US Govt gets Court approval to set up website for victims of binary options fraudster Lee Elbaz
The Court has taken into account that there are a large number of potential crime victims in the case targeting the former CEO of Yukom Communications.
Judge Theodore D. Chuang of the Maryland District Court has granted a motion by the United States Government to use alternative notification procedures with regard to the victims of alleged binary options fraudster Lee Elbaz.
The Court has taken into account there are “multiple crime victims” in the case which targets the former CEO of Israel-based Yukom Communications. The Court has ordered that the Government may provide notice to potential crime victims in this case through publication on a website maintained by the Department of Justice as an alternative to providing individualized notice.
The website would provide a summary of the case, information regarding the case’s status, and other significant case-related documents, such as the charging documents. The website also would contain an e-mail address and telephone number for a Victim Assistance Line through which individual potential crime victims could contact the Department of Justice with questions regarding the case. The website is not yet operating.
Yukom Communications provided investor “retention” services for two websites, known as BinaryBook and BigOption, promoting and marketing binary options. The indictment alleges that in her role as CEO of Yukom, Elbaz, along with her co-conspirators and subordinates, misled investors using BinaryBook and BigOption by falsely claiming to represent the interests of investors but that, in fact, the owners of BinaryBook and BigOption profited when investors lost money.
In September this year, the Court denied Elbaz’s motions to dismiss the case against her.
Back then, the Judge noted that the Indictment sufficiently stated a conspiracy charge. Beyond that, the Court found that the Indictment sets forth a detailed description of the manner and means of the conspiracy, including that Elbaz and her co-conspirators induced investors to deposit funds based on four different categories of misrepresentations made by BinaryBook and BigOption personnel, specifically misrepresentations that Representatives were paid based on total investor profits, when in fact they were paid based on total investor deposits, misrepresentations about the profitability of their accounts, misrepresentations about the location and education of particular Representatives, and misrepresentations about investors’ ability to withdraw their funds.
These additional facts, the Judge said, are more than enough to identify the offense Elbaz is charged with conspiring to commit.
Furthermore, the Judge explained that this is not a case involving foreigners defrauding foreigners in which there was incidental use of US wires. The Indictment alleges that there were victims in the United States, specifically in Maryland, and that Elbaz caused wires to be sent to them in furtherance of a scheme to defraud. Thus, there is a significant US interest in preventing the defrauding of US persons.
The Judge also noted that the Indictment alleges that Elbaz supervised and trained Representatives to make false statements to defraud investors, and some of those Representatives then directly engaged with Americans over US wires. Under these circumstances, he said, it is neither arbitrary nor unfair to prosecute Elbaz in a United States court. Hence, the Court ruled that there was no due process violation.
