Court nixes Y Trading’s owner request to be freed from electronic monitoring

Judge Allyne R. Ross of the New York Eastern District Court has denied a motion by alleged binary options fraudster Yehuda Belsky, also known as “Jay Bell,” to be freed from electronic monitoring.

Let’s recall that the owner of Y Trading stands accused of (1) mail fraud; (2) failure to register as a Commodity Trading Advisor; and (3) misappropriation of customer funds. At the presentment in September this year, Pretrial Services initially recommended a condition of pretrial release to include no computer usage at all by Belsky while on bail. But afterwards the parties jointly agreed this condition was overbroad and, instead, the government proposed that the condition should include electronic monitoring by Pretrial Services of all of Belsky’s personal devices that connect to the Internet.

But in October, the defense counsel argued that the monitoring software (“RemoteCOM”) is “incredibly comprehensive”, violating Belsky’s First, Fourth and Fifth Amendment rights and the limiting principles and mandates of the Bail Reform Act.

Early in November, the US Government opposed the defendant’s motion. The government stated that the software monitoring had already caught the defendant violating the conditions of his release by engaging, or purporting to engage, “in the business of providing financial services to investors.” Specifically, the monitoring has revealed recent text-message communications regarding the purchase of certain securities between the defendant and an individual who had engaged the defendant on behalf of some investors. Consequently, the government requested detention of the defendant and revocation of his bond “or, at the very least, the imposition of additional conditions of release.”

In an Opinion & Order, issued on November 8, 2018, the Court denied the defendant’s motion, arguing that Belsky has failed to propose a less restrictive condition that would provide a meaningful check on his alleged criminal activity. His request that he be barred from using “certain specified electronic securities trading platforms” was found to lack clarity on how such a restriction would prevent him from defrauding putative investors by taking their money and putting it toward his own purposes “instead of investing it”. Furthermore, the government’s collection of the defendant’s text messages underlines how ineffectual the defendant’s proposed alternative would be.

The government’s request to remand the defendant into custody and revoke his bail was also denied. However, the Judge said that if the government believes that additional conditions of release should be imposed, it should request the specific conditions that it believes are appropriate.

The case is captioned USA v. Belsky (1:18-cr-00504).