The Jewish Press
Federal Judge Jeremy Daniel has ruled that three Israelis—Lee Elbaz, Yossi Herzog, and Shalom Peretz—and the companies they own, Ucom Communications and Linkopia Mauritius, must pay a total of $451.6 million for their involvement in a binary options fraud. This includes a $338.7 million fine and $112.9 million in compensatory damages.
On August 12, 2019, the US Commodity Futures Trading Commission (CFTC) filed a complaint in federal court in Chicago against Lee Elbaz, Yaakov Cohen, Yossi Herzog, Shalom Peretz, and several companies, including Yukom Communications Ltd. and Linkopia Mauritius Ltd.
The case involved a binary options scam, where a derivative contract pays a fixed amount or nothing depending on the price at expiration. From 2014 to 2019, the businesses promoted binary options to customers through websites with fabricated trade names like BigOption, BinaryBook, and BinaryOnline, ultimately collecting around $100 million from investors, according to the CFTC.
Only about $20 million of the funds were ever returned.
The CFTC contended that ‘Defendants do not connect their customers to legitimate binary options exchanges or otherwise match buyers and sellers of binary options. Instead, defendants are counter-parties to each transaction, acting in a manner similar to that of a casino or sports book, take the opposite position on each trade.’
In August 2019, Lee Elbaz was convicted of wire fraud, sentenced to 20 years in prison, and ordered to pay $28 million in restitution.
As to Yossi Herzog: in February 2024, Ynet reported that the US Justice Dept. had taken legal action against 21 Israeli individuals, including Yosef Herzog, Yaakov Cohen, Ori Maymon, Nissim Alfasi, Elad Bigelman, Runal Jeebun, Sabrina Elofer, Afik Tori, Anog Maarek, David Barzilay, Gilad Mazugi, Hadas Ben Haim, Yousef Bishara, and Nir Erez. All of the accused, either current or former residents of Israel, are facing charges of conspiracy to commit wire fraud and multiple counts of wire fraud.
The most recent unsealed indictment identifies Yossi Herzog from Israel and Yaakov Cohen from Mauritius as the owners of the binary options operation that includes Yukom Communications and its affiliated websites, BigOption.com and BinaryBook.com.
Yaakov Cohen pleaded guilty to conspiracy to commit wire fraud and was sentenced to five and a half years in prison in 2024, according to the CFTC.