The binary options scam surrounding Israeli boiler room Yukom Communications Ltd (Yukom) was brought to trial by U.S. prosecutors back in 2019. The masterminds behind the Yukom scam were the two Israeli Yossi Herzog and his junior partner Kobi Cohen. Lee Elbaz, an Israeli, was hired as the CEO for the Yukom boiler room in Israel. She allegedly managed the fraud on investors under direction and instruction. The U.S. jury found her guilty of fraud, and she was sentenced to 22 years in prison and $28 million in restitution payments. On Dec. 18, 2020, she filed the appeal, asking for a vacation of the conviction because her former boss Herzog, also charged, remains at large and has not testified. They would have confirmed that Elbaz had no intention to commit fraud, the appeal argues.
Elbaz’s Opening Brief for Appellant is 55 pages long and was filed under Case File No. 20-4019 by her attorneys, led by G. Alan DuBois, on December 18, 2020. The grounds for reversal enumerated therein are multiple and include both U.S. court jurisdiction issues over transactions conducted or induced outside the U.S. to jury bias.
One of the grounds in the appeal also relates to U.S. authorities’ refusal to allow the witness, their former boss with Yukom Yossi Herzog, to be questioned under oath in Israel. Herzog would have traveled to the United States only if the U.S. authorities had granted him immunity. This was denied, and that would not have been proper, Elbaz said in her appeal.
While the prosecution’s witnesses – former employees in the Yukom scam – had previously pleaded guilty to fraud themselves, Herzog would have confirmed that she had not committed fraud.
Mr. Herzog will testify that he instructed his employees to be truthful with BinaryBook and BigOption customers about the financial product, he personally observed Ms. Elbaz conveying that policy to Yukom employees, and he was aware that Ms. Elbaz fired employees who acted in violation of that policy by making false statements to customers
Lee Elbaz Appelation
about the financial product.
In opposition to four individuals who had pleaded guilty to fraud and thus had an incentive to testify against Elbaz and that she knew about their fraud, Herzog and three other witnesses – all of them are also indicted in the Yukom case – would testify that Elbaz trained people not to commit fraud. Unfortunately, the jury never heard from Herzog and the other defense witnesses. According to the appellation, the U.S. prosecutors informed the witnesses that three were also under indictment and may want to reconsider whether they wish to testify in the Elbaz case.
It may be seriously doubted whether Yossi Herzog would confirm Elbaz’s innocence. In a phone conversation with Herzog in the summer of 2019, the latter told FinTelegram that he would not know anything about Elbaz’s fraud and if she had committed it, then she should be punished. In any case, he did not defend or excuse her.
Regardless, Yossi Herzog is currently not available to the authorities anyway. He is on the run and is said to be in Ukraine. This is the new home for many Israeli scammers and boiler rooms in the Forex and crypto segment.
