Sunday, December 22, 2019

US court sentences Israeli CEO for scamming Americans, media ignore it

Ed's note: Americans "best friend" in the Middle East.
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Source: If Americans Knew Blog

DECEMBER 20, 2019 | By LEE ELBAZ, YUKOM

Ramat Gan diamond center in Tel Aviv, where many binary options companies were based.

Israeli media (not US newspapers) report that an Israeli CEO has been sentenced in a US court for defrauding Americans out of millions of dollars. The company specifically targeted the elderly and the vulnerable, one of over 100 Israeli companies perpetrating a scam called "binary options"… Israel permitted the scam for a decade…

By Alison Weir

The Times of Israel reports that Lee Elbaz, an Israeli CEO, was sentenced to 22 years in prison by a Maryland court on Thursday. US media have largely failed to report on the conviction, despite the fact that American taxpayers give Israel over $10 million per day. The pro-Israel lobby has long been deeply influential in US Mideast policies.

Elbaz was the CEO of an Israeli company called Yukom Communications Ltd., which perpetrated an international financial scam called "binary options." More than a hundred binary options companies operated in Israel between the years 2008-2018, scamming people around the world out of hundreds of millions of dollars. For years Israel allowed the scammers to operate unhindered. TOI reports that the US judge said that Elbaz and others "specifically targeted vulnerable people, including the elderly, and tried to get people addicted to trading like in a casino. He said that Elbaz would suggest that clients use their retirement funds for investments."

Yukom employees pretended to be from other countries, lied about their professional qualifications, lied about their historical rates of return, and didn’t tell investors that they only made money if their customers lost money.

TOI reports: "An email instructed BinaryBook sales representatives to target retirees, Social Security recipients, pension holders and veterans as clients."

An Israeli lawyer told TOI: "I estimate that hundreds, if not thousands, of Israelis were engaged in pretty much the same conduct for which Elbaz was convicted and sentenced… If Israeli law enforcement authorities had done their job, we wouldn't have come to this sad day."

According to TOI: "Binary options fraud flourished in Israel for about a decade before the entire industry was outlawed via Knesset legislation in October 2017, largely as a result of investigative reporting by The Times of Israel that began with a March 2016 article entitled 'The wolves of Tel Aviv.' At its height, hundreds of companies in Israel were engaged in the widely fraudulent industry, employing thousands of Israelis, allegedly fleecing billions out of victims worldwide.

"Many of the fraudulent operatives have since moved their operations abroad, or switched to other scams, though Israeli law-enforcement authorities have proved unwilling or unable to prosecute more than a handful of alleged offenders. By contrast, the US government is ratcheting up efforts to bring Israeli offenders to justice."

A US prosecutor told the court that "videos from inside Yukom showed that employees enjoyed their work, and that Elbaz fostered a work environment where it was fun to defraud investors."

"There was a mentality at this company that the defendant fostered, with gongs and bells, to say this is exciting, it’s a good thing to defraud investors. That culture that permeated company is no doubt one of the reasons why this fraud grew from a few hundred thousand dollars and a few employees to hundreds of employees and millions and millions of dollars in losses to investors," he said.

A London-based NGO, the Bureau of Investigative Journalism, takes credit with TOI for first exposing Elbaz: "A whistleblower from inside the industry approached the Bureau and the Times of Israel in 2016 with inside files including lists of thousands of victims from 50 countries and the sums which they had been defrauded of. The information helped the US authorities prosecute Elbaz."

Please go to If Americans Knew Blog to read the entire article.

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