Former CEO of Israeli Company Found Guilty of Orchestrating $145 Million Binary Options Fraud Scheme
The former CEO of the Israel-based company Yukom Communications, a purported sales and marketing company, was found guilty yesterday for orchestrating a scheme to defraud investors in the United States and worldwide by fraudulently marketing approximately $145 million in financial instruments known as “binary options.”
Lee Elbaz, 38, a citizen of Israel, was found guilty after a three-week jury trial of one count of conspiracy to commit wire fraud and three counts of wire fraud. Sentencing is scheduled for Dec. 9, 2019, before U.S. District Judge Theodore D. Chuang of the District of Maryland, who presided over the trial. Elbaz was arrested on a criminal complaint in September 2017 and indicted in March 2018.
“This verdict demonstrates that the Department will hold accountable those who deceive American investors with false claims and rates of returns,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “We are committed to prosecuting financial fraud, even when perpetrated from abroad.”
“I would like to commend the FBI agents, analysts and our DOJ colleagues for their hard work to seek justice for the victims of Lee Elbaz’s fraud,” said Acting Assistant Director in Charge of the FBI's Washington Field Office, John P. Selleck. “We would not be successful in our work if not for our partners around the world; and this investigation demonstrates that no matter where fraudsters and criminals try to hide, we will work tirelessly to locate them.”
According to the evidence presented at trial, the defendant and her 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. The evidence showed that in her role as CEO of Yukom, Elbaz, along with her co-conspirators and subordinates, misled investors using BinaryBook and BigOption by falsely claiming to represent the interests of investors when, in fact, the owners of BinaryBook and BigOption profited when investors lost money; by misrepresenting the suitability of and expected return on investments through BinaryBook and BigOption; by providing investors with false names and qualifications and falsely claiming to be working from London; and by misrepresenting whether and how investors could withdraw funds from their accounts. Representatives of BinaryBook and BigOption, working under Elbaz’s supervision, 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, the evidence showed.
This case was investigated by the FBI’s Washington Field Office. Principal Assistant Chief Henry Van Dyck and Trial Attorneys L. Rush Atkinson and Caitlin Cottingham of the Criminal Division’s Fraud Section are prosecuting the case. Assistant Chief Tracee Plowell and Trial Attorney Ankush Khardori previously prosecuted the case.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information at: https://www.justice.gov/criminal-vns/case/lee-elbaz.