Despite CFTC’s efforts, whereabouts of Yossi Herzog remain unknown

Maria Nikolova

According to the regulator, Herzog is not currently in Israel and attempts to determine his current geographic location have been unsuccessful.

As the United States Commodity Futures Trading Commission (CFTC) tries to press ahead with its action against a large-scale fraudulent binary options scheme evolving around Israeli firm Yukom Communications, the regulator continues to experience trouble with locating the defendants in the case and effecting service on them.

Earlier today, the CFTC filed a motion with the Illinois Northern District Court for an order for alternative service on several defendants in this case – Yukom Communications Ltd., Yakov Cohen, Yossi Herzog and Shalom Peretz.

The CFTC seeks the Court’s authorization to serve Yukom, Cohen, Herzog and Peretz by: (1) sending the Summons and Complaint via “ordinary” mail, no signature required, to their last known addresses; (2) sending the Summons and Complaint by email to accounts used by the three individual defendants in connection with the fraudulent conduct at issue; and (3) publishing a notice in the Times of Israel.

On August 12, 2019, the Commission filed its five-count Complaint charging Yukom, Linkopia Mauritius Ltd., Wirestech Limited d/b/a BigOption, WSB Investment Ltd d/b/a BinaryBook, Zolarex Ltd. d/b/a BinaryOnline, Cohen, Lee Elbaz, Herzog and Peretz with fraudulently soliciting individuals throughout the United States and other countries to enter into illegal, off-exchange transactions in binary options through fictitious entities using the trade names “BigOption,” “BinaryBook,” and “BinaryOnline”.

The Complaint alleges that the Yukom Defendants operated a global retail binary options enterprise whose employees and agents made material misrepresentations and omissions to induce customers to trade, including by misrepresenting the profit potential and fundamental nature of the binary options offered and failing to disclose that Yukom was on the opposite side of all customer trades, and that the defendants fraudulently accepted at least $103 million in customer funds.

The Commission has yet to serve Yukom, an Israeli entity, and Cohen, Herzog and Peretz, all of whom are Israeli citizens currently located outside the United States.

Herzog is an Israeli citizen who resided in Zichron, Israel during the relevant time.

On August 14, 2019, and after confirming Herzog’s registered address with the ISA, the CFTC sent the Summons and Complaint to Herzog’s residence via Registered Mail. As of January 13, 2020, those documents cannot be traced and are therefore likely undelivered.

According to the CFTC, Herzog is not currently in Israel. CFTC counsel has communicated with representatives of various foreign financial regulatory agencies in an ultimately unsuccessful attempt to determine Herzog’s current geographic location and identify alternative addresses for service. Despite the Commission’s efforts, Herzog’s whereabouts are currently unknown.

Herzog is among the defendants indicted in a criminal case in the District of Maryland. According to the DOJ, no representative of Herzog has contacted the US authorities.

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