A U.S. court has sentenced an Israeli implicated in a scam that defrauded would-be investors of nearly $140 million to 22 years in prison.
Lee Elbaz was the CEO of Yukom Communications, a “binary options” firm that targeted vulnerable people around the world. Her employees regularly used false identities and misrepresented their location, credentials and product.
Binary options are marketed as a financial instrument that can yield big returns quickly. The companies’ websites allow clients to place bets on whether a commodity, like a stock or trading index, will increase or decrease in value over a short time period. In most cases, though, clients lose all or nearly all of their investment because the game is rigged.
Elbaz was sentenced Thursday in U.S. District Court in Maryland after being convicted earlier in the year of wire fraud.
District Court Judge Theodore Chuang described the impact of her actions on her victims during the sentencing hearing.
“Among such victims was Larry Burton, who lost over $200,000, including $70,000 from his retirement account,” Chuang said. “He also borrowed 30,000 for his investment and afterwards had to refinance his home.”
Israel banned the binary options industry in 2017 after a decade in which Israeli firms, most of them operating out of Tel Aviv, scammed millions of people around the world.