Former Yukom’s CEO Lee Elbaz pleads “not guilty” in binary options fraud case
The case is going away from public view, as the US Government believes that certain information could be used to identify co-conspirators of Elbaz and/or subjects of the Government’s investigation into binary options fraud.
The criminal case against Lee Elbaz, the former CEO of Israel-based Yukom Communications, a purported binary options sales and marketing company, is a landmark one for the US authorities’ efforts to prosecute binary options fraud.
A month has passed since a grand jury returned an Indictment against Ms Elbaz charging her with one count of conspiracy to commit wire fraud and three counts of wire fraud. FinanceFeeds has examined the Court filings in the criminal case against Ms Elbaz, captioned USA v. Elbaz (8:18-cr-00157). It is apparent from the documents that there will be a fight but most of it will remain away from public view due to a Protective Order signed by Judge Theodore D. Chuang of the Maryland District Court late last week.
Let’s recall that, according to the indictment, Yukom provided investor “retention” services for two websites, known as BinaryBook and BigOption, promoting and marketing binary options, and those binary options were fraudulently sold and marketed. The indictment further 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.
- So, what are the updates?
Court filings, seen by FinanceFeeds, show that during the Initial Appearance and Arraignment of Lee Elbaz, a plea of “Not Guilty” was entered on Counts 1 through 4 of the Indictment. This means that the defendant pled “not guilty” to “Conspiracy to Commit Wire Fraud” and “Wire Fraud”.
No detailed information about the case is made available, as the Court has signed a Protective Order. Under this Order, defense counsel are prohibited from disseminating any tangible discovery material, whether in written, electronic or any other form, to anyone. They are also prohibited from revealing, by any means, witness location information and information that could reasonably lead to the discovery of a witness’s location, to anyone, including any client, other defendant, or any third person.
The United States Government anticipates that discovery in this proceeding will include, among other things,
- information that could be used to identify potential co-conspirators with the Defendant and/or subjects of the Government’s ongoing investigation into fraud in connection with the sale, marketing, and execution of binary options; and
- personal identifiers for third party individuals, including but not limited to social security numbers, birth dates, financial account numbers, and home addresses of individuals.
The Government is worried that in the absence of a protective order, the integrity of the ongoing criminal investigation may be compromised. Absent a protective order, unindicted co-conspirators and subjects of the Government’s investigation could become privy to the nature and strength of evidence in the Government’s possession that could expose them to the risk of prosecution in the United States.
Talking of co-conspirators, it is worth noting that some of the first documents filed by the US authorities in relation to the investigation of Elbaz and her binary options activities alleged connections between Yukom and SpotOption.
The case against Lee Elbaz continues at the Maryland District Court.
