U.S. Authorities Charge Two More Israeli Women of Binary Options Fraud

Picture clockwise: Liora WELLES, Lee ELBAZ, Lissa MEL

The Israeli Lee ELBAZ was already arrested by the U.S. authorities in 2017 for binary options fraud. In March 2018, she was charged in an indictment with one count of conspiracy to commit wire fraud and three counts of wire fraud for her alleged participation in a scheme to defraud investors in the United States and across the world in financial instruments known as “binary options.” The trial is scheduled to take place in 2019 before the District Court for the District of Maryland. ELBAZ was CEO of the Israeli company YUKOM, which operated numerous illegal (unregulated) broker sites. Among them the two sites BinaryBook and BigOption.

Lee ELBAZ and the Israeli Method

Due to a large number of victims of the binary options fraud, the U.S. Department of Justice has launched a dedicated website for the victims of Lee ELBAZ and YUKOM as part of the U.S. DOJ’s Victim Notification Program.

Among other things, the indictment alleges that YUKOM provided investor “retention” services” for the two websites BinaryBook and BigOption. This essentially involves systematically acquiring new funds from existing customers and also preventing customer funds from being paid out. According to the U.S. indictment, customers were induced to constantly invest new funds with false bonus and unrealistic profit promises. At the same time, the disbursement of paid-in funds and winnings was prevented presenting a variety of reasons. If everything did not work and the clients insisted on payouts, then these illegal broker sites accuse the customers of fraud, terminated accounts and kept the money. In most cases, the customers’ money was no longer available anyway.

Illegal brokers such as BinaryBook and BigOption do not keep customer funds on segregated, insured accounts as requested by law, but use these funds to finance marketing, customer acquisition, high salaries, and commissions. The responsible retention managers and their employees receive high commissions from the customer’s new funds, i.e. the funds were misappropriated from the very beginning.

Furthermore, ELBAZ, along with her co-conspirators and subordinates, misled investors using BinaryBook and BigOption by falsely claiming to represent the interests of investors but that, in fact, the owners of BinaryBook and BigOption profited when investors lost money. That’s in the genes of binary option fraud schemes.

A particularly condemnable approach has emerged in the course of the FBI’s investigations. YUKOM has defined old people, pensioners, and war veterans as its target group. This group of small investors, which as a rule has little experience with complicated financial instruments such aus derivates or binary options, was probably an easy victim.

Tens of millions of dollars missing

The U.S. authorities believe that the YUKOM sites have betrayed investors to the tune of tens of millions of dollars. The BinaryBook site alone is said to have received USD 99 million from investors between the 2nd quarter of 2017 and the 4th quarter of 2016. However, only USD 20 million was paid out to customers during this period, the FBI found in its investigations.

YUKOM’s Retention Service worked efficiently in this regard. FinTelegram is aware of similar complaints about other illegal brokers such as Option888 or SafeMarkets. YUKOM is s role model for the fraudulent online trading industry. While the brokers’ Boiler Rooms perpetrate customers and acquire their money, the retention services staff ensured that nothing was paid out and more funds were deposited.

Defendants Pleaded Guilty

Lee ELBAZ, according to her legal representative Jonathan LOPEZ, does not plead guilty to the charges. She asserts that she worked for a legitimate company and did legitimate business. However, her employees at the time might see things differently and thus probably get ELBAZ into trouble.

Simona WEINGLASS of the Times of Israel has reported that Lee ELBAZ’s two more employees, Liora WELLES and Shira UZAN, have been charged with binary options fraud. According to a Washington Post report, they both pleaded guilty to the charges of binary options fraud and admitted that under Lee ELBAZ’s leadership they were responsible for investor fraud of USD 2.4 million and USD 1.8 million, respectively.

Already in November 2018, the former Israeli reality TV star Lissa MEL was arrested and charged for her involvement in the illegal activities of these brokers in Los Angeles. She is said to have worked as “Retention Manager” and “Senior Broker” for BinaryBook and BigOption, writes the Times of Israel. She is said to have used a number of fake names such as Monica Sanders. She is facing a sentence of up to 20 years imprisonment as perpetratof in a binary options fraud.