The US Commodity Futures Trading Commission is pushing for an entry of default against the perpetrators of a $103 million binary options scam. It claims that the time for the defendants in the case, which includes five entities and four individuals, to respond to the lawsuit has expired.
Yossi Herzog, Yakov Cohen and Shalom Peretz, as well as convicted Yukom CEO Lee Elbaz, have been sued by the US government since August 2019. The scheme involved the binary option brands Yukom Communications Ltd., Linkopia Mauritius Ltd., Wirestech Limited (BigOption), WSB Investment Limited (BinaryBook), and Zolarex Ltd. (BinaryOnline). These companies were based in Israel, the U.K., Mauritius, the Marshall Islands and other offshore jurisdictions and targeted investors in the U.S. and elsewhere.
The complaint against these execs parallels and rests on the same findings as the criminal charges against Lee Elbaz, who was criminally convicted of wire fraud and conspiracy to commit wire fraud back in August.
The CFTC says the defendants used high-pressure sales tactics, manipulated their clients’ trades to force losses and generate profits for their companies, and ultimately misappropriated their money. The CFTC also said they concealed the operation’s true nature by using foreign names to open offshore bank accounts.
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In a separate statement, the CFTC said it had served all defendants that they have been sued in the US, either through emails to the companies or a legal notice published in The Times of Israel to inform Yossi Herzog, Yakov Cohen and Shalom Peretz.
However, as the watchdog seemingly failed to locate the three Israelis, they may not show up for the court’s criminal proceedings against them.
The four defendants and their associated brands were also named in other lawsuits that based on the same underlying facts as the CFTC’s allegations against Lee Elbaz, who was put behind bars for 22 years for her participation in a $140 million binary options scheme.
Her former bosses, who were also owners of the binary options websites BigOption and BinaryBook, together with 13 other employees, were charged with fraud in a Maryland court.
The defendants in the complaint are two business partners who allegedly had ownership interests in Yukom Communications and other related entities, Yakov Cohen, 27 and Yosef Herzog, 54. In addition, the complaint also names Ori Maymon, 33; Nissim Alfasi, 33; Elad Bigelman, 37; Runal Jeebun, 29; Sabrina Elofer, 28; Afik Tori, 27; Anog Maarek, 28; Oron Montgomery, 38; David Barzilay, 41; Gilad Mazugi, 36; Hadas Ben Haim, 34; Yousef Bishara, 32; and Nir Erez, 29.