Eric Shah, the brother of Israeli-American binary options operator Michael Shah, has applied to the court to defend his stake in a house the government seized in 2019.
Eric Shah argues that he owns 50 percent in a homestead that was among assets frozen by the court in connection with a binary options fraud.
“Further, he resides in the property as his protected constitutional homestead under Florida law. He therefore has a direct, substantial and legally protectable interest in the outcome of the Receiver’s Motion for Constructive Trust,” the legal notice states.
The filing also states that primary defendants in this case, online advertiser Michael Shah and his company Zilmil, Inc filed their response to the ‘Motion for Constructive Trust” one day before Eric moves to protect his shared house.
The FBS CopyTrade Team Introduces New ‘Risk-free Investments’ FeatureGo to article >>
Fraudulent campaigns to promote binary options systems
Eric’s brother was hit with over $22 million penalties for defrauding his American victims through numerous binary options websites, as well as violating the Commodity Exchange Act. Shah, who worked in tandem with call centers in Israel in return for large commissions, sent traffic to binary options sites including LBinary, TraderXP, Trade Rush, Banc de Binary and OptionRally.
The CFTC originally asked the court to order the defendants to pay back over $75 million in fines and penalties.
The penalties, in this case, were the largest the US authorities have imposed so far against binary options operators. The case unfolded in 2018, just as Finance Magnates exclusively reported on a major crackdown by the US regulators against the binary options industry.
The court papers show that the fraud scheme had been going on since at least 2013 through July 2017, and involved fraudulent ad campaigns that relied on other marketers. They attracted their victims by sending misrepresentations about the trading platforms, also paying video producers to make fraudulent testimonials promoting the trading systems.