Israeli woman convicted in US of scheme to defraud investors

Maryland judge convicts Israeli woman of orchestrating a scheme to defraud thousands of investors out of tens of millions of dollars.

Arutz Sheva Staff,

Fraud
Fraud
iStock

An Israeli woman was convicted on Wednesday of orchestrating a scheme to defraud tens of thousands of investors across the globe out of tens of millions of dollars, The Associated Press reports.

Lee Elbaz, 38, is scheduled to be sentenced December 9 by a federal judge in Maryland following her conviction on of three counts of wire fraud and one count of conspiracy to commit wire fraud, said Justice Department spokesman Peter Carr.

Each count carries a maximum sentence of 20 years in prison.

Elbaz had been free on bail and living with a relative in San Francisco while awaiting trial. US District Judge George Hazel ordered her taken into custody immediately after the jury's verdict, according to her attorney.

She had served as CEO of Yukom Communications, an Israel-based company that operated in the "binary options" industry under the brand names BinaryBook and BigOption.

Elbaz trained employees to lie to investors and rigged the odds against them making and recouping any money, Justice Department prosecutor Rush Atkinson said during the trial's closing arguments last week, according to AP.

"There is no way this fraud happened without Lee Elbaz," Atkinson said. "Everybody told the exact same lies because that is what Ms. Elbaz trained them to do."

Elbaz is one of 15 defendants in the case and was the first to be tried. Five have pleaded guilty and agreed to cooperate with prosecutors.

FBI agents arrested Elbaz in September 2017 after she traveled to New York.

The binary options market largely operates outside the US through unregulated websites. The payout on a binary option typically is linked to whether the price of a particular asset, such as a stock, rises above or falls below a specified amount at a particular time, at which point the investor receives either a pre-determined amount of cash or nothing.

Yukom employees pretended to be from other countries, lied about their professional qualifications and adopted "stage names." Elbaz used the alias "Lena Green" while interacting with investors, according to prosecutors.

Yukom employees also falsely guaranteed profits, lied about their historical rates of return and didn't tell investors that they only made money if their customers lost money, prosecutors said.

Elbaz’s attorney, Barry Pollack, told jurors that his client never crossed a line between "selling" and committing fraud.

"She drew the line exactly where she believed the company's lawyer told her was the proper place to draw the line," Pollack argued, according to AP.




top