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The U.S. District Court for the Northern District of Illinois issued a default judgment against five offshore entities and three individuals for executing a fraudulent global retail binary options scheme that targeted U.S. residents.
The defendants, including Yukom Communications Ltd., Linkopia Mauritius Ltd., and individuals Yossi Herzog, Lee Elbaz, and Shalom Peretz, were found liable for fraud and violations of the Commodity Exchange Act (CEA) and CFTC regulations.
The court’s order found that from March 26, 2014, until August 12, 2019, the defendants engaged in deceptive practices through internet platforms using names like BigOption, BinaryBook, and BinaryOnline. They made false representations to customers, claiming binary options trading was profitable, while most customers incurred losses. The defendants also misappropriated funds and manipulated their trading platforms to reduce the chances of customers’ successful trades.
As a result of their unlawful actions, the defendants are ordered to pay $112.9 million in restitution and a $338.7 million civil monetary penalty. Furthermore, they are permanently enjoined from violating the CEA as charged and are banned from registering with the CFTC or trading in any CFTC-regulated markets.
This judgment follows the CFTC’s complaint filed on August 12, 2019, which charged the defendants with fraud among other violations. The case also ties into parallel criminal actions, where Lee Elbaz was convicted of wire fraud and conspiracy to commit wire fraud on August 7, 2019, and sentenced to 20 years in prison with $28 million in restitution.
Similarly, Yakov Cohen, another defendant, pled guilty to conspiracy to commit wire fraud and was sentenced to 5.5 years with $7 million in restitution on January 22, 2025.
The CFTC has acknowledged the assistance of the U.S. Attorney’s Office for the District of Maryland in this matter. The Division of Enforcement staff members Heather Dasso, Elizabeth N. Pendleton, Elizabeth Streit, Scott R. Williamson, and Robert T. Howell were responsible for the prosecution of this case.
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