DOJ gets to use alternative means for notification of binary options fraud victims

Maria Nikolova

The US action against the ex-CEO of Yukom Communications Lee Elbaz now targets more Israeli citizens, including Liora Welles, Shira Uzan, and Lissa Mel.

The Honorable Theodore D. Chuang of the Maryland District Court has granted a request by the United States Department of Justice (DOJ) to use alternative means to notify victims of a fraudulent binary options scheme focused on Lee Elbaz, the former CEO of Israel-based Yukom Communications, and a number of her co-conspirators.

On Friday, January 18, 2019, the Judge signed an Order establishing that the Government may provide notice to potential crime victims in a number of cases linked to the criminal case targeting Lee Elbaz. The notification will happen through publication on a website maintained by the Department of Justice as an alternative to providing individualized notice.

There are at least three cases related to Lee Elbaz’s case.

Defendant Lissa Mel was charged on November 16, 2018 by criminal information with one count of conspiracy to commit wire fraud. She was previously charged by complaint on September 13, 2018.

Lissa Mel is an Israeli citizen who is alleged to have participated in a conspiracy to commit wire fraud in connection with the sale and marketing of binary options. The conspiracy concerns two binary options brands – BinaryBook and BigOption. There are several types of misrepresentations made by representatives of these “brokers” to investors, including misrepresentations about the suitability of binary options as investments, the deceptive use of “bonuses” and misrepresentations about the names, location and qualification of representatives “assisting” investors. The Government has alleged that this conspiracy resulted in over $80 million in losses to investors.

The criminal complaint against Lissa Mel, aka “Monica Sanders”, alleges she participated in the conspiracy from at least in or around May 2015 through at least May 2016.

The second case targets Liora Welles, also known as “Lindsay Cole,” “Lindsay Wells,” and “Lindsay Taylor”. She pleaded guilty to one count of conspiracy to commit wire fraud charged in a criminal information on December 19, 2018. Sentencing has been scheduled for March 22, 2019.

The third case targets Shira Uzan. She pleaded guilty to one count of conspiracy to commit wire fraud charged in a criminal information on December 21, 2018. Sentencing has been scheduled for March 22, 2019.

From January 2015 to September 2016, Uzan worked as a sales representative for BigOption and BinaryBook. It was the purpose of Uzan and representatives of Yukom, BigOption, BinaryBook and other entities, to obtain maximum deposit from investors and to take steps to ensure that investors lost money in their accounts – thereby making money for themselves and their brand in the process. The misrepresentations made by Uzan and the other co-conspirators included, inter alia, false statements regarding investors’ ability to withdraw their funds, as well as “bonuses” and “risk-free trades”.

Yukom Communications provided investor “retention” services for two websites, known as BinaryBook and BigOption, promoting and marketing binary options. The indictment alleges that in her role as CEO of Yukom, Elbaz, along with her co-conspirators and subordinates, misled investors using BinaryBook and BigOption by falsely claiming to represent the interests of investors but that, in fact, the owners of BinaryBook and BigOption profited when investors lost money.

In September 2018, the Court denied Elbaz’s motions to dismiss the case against her. Her trial has been scheduled for July 9, 2019.

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