A federal jury in Maryland was set to begin deliberating Thursday in the case against an Israeli woman charged with orchestrating a scheme to defraud tens of thousands of investors out of tens of millions of dollars.
Jurors were expected to hear closing arguments in the trial of 38-year-old Lee Elbaz before deliberations begin. Elbaz is charged with three counts of wire fraud and one count of conspiracy to commit wire fraud.
Elbaz was CEO of Israel-based Yukom Communications. Prosecutors said she trained employees to dupe investors through the sale and marketing of financial instruments known as binary options.
A defense attorney said Elbaz did not condone the fraudulent tactics used by employees who worked under her supervision.
FBI agents arrested Elbaz in 2017 after she traveled to New York.
During the trial, federal prosecutors alleged that far from being unaware of the fraud her employees were committing, Elbaz directed her sales agents to lie over the phone in addition to lying herself.
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 fraud, employing thousands of Israelis.
In a trial brief filed shortly before the Elbaz trial began, the US government set out how binary options fraud was generally perpetrated, describing how victims were approached, lured in, lied to, encouraged to make ever-greater deposits, and thwarted if and when they tried to withdraw their money.
Setting out in detail the means by which Elbaz allegedly fleeced her victims, the prosecution document constitutes a devastating insight into the cynical practices by which the fraudulent industry stole immense amounts of money from trusting victims around the world. The document provides confirmation by the US government much of the reporting by The Times of Israel over the past three-and-a-half years, regarding the methods by which binary options fraudsters duped their victims.
Simona Weinglass contributed to this report.