Court requires more info ahead of sentencing of binary options fraudster Lee Elbaz

Maria Nikolova

The parties in the criminal proceedings targeting the former CEO of Yukom Communications are ordered to meet and confer about the loss amount for which Elbaz will be held liable.

As FinanceFeeds has reported, the sentencing of binary options fraudster Lee Elbaz has been rescheduled for December 19, 2019. Ahead of the sentencing, the Court is seeking more information from the parties in these criminal proceedings.

On December 9, 2019, Judge Theodore D. Chuang of the Maryland District Court, issued an order regarding the additional information needed. The Judge explains that, having reviewed the parties’ sentencing memoranda, the Court requires additional information in advance of the sentencing hearing.

The parties are ordered to meet and confer and submit a joint calculation of the loss amount based on the following assumptions:

  • The loss may be calculated from the Spot Option data using the overall net losses for all clients.
  • The loss is limited to activities occurring on or after the date that Lee Elbaz began employment at Yukom in May 2014.
  • The loss includes activities involving US victims and foreign victims.
  • The loss includes all activities of all retention agents of Yukom, Numaris, and Linkopia, whether or not specifically found at trial to be members of the conspiracy, but does not include the activities of other companies engaged in binary options fraud.

The Court requires that the calculation includes summary charts and other relevant supporting documentation. If the parties cannot agree on the calculation, the submission is set to identify areas of disagreement and provide each party’s proposed calculation.

Documents filed earlier by the Department of Justice (DOJ) have indicated that the US Government will hold Elbaz jointly and severally liable for the entire restitution and loss figure of $140,318,619.

In August 2019, Elbaz was convicted of conspiracy to commit wire fraud and three substantive counts of wire fraud. Each count implies a maximum sentence of 20 years in prison.

The government has estimated that Elbaz’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.

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.

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