The days of the fraudulent Israeli binary options industry are over in 2018, and many of the firms have disappeared. Millions of investors worldwide were harmed, and the damage could have been as high as $50 billion. However, the legal process is still ongoing in many jurisdictions and will result in many more trials. The German prosecutors in Koblenz filed charges against Israeli Avi Itzkovich and James Henry Wygodzki. They are accused of establishing and running a vast cybercrime network. Both allegedly plead guilty.
The Never-Ending Fraud Stream
We recently referred to the cybercrime network around Avi Itzkovich and James Henry Wygodksk as the LibraMarkets network. It’s difficult to name these cybercrime organizations given the number of fraudulent brands they have operated. During 2014 and 2021, this Israeli-controlled LibraMarkets network has been connected with many other major binary options scam brands. It started around 2014 with Tradorax (TDorax), continued with KontoFX, KayaFX, InstaFX, InstaFX24, NovaTrades, UProFX, ProuFX, or EZCryptoPlace. LibraMarkets was one of the last fraud brands they operated before it collapsed.
While the brands with the operating legal entities – mostly just empty offshore front companies with nominee directors and shareholders – disappeared when too many victims complained, the boiler rooms behind them remained the same. These boiler rooms and their payment facilitators have been the real attackers and fraudsters behind the thousands of binary options schemes.
The Boiler Rooms
The Bulgarian companies register shows that, in addition to Itzkovich and Vygodzki, Maor Ben-Zvi, Daniel Koen, Jonathan Grinfeld, Or Tal Shlomei, Erez Legerbaum, Tal Kerzfeld, Moran Kerimov, Michael Zalk, Eden Sror, Daniel Natan Huluban Mandl, Avraham Aviv Hileli, and Dror Geht have been registered as managers in the Bulgarian company register.
All of these individuals were responsible for tens of thousands of victims of various binary options brands as boiler room managers. It will become clear in the course of the trial and further investigations in Koblenz how far the charges will go. A complete clarification in the sense of the victims is desirable.
The Addictive Fraud Environment
Between 2014 and 2018, Sofia in Bulgarian and Belgrade in Serbia were the centers of illegal boiler rooms behind fraudulent binary options brands. The boiler room agents were called financial advisors or brokers and were talented local young people (mis)led by their Israeli managers.
Legendary were the parties at the Israeli boiler room managers in Belgrade. Alcohol and coke flowed in streams on the party ships on the Danube. The situation in Sofia was similar. Some of the accused Israeli boiler room managers, like Jacki Fitelzon (report here), told the court that they became addicted to drugs and alcohol during their fraudulent activity. Fitelzon was one of the boiler room managers of Gal Barak‘s Israeli E&G Bulgaria and was sentenced to 82 months in prison in January 2022. He has asked the court to transfer him to a rehab center in Israel.
The Tradorax Beginning
The binary options scheme Tradorax (later TDorax) was launched in 2013 by Alagos Limited, Gibraltar. From 2015 until it vanished around 2016, the scheme was operated via AM Capital Ltd, Anguilla, and the Marshall Islands. This company’s sole shareholder and director was the Swedish citizen Per Gunnar Astrom, against whom prosecutors in several jurisdictions took action.
The Fraud Table
|Company||Jurisdiction||Brand / Trading Style||Remarks|
|Alagos Limited||Gibraltar||Tradorax (TDorax)||An offshore entity operating the brand|
|AM Capital Ltd||Marshall Islands||Tradorax (TDorax)||offshore, a shareholder of BetaTech EOOD and Alpha Capital House Ltd|
|BetaTech EOOD||Bulgaria||Tradorax (TDorax)||frontend, shares held by AM Capital|
|Alpha Capital House Ltd||United Kingdom||Tradorax (TDorax)||frontend, shares held by AM Capital|
|GammaTech Services OÜ||Estonia||KayaFX||Director Petar Borislav Zlatkov (Bulgaria)|
|NovaTrades Ltd||Marshall Islands||NovaTrades, InstaFX24||operator|
|InstaFX24 Ltd||Marshall Islands||InstaFX24||operator|
|EZCryptoplace Limited||United Kingdom||EZCryptoPlace||operator, compulsory strike-off Nov 2020|
|NTMT Transformatic Markets OÜ||Estonia||KontoFX, EZCryptoPlace||operator, director Petar Borislav Zlatkov (Bulgaria)|
|Nordindustries OÜ||Estonia||KontoFX||operator, director Ivan Simeonov Iliev|
|Yield Enterprise Currency Software OÜ||Estonia||UproFX, EZCryptoPlace, Libra Markets||operator, director Petar Borislav Zlatkov (Bulgaria)|
|Mercure Group EOOD||Bulgaria||Tradorax, KayaFX, KontoFX, Libra Markets et al||boiler room operator in Bulgaria, previously known as Rax Media EOOD|
|ABC Global EOOD||Bulgaria||Tradorax, KayaFX, KontoFX, Libra Markets||boiler room operator in Bulgaria|
Over the next few weeks, we plan to accompany the upcoming trial with coverage of the binary options people who have disappeared. If you have any information about this, please let us know via our whistleblower system, Whistle42.