Earlier today in federal court in Central Islip, Blake Kantor, who formerly operated a binary options company known as Blue Bit Banc and Blue Bit Analytics (“BBB”), pleaded guilty to conspiracy to commit wire fraud. As part of his plea agreement, Kantor admitted to obstructing an investigation into his fraudulent scheme. When he is sentenced, Kantor faces up to 20 years in prison, as well as restitution, criminal forfeiture and a fine. The guilty plea was entered before United States Magistrate Judge Gary R. Brown.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), and James McDonald, Director, Division of Enforcement, U.S. Commodity Futures Trading Commission (CFTC), announced the guilty plea.
“Kantor defrauded investors to enrich himself and then tried to cover his tracks by lying to the federal agents investigating the scheme,” stated United States Attorney Donoghue. “We will continue to protect the integrity of the financial marketplace by prosecuting to the fullest extent those who deceive the investing public and obstruct the pursuit of justice.”
According to court filings and facts presented at the guilty plea proceeding, in March 2014, Kantor established BBB, which sold binary options, a type of investment in which investors are promised an opportunity to be paid predetermined amounts based upon the price of securities, commodities or other investments at particular points in time. From approximately 2014 to 2017, Kantor and others solicited and took in approximately $1.5 million from more than 700 investors in BBB’s binary options. Kantor told investors that they could place binary option trades, or a BBB representative could do so for them, and that the predetermined profits promised them would be based on the actual prices of securities, currencies and other investments at particular points in time. However, Kantor did not inform the investors that a computer software program of BBB’s fraudulently altered data associated with binary options investments so that the probability of investors earning a profit favored BBB and disadvantaged investors. To further his scheme, Kantor directed that bank accounts—including one in the island nation of St. Kitts and Nevis—be opened using aliases and identifying information of others, making it more difficult to trace the funds that Kantor fraudulently took from investors. Kantor also converted BBB investments into ATM Coin, a worthless cryptocurrency that he misleadingly told investors was worth substantial sums of money.
In October 2017, after FBI agents informed Kantor that they were investigating his involvement in binary options, Kantor directed a co-conspirator to alter BBB customer lists. When interviewed by the FBI, Kantor falsely stated that he had not been involved in binary options since August 2013.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Bradley T. King and Madeline M. O’Connor are in charge of the prosecution.
BLAKE KANTOR (also known as “Bill Gordon”)
Fort Lee, New Jersey
E.D.N.Y. Docket No. 18-CR-177 (SJF)
United States Attorney’s Office