Romanian prosecutors are set to try at least 10 individuals involved in alleged forex and binary options fraud who were operating illegally on Romanian soil, the country’s Police Directorate for the Investigation of Economic Crimes told The Times of Israel.
The 10 individuals were arrested on May 25 in a major series of raids on binary options and forex brokerages all over Romania. According to a police spokesman, the sweep involved special operations forces and consisted of 55 searches in Bucharest and the counties of Buzau, Calarasi, Dambovita, Dolj, Giurgiu, Ialomita, Neamt, Olt, Prahova, Suceava, Teleorman and Vaslui.
The police spokesman said Romanian law prevented the naming of the suspects at this stage. However, he said that much of the money obtained by these allegedly fraudulent brokers found its way to bank accounts in Bulgaria, Cyprus and Israel, with some of the money then finding its way back to the suspects. The final recipients of the funds, he indicated, were not Romanian residents. At least six firms are implicated in the alleged criminal activity, he said.
Reports in the Hebrew press have alleged that several of the arrested individuals are Israeli and that most unlicensed binary options and forex firms operating in Romania have Israeli owners.
Romanian police told The Times of Israel that more than 300 hard drives were seized from homes and businesses in the raids.
They said that staffers at the six illegal companies telephoned individuals in Europe and tried to persuade them to invest in capital markets with the promise of high returns, when in fact the money was going directly into the company’s bank account and most “investors” lost all their money.
Hebrew financial daily TheMarker alleged that one of the companies raided by Romanian police until recently belonged to Israeli businessman Itamar Patishi. Romanian daily Romania Libera, citing prosecutors, said that YouTradeFX was one of the companies stormed in the raid.
YouTradeFX is related to the Israeli company USG Capital, which was founded by prominent Israeli entrepreneur Itamar Patishi and later sold to Tomer Sinai, a former owner of the Hapoel Petah Tikva soccer team who was arrested in 2011 as a suspect in a scandal involving the alleged rigging of soccer games for purposes of illegal gambling. The case was later closed due to lack of evidence. The Israel Securities Authority recently denied USG Capital’s license to operate due to multiple fraudulent practices it discovered when it inspected the company. However, YouTradeFX continues to target customers abroad.
Itamar Patishi is listed as a former director of a company called YouTrade Capital Markets Ltd. as well as an official of YTF Trade Ltd., a Cyprus-based company that later changed its name to AirFinance Pro Ltd. and operates the trading platforms BuzzTrade, Binary Royal, OptionsXO, CFD Royal and Uptrade 7.
Patishi told the TheMarker in a statement that he is no longer active in forex/binary options, that he has not owned any companies in the industry for at least two years, and that he has nothing to do with the Romanian raid.
The Times of Israel has been detailing massive fraud by Israeli binary options firms in recent weeks, beginning with an article entitled “The Wolves of Tel Aviv.” Local binary options firms have now been banned by the Israel Securities Authority from targeting Israelis, but are still free to target people abroad.
France, Romania, Canada and other countries are investigating the Israeli fraudsters’ operations 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 turn over hundreds of millions of dollars per year.