Binary options fraudster Lee Elbaz challenges Appeals Court ruling
Binary options fraudster Lee Elbaz has once again challenged the Appeals Court ruling by filing her second petition for rehearing en banc.
The petition, seen by FX News Group, was filed on November 17, 2022, that is, about a fortnight after the Appeals Court affirmed Elbaz’s prison sentence but remanded the case to the Maryland District Court for a review of the restitution order.
On November 3, 2022, the panel granted a rehearing and issued an amended opinion, which mooted the en banc petition.
Ms. Elbaz now petitions this Court for en banc review of the amended panel opinion. While the amended opinion attempts to reconcile its reasoning and result with this Court’s prior cases, it simply cannot do it, Elbaz says.
According to the defendant, amending the panel opinion but reaching the same result cannot fix that fundamental incompatibility. Thus, en banc review is necessary to secure and maintain uniformity of the court’s decisions.”
Elbaz notes that the amended panel opinion conflict with the framework that the Court employs to determine whether a juror’s receipt of improper and prejudicial information during deliberations violated the Sixth Amendment. Ms. Elbaz acknowledges that jury prejudice issues are often fact-bound and not appropriate for en banc review. But that is not the case here. The amended panel opinion did not apply the well-established legal test that this Court uses to resolve such claims.
Thus, it creates a legal conflict with this Court’s precedents. As a result, Elbaz claims she did not receive a fair trial, and en banc review is necessary to secure and maintain uniformity of this court’s decisions.
Lee Elbaz and her confederates orchestrated a multimillion-dollar fraud scheme, operating from Israel and targeting unsophisticated victims worldwide. Posing as an investment firm, Elbaz and her partners solicited “investments” that cost fraud victims over $100 million, including millions from victims in the United States. While vacationing in New York, Elbaz was arrested and later convicted for conspiring to commit wire fraud and for substantive wire fraud itself. She was sentenced to 22 years in prison and required to pay $28 million in restitution.
Elbaz and her partners’ fraud scheme involved so-called “binary options.”
The scheme operated in three layers. First, binary-option investments were marketed by two foreign companies, BinaryBook and BigOption. Second, when a customer responded to an advertisement, they would be contacted by a “conversion” agent from a company called Linktopia, who would persuade the customer to become a client by depositing at least $250. Third, once the customer was on the hook, responsibility for “retention” would transfer to Yukom Communications, based in Israel.
Elbaz worked for Yukom in Israel in various capacities, including as its Chief Executive Officer. Elbaz and others at Yukom made fraudulent representations to retain investors by convincing them to deposit more money, then stopping them from withdrawing their funds. Yukom’s retention agents used fake names and told investors significant lies about their education, work experience, compensation incentives, location, and investment performance.
And these lies supported their various techniques to “lock the client in,” obtaining more deposits and refusing to permit withdrawals. In total, the scheme netted more than $100 million in deposits, including millions from American victims.