US authorities move forward with civil suit vs Yukom binary options operatives
The US CFTC alongside the U.S. District Court for the Northern District of Illinois has placed ads in Israeli news websites, as part of efforts by US authorities to move forward with a $103 million civil lawsuit against the owners and former senior managers of a number of now-defunct Binary Options brokerages.
The ads were placed, after receiving permission from the US court to use “alternative means” as a way of notifying most of the individuals named in the lawsuit whom the CFTC and the court have been unable to reach by other regular means.
US rules require defendants to be notified before a lawsuit can proceed. However after first filing suit in August 2019, and then announcing settlements with a number of the more junior managers of the binary options outfit in September 2019 which included their agreement to testify against their former bosses in the lawsuit, both the CFTC and the court have been unable to successfully contact or serve the main defendants named in the suit – namely Yakov Cohen, Yossi Herzog, and Shalom Peretz.
The fourth defendant named in the civil suit, Lee Elbaz, was successfully served in US prison, where she is serving a 22 year sentence after being convicted of fraud last year in a criminal proceeding relating to the same matter. All but Mr. Peretz also face criminal action in the US, if they are ever located.
The binary options brokerage brands named include BigOption, BinaryBook, and BinaryOnline, all part of the family of companies run by Yukom Communications Ltd.
As noted above, one of the Yukom executives now sits in a US prison having received a lengthy sentence for her role with Yukom and the binary options brokerages. Lee Elbaz was not one of the owners of Yukom, but as CEO ran the call center which engaged directly with clients of the brokerages. At Ms Elbaz’s trial one of her emails to company “brokers” was revealed stating:
“We are the money makers and no one can stop us! I want to hear the noise on the floor! This is not a cemetery here! It is a boiler room!… Either you sell the client or he sells you a reason he can’t deposit!… Don’t leave the money! Just Take It!”
Ms. Elbaz was nabbed by US authorities in September 2017 when she got off a plane from Israel at JFK airport in New York. Her criminal trial concluded last summer.
According to the Times of Israel, which has been very active covering the Yukom saga as well as the uncovering of massive fraud in the binary options sector, two of the defendants – Cohen and Herzog – are no longer in Israel with US and Israeli authorities having no idea where they are. (Although the CFTC did indicate in a filing that it believes that that Cohen “may be located somewhere in the Congo”.). Peretz may or may not be in Israel, but similarly his whereabouts are unknown to authorities.
The ads placed by the US court and the CFTC give the named defendants until June 21 (i.e. one month) to respond to the complaint filed against them in the Illinois court. If they don’t then the ads state that “judgment by default will be taken against you for the relief demanded in the complaint”. But again, that might not mean much if neither they nor their money can be found.