A new spate of lawsuits suggests that despite legislation and prosecutions by foreign governments, alleged investment fraud remains a lucrative business in Israel, with local law enforcement doing little to crack down on suspected online scammers.
Among the recent lawsuits — filed in Israel by alleged victims from countries including Australia, Azerbaijan, Germany, Holland, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Norway, Singapore, South Africa, Sweden, Switzerland, United Kingdom and the United States — are claims against individuals who used to sell binary options investments and pivoted to other financial instruments. When the binary options industry was outlawed by the Knesset in October 2017 for being irredeemably fraudulent, some of the individuals involved began selling foreign exchange bets, contracts for difference (CFDs), and cryptocurrency investments. Israeli law enforcement has indicted almost no online fraudsters, despite the fact that the industry employed thousands of people and allegedly stole billions of dollars.
Prosecutors in a European country recently told The Times of Israel that while investment scam call centers are now located throughout Europe, time after time investigators have found that a scam website’s service providers are Israeli or that fraud proceeds end up in Israeli bank accounts or in the bank accounts of individuals of Israeli origin.
Many of the plaintiffs are over 50 and some were allegedly bamboozled out of their retirement savings. Many of the plaintiffs allege that they began trading successfully on what seemed like a reputable website, but that when they tried to withdraw money from their accounts, they encountered resistance and were ultimately ghosted, with their formerly friendly, warm and caring account managers failing to respond to their phone calls or messages.
They soon learned that their brokers had used fake names and identities. Through determined research, the hiring of private detectives, or an occasional lucky break, the plaintiffs managed to track down their alleged victimizers to Israel.
While there are dozens of lawsuits currently in process against alleged Israeli investment fraudsters, The Times of Israel in this article highlights 10 such suits — all of them filed in the last year and a half — as a representative sample.
In almost all cases, the defendant’s first line of defense was that they had nothing to do with the alleged scam. This claim is made by possible by the dense forest of shell companies the alleged fraudsters use, normally registered to offshore locales that keep the identities of owners and beneficiaries secret. The alleged victim often has no way of ascertaining who actually owns the website that scammed them — although often it is the owner, or an associate of the owner, of the Israeli call center involved.
Most of these lawsuits are ongoing. In the past, such lawsuits have often been resolved when the plaintiff settled with the defendant in exchange for withdrawing their lawsuit and signing a nondisclosure agreement.
While settlements or even victories in civil lawsuits offer relief to the individual plaintiff, critics argue that only criminal prosecutions can achieve a measure of justice for victims who have fallen prey to Israel’s fraudulent online trading industry.
According to Nimrod Assif, an Israeli lawyer who is suing several forex and binary options companies, only a tiny percentage of alleged victims even get as far as filing a lawsuit.
“Since the perpetrators of the scam use fake names and lie about their location, most of the victims don’t know whom to sue,” he said, “or even in which country they need to search for an attorney who can help them. Also, losses up to a certain amount — at least $50,000 — don’t justify the legal costs of pursuing cross-border and complex litigation. Furthermore, the victims who have suffered significant losses are often in dire financial condition and will find it extremely difficult to come up with the amount needed to even start civil litigation.
“Consequently,” said Assif, “civil litigation provides no deterrence against this kind of fraud. So long as the Israeli police don’t step in, continuing the fraud is worthwhile for the perpetrators.”
1. An unexpected phone call from a ‘whistleblower’ (case 60243-08-20)
In August 2020, John, a Hong Kong businessman, sued an Israeli company called Random Technology Company Ltd. for $650,000. (For privacy reasons, only the first names of the plaintiffs are being published here.) He also sued three individuals: Michael Mireli, who he alleged was running the company, Jorge Aitor Azpiazu Cigaran, who is registered as the company’s director, and Haim Eliezer Schwartz, the company’s sole shareholder.
The lawsuit came about in an unexpected way. In March 2019, the plaintiff, in his 50s, came across several ads for Infinitrade.com on the internet and social media sites. The ads claimed that Infinitrade was an easy-to-use and cutting-edge platform for trading on the value of currencies, indices and commodities.
The ads further proclaimed that Chinese businessman Jack Ma, the founder of Alibaba and one of the richest men in the world, was a client of Infinitrade. This caught John’s attention.
“At the plaintiff’s request, a representative of Infinitrade contacted him and told him over the phone and by email that Jack Ma did in fact carry out investments through Infinitrade,” the lawsuit alleged.
A recording posted online appears to include an Infinitrade representative speaking to a chatbot named Lenny, referencing ads that claim that billionaires Bill Gates and Richard Branson are clients.
According to the suit, between March and June 2019, John made 37 bank transfers to his Inifinitrade account, for a total of $582,000. Through successful trades, his account balance reached over $2 million. He asked to withdraw $50,000 here and $75,000 there, and encountered no problem. But then everything changed.
“On June 5, 2019, the plaintiff tried to withdraw an additional $50,000 from his account. The plaintiff received a message confirming that the money had been transferred, but in contrast to previous times, the money never arrived,” the complaint alleged.
Two weeks later, John’s life allegedly turned into a nightmare.
One day, the plaintiff received a “surprising and worrying phone call from someone who claimed to be an employee of Random Technology Company.”
The employee was named Ilya.
“In that conversation, Ilya told the plaintiff that Random Technology Company in fact operates Infinitrade (as opposed to what the website says), that it operates from Tel Aviv and not from London and Bulgaria as it claims, and that Ilya personally had carried out trades in the man’s account as part of his job,” the complaint alleged.
Ilya told him in no uncertain terms that Infinitrade was a scam.
“Ilya warned him that Random Technology had no intention of returning his money, and said that the money only appeared to be in his account, describing it as ‘virtual money,’” the complaint alleged.
Upon hearing this, the Hong Kong man was devastated, the complaint said. He stopped all trading in his account, then tried to withdraw $600,000, to no avail. His phone calls, emails and texts to Infinitrade went unanswered.
“The plaintiff, who was an established businessman in Hong Kong, lost his money, his house and his business as a result of a fraud. He is left with heavy debts and doesn’t know what to do,” said the complaint.
Attorney Gidon Weinbaum filed John’s lawsuit in August. It alleges that the company had no legitimate business purpose.
“All of the professional lingo used by the defendants, terms like ‘financial tools,’ ‘business plan,’ ‘account manager,’ ‘trading platform,’ etc. were all a ruse — a cover for the real activity of the defendants, which is defrauding innocent people and stealing their money never to be returned,” the complaint alleged.
Two of the defendants, Schwartz, a Rehovot-based lawyer, and Azpiazu Cigaran, a Spanish man living in Israel, did not respond to the complaint.
While Schwartz has almost no online footprint, the backstory of Jorge Aitor Azpiazu Cigaran, the company’s director, is described in several articles in Spanish-language media.
A November 29, 2011 article in the Colombian newspaper Vanguardia describes him as a cycling enthusiast and the organizer of an athletic delegation to Israel under the auspices of Saxo Bank — a Danish bank with strong ties to Israel’s online forex industry.
A June 2012 article in Spain’s El Mundo describes him as a former military officer who moved to Israel in 2007 to work at the Spanish Embassy, married an Israeli woman, and opened a gym for high-performance athletes.
Defendant Michael Mireli (a shortened version of Mirilashvili) did file an answer to the complaint.
Publicly available information shows that Mireli is a veteran of the gambling and binary options industries in Russia, Kazakhstan and Israel. A separate November 2017 lawsuit by a former employee of Random Technology Group shows that as recently as August 2017 the company operated the binary options website BinaryTilt and that Mireli was in charge of affiliate marketing there.
According to his LinkedIn page, Mireli was previously the CIS regional manager of Casino Imperiya in Moscow in 2012-2014, while in 2014-2015 he was the COO of Vulkantrade, also known as Vulkan K.S.I, a binary options company in Almaty, Kazakhstan, that had been purchased by SpotOption owner Pini Peter and that used the SpotOption platform.
In his answer to the complaint, Mireli’s attorney argued that the plaintiff should take up his dispute with Inifinitrade, and not with Random Technology Company in Israel, which she said has nothing to do with Infinitrade.
Mireli’s attorney argued that Israel does not have jurisdiction over a dispute between a London-based website and an allegedly defrauded client in Hong Kong. She further claimed that Mireli did not hold a position at any of the companies mentioned in the complaint.
“This lawsuit is not based on facts and evidence and is nothing but a baseless conclusion of the plaintiff,” she wrote.
Mireli’s lawyer said that she had looked into Ilya, the alleged whistleblower, and had learned that he had been fired on disciplinary grounds after only a few days of employment. Mireli’s lawyer also claimed that the employee is suspected of the criminal offense of stealing equipment from the company.
She warned that her client could make problems for the former employee if the case is not dropped.
“At the time [of the alleged theft incident] Random Technology Company had mercy on the employee but in light of what is written in the complaint, and to the extent that [the accusation] remains against my client, my client will do everything in his power to bring this incident back to the forefront. It is unacceptable that the former employee should behave this way and cause my client unnecessary expense with the lies and falsehoods in the complaint. My client will work to get hold of the video footage from that time as well as other information in this case against the ex-employee.”
The case is ongoing and the next court hearing is scheduled for December 22, 2021.
2. The Italian job (case 18882-09-20)
In September 2020, Massimo, an Italian man who resides in Azerbaijan, sued an Israeli company known as Pay Trade Ltd. together with its owner, Mordechay Moti Mor, for NIS 815,800 ($246,656).
Massimo, in his 50s, alleged that Pay Trade Ltd. operated the website Tradingbanks.com, which had purported to offer online forex trading to investors worldwide, along with the forex websites Trade12.com and Mxtrade.com.
According to the complaint filed by his attorney Nir Friedman, Massimo was contacted in February 2016 by a man named Michele Rinaldi, with whom he had a prior acquaintance.
Rinaldi told him he worked as a broker at Tradingbanks.com, based in London, and allegedly said if he opened an online trading account he could see returns of 5 percent a month.
The plaintiff deposited a small amount, followed by three deposits of 50,000 euros each. His brokers then allegedly told him that because he had received a bonus, he needed to deposit additional funds to make his account “liquid.” He did so.
The brokers then allegedly encouraged him to deposit an additional 200,000 euros.
At this point, Massimo became suspicious. He refused to transfer the additional funds. On that day, the man claims, the company closed his account and he hasn’t been able to withdraw his money since.
He is suing for the NIS 795,800 he said he lost to the site as well as an additional NIS 20,000 in punitive damages.
In his answer to the complaint, Mor, the owner of Pay Trade, said that he has nothing to do with Tradingbanks.com.
He did acknowledge, however, that his company provided services to Lau Global Services Corp. of Belize and Exo Capital Markets of the Marshall Islands, companies that owned two other sites, Mxtrade.com and Trade12.com respectively.
“[Pay Trade] provided sales and marketing services to Lau Global and Exo but this was a supplier-customer relationship and this does not mean the defendants had ownership of either of these companies or the websites,” Mor said in an affidavit dated January 15, 2021.
According to a Paradise Papers leak, Lau Global Services Corp. owns a Maltese company called Grizzly Limited that owned TradingBanks.com at the time of the alleged fraud, according to the fine print at the bottom of the Tradingbanks website.
This suggests that the company was not merely an Israeli operation, but part of a global network of call centers.
According to the Paradise Papers, the director of Grizzly Limited is an Israeli national named Shlomo Matan Shalom Avshalom, known as Shlomi Avshalom to his friends and acquaintances.
In 2018 and perhaps earlier, Avshalom supervised two call centers in the Philippines known as BSD Trading Service Corp. and GWU Marketing Corporation, according to a source who spoke to The Times of Israel on condition of anonymity. BSD Trading Service Corp made phone calls on behalf of Tradingbanks.com, the source said. The boss of the call center was someone named “Mike,” while Avshalom was second-in-command, The Times of Israel was told.
Avshalom did not respond to the Times of Israel’s request for comment.
The source told The Times of Israel that from at least 2017, there were several Israeli-run binary options and forex call centers in the Philippines that brought young Israelis to the country specifically to work for them. Among these Israelis were two 27-year-old employees of GWU Marketing Corporations who lost their lives in 2017 when the car they were driving was hit by a truck.
Mor, the Israel-based defendant in the case, said that neither he nor his company Pay Trade ever had any contact with the plaintiff.
Mor’s surname was originally Mirilashvili, but the Times of Israel is not aware of any family relationship between him and Michael Mireli, who worked at Random Technology Company (see above).
A private intelligence report commissioned by the plaintiff’s attorney quotes a former employee of Pay Trade Ltd. saying that Tradingbanks and related websites left Israel and moved their operations to Albania in late 2016 or early 2017.
The report quotes the same employee saying that the online trading industry has done particularly well during the coronavirus pandemic.
“There have been tons of deposits,” the former employee said, according to the complaint.
The lawsuit is ongoing. On February 21, 2021, the judge in the case, Ayala Gazit, ordered the plaintiff to deposit NIS 40,000 in collateral as a condition for the lawsuit to continue. She did this at the request of the defendant, in order to cover their legal costs should the case be dismissed.
In her February 21, 2021 decision, the judge said that she is skeptical of the lawsuit’s chances of success due to the fact that the plaintiff did not file a police complaint and because he had a history of online trading and knew this was a risky activity, she wrote.
3. The witness who got cold feet (case 20218-08-20)
In August 2020, three residents of Australia, aged 66, 70 and 80, sued 11 Israeli plaintiffs for alleged fraud in connection with the website Cryptotag.financial.
The defendants are Idan Gabay, Iris Gabay, Elad Raz and Yonit Raz, and the Israeli companies Miriam Finance, Netz View, Dror 1, Elegance Marketing, Gili Ben Mocha, Israel Miriam Holdings, and Shirion Procurement and Business Assistance.
The plaintiffs are seeking a total of NIS 676,000 ($204,266).
According to the complaint, written by attorney Yoram Fay, Idan Gabay was the alleged mastermind of a fraud scheme that revolved around a website known as Cryptotag.financial. According to the complaint, Cryptotag.financial operated from the 31st floor of an office tower located at Ariel Sharon 4 in Givatayim, a suburb of Tel Aviv.
Idan Gabay, the complaint pointed out, has a criminal history, having served eight months in Israeli prison after being convicted of criminal extortion and threats of violence.
The complaint alleged that the Cryptotag website, ostensibly a cryptocurrency exchange, was a mere simulation and that investors never actually traded on any kind of real-world markets.
“The defendants never invested the plaintiffs’ money in capital markets,” the complaint alleged, “but just created a representation on the computer that the plaintiffs were trading — earning or losing — when in fact it was a demo account, a mere simulation controlled by the defendants.”
The complaint described the three Australian plaintiffs as “simple people” without much knowledge of capital markets or computers. In late 2017 and 2018 they lost what to them were huge sums of money.
Jeff, 70, lost AUD 25,032 ($19,467) to the site. Pamela, 66, lost AUD 245,000 ($190,445) but is only suing for AUD 150,000 of that amount because she cannot afford the 1.25% court fee. A third plaintiff, Joan, allegedly cashed out her entire pension, AUD 136,000 ($105,692) to buy Bitcoin through Cryptotag.financial and never saw her money again.
According to the complaint, the defendants initially showered the plaintiffs with what appeared to be caring concern.
“During the period when the plaintiffs were transferring money to the defendants,” the complaint said, “the defendants and their employees kept in constant touch, enveloping the plaintiffs in warmth and attention. They would congratulate them for their good choices and promise that their investments would yield glorious returns.”
In their answer to the complaint, Idan and Iris Gabay (Elad and Yonit Raz have not yet filed an answer) completely denied that they or their companies own Cryptotag.financial. They described the Israeli companies under Idan Gabay’s ownership as being reputable and sophisticated high-tech companies involved in the fields of “defensive cybersecurity, biometric security, artificial intelligence and automated interpretations of CT and MRI scans,” the answer said.
But a separate lawsuit (48251-03-19) filed against two of Idan Gabay’s former employees belies this denial. In it, two companies owned by Gabay acknowledged that they did, in fact, operate Cryptotag.financial.
“Plaintiff 1 Miriam Finance Ltd., is a company that gives telemarketing lessons and courses and provides services to various companies. The company provides services to, among others, GGO which operates a cryptocurrency trading platform under the brand Cryptotag,” stated the complaint.
“Plaintiff 2, Elegance Marketing, is a company involved in development, marketing and advertising and provides services to various companies, including GGO,” it said.
The three Australian investors got help in their lawsuit from an unlikely source: a man named Elliot Yaffe who said he helped the defendants move money from investors’ bank accounts into their own bank accounts.
In an affidavit submitted with the complaint, Yaffe said that Cryptotag investors would transfer money to his bank account at HSBC in Hong Kong. Yaffe took a 2.5 percent commission and then transferred the money to a company called Karlin Inc. in Bulgaria, which he said was controlled by Gabay.
“In the beginning I trusted Idan Gabai, who explained to me about his business and presented it as a real and genuine crypto trading platform that would benefit his clients,” Yaffe said in his affidavit.
“I later discovered that Idan Gabai’s trading platform did not reflect any real investment and its true purpose was to deceive his clients/victims,” he said.
Yaffe said that his relationship with Cryptotag eventually led HSBC to freeze his bank account, including $100,000 of his own money.
In his defense, Gabay claimed that Yaffe had submitted the affidavit under duress, after the plaintiffs’ attorney Yoram Fay promised that if he helped the plaintiffs he would not be named as a defendant in their lawsuit.
Fay claims that in fact Yaffe submitted the affidavit willingly because he wanted to recover funds from Gabay.
According to court filings, Yaffe called Yoram Fay in September, a month after the affidavit was filed, and asked him to destroy his testimony.
According to a second affidavit submitted by Fay, Fay then asked Yaffe why he wanted to withdraw his affidavit and asked him whether he had been threatened, to which Yaffe replied “yes,” according to Fay.
The lawsuit is ongoing.
4. A ‘law-abiding’ binary options company? (case 61755-05-20)
In October 2017, the Knesset passed a law banning the binary options industry, including companies operating from Israel that solicited investors abroad. Binary options operatives claimed that only part of the industry was fraudulent, and that it would be a pity to throw out the purportedly non-fraudulent baby with the dirty bathwater, but the Knesset rejected that characterization. The law took effect in January 2018.
An earlier draft of the law had also targeted unregulated forex and CFD companies operating from Israel, and would have required them to obtain a specific license to operate in any country where they have customers. But after heavy lobbying from the online trading industry, the provision concerning forex and CFD companies was dropped.
In May of last year, no fewer than 38 plaintiffs from around the world sued an Israeli call center and related individuals and entities for allegedly defrauding them, through binary options, forex, CFDs and other financial instruments. The defendants argued that they had not broken any laws because they stopped selling binary options before January 2018.
The plaintiffs claimed to have been defrauded through the websites PlusOption, Greenfields Capital, Brighter Trade, Bitxplace and GFC Investments. The alleged fraud occurred from 2017 through the beginning of 2019.
While PlusOption was a binary options website, one that Australian regulators warned investors to stay away from because it “could be involved in a scam,” the other websites in the complaint offered trading on forex, CFDs and other non-outlawed financial instruments. All of the plaintiffs who began trading in 2018 interacted with one of the latter websites.
The defendants in the lawsuit are Eliran Oved, Liat Oved, Haim Tal Mizrahi, Shai Berl Dov Shatsberg and Tomer Raz as well as the companies Linkin Media Ltd., E.A.D. Media International Links, and Refael B.M. Ltd.
Eliran Oved was convicted and sentenced to a year in prison in 2012 for running an illegal gambling website and money laundering. He is reportedly a financial supporter of the Bnei Yehuda soccer team.
The sum total of the demand by all 38 plaintiffs is NIS 7,352,809 ($2,225,312).
Raz claimed that the lawsuit did not apply to him because he has lived in Cyprus as opposed to Israel for several years. The other defendants filed a response to the complaint acknowledging that Linkin Media had provided call center services to foreign companies, including the offshore companies that had owned PlusOption and Greenfields Capital.
However, they argued, the call centers did not sign a contract with end-users and therefore the end-users had not been customers of the Israeli service providers. They further claimed that Linkin Media never provided call center services for Brighter Trade, Bitxplace and GFC Investments and that the company had stopped providing call center services altogether on December 31, 2017. In fact, the defendants said, Linkin Media is no longer an active company.
Moreover, as soon as the Knesset passed the binary options ban in October 2017, the company immediately informed its binary options clients that it could no longer work with them, the defendants claimed.
“A few days after Amendment 66 (the law banning binary options) passed the Knesset plenary in its second and third readings… Linkin Media informed the foreign online trading companies that it provided services to that from December 31, 2017 it would no longer provide these services and in effect on that day the company ceased all its activity,” the defendants wrote.
The lawsuit is ongoing and the next hearing is scheduled for November 10, 2021.
5. ‘We only provided services’ (case 21679-10-20)
In a lawsuit against a now-defunct binary options call center, a woman from Singapore named Sharmaine has sued Rushmore Marketing and its owner Jonathan Siennicki.
Represented by attorney Lior Shaby, Sharmaine is demanding NIS 520,441 ($157,458). The woman says she lost money trading with MagnumOptions.com and BossCapital.com between December 2015 and August 2016 and alleges that Rushmore Marketing ran these websites.
The defendants responded that Rushmore Marketing merely provided marketing and support services to Redtulips Consultants Ltd. and Marblestone Partners Ltd., the offshore companies that owned the websites MagnumOptions.com and BossCapital.com, and therefore they are not the appropriate defendants. The plaintiff’s attorney responded that they had in their possession an investigative report showing that Rushmore Marketing in fact ran the websites.
Siennicki’s former partner in Rushmore Marketing’s online gambling business is a man by the name of Naphtali Goldman, who ran for political office in Israel’s March 2021 elections as head of the anti-homosexual Shema Party. The party sought to “work towards a moral society that censors pornography for children, renders the political support of homosexuality illegal, and works towards creating happy family units.”
The party did not win enough votes to enter the Knesset. In 2007-2008, the same years that he was associated with Siennicki, Goldman was the director of a UK company called Entersa Limited, which the US Department of Justice later alleged had been owned by alleged JP Morgan hacker Gery Shalon and used in his allegedly fraudulent pump and dump stock schemes.
The next hearing in the case is scheduled for September 29, 2021.
6. From skin lighteners to binary options? (case 9833-06-20)
In another recent lawsuit, 9833-06-20, a woman from Germany named Ina is suing Inventiva Marketing and its executives Samuel Falcon, Gil Scott, Gilad Hirsch and Ron Rahamim Barad for NIS 176,061 ($53,259).
Ina, represented by attorney Nir Fridman, claims to have lost money to the site Rtcfinance.com starting in April 2017. The lawsuit alleges that the defendants operated the site as well as the sites Onetwotrade.com and Vincicm.com. The defendants responded jointly that while Inventiva Marketing did provide services to the offshore company that owned Rtcfinance.com, these were merely customer relation management and online marketing services and therefore there is no privity between the plaintiff and defendants.
In an affidavit submitted to the court on March 4, 2021, defendant Samuel Falcon said that the ultimate beneficial owner of Icon Markets Limited of Belize, which owned the website Rtcfinance.com, is in fact a South African businessman by the name of Solomon Krok. Falcon said that Krok is also a shareholder in the Malta-based company Up & Down Marketing Ltd., which owned the binary options site Onetwotrade.com. Malta corporate documents confirm that Krok was a shareholder of Up & Down Marketing Ltd. but The Times of Israel was unable to independently determine the ownership of the Belize-based Icon Markets Limited.
Ninety-two-year-old Solomon Krok, one of South Africa’s wealthiest men, made his fortune selling skin lightening creams to non-whites in apartheid South Africa.
Krok did not respond to The Times of Israel’s request for comment.
The case is ongoing.
7. The alleged million-dollar con (case 24690-03-20)
In one notable lawsuit, a man from Australia named Andrew alleges that he was defrauded out of over $1 million.
Andrew, a 60-year-old truck driver, said he was cheated by the website 365binaryoption.com over more than two years, from February 2015 to July 2017.
The complaint, filed by attorney Ofir Blatman, names the Israeli company Paperclick Marketing, currently in liquidation, its owner Roy Shagan, and alleged salespeople Leah Aharon and Tommy Dotan Agami as the defendants. The plaintiff is demanding NIS 3,963,201 ($1,198,797) in the lawsuit.
The complaint names the banks that the plaintiff allegedly transferred his money to: Bank of Valletta in Malta, Eurobank Bulgaria, Nordea Bank in Lithuania and Banco Comercial Portugues in Lisbon.
In their answer to the complaint, Paperclick Marketing, Shagan and Agami claimed that Paperclick Marketing was never a binary options company, but a company that provided services to companies abroad, including Fintech Software, Inc. which owned 365binaryoption.com. They claimed that the lawsuit should be served to Fintech Software, Inc. in the British Virgin Islands, not to Paperclick Marketing.
Due diligence documents seen by The Times of Israel reveal that, on paper, the ultimate beneficial owner of the company that owned 365binaryoption.com was a 77-year-old Romanian man named Relu Nadler.
Nadler has almost no online footprint. The Times of Israel was unable to track him down for a response.
The case was settled out of court and on May 3, 2021, the judge approved the settlement and did not require the plaintiff to pay the defendant’s legal fees — often an indication that the judge deemed the lawsuit justified.
8. Settled quietly (case 56988-06-20)
A case that was recently settled involves a woman from Holland named Hannie who claimed she had been defrauded while trading on a website called Stoxmarket.com in 2017 and 2018. In June 2020, Hannie, who is in her 70s, sued Israeli company Eventus Consulting and Media, as well as its owner Chaim Elazar Bornstein, seeking NIS 244,292 ($73,852).
The defendants did not file an answer to the complaint.
In November 2020, the plaintiff and defendant told the court they had reached a settlement. The plaintiff withdrew her lawsuit, without being required to pay the defendants’ legal fees. The plaintiff’s attorney, Nir Friedman, refused to discuss the case with the Times of Israel.
9. All in the family (case 45376-10-20)
In October, an American woman named Sharon sued Israeli-Canadian brothers Joshua, Jonathan and David Cartu, their business associate Oren Gurewitz, the Israeli call center Tracy P.A.I. and the Irish company Greymountain Management.
The woman, represented by Israeli lawyer Avi Aseyo, demanded NIS 1,252,412 ($378,619) from the defendants, alleging they had defrauded her through the websites Porterfinance.com and Glenridgecapital.com
The woman claimed she lost over $281,000 to the two websites between November 2015 and March 2017. While Porter Finance was not run by the Cartus, its payments were processed by Greymountain Management, which was allegedly controlled by the Cartus, the complaint said. The woman’s complaint relies heavily on claims made in a recent US Commodity Futures Trading Commission lawsuit against the Cartus, which alleged they had carried out $165 million in fraud.
In their March 9, 2021 answer to the complaint, Tracy P.A.I., David Cartu and Oren Gurewitz, who is accused of running Glenridge Capital, described the lawsuit as “brazen, false and deceitful.” They claimed that the CFTC lawsuit against them was merely over breaches of US regulations and that the CFTC had not accused the defendants of cheating or fraud.
“The proceeding known as administrative civil charges was initiated against David Cartu as well as against numerous companies out of a suspicion that they breached regulations that are part of US law. This has nothing to do with Israel. It is not remotely about cheating or fraud as the plaintiff claims. This is not a criminal proceeding at all,” the defendants’ lawyer wrote.
In fact, the February 2020 CFTC complaint accuses all three Cartu brothers of operating a “massive fraudulent binary options trading scheme.”
The defendants in the Israeli civil case claimed that Gurewitz had nothing to do with the companies mentioned in the complaint. They also pointed out that none of the defendants ran the website Porter Finance.
The plaintiffs’ attorney told The Times of Israel that he has not managed to serve all the defendants, and so far has served Tracy P.A.I., David Cartu and Gurewitz.
The case is ongoing.
10. Nobody’s home (case 33988-03-20)
In one of the more quixotic recent lawsuits against a binary options company, a British couple, Frank and Ann, last year sued Yukom Communications as well as nine of its executives and employees for losses they allegedly sustained trading on the website Bigoption.com.
In addition to the call center Yukom Communications, the couple sued Yossi Herzog, the company’s owner; Lee Elbaz, its CEO; Kobi Cohen, another owner; Ronen Roitman; Relly Tito; Afik Tori; Guy Harel; David Shir; and Eden Haviv. The amount they demanded is NIS 1,528,053 ($461,948).
Yukom Communications has been at the center of a US federal investigation. Defendants Herzog, Cohen and Tori have been indicted while Lee Elbaz was convicted in August 2019 and sentenced to 22 years in prison. Cohen and Herzog are both believed to be hiding from US law enforcement in the Democratic Republic of the Congo.
Understandably, the plaintiff’s lawyer encountered difficulties serving the defendants in the lawsuit.
Soon after filing the lawsuit, attorney Tom Lifshitz tried to serve Yukom Communications. He visited the company’s registered offices at Tarshish 19 in Caesarea but was told that the company was no longer there. On March 20, 2020, he went to Yossi Herzog’s address as it appears in the Population Registry but could find no one there. He also tried to serve the complaint to Herzog’s ex-wife and children, at their separate home, to no avail.
On March 22, he returned to Herzog’s house. Lifshitz said he could hear noises inside but no one would open the door.
“I left the complaint outside the door,” he told a judge.
Neither Yukom nor Herzog filed an answer to the complaint. In a default judgment, the judge ordered them to pay the full NIS 1,528,053 to the plaintiffs.
Lifshitz told The Times of Israel that he has not tried to serve any of the other defendants as he has already obtained a default judgment. He said that he is now trying to locate Herzog’s assets in Israel so they can be seized and used to pay the plaintiffs. He added that he also served Herzog and Ronen Roytman, who headed Yukom’s sister company Numaris Communications, in a separate case that is ongoing.