In first, US jails Israeli binary options agent, an ex-reality TV star, for year
Lissa Mel pled guilty to her role in $145M fraud; must also pay $288K restitution to her victims; Yukom Comms CEO Lee Elbaz, convicted in same fraud, to be sentenced in Dec.
Simona Weinglass is an investigative reporter at The Times of Israel.
A US federal judge has sentenced Israeli binary options operative Lissa Mel to a one-year prison term for her role in a $145 million fraud scheme carried out by the Israeli-run binary options websites BinaryBook.com and BigOption.com.
In a judgement filed on Thursday, August 29, Mel was sentenced to a prison term of 12 months and a day, to be followed by supervised release for a term of two years. She is also required to pay restitution to victims of $288,024.
Mel signed a plea deal with the US Department of Justice in January 2019. Parts of the plea deal and related documents remain sealed. The maximum sentence for the offense to which she pleaded guilty, conspiracy to commit wire fraud, is five years in prison.
According to the “Stipulation of Facts” attached to her January 29, 2019 plea agreement, Mel worked as a sales representative for Numaris Communication from July 2015 till November 2016.
While there, she induced investors to deposit funds based on material misrepresentations, including lies about the fact that her interests were not aligned with those of investors, lies about the anticipated returns from binary options trading, lies about her qualifications and lies about investors’ ability to withdraw funds, according to the document.
Also according to the “stipulation of facts” document, Mel referred to herself as a “Senior Broker,” “Account Manager,” or “Chief Analyst,” for the website BinaryBook.com. She used the alias “Monica Sanders” to interact with investors and lied about her location and credentials.
According to the plea agreement, “the defendant communicated with more than ten investors and was directly responsible for approximately $288,024 in investor losses.”
Mel is one of 15 employees of the Israeli companies Yukom Communications Ltd. and/or Numaris Communication Ltd. who have been prosecuted by the United States government. These two Israeli companies, along with others, operated the websites BinaryBook and BigOption among others.
The CEO of Yukom Communications, Lee Elbaz, was convicted by a Maryland jury on August 7 of three counts of wire fraud and one count of conspiracy to commit wire fraud. She is now in jail awaiting sentencing, which is scheduled for December.
Four other former employees of Yukom Communications Ltd. and Numaris Communication Ltd. in Israel — Shira Uzan, Liora Welles, Austin Smith and Yair Hadar — also signed plea deals with the US government and await sentencing. These four, but not Mel, testified at Elbaz’s trial on behalf of the prosecution, claiming that Elbaz instructed them to lie to investors in order to get those investors to deposit as much money as possible, and to do everything possible to prevent them withdrawing their funds.
Nine other Yukom defendants were indicted in February. The separate indictment against these nine, including Yukom owner Yosef Herzog, says the scheme involving BinaryBook and BigOption cost investors more than $145 million worldwide, including thousands of victims in the US.
Reality bites
Lissa Mel, 30, who also goes by the name of Melissa Turdiev, was arrested by the FBI on September 17, 2018 at Los Angeles International Airport as she attempted to board a plane back to Israel.
Mel achieved minor celebrity in Israel in 2008, at the age of 19, when she was a contestant on the first season of the reality TV show, “Hayafa Vehahnun,” the Hebrew-language version of the international franchise “Beauty and the Geek,” in which beautiful young women team up with young men perceived to be smart, yet socially awkward, to compete for cash prizes.
The website for the show described Mel as “a pampered princess who likes to take cabs, go to the gym, get a manicure once a week, and use tons of beauty creams.”
The website also said that Mel moved to Israel at the age of 11 from Uzbekistan and grew up in the tony suburb of Herzliya Pituach. She was the daughter of professors, but was not herself a good student, the website said. She worked at a high-end men’s boutique and also had work experience as a jewelry designer, makeup artist, lifeguard and a dentist’s assistant during her military service.
One of thousands
Mel was one of many thousands of Israelis who have worked in the binary options and related Internet scams over the past decade.
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 the industry’s 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. The vast majority of the perpetrators have enriched themselves at the expense of victims around the world while enjoying impunity and suffering little social stigma.
Israeli law enforcement has proven unable or unwilling to effectively tackle the country’s Internet scams, despite the fact that for several years they have operated at an industrial scale.
“To anyone familiar with the binary options industry in Israel, it is clear that the fraudulent tactics presented in the Yukom case were not unique but rather a standard practice among many companies in this industry,” Israeli lawyer Nimrod Assif, who has sued several forex and binary options companies, told The Times of Israel.
“Such an ongoing and vast illegality could have been made possible only by a systematic failure of law enforcement. While in many areas, like technology and the academy, Israel is at the forefront of the developed world, in this area Israel seems to be falling behind other developed countries, especially the United States. In taking more enforcement actions, the United States can help the state of Israel, not only by signaling to lawbreakers in Israel that they cannot act with impunity, but also in leading the way for Israeli enforcement agencies.”
