The U.S. Commodity Futures Trading Commission (CFTC) has announced a significant development in its crackdown on fraudulent binary options operations, highlighting the case against the vast binary options fraud scheme GreyMountain Management (GMM), and its three Israeli owners. This case is part of a broader action against a sophisticated binary options fraud scheme linked to the Canadian-Israeli Cartu Brothers—David, Joshua, and Jonathan Cartu.
The Whistleblower Call
On March 19, the CFTC released a Notice of Covered Action (NCA) related to its enforcement action that resulted in over $50 million in penalties against Blue Moon Investments, a Seychelles-registered binary options firm, for its role in offering illegal, off-exchange binary options to U.S. customers. This announcement triggers the acceptance of whistleblower award claims under the CFTC Whistleblower Program, which rewards individuals who come forward with vital information that leads to successful enforcement actions.
The origins of this case trace back to September 2020, when the CFTC charged the Cartu Brothers and their GreyMountain Management (GMM) binary options fraud scheme along with their associated entities—All Out Marketing Limited, Blue Moon Investments, Ltd., and Orlando Union Inc.—for their illegal operations under the brands BeeOptions, Glenridge Capital, and Rumelia Capital. These operations targeted U.S. residents, offering fraudulent returns of 60% to 85%. The scheme also involved Israeli residents Leeav Peretz and Nati Peretz, who managed call centers aimed at defrauding U.S. citizens.
Read our GreyMountain Management (GMM) reports here.
The CFTC’s diligent efforts culminated on March 14 with a U.S. District Court for the Western District of Texas ordering final judgment against Jonathan Cartu, Leeav Peretz, Nati Peretz, and Blue Moon Investments Inc. They were found liable for offering illegal binary options and committing fraud, thus concluding the case initiated in September 2020. The judgment mandated the defendants to cease all activities violating the Commodity Exchange Act (CEA) and imposed a restitution of $51,155,645, alongside a penalty of $153,466,935.
The Wirecard Connection
The GMM scheme laundered a significant proportion of the money stolen from customers via Wirecard Ireland. Rumors at the time even saw the Cartu brothers as shareholders of Wirecard because of the many interconnections. In fact, Wirecard‘s international take-off happened in Ireland. In June 2020, Wirecard went bankrupt after €1.9 billion went missing. Trials against Wirecard executives are currently taking place in Munich and Singapore.
Whistleblowers play a crucial role in uncovering such fraudulent schemes, and the CFTC’s NCA provides a 90-day window for individuals to submit claims for awards. Since the establishment of the CFTC Whistleblower Program in 2010, it has been instrumental in recovering over $3 billion from fraudsters, with more than $365 million awarded to whistleblowers.
