Receiver recovers only $29k from binary options scammers in Q1 2018

Maria Nikolova

A number of binary options entities targeted in a CFTC enforcement action have continued to invoke their Fifth Amendment right against self-incrimination and refuse to produce financial information as required by the Court.

Court-appointed Permanent Receiver Kenneth Dante Murena has just published his third report concerning the work dedicated to recovery of funds in a binary options fraud case targeting Jason B. Scharf, doing business as Citrades.com and AutoTradingBinary.com, his companies CIT Investments LLC, Brevspand EOOD, CIT Investments Ltd., and A & J Media Partners, Inc., as well as their affiliate marketers Zilmil and its owner Michael Shah.

The third report, which covers the Receiver’s activities from January 1, 2018 through March 31, 2018, did not bring much of positive news. During this Reporting Period, the Receiver recovered only $29,551.98. This sum came from unused funds prepaid by Zilmil, Inc. to Clickbooth.com (an Affiliate Network) for advertising services.

Since the inception of the Receivership, the Receiver has frozen in excess of $7.9 million and recovered in excess of $6 million in funds held in accounts at multiple financial institutions and in an attorney’s trust account, pursuant to the Statutory Restraining Order and Preliminary Injunctions.

The total amount, including interest earned, in the Receiver’s fiduciary accounts for all Defendants equals $6,013,684.42 as of the end of the Reporting Period. The remaining approximately $1.9 million of the approximately $7.9 million in funds recovered remains frozen in accounts at financial institutions pending further investigation of the Receiver and developments in the Enforcement Action.

Mr Murena explains that the defendants have not provided a meaningful amount of additional financial information to him, and have continued to decline to provide written accountings of their respective assets, in the face of the Court’s orders. In particular, other than providing limited information regarding the existence or absence of certain categories of assets and producing certain bank statements and login credentials for online access to bank accounts, the defendants have not submitted financial disclosures or otherwise satisfied the production requirements in the Court’s orders, continuing to invoke their Fifth Amendment right against self-incrimination.

Regarding any contacts with victims of the scammers, the Receiver has begun, but has not completed, an investigation into the number and identity of the defendants’ customers. During the first quarter of 2018, the Receiver continued that investigation until the March 16, 2018 hearing, during which the Court indicated that the Receiver should take no further action searching for, or attempting to communicate with or obtain information or records from, the Defendants’ customers.

According to the allegations, from June 2013 through the present the Citrades Defendants operated 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.

Similarly, the Court found that there is good cause to believe that during the same time period, the Zilmil Defendants 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.

The case is captioned Commodity Futures Trading Commission v. Scharf et al (3:17-cv-00774).

Read this next

Digital Assets

Point72 invests $77.5 million in Bitcoin, Morgan Stanley holds $269.9 million

Point72, the $34 billion hedge fund owned by billionaire and New York Mets owner Steven Cohen, held $77.5 million in the Fidelity Wise Origin Bitcoin Fund (FBTC) at the end of the first quarter, according to a recent filing.

Digital Assets

Binance claims Nigerian officials sought $150 million bribe

A Nigerian court has ruled that Tigran Gambaryan, a Binance executive detained on charges of tax evasion and money laundering, can stand trial on behalf of the world’s largest cryptocurrency exchange.

Digital Assets

Kraken reviews Tether listing in Europe ahead of MiCA adoption

Cryptocurrency exchange Kraken is “actively reviewing” whether to delist the stablecoin Tether (USDT) from its European platform, according to a report by Bloomberg.

blockdag

Discover How MoonBag Coin Presale Stacks Up Against Dogecoin & Litecoin

Discover how the MoonBag Coin presale compares to Dogecoin and Litecoin, with unique features, a robust presale structure, and new opportunities in 2024.

Fundamental Analysis, Market News, Tech and Fundamental

Global FX Market Summary: Federal Reserve Policy, USD, May 17 ,2024

Overall, both the Federal Reserve’s policy and the US dollar’s outlook are shrouded in some degree of uncertainty.

Market News, Tech and Fundamental, Technical Analysis

Ethereum Technical Analysis Report 17 May, 2024

Ethereum cryptocurrency can be expected to rise further toward the next resistance level 3200.00, which is the top of the previous impulse wave i.

Digital Assets

Hong Kong adopts digital yuan payments through Chinese banks

Hong Kong has launched a pilot program enabling digital yuan payments through major Chinese banks, marking the first instance of China’s digital currency project being deployed outside the mainland.

Retail FX

Saxo Bank increases client assets five-fold to $116 billion

Copenhagen-based broker Saxo Bank has achieved a major milestone, surpassing $116 billion (DKK 800 billion) in client assets.

Inside View

ISDA says US Basel III “endgame” to heighten market risk capital

ISDA further explained that, by requiring banks to hold additional capital that is misaligned with levels of risk, the proposal would significantly reduce capital market access for US end users and businesses, restrict the ability of businesses to hedge exposures to changes in commodity prices, and increase the cost of everyday consumer goods, including food and gasoline.

<