“So give him a good time” – recordings reveal extent of binary options fraud at Yukom

The trial of Lee Elbaz, aka Lena Green, started on July 16, 2019, and although most of the documents about the proceedings are sealed some information on how the case is progressing has become available. Elbaz, who is the former CEO of Israel-based Yukom Communications, a provider of conversion services for a raft of binary options firms, is accused of fraud.

On Wednesday, July 17, 2019, the US Government submitted a Brief on the Admissibility of Co-Conspirator Statements and Other Evidence. The government submitted this brief after having learned tonight that Elbaz will object to (or at least has not agreed to the admission of) the vast majority of the government’s exhibits which will be introduced through the government’s next two witnesses, Shira Uzan and Liora Welles. These are former employees of Yukom.

The government will be offering Elbaz’s own statements in the form of, among other things, (1) audio recordings of training sessions for new employees conducted by the defendant, (2) the defendant’s own emails and chat messages, and (3) video recordings of the defendant speaking to employees inside Yukom.

The audio recordings of the defendant were made by her own employee, Shira Uzan, while Ms. Uzan was participating in the training class, and thus many of those recordings will be offered into evidence through Ms. Uzan. In the audio recordings of Ms. Uzan’s training, Ms. Elbaz can be heard engaging in a role-playing simulation to teach new employees how to speak with potential investors on the phone. Among other things, Ms. Elbaz says while simulating the role of the account manager speaking to a client “even if I’m gonna make every month not 30 percent, every month I’m gonna make you 5 percent every month, in one year… do you know how many percent it’s gonna be?”

Later, Ms. Elbaz directs her employees during the training on the importance of not taking too much money from a client right off the bat, stating “If you ‘drink’ the client and you don’t give him a good time, you’ll ‘drink’ him once or twice and that’s it. If you give him a good time, you’re f**king going to drink every 3-4 days over a period of time . . . so give him a good time . . . .”

Ms. Uzan testified that the defendant, Lee Elbaz, hired her and directed her to participate in a training course when she started working at Yukom. Among other things, Ms. Uzan testified that she lied to clients about whether she had experience in financial markets (telling them she had 15 years of experience) and about how Yukom made money (telling clients she was paid commissions on winning trades). Ms. Uzan testified that she was “taught what to tell clients,” including the lies described above, “during the training course,” that the defendant directed her to take during her first weeks at Yukom. Ms. Uzan further testified and “after the one week of the training course, she continued to have training by the managers, by the CEO.”

Further, the government anticipates that Ms. Uzan will identify her direct supervisors, including Or Maymon and Nissim Alfasi, as among her supervisors who also trained her to lie to potential investors.

In addition to Ms. Elbaz’s recorded statements from Ms. Uzan’s training as a new employee, the government will be offering audio recordings of Mr. Alfasi and Mr. Maymon instructing new employees to (1) “choose whatever the f**k you want, 15 to 20%” to tell investors they will earn in binary options, (2) falsely tell potential investors “always you work 20 years, 15 years” because “nobody wants to invest 100k or a quarter of a million, and this is your targets, with somebody that works five, six years because on his end, you’re like uh, you just started. You’re a junior broker,” and (3) falsely tell potential investors employees are paid “five percent” from the client’s successful trades.

The government also intends to introduce WhatsApp text messages between Ms. Welles and Ms. Elbaz, which were recovered from Ms. Elbaz’s cellular telephone.

Finally, the Government expects the evidence will establish that the defendant exercised supervisory authority over her co-conspirator employees. The government anticipates that testimony from numerous cooperating witnesses will confirm that the defendant was a high-level manager who oversaw all Yukom employees.

Even the defense emphasized that Elbaz not only monitored her employees by listening to recorded calls, she also maintained the authority to dictate policy at Yukom and to discipline and terminate employees — even though the latter was apparently “very difficult” under Israeli labor laws. In short, there appears to be no dispute that the evidence will establish an agency relationship between the defendant and her employees, the Government notes.

The trial continues at the Maryland District Court.