This Tuesday, a federal trial is set to begin for Israeli businesswoman Lee Elbaz who has been charged in the United States for directing a large binary options scam, which defrauded investors out of tens of millions of dollars.
Elbaz is the former Chief Executive Officer (CEO) of an Israel-based company called Yukom Communications, a purported sales and marketing firm specializing in the binary options industry.
Today, jury selection for Elbaz’s trial is scheduled to start in Maryland. She is the first out of 15 defendants in the case to be tried. Out of the 15, five have pleaded guilty and agreed to cooperate with prosecutors.
A separate indictment against nine other defendants claims that the binary options scam cost investors more than $145 million worldwide, including in the US and the United Kingdom.
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As Finance Magnates reported, Elbaz was charged in the District of Maryland with three counts of wire fraud, and one count of conspiracy to commit wire fraud in March of 2018. Each of these four charges carries a maximum penalty of 20 years’ imprisonment.
Background on the Elbaz binary options scam
A lot of detail into the charges against Elbaz has been given to the public. Last week the US government filed its ‘trial brief’ ahead of the prosecution. In this document, the process of how the binary options fraudsters stole from their victims was given in rare detail.
As reported by The Bureau of Investigative Journalism, the binary options scandal was a sophisticated technology-powered boiler room scam. As is characteristic of many scams, the fraudsters would cold call potential investors and convince them to place money on the direction a share or commodity price would go.
To ensure investors continued to send the fraudster’s money, victims would initially be able to see their money growing in an account held by the company and were then encouraged to invest more.
However, when they tried to withdraw the money, the scammers would act evasively and eventually stop taking their calls.