US Govt seeks prison term for SEC impostor pretending to offer binary options recovery services

Maria Nikolova

Leonel Valerio Santana falsely claimed to provide assistance to victims of companies like Banc de Binary.

United States authorities continue their fight against binary options scams, with the scope of regulatory action spreading to fraudulent recovery schemes. On Friday, August 10, 2018, the US Government filed a Sentencing Memorandum with the Massachusetts District Court in a case targeting an individual behind such a recovery scam.

Leonel Valerio Santana is said to have pretended to be an official of the Securities and Exchange Commission (SEC) pretending to offer recovery services to binary options broker victims. The Government presents plenty of evidence including emails and documents falsely claiming to offer victims legal representations in cases related to binary options firms like Titan Trade and Banc de Binary.

In order to convince victims to pay for the services offered, members of Santana’s conspiracy pretended to be employees of the Securities and Exchange Commission, sometimes real ones, whose identities as SEC employees could be verified with an internet search. The conspirators used official-seeming e-mail addresses like [email protected] and [email protected], fake forms bearing the SEC seal, and documents that appeared to be legal contracts, all in an effort to trick their victims into believing they were sending money to a legitimate government entity.

To avoid detection, Santana and his associates hid their true identities behind anonymous e-mail addresses, internet-based voiceover IP phone numbers, and several layers of money transfers among nominees who were paid small amounts for their services. The result was a substantial financial loss to tens of victims, the victimization of SEC employees whose identities were stolen, and an additional basis for public mistrust that threatens the SEC’s ability to help victims of the regulatory violations that agency seeks to remedy.

The government recommends a sentence of 78 months in prison, 36 months of supervised release, and restitution of $105,869.74, to be paid pro rata to the victims.

Let’s recall that in May this year, the defendant agreed to plead guilty to charges of (1) conspiracy to commit wire fraud, to impersonate a federal employee and to misuse a government seal, in violation of 18 U.S.C. § 371, and (2) conspiracy to commit money laundering, in violation o f 18 U.S.C. § 1956(h).

In the plea agreement, Santana expressly and unequivocally admitted that he committed the crimes charged in Counts One and Two of the Information, did so knowingly intentionally, and willfully, and is in fact guilty of those offenses.

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