Follow the money: How one defrauded binary options ‘investor’ got his cash back

Follow the money: How one defrauded binary options ‘investor’ got his cash back

Fraudulent binary options firms are fleecing vast numbers of victims worldwide. Most never recover their money. Here’s how a persistent engineer from Singapore achieved the near-impossible

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

Tel Aviv's Electra Building is home to multiple binary options firms (Lior4040 / Wikipedia)
Tel Aviv's Electra Building is home to multiple binary options firms (Lior4040 / Wikipedia)

When Wenxuan Su, 37, a semiconductor engineer from Singapore, lost $15,900 to binary options firm SecuredOptions, he thought to himself, “I am quite foolish but I am not stupid.”

Suspecting he had been scammed, Su got to work, methodically searching the internet, posting in forums, contacting law enforcement in four different countries, emailing everyone he could think of. Lo and behold, seven weeks later, SecuredOptions returned his money in full.

Su was more fortunate, and more persistent, than most. The majority of customers who trade and lose large sums of money to fraudulent binary options firms are beset by despair, shame and helplessness, not to mention the inability to find the people who took their money.

With losses of $15,900, Su is by no means a big fish in the pool of scammed binary options victims — hundreds of thousands, if not millions, of whom have been fleeced by corrupt firms in recent years. What is remarkable about his case is that he got all of his money back.

How did he do that? He followed the money trail, and he wrote about it online.

“I have received back all my initial deposits,” Su told The Times of Israel recently. “So I can say with a sigh of relief that my battle with SecuredOptions is over and I emerged the victor.”

Copying Warren Buffet

Su’s saga started in April of 2016, when he chatted with a co-worker at Micron Technology in Singapore who had been trading on the stock market.

“He seemed to be quite successful at buying and trading stocks on his own.”

Knowing very little about trading himself, Su researched online, and an ad for an auto-trading robot called “Copy Buffet” popped onto his computer screen. The ad promised that the robot’s algorithm would copy the secret trading strategies that had enabled renowned investor Warren Buffett to amass his $60 billion fortune.

Wenxuan Su (Courtesy)
Wenxuan Su (Courtesy)

Intrigued, Su deposited $250 to use the robot. Shortly afterward, he was phoned by a representative from SecuredOptions, who promised Su he could generate handsome profits for him if he deposited another $650. This would be a managed account, where the broker would make the trades on Su’s behalf and Su could also make trades himself. Su agreed, sent the money, and began earning thousands of dollars in profits, at least on his computer screen. Egged on by his broker, Su deposited another $5,000, and then $10,000, until his total outlay amounted to $15,900. (Another ad campaign linked to SecuredOptions features a video in which actors pretending to be experts tout a trading algorithm, Neo2, that purports to beat the stock market by predicting weather patterns.)

“He told me, ‘We’re not not guaranteeing you will become a millionaire overnight, but you will make constant 5 to 10 percent profits every month.’” Su recalled.

His broker, who said his name was “James C. Bennet,” told Su he was speaking from London, but Su has since learned he was calling from Israel. “James” was friendly and relatable, telling Su that he too had not grown up with a silver spoon in his mouth, and had actually had to work three jobs to pay off his family’s debts before becoming a millionaire.

For several weeks, most of Su’s trades were successful, and Bennet kept encouraging him to put in more money. When Su hesitated, Bennet urged him to borrow from friends, take out loans or sell his car.

Excerpt of a Skype conversation between "James C. Bennet" and Wenxuan Su (Courtesy)
Excerpt of a Skype conversation between “James C. Bennet” and Wenxuan Su (Courtesy)

But although his $15,900 deposits had purportedly grown to $23,000 in his account, he balked.

One day, Su informed Bennet that due to prior financial commitments, he would not be able to put any more money into trading for the next six months. “That’s when our relationship turned sour.”

Bennet proceeded to carry out five trades on Su’s account, Su said, four of which were losses. There was now $7,449.50 left in his account. Su sent emails to the SecuredOptions’ Compliance Department, Accounting Department, and to James C. Bennet to stop trading on his account immediately, and stated that he wished to withdraw his money.

A senior account manager offered to help recover his funds… on condition that he put in more money

But several days later Su saw that someone had placed most of his remaining money into another two trades, both of which were losses. His account was down to $1,800.

Su Skyped “James Bennet,” who informed him that he was being called in for disciplinary action by his bosses, and that he could not continue the relationship. He referred Su to another senior account manager, who offered to help recover his funds… on condition that he put in more money.

“I did not put in any more money. I stopped it right there and then,” said Su. He felt ashamed to have put in so much, and now sprang into action to try to get his money back.

(The Times of Israel has been detailing massive fraud by Israeli binary options firms in recent months, beginning in March with an article entitled “The Wolves of Tel Aviv.” The fraudulent firms purport to be guiding their customers in making lucrative short-term investments, but are in fact using various ruses, including allegedly manipulating rigged trading platforms, to simply steal their clients’ money. Local binary options firms have now been banned by the Israel Securities Authority from targeting Israelis, but they are still free to target people abroad. France, Romania, Canada and other countries are investigating the Israeli fraudsters’ activities in their countries. Israel’s police and law enforcement have thus far proved unwilling or unable to tackle the snowballing fraud, which is estimated to involve hundreds of firms, with thousands of employees in Israel, turning over more than a billion dollars a year.)

The runaround

Su began posting on a website called the “Forex Peace Army,” which says it is an internal industry watchdog that posts reviews by traders who feel they have been defrauded. There, he found other traders from around the world who had had similar experiences with SecuredOptions.

Su then contacted the Singapore police, who said the issue was not under their jurisdiction but they would pass it on to the consumer affairs authorities. Because SecuredOptions claimed to be based in London, Su also contacted the British Financial Conduct Authority as well as ActionFraud UK, the UK’s national fraud and cyber crime reporting center, but to no avail. He contacted, a consortium of consumer protection agencies around the world. He even contacted the US government’s Commodity Future Trading Commission (CFTC).

Finally, having been tipped off that SecuredOptions is actually based in Israel, he contacted the Israel Securities Authority (ISA) and the Israeli police.

Itzik Shurki of the ISA, responsible for supervision of trading platforms (Courtesy)
Itzik Shurki of the Israel Securities Authority, responsible for supervision of trading platforms (Courtesy)

The ISA did not respond, said Su. Israel police sent him a standard email suggesting he complain at an Israel police station.

Su persisted, writing to the Israeli police that he is a Singaporean, living in Singapore, and that there are numerous other people like him — with whom he had been in contact over the internet — who believe they have been scammed by the same Israel-based company.

“Please advise how else we can proceed with submitting complaints, other than being physically present?”

The Israeli police wrote back: “Please file a complaint at your nearest police station including all the information you have.They will investigate the matter with the Israel Police through the Interpol.”

But Su was skeptical that this would ever happen.

“By introducing such a complicated chain and hurdles of having to go through local police, then Interpol, then the Israel Police, there is a high chance any complaints filed will get lost or some authorities will be reluctant to follow up,” he assessed.

Not giving up, Su contacted several private investigation firms and law firms.

He intended, as his next step, to begin legal action against SecuredOptions, he said.

Victory at last

“I was about to pull the trigger (and launch legal action) when a ‘Mike Jensson,’ who claimed to be the manager of the legal department in SecuredOptions, contacted me on June 21,” he said.

According to Su, “Jansson” promised that SecuredOptions would give him his money back on the condition that he remove all negative comments he had posted about the firm on various online forums. Jansson also asked Su to recall a complaint he had made against the firm with MoneyNetInt, a payment-processing firm. Su believes that MoneyNetInt was the key to his recovering his money.

Su had transferred his largest deposit to SecuredOptions, of $10,000, through MoneyNetInt. MoneyNetInt had transferred the money to a Polish bank, Bank Millennium, in Warsaw. On June 1, Su had sent a complaint to the UK-registered payment-processing company alleging that it was part of the process that was enabling a scam.

MoneyNetInt describes itself as a “payment processing and financial services provider, a licensed electronic money institution, established in London, United Kingdom.” The FCA-regulated company also appears to have a strict policy to prevent fraud, money laundering and other financial crime, stating on its website that “it is the policy of Moneynetint, Ltd. to take all reasonable and appropriate steps to prevent persons engaged in money laundering, fraud, or other financial crime, including the financing of terrorists or terrorist operations (hereinafter collectively referred to as “money laundering”) from utilizing MNI products and services.”

‘Stay as far away from all binary options related “investments” as possible’

MoneyNetInt has been in the news recently because it offers payment processing services to a number of binary options companies, including LBinary and NRGBinary, against which London-based law firm Giambrone has stated it is preparing a class-action suit on behalf of thousands of allegedly scammed clients all over the world. MoneyNetInt markets its services to binary options brokers at the industry’s conferences and trade shows. It operates as a company registered in Britain and a company with a similar name, MoneyNet International Money Transfers Ltd. is registered in Israel. In both cases, its directors are named as Israeli citizens Raphael Golan and Yishai Trif and British citizen Leon David Isaacs. There is no evidence that MoneyNetInt is involved in any alleged frauds.

Su believes that MoneyNetInt took his complaint very seriously and pressured SecuredOptions to return his money.

“SecuredOptions sounded desperate,” Su told The Times of Israel. He said “Jansson” (whose name and title changed from email to email) told him that MoneyNetInt was withholding from SecuredOptions an amount equivalent to the money he had deposited while it investigated the transaction. “SecuredOptions asked me to recall the complaint, following which they would refund all the money I had deposited — not only (the money sent) via MoneyNetInt but also payments I had made with credit cards.”

Late last month, he said, “I received back all my initial deposits.”

The Times of Israel called MoneyNetInt’s offices in London several times but no one picked up the phone. The Times of Israel also called SecuredOptions, which asked us to put our questions in writing, which we did. As of this writing, SecuredOptions had not responded.

Wenxuan Su’s advice to others who have lost their money?

“Stay as far away from all binary options related ‘investments’ as possible.”

But if you have been defrauded, “do not give up fighting.”

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