MARYLAND
A federal jury Wednesday found the former CEO of the Israel-based company Yukom Communications, a purported sales and marketing company, of orchestrating a scheme to defraud investors in the United States and other countries, according to authorities.
Lee Elbaz fraudulently marketed about $145 million in financial instruments known as “binary options,” officials stated.
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.
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.”
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 indicated 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.
The owners of BinaryBook and BigOption, however, profited when investors lost money.
According to the evidence, this is how they profited:
- Misrepresenting the suitability and expected a return on investments through BinaryBook and BigOption
- Providing investors with false names and qualifications and falsely claiming to be working from London
- 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 indicated.
DOJ NOTED:
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.