US Govt argues against granting immunity to Yossi Herzog in binary options fraud case

Maria Nikolova

The US Government notes that there is no reason to immunize a charged co-conspirator because Lee Elbaz wishes to call him as a witness.

Less than a fortnight after Lee Elbaz, the former CEO of Yukom Communications, who stands accused of binary options fraud in the US, accused the Government of dissuading a number of her witnesses from testifying, the US Government has filed its objections to her allegations and requests.

Let’s recall that, earlier in June it became clear that three of the witnesses that Elbaz wished to call to testify were charged with fraud in the United States. It turned out that, on February 13, 2019, a grand jury returned an indictment charging multiple individuals— including Yosef Herzog, Nissim Alfasi, and Elad Bigelman – with conspiring to defraud BinaryBook and BigOption investors out of millions of dollars. The Herzog Indictment alleged that each defendant was involved with Yukom Communications, the same company where Elbaz worked during the conspiracy.

The three dubbed witnesses then refused to testify without immunity.

In a document, filed with the Maryland District Court on Tuesday, June 25, 2019, the Government explains that, on June 12, 2019, the government spoke with Defendant Elbaz’s counsel to explain that the government had recently notified Israeli counsel for the three Herzog defendants named as Rule 15 witnesses of the pending Herzog Indictment, and that the purpose of the notification was to allow the witnesses to make fully informed decisions as to whether to waive their rights and proceed with the depositions.

According to the Government, the contention that it moved to unseal the Herzog Indictment in bad faith and for tactical reasons is nonsensical on its face. By unsealing the Herzog Indictment, the government says it now faces the substantial risk that the three charged individuals – all of whom reside abroad and possess the means, opportunity, and motive to evade capture – will never be brought to justice for their roles in a scheme that cost victims worldwide at least $100 million. The government moved to unseal the Herzog Indictment reluctantly, after consultation with the Court, and after concluding that there was no better option.

Regarding Elbaz’s request to compel immunization of the three charged co-conspirators, the US Government calls it “meritless” and unsupported by Fourth Circuit law. The US authorities note that the redacted Herzog Indictment makes clear that Herzog, Bigelman, and Alfasi are alleged to have participated in the same conspiracy and scheme as Elbaz. Likewise, during Elbaz’s trial, the government will prove that Herzog, Bigelman, and Alfasi were her co-conspirators.

The Fourth Circuit has squarely rejected the proposition that the government should immunize a charged co-conspirator because the defendant wishes to call him as a witness, the Government says.

Finally, in light of the serious nature of the allegations about the government’s decisions and conduct, the government requests that the Court make a finding that the government did not engage in misconduct or otherwise acted in bad faith.

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