US Govt opposes request by binary options fraudster Lee Elbaz for foreign depositions

Maria Nikolova

It is unclear whether the proposed deponents, including Yossi Herzog, are unavailable to testify at trial, the US Government argues.

A couple of weeks after Lee Elbaz, also known as Lena Green, the former CEO of Israel-based Yukom Communications who stands accused of binary options fraud in the United States requested to depose certain individuals, the United States Government has filed its opposition to the request.

Let’s recall that Elbaz requests an Order permitting her to take videotaped depositions in Israel of Yossi Herzog, Elad Bigelman, Nissim Alfasi, and Chanan Tabarko in order to preserve the testimony of these individuals for trial. According to Elbaz, exceptional circumstances and the interest of justice support granting her Motion.

The names of Lee Elbaz and Yossi Herzog have been associated in the past, as FinanceFeeds research has demonstrated. Herzog is the majority owner of Yukom Communications. Furthermore, Elbaz and Herzog are known for their work at now-defunct 4XP.

The details about Elbaz’s motion to depose Herzog and other witnesses are not made public. The relevant documents are sealed.

On May 8, 2019, the US Government submitted its opposition to the defendant’s request at the Maryland District Court. The US authorities note that Elbaz’s memorandum in support of her motion was filed ex parte and under seal, so the Government cannot ascertain whether Elbaz has made the requisite showing under Rule 15.

The US Government stresses that a party seeking to take foreign depositions bears the burden of showing that the requirements of Rule 15 have been met based on three considerations: (1) whether the prospective witness is unable to attend or will be prevented from attending trial; (2) whether the prospective witness’s testimony is material; and (3) whether the prospective witness’s testimony is necessary to prevent a failure of justice.

As an initial matter, the US Government says the defendant’s motion should be denied in the absence of a compelling explanation in her ex parte submission for the delay in seeking these depositions until two months before trial. Elbaz was indicted over a year ago (in March 2018). The Government has not been made privy to any explanation for this delay.

Further, the Government argues that it is unclear whether the proposed deponents are unavailable to testify at trial. Also, according to the US Government, it is unclear whether the defendant has shown that the proposed testimony is material.

Elbaz was arrested by the FBI in September 2017. The Indictment charges her with one count of conspiracy to commit wire fraud and three counts of wire fraud. The Indictment alleges that Elbaz participated for over three years (from approximately May 2014 and continuing through approximately June 2017) in a fraudulent scheme involving the sale and marketing of binary options – including as the Chief Executive Officer of Yukom Communications. Yukom was an Israel-based business that provided sales and marketing services, including investor “retention services,” for two internet-based businesses that sold and marketed binary options with the brand names BinaryBook and BigOption.

Read this next

Digital Assets

Crypto miner BitFuFu to go public on Nasdaq through $1.5 billion SPAC merger

Cloud-mining service provider BitFuFu, backed by industry giant Bitmain, will go public through a merger with a blank-check firm in a deal that values the combined entity at $1.5 billion. This valuation is 4.6x 2022 projected revenue and 3.3x projected December 2022 annualized recurring revenue.

Digital Assets

Bithumb will no longer allow withdrawals to unverified crypto wallets

Bithumb, one of South Korea’s big four exchanges — alongside Coinone, Korbit, and Upbit — exchange is moving to block the use of anonymous wallets.

Retail FX

Cyprus compensation fund (ICF) to protect customers of Sonafx and BelightFX

The Cyprus Securities and Exchange Commission (CySEC) today published a new list of financial services providers that were disbarred from its lifeboat scheme.

Opinion

Exclusive interview with Stacey Van Niekerk of Finalto Group

With qualifications in A+ IT certification; in programming and wealth management as well as currently studying Investment Management at CISI Stacey Van Niekerk is an incredible asset to the Finalto Group. Having 10 years combined extensive experience in the Financial Industry working and helping Brokerage Firms and Fintech companies assist clients around the world in regions such as Australia; Africa; Europe; Asia; Uk and Mena Stacey is now responsible for driving Finalto’s B2B technology offering.

Institutional FX

MOEX lifts restrictions on repo transactions, including short positions

Russia’s largest institutional trading venue has lifted restrictions it applied last month to repo transactions with a central counterparty (CCP) in US shares.

Retail FX

USGFX has a heavy shortfall in client money, nearly $350M missing

BRI Ferrier, the liquidators of Union Standard International Group, known as USG or USGFX, today said creditor claims have hit $357 million, and this amount may increase further.

Industry News

Ripple fails to stop discovery extension amid SEC’s 180º on Hinman’s speech

The plaintiff has made a 180º turn by suggesting that the speech wasn’t merely peripheral to actual policy formulation”, but was in fact an “essential link” in the SEC’s deliberative process with respect to Ether” and other digital assets. 

Digital Assets

Gemini hires Pravjit Tiwana as CTO with eyes on Web3 and Metaverse

“I want to help build Web3 and the decentralized Metaverse. The promise is as big as the Internet itself and Gemini is well-positioned to help build and catalyze that future.”

Institutional FX

Broadridge automates Santander’s Shareholder General Meeting services in Spain

Broadridge has recently expanded coverage for proxy processing and extended voting windows for 20 sub-custody markets in 2021, with more markets to follow in 2022 and 2023.

<