Binary options fraudster Lee Elbaz to challenge application of US law to her activities in Israel
Lee Elbaz, the former CEO of Yukom Communications, a company at the heart of a large-scale binary options scams, has secured more time to file her opening brief as she appeals from her sentencing.
The appeal case was launched in January 2020 at the Fourth Circuit U.S. Court of Appeals but Elbaz has not yet submitted the brief and appendix that will mark the actual start of argument in the case. As per Court order entered on October 16, 2020, the opening brief and appendix are due December 18, 2020.
In documents filed with the Fourth Circuit U.S. Court of Appeals on October 15, 2020, Elbaz explains why she asked for more time to submit the brief and appendix. Elbaz notes that this appeal has a large record and raises complex issues involving the scope of the prosecution, the trial itself, the sentencing, and restitution.
“The amount of material is daunting”, Elbaz says. This case involves over 4,000 transcript pages, almost 1,000 pages of unsealed legal motions and orders, and over 4,000 pages of sealed legal filings. Further, counsel has been working with trial counsel for Elbaz and the government to obtain the trial exhibits. There are over 500 exhibits – including audio and video recordings.
Notably, the documents submitted at the Court earlier this week indicate some of the key points of the appeal. Elbaz will be challenging:
- the extraterritorial application of the criminal statute over her activities in Israel;
- the propriety of blocking overseas depositions that would have benefited the defense;
- the inadvertent disclosure of 10,000 privileged documents to the prosecution and the remedy for that disclosure designed by the district court;
- and the decision to replace a juror rather than declare a mistrial after a juror received improper information about the case.
Regarding sentencing, Elbaz’s counsel expects to challenge the loss calculation that resulted in a 22-level sentencing enhancement, as well as the sufficiency of the district court’s sentencing explanation, and the amount of restitution ordered.
Let’s recall that, in December 2019, Elbaz was sentenced to 22 years in prison for orchestrating a scheme to defraud investors who had purchased more than $100 million in binary options.
According to the evidence presented at trial, Elbaz and her co-conspirators fraudulently sold and marketed binary options to investors located in the United States and throughout the world through two websites, known as BinaryBook and BigOption. The evidence showed 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 when, in fact, the owners of BinaryBook and BigOption profited when investors lost money.
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.