CFTC has yet to effect service on Yossi Herzog in binary options fraud case
The Commission has yet to effect service on at least four of the Yukom Communications defendants: Yukom, Yakov Cohen, Yossi Herzog, and Shalom Peretz.
About three months after the United States Commodity Futures Trading Commission (CFTC) charged Israel-based Yukom Communications and a number of entities and individuals linked to it with binary options fraud, the regulator has provided an update on the status of service on the defendants.
The list of defendants in this case includes: Yukom Communications Ltd., Linkopia Mauritius Ltd., Wirestech Limited d/b/a BigOption, WSB Investment Ltd d/b/a BinaryBook, Zolarex Ltd. d/b/a BinaryOnline, Yakov Cohen, Yossi Herzog, Lee Elbaz and Shalom Peretz.
With the exception of Elbaz, who is currently incarcerated in the Washington D.C. area, all of the defendants are believed to be located outside of the United States. To date, none of the defendants have filed an answer or otherwise responded to the CFTC Complaint.
With regard to Elbaz, the CFTC explains that on August 23, 2019, the Commission served Elbaz, Yukom’s former CEO. Elbaz has failed to answer or otherwise respond to the Complaint, and the Commission anticipates requesting that the Court enter a default judgment against her.
Despite diligent efforts, the Commission has yet to effect service on at least four of the Yukom defendants: Yukom and three individuals (Cohen, Herzog, and Peretz), all located outside of the United States; and is in process of confirming service as to WSB.
CFTC counsel caused copies of the Summons and Complaint to be sent via Registered Mail, pursuant to Article 10 of the Hague Convention, to Yossi Herzog’s last known address in Israel on August 14, 2019. As of November 18, 2019, those documents remain in transit according to U.S.P.S. Records.
As FinanceFeeds has reported, in February 2019, a grand jury in the District of Maryland returned a sealed indictment against twelve defendants, including Herzog. That indictment alleges that Cohen and Herzog had an ownership interest in Yukom and other related entities, including Linkopia, used to perpetuate their fraudulent scheme. It also states the Cohen was a resident of Mauritius and Herzog was a resident of Israel.
The Commission anticipates asking the Court to extend the November 26, 2019 deadline to effect service on Yukom, Cohen, Herzog, and Peretz, as well as WSB (if necessary).
According to the CFTC’s complaint, from March 2014 through the present, the defendants fraudulently solicited and accepted more than $103 million in connection with their binary options trading scheme. As alleged in the complaint, the defendants have solicited individuals located throughout the U.S. and elsewhere to trade binary options through internet trading websites. The complaint further charges that the defendants have falsely stated that the binary options offered by the five defendant entities are actual transactions subject to objective market conditions when, in fact, they are mere book entries whose outcomes can and have been manipulated to force customer losses.
In its continuing litigation against the defendants, the CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution for the benefit of customers, permanent registration and trading bans, and a permanent injunction from future violations of the Commodity Exchange Act.