US Judge nixes Lee Elbaz’s attempt to dismiss binary options fraud lawsuit against her
Judge Theodore D. Chuang noted that the Indictment had managed to state clearly how Elbaz and her co-conspirators induced investors to deposit funds based on various misrepresentations made by BinaryBook and BigOption staff.
Less than six months after the United States Department of Justice announced that Lee Elbaz, former CEO of Israel-based company Yukom Communications, a purported binary options sales and marketing company, was charged in an Indictment, the Maryland District Court denied her Motion to Dismiss the criminal case against her.
In a Memorandum Opinion, signed by Judge Theodore D. Chuang, the Court nixes Elbaz’s attempts to put an end to the action against her.
Let’s recall that Elbaz, a resident of Israel, was the Chief Executive Officer of Yukom Communications, an Israel-based business that provided sales and marketing services for two internet-based businesses with the brand names BinaryBook and BigOption. She is charged with one count of conspiracy to commit wire fraud and three counts of wire fraud.
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 addition, the defendant misrepresented the suitability of and expected return on investments through BinaryBook and BigOption and provided investors with false names and qualifications. Lee Elbaz was usually Lena Green.
The representatives were falsely claiming to be working from London and were misrepresenting whether and how investors could withdraw funds from their accounts. Representatives of BinaryBook and BigOption, working under Elbaz’s supervision, misrepresented the terms of so-called “bonuses,” “risk free trades” and “insured trades,” and deceptively used these supposed benefits in a manner that in fact harmed investors, according to the indictment.
Elbaz had filed a total of four Motions to Dismiss in which she argued that the Indictment fails to state an offense, the charged offenses are improperly based on extraterritorial conduct, the conspiracy charge exceeds Congress’s power under the Commerce Clause to criminalize a foreign conspiracy, and the Indictment fails to allege proper venue in the District of Maryland.
As per the latest Court filings, seen by FinanceFeeds, all four Motions to Dismiss are denied.
In explaining his decision, the Judge noted that the Indictment sufficiently stated a conspiracy charge. Beyond 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. There is no due process violation.
The case against Lee Elbaz is captioned USA v. Elbaz (8:18-cr-00157).
