Binary options fraudster Lee Elbaz faces lifetime sentence, seeks release ahead of sentencing
The US government estimates that Elbaz’s advisory sentence will be life imprisonment, which reflects not only the substantial losses caused by the fraudulent scheme but also enhancements for her role as a leader of the scheme.
Binary options fraudster Lee Elbaz, the former CEO of Israel-based Yukom Communications, wants to be released pending her sentencing in the United States. This becomes clear from a brief submitted by the US Government at the Maryland District Court on September 4, 2019.
The government has filed the brief in opposition to the Defendant’s Motion for Expedited Reconsideration of Order Revoking Bail. The US authorities argue that Elbaz’s request for release pending sentencing should be denied.
What becomes clear from the Government’s Brief is that Elbaz wants out before her sentencing which is due in December this year. She is suggesting that she post additional bond secured by collateral located in Israel. But the US Government stresses that pledging an additional $1.189 million in collateral would not alter the analysis in this case, particularly where the government has still not located over $100 million in fraud proceeds.
The government objects to the suggestion that pledging collateral located abroad would be sufficient to guarantee the defendant’s appearance or appropriate in this case. Simply put, it would be extremely difficult, if not impossible, for the government to seize assets located abroad in the event the defendant decided to flee. Pledging these assets as collateral thus provides no assurance of the defendant’s appearance for sentencing.
Between May 2014 and June 2017, Elbaz orchestrated a scheme to defraud tens of thousands of binary options clients out of over $100 million. As a manager and CEO of Yukom Communications, Elbaz was responsible for hiring, training, and overseeing dozens of employees. As the evidence at trial showed, the defendant trained her employees and co-conspirators to lie to clients about, among other things: whether investors made money in binary options; the nature and safety of “investments” in binary options; gains and rates of return clients could expect to receive; the alignment of financial interests between Yukom and its clients; the education, credentials, and experience of the defendant and her employees; and whether clients could withdraw funds from their accounts. At the defendant’s direction, her employees lied to clients and used other fraudulent tactics to convince clients to send money and to prevent clients from withdrawing their funds.
On August 6, 2019, the jury unanimously convicted Elbaz on all counts.
The statutory maximum sentence for each of the four counts of conviction is twenty years. The government estimates that the defendant’s advisory sentence will be life imprisonment, which reflects not only the substantial losses caused by her scheme but also enhancements for her role as a leader of the scheme, using of sophisticated means to defraud investors, causing substantial financial hardship to victims, and targeting vulnerable victims.
The Government argues that, given her conviction and potential lengthy sentence, Elbaz has a strong motive to flee and her lack of flight to date is simply not sufficient to establish that she will remain in the United States now that she has been convicted and faces a substantial sentence.