United States Commodity Futures Trading Commission (CFTC) issue legal notices at The Times of Israel on May 21 in an effort to notify three Israelis – Yossi Herzog, Yakov Cohen and Shalom Peretz – as well as the Yukom Communications company that they had been sued by the US government.
The CFTC published the notice after a judge agreed on April 20 to allow the CFTC to serve defendants with legal documents “in an alternative way” because of the efforts of the US government over the previous eight months to send them a complaint and the summons failed.
Yukom Communications Ltd. apparently no longer operational, the CFTC said in a recent legal submission, while defendants Cohen and Herzog are no longer in Israel. CFTC doesn’t know where they are, he said.
Registration is free
CFTC has file a lawsuit Last August 12 against companies and individuals linked to the BigOption binary options website, BinaryBook and BinaryOnline, charging them with $ 103 million “fraud related to global retail binary options companies that target and become victims of the US population.”
The defendants in the complaint were Cohen and Herzog and Lee Elbaz, Shalom Peretz, Yukom Communications Ltd. (Israel), Linkopia Mauritius Ltd., Wirestech Limited (United Kingdom), WSB Investments Ltd. (St. Vincent and the Grenadines), and Zolarex Ltd. (Marshall Islands).
Elbaz was convicted of fraud in a criminal case on August 7, 2019, and then sentenced to 22 years in prison. He was served with documents from CFTC last August at the Correctional Care Facility in Washington, DC.
However, the CFTC’s inability to find them shows that they may also not appear for US criminal proceedings against them.
While CFTC has successfully served Elbaz, Linkopia Mauritius Ltd., Wirestech Limited, WSB Investments Ltd., and Zolarex Ltd. with legal documents, US regulators failed to serve the defendants Cohen, Herzog, Peretz and Yukom Communications Ltd., despite repeated attempts to do so.
Under the laws of the United States and many other countries, plaintiffs in civil lawsuits are required to serve defendants with summons and / or complaints so that the court has jurisdiction over them. One way for defendants abroad can be served, according to The Hague Convention Overseas, is by registered mail.
According to CFTC lawyers in this case, Elizabeth Pendleton, Elizabeth Streit and Scott Williamson, several attempts to serve Israeli defendants were unsuccessful.
Lawyers claim that Yukom Communications, one of Israel’s call centers that run binary options websites, appears to be no longer active.
“Not long after filing a complaint, the commission confirmed the Yukom address registered with the Israeli Securities Authority, Israel’s national securities regulator, and sent summons and complaints to that address by registered mail,” read the court’s filing.
But the CFTC packet was returned.
“On or around November 12, 2019, the commission service package was returned without a sign stating that Yukom had” left. “, According to CFTC lawyers. “The possibility that Yukom is no longer actively doing business is supported by the fact that the website allegedly used by Yukom to perpetuate fraudulent binary options schemes – including www.yukom-com.com and yukomgroup.com – is no longer active.”
As for Cohen, one of the alleged Yukom owners and their associated companies, registered letters sent to his last known address in Israel were returned to the CFTC marked “rejected.”
According to the court’s submission, the CFTC “has received information indicating that Cohen might be located somewhere in the Congo.”
Registered packages sent to Herzog’s last address in Israel appear to have been lost on the way. CFTC indicates it doesn’t know where it is.
“Herzog is not currently in Israel,” the lawyer said. “[The CFTC] has communicated with representatives of various foreign financial regulatory bodies in an effort which ultimately failed to determine Herzog’s current geographical location. “
Lawyers for the Department of Justice told the CFTC in January that no lawyer appeared on behalf of Cohen or Herzog in the criminal proceedings, nor had he spoken to the lawyer who was currently representing them.
Meanwhile, letters registered to the last known address of Peretz, which were not demanded by the Department of Justice, but were only demanded by CFTC, were returned to CFTC marked with the words “missing.”
“The Commission was unable to identify a new address for Peretz and hence, despite the Commission’s diligent efforts, Peretz’s whereabouts are currently unknown,” CFTC said.
Acknowledging these difficulties, on April 20, a judge granted the CFTC’s request to serve the defendants in an “alternative way.” These methods consisted of sending summons and complaints to the defendants through ordinary letters, sending documents to email addresses that they had used in the past and publishing legal notifications in the Times of Israel.
Where did the defendants go?
In a document dated January 15, CFTC lawyers Pendleton, Streit and Williamson alleged that “three of each defendant had escaped from their registered address in Israel and may have tried to avoid responsibility for their fraudulent actions.”
They say that the last Cohen was believed to be in Congo. Cohen is reported to have been active there for several years, running a sports betting company, according to a Telephone conversation The FBI took Elbaz’s phone after his arrest and played during the July-August 2019 trial.
As for Peretz, while there is no record of him leaving the country, he could have moved into Israel without notifying the government, an unusual situation, said a lawyer familiar with the service process to The Times of Israel.
Herzog, one of the owners of Yukom Communications and related companies, appears to have been in Israel as recently as June 2019, according to a US court filing.
On April 24, 2019, three months before the scheduled trial, Elbaz filed a motion asking for permission to take video footage from former Yukom executive.
“Lee Elbaz is moving to the Order which allows him to take video footage in Israel from Yossi Herzog, Elad Bigelman, Nissim Alfasi and Chanan Tabarko to protect the testimonies of these people for trial,” the motion said.
On May 15, 2019, the judge granted Elbaz’s request and a deposit would begin in Israel on June 19, 2019, stating that Herzog was still in Israel in June.
On June 11, a court filing showed that the Department of Justice had replaced prosecutors in this case with three new prosecutors, one of whom, Henry Van Dyck, reportedly summoned Herzog’s lawyer, Zvi Gabbay, and reportedly told him that he had been charged in February, that the charges against Herzog sealed, and that the extradition process is likely to begin soon, according to a June 15 statement by Gabbay.
“Mr. Van Dyck said that the reason he told me about the suspended charges against Mr. Herzog at this time was that he thought that Mr. Herzog had to have this information before voluntarily giving testimony in Ms. Elbaz’s case,” Gabbay said.
The indictment was deleted immediately afterwards and Herzog then changed his mind about testifying on Elbaz’s behalf.
During Elbaz’s trial from 16 July to 7 August 2019, Hadar Israel’s lawyer, Gabbay’s colleague at the Barnea & Co law firm, sat in the courtroom every day making excessive notes, possibly making the company’s client, Herzog, aware of developments.
On August 22, two weeks after Elbaz was sentenced, the CFTC learned from the Israeli Securities Authority that Herzog was no longer in the country.
A researcher at the Israeli Securities Authority, Lior Shpitz, sent an email to the CFTC with the following statement: “Please note that according to our records Shalom Peretz is the only person currently in Israel. The rest are currently involved abroad.”
The Israeli Securities Authority may know this because Herzog did not flee across the border but has gone through the official border where his departure will be recorded by the government.
The Times of Israel contacted the Israeli Ministry of Justice to ask if they had received an extradition request from the US Department of Justice before Herzog’s departure and whether such a request would be a precondition for preventing him from leaving the country.
A spokesman said, “We are not talking about the presence or absence of extradition requests except when the process is open.”
Calls issued by CFTC on Thursday informed Cohen, Herzog and Peretz that they were required to answer CFTC complaints against them within 30 days.
The charges against the defendants were that starting on or around March 26, 2014, the defendants “individuals who were fraudulently requested throughout the United States and other countries to carry out illegal transactions, exchange in binary options through fictitious entities using the trade name BigOption , BinaryBook, and BinaryOnline. “
These brands, the complaint said, were under the ownership and control of Cohen and Herzog, whose workers “made the wrong presentation of material and negligence to encourage customers to trade, including misrepresenting the potential benefits and nature of the binary options offered, incorrectly stating that their brand interests are aligned with the interests of customers, and failing to reveal that Yukom is on the opposite side of all customer trades and profits from customer losses. “
The binary options industry developed in Israel for a decade before it was banned through the Knesset law in October 2017, largely as a result of investigative reporting by The Times of Israel which began with a March 2016 article entitled “Wolf in Tel Aviv.“
At its peak, hundreds of companies in Israel employed thousands of Israelis who were accused of cheating billions of victims worldwide. Fraudulent companies will deceive victims into believing that they have succeeded in investing and making money, encouraging them to save more and more into their accounts, until the company finally breaks contact with investors and disappears with all or almost all of their money.
Israeli prosecutors have not yet accused one of the binary options suspects of fraud, while the United States has charged around two dozen and taken civil enforcement action against many others.
to request modification Contact us at Here or [email protected]