Terror, espionage & binary options: Former US secret agent who recovered $2 million for victims likens binary to serious organized crime
Former US secret agent Haggai Carmon explains how he has the ability to finish the binary options business saying that he can “bring the whole house down”. Here is the full account
“Sleep With One Eye Open”, the intelligence thriller was called.
Appropriate indeed, considering the likeness that the author of exactly that series, famous Israeli writer Haggai Cormon, unwittingly portrays between his subjects and the binary options fraudsters that have risen to global notoriety over the last few years.
Mr Carmon, however, is not just an author of novels about Mossad agents and government bankrolled international spies. He himself has spent twenty years of his career searching for money launderes in his employment at the United States Department of Justice.
This week, the Times of Israel spoke to Mr. Carmon who said that the way that binary options fraudsters structure their businesses, that being shell companies providing services to other shell companies, entities in various offshore jurisdictions owned by entities that are holdings companies and then using a series of smoke and mirrors to deflect the authorities and any recourse reminds him of “a sophisticated espionage or terror organization.”
He gave up a promising career with the Mossad when one blown cover relegated him to a desk job for life. Now based in the U.S., Mr Carmon had a long career with the Justice Department, gathering intelligence, recovering assets and following elusive trails around the world. His assignments often overlap with matters of national security, so he’s no stranger to collaborating with the CIA…and using his Mossad training to get out of very sticky, often deadly situations.
Since his recent retirement, Mr. Carmon has dedicated his energies and abilities to a different form of intelligence work, that being to recover approximately $2 million on behalf of four victims of the nefarious and illegitimate binary options industry, which emanates from Israel and is serving to destroy the reputation of the entire country as a business environment.
Mr Carmon explained to the Times of Israel that he had managed to trace the real identity of the binary options brands concerned, many of which, as defined in detail by FinanceFeeds last week, use the facade of operating from a London address when absolutely nothing could be further from the reality.
“I used shock and awe,” Mr Carmon said, describing how he recovered $1.5 million on behalf of California-based businessman Steven Koel.
According to the report, Mr. Carmon sent messengers to the homes of senior management and retention staff at binary options website BinaryBook. Each received a personalized letter demanding Mr Koel’s money back.
“They thought that they would be protected by the fact that they used fake names and said they were in England. As soon as I knew their real names and where they live, they were exposed, they lost all their defenses.”
Mr Koel, the California businessman, told The Times of Israel that he was looking for ways to increase his savings to pay for the care of his son, who has serious health issues. He researched online and came across BinaryBook, “which had a very robust and legitimate-looking website,” as well as patient and professional-sounding phone representatives. Koel began trading, winning some trades and losing others, but on the whole seeing his account balance rise. Things went sour earlier this year when he asked BinaryBook to let him withdraw $1 million from his account, and the company hemmed and hawed. Koel felt something was not right.
FinanceFeeds can confirm categorically that the BinaryBook brand has offices in Ramat Gan, Israel and operates from those particular offices to scam people from all over the world, even if the company’s actual structure is layered so that one entity is offshore, service providers are elsewhere, and an address in Sofia, Bulgaria is listed on the website, claiming that the firm is owned by a Bulgarian company called Tech SB Limited.
FinanceFeeds has been to the offices of BinaryBook and contacted several former members of staff there, all of whom verify that it is operated in its entirety from Israel.
Mr. Carmon continued to explain to the Times of Israel that when he was first exposed to the scope and sophistication of Israel’s binary options fraud this past April, he was disgusted and awestruck in equal parts.
“I have yet to see a person who earned money trading binary options — not on their computer screen, but who actually withdrew their winnings. Some of the companies are rigged.” – Haggai Carmon, former US Secret Agent
At the same time, Mr Carmon says that the binary options industry is “layered” in a manner he has seen only in espionage organizations or among world-class money launderers or terrorist organizations.
“A top professional tailored the layering,” he said, referring to the practice among money launderers to distance money from its criminal origins by hiding it behind layers of financial transactions. Binary options companies, 90 percent of which, Carmon estimates, operate from Israel, similarly hide behind layers of false identities.
“The customer doesn’t know who they’re talking to. They call a virtual number with a UK country code, but may actually be speaking to someone in Cyprus or Romania. Those people transfer your details to a third company who call you back from Israel, using Anglo-Saxon-sounding fictitious aliases, making you believe they are professional brokers. In fact, they are fast-talking individuals off the street who are trained to make you increase your investment. They transfer your money to a fourth company with a bank account in a fifth country” – Haggai Carmon, Former US Secret Agent
FinanceFeeds can confirm that ever since the rise of binary options, the modus operandi has been to lie about names of sales staff, lie about location, lie about the type of service provided.
Israel is home to not only the majority of the owners and holdings companies that control the binary options brands that operate from various jurisdictions globally, but also the major so-called platform providers and technology firms, which are really just spin-offs from the very lowbrow online gambling and lead buying or affiliate digital marketing scams that have been operating in Israel for many years, and are in reality simply market makers that provide the you-against-the-house weighted environment in which customers are led to believe – quite wrongly – that they are trading a financial instrument when there is no financial markets element whatsoever.
The Chairman of the Israel Securities Authority (ISA) Professor Shmuel Hauser has made it one of his top priorities to be able to implement a law and expedite such a law that would prevent the entire binary options business from operating anywhere in the world.
In France, Belgium, Israel, the United States, Germany, Holland, China and Denmark, binary options are classified as illegal due to their fraudulent and deceitful nature, thus no firm is allowed to operate on their territories, although it is very clear that these firms continue to flout such rules and are still duping American customers, several years after the ban, as detailed by extensive FinanceFeeds research and despite Banc de Binary, one of the world’s largest binary options brands, having been fined $11 million for doing just that.
It is simply a case of the mentality of the operators in that if they are prepared to steal from unsuspecting members of the public by offering a weighted gambling platform disguised as a financial product with no remorse, then they are likely not to have any regard for any national laws, especially where they do not reside.
Mr. Carmon, in his discussion with the Times of Israel compared pinning down the owners of a fraudulent binary options company to trying to grasp an eel. “It slips out of your hands and it gives you an electric shock.”
Despite this, however, Mr Carmon followed the money. In Steven Koel’s case, Mr. Koel made one bank transfer to Česká Spořitelna bank in Poland and another to Bank Zachodni in Poland. Mr. Carmon hired a local Polish attorney whose legal opinion was that this was money laundering since the money was being sent back out of the country. Carmon succeeded where other lawyers have not, he believes, because those lawyers tried to sue BinaryBook’s London shell company as opposed to conducting an in-depth investigation.
“They were afraid of me; they knew I could bring the house down,” he said.
Asked why he doesn’t use his investigative abilities to launch a lawsuit that would bring down the entire industry, Mr Carmon avers that his primary task is to do what’s best for his clients, but adds that if someone were interested in hiring him for such a job he could “look at it.”
Mr. Carmon, along with many people who have rallied against the thugs that operate the binary options industry, who bear absolutely no relation to the real electronic trading industry in bona fide regions across the world, has received threats.
When asked how he responds to such threats, Mr. Carmon says
“I tell them to go **** themselves. I have fought terrorists. I am not deterred. Anyone who threatens me has failed to read my resume.” – Haggai Carmon, Former US Secret Agent
For people receiving threatening calls from binary options bullies for having railed against their criminal activities, Mr. Carmon has absolutely sound advice.
“Go to the police. Tell anyone who threatens you, ‘this phone call has been recorded. From now on you are my life insurance policy. If I so much as slip on a banana peel you will be held responsible.’”
FinanceFeeds has also been threatened by several binary options fraudsters, however our dedication to ensuring that these entities are removed from the entire connection with the real electronic trading industry which it is our absolute duty in order that we take our part in ensuring the longevity and reputational uprightness of the global electronic trading industry means that this will not deter us.
Currently, binary options fraudsters are creating tremendous damage by giving rise to regulatory action that could curtail the legitimate business of firms across the globe whose businesses have been founded on the principles of innovation, financial markets experience and knowledge and adept platform development and market connectivity, just as has been seen recently with advertising bans in several European countries relating to OTC derivatives and now a proposal from the FCA to restrict how CFDs – the core business of many top quality British firms – are offered to retail clients.
On this basis, the binary fraud must be put to an end, and people like Haggai Cormon, along with the US authorities are the right people for the job.
Professor Hauser has managed to get binary options banned in the domestic Israeli market, but his concern is that almost all of the firms and their suppliers are based in Israel, operating as a merry gang of criminals, fleecing people overseas, thus the Israeli legal system has no jurisdiction over a company whose owners may be in Israel but is registered in an offshore jurisdiction and targets people all over the world. This is what he wants to change – and it is now looking very likely that he will succeed.
As summer gave way to fall this year, Professor Hauser requested permission from Israel’s Attorney General Amichai Mandelblit to amend the law so that it can prohibit the marketing of binary options from anywhere in Israel to anywhere in the world, including from any commercial structure (many of these slippery characters disguise their operations as marketing or service firms that support their real firm abroad).
This was broadcast nationally on Israeli television, and was featured in a series of Laila Calcali (Hebrew for Economic Night) show on Channel Ten in October this year.
“Israel’s fraudulent binary options industry is an ugly phenomenon that harms innocent people and unfortunately fans the flames of negative perceptions of Israelis and Jews. We must do everything possible to eradicate this phenomenon” – Professor Shmuel Hauser, Chairman, Israel Securities Authority
FinanceFeeds investigated the method by which binary options brands employ their sales staff, by conducting a covert job interview at one of the largest brands.
Our investigator asked what they look for in a sales person. The answer, and I quote verbatim, from one particular large binary options brand that also has a lead buying and gaming business was “We target people who are addicted to gambling. We look to get leads from all sources and funnels, and if people working here can bring leads then this is better.”
What this particular binary options brand owner was alluding to was that they like to employ people who have worked at another binary firm, who before leaving, have copied the database onto a memory stick in order to bring it to another firm.
If the internal procedures do not respect the intellectual property of other businesses, legitimate or not, then there is little hope for any morality toward product or customers.
Another nasty trap is the plethora of entities now selling leads on the internet, with very garish marketing campaigns aimed at attracting the attention of hungry binary options brand owners.
Affiliate marketers – likely ex-binary options sales staff – selling stolen leads
As part of detailed research into this matter, FinanceFeeds approached three of these entities, however we believe that they are all connected and that it is a band of former binary options salespeople who have stolen leads and are now offering them on the open market. “Ping Me For Leads” stated the front page slogan on the messenger used by one particular entity. Hmm, how inviting. I might just do that….
Our conversation began with one particular sales person stating “Let me explain how we qualify leads. We have a call center in house, where we qualify leads, and for each lead you get fully verified details, (no wrong numbers, duplicates etc.), they will be all in a position to invest, they expect to get a call and to be made an offer to trade from your sales team, and all leads are qualified in an individual campaign for each client and are branded (we introduce your brand, promotions etc.)”
(Editor’s note. I had to straighten the English out here. Normally, the addition of the abbreviation sic. would be enough, but to comprehend what was an incoherent written sales pitch, I needed to adjust the English significantly. John Smith, my foot.)
The salesman was then asked by FinanceFeeds how the leads are acquired. “We get them from our funnels – financially related seminars, webinars, e-books etc”. I would love to know what the “etc” is. Sounds fascinating. Perhaps it is an acronym for ‘entirely, totally corrupt’.
When asked how lead sales people safeguard the leads that they are selling to ensure that they are not stolen, the salesperson backtracked, admitting “We target all of the regions that are popular, however these leads are not fresh and this is the main issue.”
We asked if they had been used by other binary options brands, to which the answer was “Yes exactly.” Make of that what you will.
The price we were offered was 22 euros per lead, and were asked how many we would like to start with.
The company maintained that “Every lead that you receive will speak to our call operators, who will introduce your brand, promotions, offer etc (more etc, interesting) and we will explain the next step which is a sales call from your sales team. Only if they agree this is counted as a lead and we set up a time-slot for the phone call.”
Once again, our industry is about liquidity distribution, market connectivity, clearing and matching, risk management and is an overall electronic financial services entity featuring multiple components, developed by some of the world’s most astute and experienced institutional professionals and large public companies with loyal client bases.
The binary options business could not be further from resembling that.