Monday, October 26, 2020

Binary Options Company Owners Face Allegations of $140 Million Fraud Scheme

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Fifteen individuals, including two former company owners, were charged in a superseding indictment unsealed today for their alleged participation in a scheme to defraud investors in the United States and worldwide by fraudulently marketing approximately $140 million in financial instruments known as “binary options,” announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge Timothy R. Slater of the FBI’s Washington Field Office.

Yakov Cohen, 27; Yosef Herzog, 54; Ori Maymon, 33; Nissim Alfasi, 33; Elad Bigelman, 37; Runal Jeebun, 29; Sabrina Elofer, 28; Afik Tori, 27; Anog Maarek, 28; Oron Montgomery, 38; David Barzilay, 41; Gilad Mazugi, 36; Hadas Ben Haim, 34; Yousef Bishara, 32; and Nir Erez, 29, all current or former residents of Israel, were charged in an indictment returned in the District of Maryland with one count of conspiracy to commit wire fraud and three counts of wire fraud.

Maarek appeared Friday before U.S. Magistrate Judge Timothy J. Sullivan in the District of Maryland.  Maarek was extradited from Hungary, after his arrest in September 2019, by Hungarian law enforcement.

The indictment alleges that beginning in 2014, the defendants and their co-conspirators fraudulently sold and marketed binary options to investors located in the United States and throughout the world through two websites, known as BinaryBook and BigOption.

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The indictment alleges that the defendants and their co-conspirators all worked for an Israel-based company called Yukom Communications, a purported sales and marketing company.  The indictment further alleges that Cohen and Herzog had ownership interests in Yukom Communications and other related entities that were used to perpetrate the fraud scheme.

As alleged in the indictment, the defendants and their co-conspirators misled investors by falsely claiming to represent the interests of investors when, in fact, the owners of BinaryBook and BigOption profited when investors lost money.

In addition, the indictment alleges that the defendants and their co-conspirators misrepresented the suitability of and expected return on investments through BinaryBook and BigOption, used false names and qualifications when talking to investors, and falsely claimed to be working from London, when they were working from Israel.

The indictment alleges the defendants and their co-conspirators also misrepresented whether and how investors could withdraw funds from their accounts and misrepresented the terms of so-called “bonuses,” “risk free trades” and “insured trades,” and deceptively used these supposed benefits in a manner that in fact harmed investors.

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An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

In a related case, Lee Elbaz, the former CEO of Yukom and a citizen of Israel, was found guilty in August 2019 after a three-week jury trial of one count of conspiracy to commit wire fraud and three counts of wire fraud.  Five additional former employees of Yukom and its affiliated companies have also pleaded guilty to conspiracy to commit wire fraud.

Source: justice.gov

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