Yukom Trial – about boiler room vampires and systematic lies to investors

Lee Elbaz and Liora Welles in US trial
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Picture above: Lee Elbaz, Shira Uzan and again Lee Elbaz

The trial in the Yukom Case, with its former CEO Lee Elbaz and the binary options platforms BinaryBook and BigOption started in the U.S. on July 16, 2019. On the second day the former subordinate of Lee Elbaz, Shira Uzan took the stand and told the jury that Elbaz coached her on how to lie to investors to bring in more cash. Law360 provided some details out of the courtroom.

The basis principle – “lie to your clients”

Shira Uzan testified that under directives from Elbaz, she went under the stage name “Emily Laski” and assured clients she had about 15 years of relevant experience, though she had none. She was instructed to promise investors massive returns knowing she couldn’t deliver them.

“Did Ms. Elbaz give you instructions to lie to investors?” U.S. prosecutor Henry Van Dyck asked Shira Uzan, who pled guilty to her role in the binary options scheme last year. She admitted having defrauded her clients out of nearly $2 million. “Yes,” Uzan answered.

The U.S. prosecutors spent the full second day of Elbaz’s trial questioned Uzan about the lies to potential clients. The jury learned that the Yukom boiler room agents actually lied about everything from their names and their background in financial markets to the past successes of other clients and the nature of binary options.

Boiler room vampires – drink clients several times a week

Uzan provided audio recordings of her training sessions at Yukom, which she said she made to listen to later to improve her sales tactics. In one snippet, Elbaz can be heard instructing Uzan to promise investors returns of 150% a week and 600% a month.

In another recorded call of Ms. Uzan’s training, Ms. Elbaz, again simulating the role of the account manager, says “So as you can see you have made a 15 percent return on your fund investment within only two days. This means, you can make 150 percent a week, 600 percent a month.”

Trial brief submitted by U.S. Government

Uzan testified that none of her clients ever made a cent investing in binary options.

In another, Elbaz directs her subordinates to chat up clients, call them “bro” and give them a good time, so they can “drink a client” not just once, but several times a week. The phrase is slang in Israel, Uzan explained, and it actually means to take their money. That almost sounds like vampirism, doesn’t it? Drink the lifeblood of your clients – their money!

Uzan said, she personally handled dozens of clients, was required to make 150 calls to clients a day, and was supposed to bring in $10,000 for the company a month. She said she never saw any reports about how her clients’ investments actually really developed or were used for.

Boiler room agents are to blame

Elbaz’s attorney, Barry J. Pollack didn’t have the chance to cross-examine Uzan on Thursday. In his opening statement on Tuesday, however, he told the jury that Lee Elbaz shouldn’t face the consequences of the fraud committed by sales representatives she once supervised. Uzan and other convicted former Yukom employees would only incriminate Elbaz to save their own skin.

Shira Uzan and four former Yukom people – Liora Welles, Lissa Mel, Austin Smith, and Yair Hadar – already plead guilty and struck deals with prosecutors. They did so to try to lessen their sentences, Elbaz’ defense attorney argued. And while Elbaz agreed with the biographical lies — using fake names, and purporting to be sitting on a London trading room floor, not an Israeli call center — she did not approve lying to potential clients about the actual investments, Pollack said.

Liora Welles is next to stand

Uzan’s testimony will continue today, followed by Liora Welles, another Yukom sales representative who already plead guilty to binary options fraud.

Elbaz’s defense lawyers say they plan to bring in an individual with years of experience working in call centers to testify on the practice of using so-called “stage names” and other tactics used by Yukom employees in the broader call center industry.

The trial adversaries

The U.S. government is represented by Henry P. Van Dyck, L. Rush Atkinson and Caitlin R. Cottingham of the U.S. Department of Justice’s Fraud Section with Jennifer Farer and David Stier of the Fraud Section as filter counsel.

Elbaz is represented by Barry J. Pollack and Jessica A. Ettinger of Robbins Russell Englert Orseck Untereiner & Sauber LLP.

The case is U.S. v. Elbaz, case number 8:18-cr-00157, in the U.S. District Court for the District of Maryland.

The following individuals have been charged by the U.S. authorities with binary options fraud around Yukom Communications and their platforms BinaryBook and BigOption.

  • Lee Elbaz (a/k/a “Lena Green”), the former CEO of the Israel-based company, Yukom Communications, was found guilty after a three-week jury trial of one count of conspiracy to commit wire fraud and three counts of wire fraud. Sentencing is scheduled for Dec. 9, 2019 .
  • Lissa Mel (a/k/a “Monica Sanders”) worked as boiler room agent for Numaris. She pleaded guilty to one count of conspiracy to commit wire fraud. She was sentenced to a 12-months prison term and a restitution payment of $288,024.
  • Austin Smith, (a/k/a “John Ried“) former Vice President of Numaris, a partner of Yukom and founder of Wealth Recovery International pleaded guilty, Sentencing has been scheduled for September 3, 2019.
  • Liora Welles (a/k/a “Lindsay Cole” “Lindsay Wells,” and “Lindsay Taylor”) pleaded guilty to one count of conspiracy to commit wire fraud. Sentencing has been scheduled for Sept 20, 2019.
  • Shira Uzan (a/k/a “Shira Baror” and “Emily Laski”) pleaded guilty to one count of conspiracy to commit wire fraud charged.  Sentencing has been scheduled for Sept 20, 2019. 
  • Yair Hadar (a/k/a “Steven Gold”) pleaded guilty on March 21, 2019. Sentencing has been scheduled for Sept 23, 2019.
  • Yossi Herzog, a beneficial owner of the Yukom Scheme, is indicted with binary options fraud. Trial date and details of the indictment are not yet publicly known.
  • Kobi Cohen, a beneficial owner of the Yukom Scheme, is indicted with binary options fraud. Trial date and details of the indictment are not yet publicly known.

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