Lee Elbaz, 42, is a former CEO of the Israeli binary options scam scheme Yukom Communications, which defrauded investors worldwide of at least $140 million. In 2019, a U.S. jury found Elbaz guilty, including bank wire fraud. She was sentenced to 22 years in prison and $28 million in restitution payments. Elbaz was working from Israel and portrayed herself as a mere middle manager following the directions of the scheme’s owners, Yossi Herzog and Kobi Cohen. She still fights her U.S. conviction.
Fighting The U.S. Conviction
Lee Elbaz was arrested in 2017 while on vacation in New York. She was charged with three counts of conspiracy to commit wire fraud. Despite Elbaz’s unsuccessful attempt to dismiss the charges by arguing that the wire fraud statute does not apply to conduct outside the United States, she was found guilty on all three counts by a jury. Consequently, she was sentenced to 22 years and ordered to pay $28 million in restitution.
The 4th Circuit of the U.S. Court of Appeals upheld Elbaz’s conviction but acknowledged that the wire fraud statute does not have extraterritorial reach. However, the court determined that the convictions were still valid as they constituted “permissible domestic applications of the wire fraud statute.”
The court reasoned that the focus of the wire-fraud statute is the misuse of U.S. wires rather than the creation and execution of a fraudulent scheme. Although the scheme itself and Elbaz’s involvement were foreign in nature, the 4th Circuit concluded that the emails and phone calls made by Yukom boiler room agents to the three victims in Maryland involved domestic wires and were, therefore, subject to federal prosecution.
In Elbaz v. United States, Elbaz seeks the Supreme Court’s review and urges them to overturn the 4th Circuit’s decision. She argues that the courts of appeals are divided over whether the federal wire-fraud statute applies extraterritorially and if not, whether and when punishing the use of domestic wires in a foreign scheme is a domestic application of the statute.
The [4]th Circuit’s decision effectively turns the United States into a global law enforcement officer over foreign financial crimes — all that is necessary is for the scheme to touch one person in the United States or travel through one U.S. wire.
Lee Elbaz V United States (link)
Looking for Yossi Herzog And Kobi Cohen
Yossi Herzog and Kobi Cohen, who also face charges, are currently evading authorities and are believed to be in Israel. It remains uncertain whether they will be extradited to the United States and when such extradition might occur.
Share Information
If you have any information about Lee Elbaz, Yossi Herzog, Kobi Cohen, and their activities, please let us know through our whistleblower system, Whistle42.
