Federal charges have been made against three additional women in a Maryland case involving multi-million investment fraud. The supposed sales and marketing company attempted to defraud investors across the United States and the world by using binary options, which were fraudulently sold and marketed.
According to authorities, a company called Yukom Communications hired employees who lied about their qualifications to potential clients, used stage names, and pretended to be from other countries. The FBI found that the staff falsely guaranteed returns as high as 40%, and didn’t disclose that the company would only make money if their customers lost money. They also falsely misrepresented whether investors could remove their funds, and how to do so if possible. And lastly, they misrepresented terms like “risk free trades” and “bonuses” to create the illusion of benefits, when these clauses were actually used to harm investors.
Employees also used a script to reassure investors. The Baltimore Sun disclosed the following as the typical script employees were expected to follow: “A broker boasted of winning up to 95 percent of his trades. Sales representatives promised a client she would be a millionaire within a year if she didn’t withdraw her five-figure investment.”
The binary options market operates mostly outside of the United States. This option revolves around a simple proposition: will an asset be above or below a specific price at a specific time? Trades are made based on a “yes” or “no” answer, making it one of the easiest financial assets to trade.
“Believe it or not, it’s not difficult for scammers to pull off investment fraud,” says Erez Law, a legal services team that specializes in investment fraud. “High returns or risk free investments are some of the most common scams in investment, and they work by making grandiose claims, especially to investors nearing retirement. Still, there are several ways that defrauded investors can recoup their lost dollars if they have knowledgeable representation.”
On January 8th, the federal trial for the company’s CEO, Israeli citizen Lee Elbaz, was scheduled to begin. She had originally been arrested during a trip to New York City, on one count of conspiracy to commit wire fraud and three counts of wire fraud. However, attorneys withdrew from the case, stating that they’d failed to properly prepare for the trial.
Recently, the same charges have been made against three new Israeli women who worked for the company: Shira Uzan, Liora Welles, and Lissa Mel. Welles and Uzan, who were sales representatives at Yukom, pleaded guilty to conspiracy charges and will be sentenced in March. According to court filing, Welles admitted to being “directly responsible” for $2.4 million in investor losses, while Uzan confessed accountability for $1.8 million. However, the total loss for investors appears to be much higher.
BinaryBook, a brand under the Yukom umbrella, received nearly $99 million between the second quarter of 2014 and the fourth quarter of 2016, and only returned almost $20 million to its clients. One senior couple invested $110,000 through their life savings and lost everything. In an interview with the Washington Post, the couple said that after speaking to who they thought brokers in London, they were unable to take their money out, and were shuffled from person to person with no answers.
One email recovered by the FBI found that Yukom employees were specifically instructed to target retirees, pension holders, Social Security recipients, and veterans.
Over the past few years, fraud centered around binary options has become highly prevalent. In 2011, the FBI’s Internet Crime Complaint Center received just four complaints about fraudulent losses. In 2016, however, they received hundreds more, making it a huge worldwide issue.
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January 25th, 2019 by financetwitter
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