A federal trial begins this week for an Israeli woman charged in the U.S. with directing a scheme to defraud tens of thousands of investors across the globe out of tens of millions of dollars.
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Jury selection for Lee Elbaz’s trial is scheduled to start Tuesday in Maryland. She is one of 15 defendants charged in the case and the first to be tried. Five of them have pleaded guilty and agreed to cooperate with prosecutors.
Elbaz was CEO of an Israel-based company called Yukom Communications. She is accused of engaging in a scheme to dupe investors through the sale and marketing of financial instruments known as “binary options.”
Yukom Communications employees pretended to be from other countries, lied about their professional qualifications and adopted “stage names,” authorities say. They falsely guaranteed returns of up to 40 percent. And they didn’t tell investors that the company handling their “binary options” trades only made money if its customers lost money, according to the FBI.
They followed a call script for reassuring investors: A broker boasted of winning up to 95 percent of his trades. Sales representatives promised a client she would be a millionaire within a year if she didn’t withdraw her five-figure investment.
“If you win, I win,” the broker told the woman, according to an FBI agent’s affidavit.
Elbaz, 37, was indicted in March on three counts of wire fraud and one count of conspiracy to commit wire fraud. She was arrested in 2017 after traveling to New York and remanded to house arrest after posting a $1.8 million.
A separate indictment against nine other defendants says the scheme cost investors more than $145 million worldwide