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Yukom Case – Owner of binary options firm Yossi Herzog indicted, no longer willing to testify without immunity

Last updated on June 30, 2019

FinTelegram reported yesterday that the indictment filed by the U.S. prosecutors in the binary options fraud case involving Israeli Yukom Communications and its platforms BinaryBook and BigOption is dramatically more extensive than previously known. Simona Weinglass of The Times of Israel yesterday uncovered this surprising news in the Yukom Case.

A total of only 18 persons are charged by the U.S. Government. Among them also Yossi Herzog, the former owner of the Israeli Yukom Communications through which the binary options platforms mentioned were marketed. Former Yukom CEO Lee Elbaz, Israel, has been indicted along with some of her former employees and partners. The trial of Lee Elbaz is scheduled for July 16, 2019. Five of the defendants have already pleaded guilty and are awaiting their punishment scheduled for August and September 2019.

As reported by FinanceFeeds Elbaz had wanted to take depositions of Yossi Herzog, Elad Bigelman, Nissim Alfasi, and Chanan Tabarko. Let’s recall that Yossi Herzog is the owner of Yukom Communications, and Lee Elbaz is its former CEO. Now it became known that Yossi Herzog himself is accused himself by the U.S. prosecutors. He has, therefore, let the U.S. authorities know through his lawyers that he is not willing to testify in the Yukom case without assuring immunity. This also applies to the co-defendants Israelis Elad Bigelman Nissim Alfasi, and Chanan Tabarko.

Consequently, Elbaz now requests the Court compel the U.S. Government to seek court-ordered use immunity for each of the witnesses. Alternatively, if the Court declines to compel the Government to provide use immunity, then Elbaz seeks a missing witness instruction.

Use and derivative use immunity prevents the prosecution only from using the witness’s own testimony or any evidence derived from the testimony against the witness. However, if the prosecutor acquires evidence substantiating the crime independently of the witness’s testimony, the witness may then be prosecuted.

A legal doctrine in the U.S. known as the missing witness rule concerns an inference that might be drawn from the absence at the trial of a potential witness. If the potential witness would be expected to have knowledge of information important to an issue in the case and if that witness is “peculiarly available” to one party because of a relationship of interest or affection but the witness is not called by that party to testify, the jury may infer that the witness would have given testimony unfavorable to that party. In this case, Elbaz evidently tries to use this rule in her favor.

U.S. vs. Israel’s binary options fraud industry

The Yukom Case is regarded worldwide as a precedent for the legal aftermath of the Israeli binary options fraud industry. Between 2012 and 2018, Israeli scammers established hundreds if not thousands of illegal and fraudulent binary options platforms to defraud retail investors by up to 10 billion dollars per year estimated by the U.S. FBI. In October 2017, the Israeli parliament banned the binary options and initiated the end of the fraud industry. Unfortunately, Israeli centres of this fraud industry are still scattered around the world. Sofia in Bulgaria is one of those Israeli broker scam centers.

The Yukom Case is the first major criminal case after years of investigation by the FBI and prosecutors. This case is not only about the defendants. It is also about the behavior of the State of Israel, which, despite its knowledge of the fraudulent nature of this binary options industry, has for years allowed investors from other countries to be cheated by its citizens. We recommend reading Simona Weinglassrespective reports on the Wolves of Tel Aviv and the fraudulent binary options industry in The Times of Israel.

Israel loves to present itself as a startup nation. The fact, however, is that much of the “successful” startup scene was involved in binary options fraud and stole billions from retail investors across the world. Time will show what will remain from this “startup miracle” once the legal procedures in the many jurisdictions are done.

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