What happened to Yukom’s CEO Lee Elbaz? FinanceFeeds looks at the binary options fraud case
FinanceFeeds scrutinizes Maryland District Court filings in the case brought by the USA against Lee Elbaz, the CEO of notorious binary options call center Yukom Communications.
There has been silence around Lee Elbaz, also known as Lena Green, the CEO of binary options call center Yukom Communications, since she was arrested in September 2017 in the United States.
FinanceFeeds has sought to find out about the latest developments in the legal proceedings launched against Elbaz at the Maryland District Court. Our investigation has shown that the case is continuing and that the Court has granted another continuance to the preliminary hearing as the parties in the case are seeking to resolve the matter. This is the fourth such continuance – it resets the hearing date for March 23, 2018.
In the meantime, the bond conditions were slightly amended as to allow Lee Elbaz’s aunt to deposit the $354,000 with the Clerk of the Court in lieu of one-half interest in the co-owned Eugenia property. Let’s recall that on September 20, 2017, Limor Elbaz (Lee Elbaz’s aunt) posted a $1.8 million Appearance Bond, partially secured by (1) her one-half interest in the Eugenia property, and (2) by her residence at the Burrows property, of which she is sole owner.
Defendant Lee Elbaz is alleged to have at all times complied with the conditions of pretrial release, including as recently modified to permit her to be outside of the house for one hour each day within a specified boundary.
FinanceFeeds has also examined the Court transcript of Ms Elbaz’s Detention Hearing at the Maryland District Court. The 86-pages document shows startling allegations made by Ms Elbaz’s defense counsel, including how a CEO in the USA is not the same as a CEO in Israel and how what she did is a common practice in Israel. Then, of course, there was the unbelievable moment when the Court granted Lee Elbaz the right to use the Internet in the face of the fact that she is charged with perpetrating an Internet-based fraud.
Illustrating the challenges that the US authorities face when prosecuting binary options fraudsters, the US representative in this case had to explain to the Judge that binary options fraud is a serious economic crime and that, as early as in September 2017, there were 33 complainants about the fraud perpetrated by Lee Elbaz. The dissociation of the defendant with the company she ran – Yukom Communications, was challenged as she appeared to have received paychecks from this entity after she allegedly left. The Government has argued that she poses serious economic risk to the community.
The defense painted a rather different picture.
Elbaz’s defense counsel argued that the complaint is based on two witnesses’ statements, alleged former employees.
“We have no idea who they are. We have no idea what their credibility is. They say certain things happened. And that is in the complaint. But there is nothing more than what they are saying, and if they are former employees, show me a company that doesn’t have disgruntled former employees who say something happened to me”.
Regarding the 33 complainants, the defense counsel had the following to say:
“Okay, show me a company that doesn’t have people calling up and saying, I got screwed out of my money. Each one of those cases is a mini-trial in and of itself”.
This argument did not work very well, as the Judge commented:
“Or, to be cynical, as part of the scheme that, when people want their money back or want their money out, you set up these roadblocks that will prevent what somebody is — perhaps an innocent investor, from taking their money back. You create roadblocks as part of your scheme, artifice and criminal activity to stop them from doing it”.
The Judge also did not like the fact that Ms Elbaz used a number of names, aliases, in her work.
“If she knows how to use aliases, and that kind of sets off some alarm bells for me that she is pretty sophisticated”, the Judge said.
The defense counsel saw no problem with that. He added that:
“They do a lot of things in this complaint to make it think like this is some Nigerian boiler room or some sort of lottery scam. That is none of these things. It is a legitimate business, legal type of business in Israel as well as here (sic! – Ed.)”
Regarding Ms Elbaz’s CEO role, the defense counsel insists that this role is not a major one. “CEO in Israel may not mean the same thing here”, he said. Apparently, she used the designation to “make the customers feel important”.
The Government objected to the efforts of the defense to diminish the charges in the complaint. The Government’s representative had to explain the very essence of the binary options fraud at hand.
“The notion that it is betting, okay? Well, here is the difference between gambling at a casino and what we are talking about here. Nobody is lying to you about your odds at a casino, okay? Nobody is calling you up and coaxing to invest more money in a financial product that, mathematically, you are going to lose money in. That is the fraud”.
Surprisingly, the Court allowed Ms Elbaz to use the Internet while under arrest at her aunt’s house, given that Internet is indispensable today. However, the Judge warned the defendant that:
“If you are foolish enough to — I am sure they will be doing what they do, the Government, and if you are foolish enough to engage in misuse of the Internet to facilitate or try to cover up or obstruct or interfere or impede justice in the prosecution or any other case that is related, and if you try to tamper or try to retaliate against people or try to intimidate people and you use the Internet to do that, then shame on you, and you will be in jail. It is that simple”.
Lee Elbaz is charged with wire fraud and conspiracy to commit wire fraud. The maximum possible penalty is 20 years and a $250,000 fine per count.
The case is captioned USA v. Elbaz (8:17-mj-02534).