Binary options fraudster Lee Elbaz, the CEO of Yukom Communications, has once again challenged her prison sentence.

On July 28, 2022, Elbaz filed Petition for rehearing and rehearing en banc with the Fourth Circuit U.S. Court of Appeals. This happens less than a month after the Appeals Court sided with the District Court and affirmed the prison sentence of Elbaz, nixing her attempt to appeal from the sentence.

Requesting a rehearing en banc is the last step when a defendant challenges a ruling.

Let’s recall that, a federal jury in Maryland convicted Ms Elbaz, an Israeli citizen, of conspiracy to commit domestic wire fraud and substantive domestic wire fraud for her role in a binary options scheme that included customers worldwide, including within the United States.

For her participation in the scheme, the district court sentenced Ms. Elbaz to 22 years in prison and 3 years of supervised release and ordered her to pay $28 million in restitution.

After the parties closed their case the jury began deliberating on Thursday, August 1, 2019. On Monday, the jury indicated that it could not reach a consensus. On Tuesday, August 6, the court confronted an issue with a juror. Juror number 9 told the court that on Sunday when he was standing in line in the CVS, he heard two people talking about the Elbaz case who said that she “wasn’t a nice person and there was something missing from the case.” He further indicated that these people did not know he was a juror, and that it was a coincidental encounter.

He said that he had thought that Ms. Elbaz was not guilty. But what he overheard affected him because it made him think that he might be wrong.

It also affected the jury deliberations. Even though the juror heard the information on Sunday, he spent all of Monday in deliberations and did not tell the court until Tuesday. When questioned, he indicated that “I didn’t say very much yesterday because I was kind of wrestling with that. So I didn’t say very much. I listened and just put in, you know, my little two cent.” The Court then asked whether the juror’s “two cents” were impacted by what he heard on Sunday, and the juror agreed that they were. Ms. Elbaz moved for a mistrial, which the district court denied.

The court dismissed the juror and started the process of bringing in an alternate. The district judge asked the parties their thoughts on conducting voir dire of the other 11 jurors to ask if any information had been brought into the jury room from outside of the trial. Ms. Elbaz objected, stating that inquiry itself “would be prejudicial” because “the remaining eleven are well aware that somebody who was apparently advocating for not guilty has been removed from the jury. [Thus,] asking that question suggests that he was removed from the jury because he was the subject of witness tampering by the defense, that he’s engaged in some wrongdoing.”

The district court downplayed this concern and overruled Elbaz’s objection. It conducted the voir dire, denied the motion for a mistrial, and seated the alternate juror. The jury began deliberations anew and, after a very short time, found Ms. Elbaz guilty. At sentencing, Ms. Elbaz objected to the district court’s decision to consider the losses suffered by all investors worldwide as “relevant conduct” for purposes of calculating the Guidelines range. She argued that her conduct was legal in Israel where she lived and worked and that the government did not provide evidence showing that any of the non-domestic losses resulted from illegal conduct. Under this Court’s longstanding precedents, she continued, “relevant conduct” had to be criminal conduct. The district court agreed that her overseas conduct appeared legal, but nonetheless overruled the objection.

The district court, in addition to the standard conditions of supervised release, imposed several special conditions on Ms. Elbaz. It did not, however, provide any explanation as to why these special conditions were necessary.

Ms. Elbaz timely appealed. A panel (Judges Richardson, Rushing, and Traxler) affirmed the conviction and most of the sentence but vacated part of the restitution order.

Relevant to Elbaz’s petition,

(1) The panel rejected Ms. Elbaz’s argument that the district court procedurally erred by not providing any explanation for why she needed additional special conditions of supervised release. In so doing, the panel held that plain error review applied because Ms. Elbaz did not preserve this argument.

(2) The panel rejected Ms. Elbaz’s argument that the district court erred by classifying non-criminal foreign activity as “relevant conduct” under the Guidelines.

(3) Finally, the panel rejected Ms. Elbaz’s argument that the government did not meet the high burden of “prov[ing] that there exists no reasonable probability that the jury’s verdict was influenced by an improper communication.”

Elbaz now raises the same arguments again. The lawsuit continues at the the Fourth Circuit U.S. Court of Appeals.