Judge denies CFTC request to drop mediation in binary options fraud case

Maria Nikolova

Judge Timothy J. Corrigan of the Florida Middle District Court denied the CFTC motion to withdraw reference from mediation of the so-called “Millionaire Money Machine” case against binary options fraudsters.

The United States Commodity Futures Trading Commission (CFTC) had its motion for withdrawal of reference from mediation of the so-called “Millionaire Money Machine” case against binary options fraudsters denied on Wednesday, according to an order issued by Judge Timothy J Corrigan of the Florida Middle District Court.

The Judge offers no arguments for his decision but sua sponte extends the deadline to mediate until May 11, 2018.

The CFTC filed its motion earlier this week, stating that Counsel for the parties have conferred, and agree that mediation would not be fruitful at this time. The CFTC noted that the case is in an early stage, and the Parties believe that additional discovery is required before the Parties can consider any potential settlement.

The defendants in the case, captioned Commodity Futures Trading Commission v. Scharf et al (3:17-cv-00774), include Jason B. Scharf, doing business as Citrades.com and AutoTradingBinary.com, his companies CIT Investments LLC, a Nevada limited liability corporation; Brevspand EOOD, a Bulgarian business entity; CIT Investments Ltd., a Marshall Islands business entity; CIT Investments Ltd., an Anguillan business entity; and A & J Media Partners, Inc., a California corporation. The case also names their affiliate marketers Zilmil and its owner Michael Shah among the defendants.

According to the CFTC allegations, from June 2013 through the present the Citrades Defendants ran a massive scam in which they fraudulently solicited customers to enter into illegal, off-exchange investments in binary options. The firms received at least $16 million in customer funds.

Also, the Zilmil Defendants are alleged to have acted as third-party ‘affiliate marketers’ who drove internet traffic to the Citrades Defendants by fraudulently soliciting customers to sign up for or purchase binary options autotrading systems. They instructed the customers to send money to the Citrades Defendants and made gross revenues of more than $4 million from sales of its autotrading systems and another $500,000 in commissions from the Citrades Defendants.

In September, Kenneth Dante Murena, named Permanent Receiver in the enforcement action, published his initial report showing that that $7,381,366.29 in funds held in accounts at multiple financial institutions have been frozen pursuant to the Statutory Restraining Order and Preliminary Injunctions.

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