Cheated out of €13,000 ‘trading’ binary options, a victim fights back
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Anatomy of a scam

Cheated out of €13,000 ‘trading’ binary options, a victim fights back

After Cologne business consultant Jutta Strake asked to withdraw her funds, she never heard from her friendly broker again, and his alleged Israel-based firm blocked her calls. So she turned detective

Simona Weinglass is an investigative reporter at The Times of Israel.

Jutta Strake  (Courtesy)
Jutta Strake (Courtesy)

Dr. Jutta Strake, a business consultant from Cologne, Germany, with a PhD in food science, is by no means lacking in sophistication or intelligence. Yet when the 58-year-old started “trading” binary options two years ago in the hopes of beefing up her retirement savings, she says, she never imagined she had walked straight into a scam.

“I feel ashamed that I didn’t know I was being cheated,” she told The Times of Israel in a telephone interview last week. “But it all seemed realistic. The website had good visuals, it looked serious, and my broker was always friendly and helped me.”

Strake ultimately lost 13,000 euros (about $15,000) to a company allegedly operating from Ramat Gan, Israel. As The Times of Israel has reported, hundreds of thousands of victims around the world have been defrauded to the tune of billions of dollars by the wolves of Tel Aviv, companies operating from Israel, while Israeli authorities look the other way. Strake’s experience is a single, dismal example from among that vast and still growing global reservoir of trusting overseas “investors” duped out of their money by sophisticated, cynical Israeli financial con artists, in a snowballing industry that Israeli law enforcement insistently refuses to confront.

When she belatedly realized that she was being fleeced and demanded her money back, Strake’s “friendly and helpful” broker simply stopped taking her phone calls, she says. But Strake did not give up easily. Instead, she tracked down thirty other people who said they had been victimized by the same company. Their experiences turned out to be remarkably similar, she reports. Now, the Israeli firm is set to be named as a defendant in a class action lawsuit led by Giambrone Law before the British High Court of Justice.

Ramat Gan's Moshe Aviv Tower, Israel's tallest building, houses many binary options companies (Simona Weinglass/Times of Israel)
Ramat Gan’s Moshe Aviv Tower, Israel’s tallest building, houses many binary options companies (Simona Weinglass/Times of Israel)

Like many victims of scams, Strake started out hopeful. “I was thinking about my retirement. I decided several years ago that I have to gain some competence in trading my own money,” she recalls.

Strake began reading as much as she could about trading online. One day, an email appeared in her inbox offering what sounded like an interesting opportunity trading “binary options.” Strake was impressed by the email’s well-informed and serious tone, so she decided to give it a try.

“I started with a small account and I tried trading on my own” — using an online platform provided by the company via which she believed she was purchasing options on various assets. “But I felt I lacked the skills (to spot the best trades); I was just a beginner.”

The company offered her the opportunity to open a VIP account, where ostensibly experienced traders would purportedly trade on her behalf. Strake’s account manager told her his name was Michael Vinyard and that he was calling her from London.

Thinking back, Strake recalls that Vinyard’s accent sounded a little funny.

“He did not sound British. He had a slightly Indian accent, which is not so unusual in London because there are a lot of people from India and Bangladesh. Sometimes I could hear that he was working in a big office; there was some noise in the background.”

Michael Vinyard helped Strake trade. There were ups and downs, which Strake tracked on an Excel spreadsheet. “There would be two gains and one loss; it all seemed quite normal.”

Because the trading was going well, Strake kept putting in more money

Every few weeks the company would inform Strake that if she made additional deposits of €3,000 a time, it would trade for her without any risk: that the company would absorb any loss while Strake herself would net all gains. She did so. In between, the company informed her of various one-time opportunities that required an additional deposit. Because the trading was going well, Strake kept putting in more money. Her total input eventually reached about €13,000, she relates.

She had begun trading in March 2014. By October 2014, Strake had achieved an account balance of €18,7667.90, a net gain of over €5,000.

One day, she received an email from Vinyard informing her that all her money had been moved to what it called an MT4 (MetaTrader) forex trading platform, and that she could continue trading there. The email provided a link to a PDF file that explained how to download the software as well as a username and ID. As hard as she tried, she remembers, she was unable to access the MT4 platform.

Strake told Vinyard she could not access the platform and asked to withdraw her money. Vinyard urged her to enlist the help of an IT professional. Strake hired an IT consultant, who was unable to install the platform and advised her that it was insecure. To which Michael Vinyard replied: “MT4 is world known platform and your IT recommended you not to use it? I really don’t understand this!”

Several weeks later, Michael Vinyard wrote a letter of apology to Strake, explaining that the reason she could not install the software was because she had been using a Mac. He then promised to transfer her funds back to her original account. That was the last time she ever heard from him. He never transferred the money.

Strake continued to try to recover her money, but the company had now blocked her from entering its platform. Her emails went unanswered, and if she tried to contact the firm by phone, she would hear an endless loop of music.

That’s when the nauseous realization hit her. “I felt so, so helpless. I felt ashamed. I had been cheated and I was so stupid that I didn’t realize it.”

Strake discovered the real names, personal information and photographs of employees at the company she alleges defrauded her

(A flat refusal to let customers withdraw their funds, and the severing of all connections, is the least sophisticated of the numerous means employed by the binary options scammers to defraud their victims. Among the numerous more cunning ruses employed to guarantee customers ultimately lose their money, as detailed by an ex-employee to The Times of Israel: encouraging customers to make bad trades; showing customers inaccurate figures; not allowing customers to trade on certain assets; creating “mock” traders to suggest that a certain trade is popular; selling clients’ assets unbidden; making “trades” unbidden.)

In the almost two years since then, Strake has been doing everything in her power to recover her money, which she says constitutes about a year’s worth of income after taxes and business expenses — money that she must save for her retirement because she is self-employed. It didn’t take her long to figure out that Michael Vinyard was likely located in Israel, she says, and she then discovered the real names, personal information and photographs of other employees of the company for which he worked or works. “They look like young men who want to be rich,” she says, trying to size up the people who allegedly defrauded her.

Giambrone Law, the London law firm acting on behalf of Strake and 2,500 other victims, has appealed to Israel’s Justice Ministry for assistance in confronting the fraudsters, thus far to no avail. The Israel Securities Authority, having dragged its feet for years, is in the process of banning Israel-based binary options firms from working with Israeli clients, but claims to lack the authority to prevent the firms from operating overseas, where fraud is being committed on a far greater scale. A French prosecutor came to Israel last month at the start of French efforts to act on behalf of a first 500 French nationals allegedly defrauded by Israel-based firms.

Strake hopes all the fleecers will be brought to justice, so they can’t continue scamming additional victims. “It’s not only the money; it hurts you deep in your psyche,” she says. “I would like to see these scammers stopped and imprisoned. And I would also like to get my money back.”

The Times of Israel invites others who have been defrauded, and others who have worked in the industry, to contact us. You can do so by email to: office@timesofisrael.com

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