Binary options fraudsters deny CFTC allegations

Maria Nikolova

In a brief answer to the CFTC complaint, defendants Jason Scharf doing business as Citrades.com and AutoTradingBinary.com, as well as A&J Media Partners Inc., denied all allegations made by the US regulator.

Less than a couple of weeks after the United States Commodity Futures Trading Commission (CFTC) secured a preliminary injunction against the so-called “Millionaire Money Machine” fraudsters, some of the Defendants in the case have filed an answer to the Complaint by the regulator.

In a brief filing with the Florida Middle District Court, Defendants Jason Scharf doing business as Citrades.com and AutoTradingBinary.com, as well as A&J Media Partners Inc, state that they deny the allegations made by the CFTC. There is barely any explanation for the denial. The majority of allegations are simply denied, whereas the rest are denied as “the defendants do not possess sufficient information or belief upon which to answer the allegations”. How such argumentation (or its lack thereof) will hold in court remains to be seen.

The defendants in the case, captioned Commodity Futures Trading Commission v. Scharf et al (3:17-cv-00774), include: Jason B. Scharf (doing business as Citrades.com and AutoTradingBinary.com), CIT Investments LLC, Brevspand EOOD, CIT Investments Ltd., A & J Media Partners, Michael Shah, and Zilmil, Inc. They are alleged to have solicited more than $16 million due to illegal offering of binary options contracts.

The CFTC Complaint details the fraudulent practices of the above-mentioned binary options firms, including promises of artificially high returns, bonuses and happy life. Once the customers invested money, any communication with them was usually halted.

Particularly stunning are the findings concerning Zilmil, which directed customers to binary options websites. Zilmil sent more than 60 million fraudulent emails to more than 1.4 million unique email addresses in a seven-month period. One of the emails concerning the “Millionaire Money Machine” started with the question: “Have you made your first $100,000 yet?”

The CFTC has managed to secure a preliminary injunction against all defendants in the case. The Order for preliminary injunctions prohibits the defendants from offering to enter into, confirming the execution of, maintaining positions in, or otherwise conducting activities relating to binary options; acting as an affiliate marketer in any capacity that involves binary options or any commodity interest; offering so-called autotrading systems or services that purport to trade binary options or any commodity interest; as well as acting as a principal, agent, or any other officer or employee of any person registered, exempted from registration, or required to be registered with the Commission.

The Order also continues the freeze with respect to Defendants’ assets and continues the prohibition against Defendants destroying books and records, or denying the CFTC access to such books and records. The Court has appointed Kenneth Dante Murena as Permanent Receiver with respect to the Defendants.

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