the publicly traded Compass Diversified Holdings, known as CODI, acquired a 60 percent interest at an enterprise value of about $256 million, paying Ferder and his entities roughly $103.7 million, of which $85.9 million went to Simba IL Holdings LLC and $17.7 million to family trusts. He kept 40 percent and stayed on as chief executive. On August 31, 2026, the SEC charged him with running a scheme that caused Lugano and CODI to record more than a billion dollars of fictitious revenue. He is in Israel, and the FBI is investigating him.
Ferder denies all of it. Through his attorney, he has stated that no money was ever diverted to him, his family, or any entity affiliated with him, and that every dollar paid by third parties under the agreements at issue went directly to Lugano. His counsel has said that claims to the contrary are not only wrong but actionable. Ferder further accuses Compass Diversified of conducting a cover-up, describing the revenue decline the parent company has reported as fiction, and asserting that Compass knew about the investment agreements and left them in place in order to enjoy the operational benefits. None of the SEC’s allegations have been tested at trial.
You Had to Be a Philanthropist to Buy From Him
Lugano’s business model was built on an unusual filter. Rather than paying celebrity ambassadors, the company cultivated a clientele of philanthropists, and access to its Privé membership program, which Forbes estimated cost tens of thousands of dollars to join, required more than money. A prospective member had to be a demonstrated supporter of charitable causes. Clients included Georgina Bloomberg and Sheila Johnson. Ferder served on the boards of the Segerstrom Center for the Arts, the Beckstrand Cancer Foundation, the American Film Festival, and the Lupus Research Alliance, the last of these carrying personal weight because his wife Idit, who was Lugano’s chief operating officer, has lupus. We believe in philanthropy, he told Forbes, and we believe that people do business with people they want to do business with.
That Forbes profile ran in April 2025. It described him unlocking vault drawers in Newport Beach to display a necklace holding 168 carats cut to resemble snakeskin, and explaining how light must break identically from every direction. One month later he resigned from every position at the company he had built, and forfeited any severance.
Investor Money Booked as Sales, Repayments Disguised as Inventory
According to the SEC’s complaint, from 2021 to 2025 Ferder sold individuals investment contracts tied to specific diamonds, promising he would acquire the stone, find a buyer, or use his expertise to turn it into jewelry and increase its value. The complaint states that neither Ferder nor Lugano ever owned those diamonds and that he never even took steps to acquire them. Money from later investors was used to make what the SEC characterizes as Ponzi-like payments to earlier ones. Bankruptcy filings describe fabricated invoices, unauthorized investment contracts, and empty-box diamond shipments affecting more than 60 high-net-worth individuals.
The accounting is what carried the fraud into a public company’s financial statements. When an investor handed over money, that money was a liability Lugano owed back. At Ferder’s direction it was instead recorded as revenue, as though a customer had bought a product. Under generally accepted accounting principles there was no basis for that treatment, because there were no real customers and nothing being delivered. When investors were repaid, the payments were disguised in Lugano’s records as deposits for inventory purchased from vendors, including four payments to Simba totaling $1.6 million. Lugano’s reported sales nearly quadrupled. By the end of 2024 it accounted for 21 percent of CODI’s reported revenue and 58 percent of its reported income.
An $11 Million Blue Diamond That Went to Miami and Never Came Back
The consignment claims illustrate how the operation touched the wider diamond trade. Scarselli Diamonds of New York alleges in a lawsuit that it shipped a pear-shaped 6.43-carat fancy intense blue, internally flawless diamond, set in a ring and worth nearly $11 million, to a Lugano salon in Miami on January 28, 2025. The stone was supposedly going to be shown to a prospective buyer and returned on demand. Scarselli says it had conducted months of due diligence beforehand, had already completed fourteen consignment transactions with Lugano worth $44 million, and had confirmation that Lloyd’s of London would cover the value if anything went wrong. At least seven separate actions arising from the diamond contracts have been filed in Orange County Superior Court, several now stayed by the bankruptcy.
A 59 Percent Drop in One Day and a $974 Million Hole
CODI’s leadership was alerted to concerns about how Lugano was financing inventory and opened an audit committee investigation with outside counsel and a forensic accounting firm. On May 7, 2025, Ferder resigned. Joshua Gaynor, a former Bulgari executive who had joined as Lugano’s president in 2024, became interim chief executive alongside chief financial officer Christoph Pachler. Idit Ferder also departed. When CODI disclosed on May 8 that its 2024 financial statements could no longer be relied upon, its shares fell roughly 59 percent in a single trading day. The company suspended its dividend, negotiated forbearance agreements with lenders, faced questions about NYSE listing compliance, and drew multiple securities class actions.
The restatement, completed on December 8, 2025, covered fiscal years 2022, 2023, and 2024. Consolidated inventory for 2024 was reduced by more than $375 million, close to 40 percent. Lugano’s revenue fell by more than 85 percent from previously reported levels once the fraudulent revenue was stripped out. CODI chief executive Elias Sabo called it the most challenging period in the company’s history and described the fraud as pervasive, complex, and isolated to Lugano. By the time Lugano filed for Chapter 11 in Delaware on November 16, 2025, in what is functionally a liquidation overseen by chief restructuring officer J. Michael Issa, CODI said it was owed approximately $718 million on a business it had bought for $256 million. Its total exposure, purchase price plus secured debt, has been put at about $974 million, the worst investment in CODI’s twenty-one year history.
The Charges, the Trusts, and a Defendant Overseas
The SEC charges Ferder with violating Section 17(a) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5 and 13b2-1, and charges Simba IL Holdings with violating Section 17(a) and Section 10(b) and Rule 10b-5. It seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and an officer and director bar. Ferder and his wife are named as relief defendants in their capacities as trustees of the Haim Family Trust, the TF 2021 Irrevocable Trust, and the RF 2021 Irrevocable Trust. A relief defendant is not accused of wrongdoing; the designation exists so a court can order the return of money that flowed to them, here more than $17.7 million from the 2021 CODI transaction. Edit Fintzi Ferder is named solely as a trustee and is not charged with fraud.
Ferder holds dual Israeli and American citizenship and has returned to Israel, where he was reported to be living in Tel Aviv while the FBI investigates. That fact matters to the practical outcome. A civil judgment, an officer and director bar, and a disgorgement order are enforceable in the United States. Collecting against a defendant who has relocated abroad is a different problem, and one that extradition, if criminal charges ever follow, would have to answer.
Conclusion
Moti Ferder learned the diamond trade from his father in Tel Aviv, cut stones in Russia after the Berlin Wall fell, and built a jewelry house whose customers had to prove they gave to charity before they were allowed to buy. Forbes profiled him in April 2025. He resigned in May. According to the SEC he had spent four years selling people contracts on diamonds he never bought, paying the earlier ones with the later ones, and instructing his company to record all of it as revenue, until Lugano represented 58 percent of its public parent’s reported income. The restatement erased three years of financials and more than 85 percent of Lugano’s revenue. CODI is owed $718 million and Lugano is being liquidated. Ferder says he never took a dollar and that Compass is covering up its own failure of oversight. He is saying it from Israel.
