On 29 January 2025, the United States District Court for the Northern District of Illinois issued a default judgment against multiple offshore entities and individuals for their involvement in a large-scale global binary options fraud. The ruling, following a United States Commodity Futures Trading Commission (US CFTC) complaint, found Yukom Communications Ltd., Linkopia Mauritius Ltd., Wirestech Limited (BigOption), WSB Investments Ltd. (BinaryBook), and Zolarex Ltd. (BinaryOnline), along with Israeli nationals Yossi Herzog, Lee Elbaz, and Shalom Peretz, liable for defrauding investors and violating the United States Commodity Exchange Act (US CEA).
The court’s order imposed $112.9 million in restitution and $338.7 million in civil monetary penalties, bringing the total financial liability to over $451 million. The defendants were also permanently enjoined from engaging in any activities violating the US CEA and were banned from trading in any US CFTC-regulated markets. The order also prohibits them from registering with the CFTC or conducting any business related to commodity trading.
The case, initially filed by the US CFTC on 12 August 2019, involved a fraudulent binary options trading scheme that operated between March 2014 and August 2019. The defendants used fictitious trade names such as BigOption, BinaryBook, and BinaryOnline to solicit investors across the United States and internationally, falsely claiming high returns on binary options trades.
The fraud involved multiple misrepresentations, including false promises of profitability, misleading clients about brokers’ expertise, and manipulating trading platforms to limit or prevent customers from winning trades. Customers were also deceived about bonuses and risk-free trades, which were in reality structured to make fund withdrawals difficult or impossible. The defendants further misappropriated customer funds, diverting them for their own benefit rather than for trading.
The legal proceedings revealed that the fraudulent scheme was orchestrated by a network of offshore companies controlled by Herzog, Elbaz, and Peretz. The court found that these entities operated as a single fraudulent enterprise, using interconnected bank accounts to move funds across multiple jurisdictions.
One defendant, Yakov Cohen, previously settled with the court in September 2024, agreeing to disgorge $7 million in illicit profits. In a parallel criminal case, Lee Elbaz was convicted in August 2019 for wire fraud and conspiracy, receiving a 20-year prison sentence and being ordered to pay $28 million in restitution. Another defendant, Cohen, pleaded guilty in 2024 to wire fraud conspiracy, resulting in a 5.5-year prison sentence and a $7 million restitution order.
The United States National Futures Association (US NFA) has been appointed as Monitor to oversee restitution payments to defrauded customers. The US CFTC has been granted authority to ensure that all financial penalties are enforced and that the defendants remain barred from US financial markets.
(Source: https://www.cftc.gov/media/11761/%20enfyukomcommunicationsorder012925/download, https://www.cftc.gov/PressRoom/PressReleases/9040-25)
