The leader of a binary options scheme in Ohio has been charged with defrauding investors out of at least $10 million, according to a 19-count federal indictment unsealed on Tuesday.
Jared J. Davis, the former head of Erie Marketing LLC, was arrested early Tuesday morning at Cleveland Hopkins International Airport and charged with conspiracy to commit wire fraud, conspiracy to launder money, wire fraud, money laundering and obstruction of justice.
Davis, who previously lived in the Columbus area and currently resides in Kalispell, Montana, ran a fraudulent binary options investment scheme between 2012 and 2016 through Erie Marketing LLC, headquartered in Sandusky, Ohio.
A binary option is a concept in which an investor seeks a future payout based on the future price of a given security or commodity. However, Davis’ binary options businesses were not registered with the Securities and Exchange Commission nor the Commodity Futures Trading Commission, which have regulatory oversight.
According to the indictment, Davis acted as a broker and did not connect investors to a legitimate binary options exchange. Instead, he took the opposing position on each trade, similar to a casino or sports book. This provided a built-in incentive for Davis to employ manipulative and deceptive practices, including failing to disclose to victims that they were not matched with individual investors.
The indictment also alleges that Davis solicited victims through Internet marketing campaigns and call centers that he operated out of Sandusky, Costa Rica and St. Maarten. He enlisted foreign nationals who, under Davis’ direction, created an elaborate web of foreign corporations to receive and launder the victims’ deposits.
“This defendant portrayed himself as a legitimate investment broker when he was really no better than a simple con man,” said First Assistant U.S. Attorney David Sierleja. “He fleeced his victims out of $10 million by manipulating trading conditions, falsely telling investors his salespeople were financial analysts and using offshore companies to spend money as fast as it came in.”
Davis is currently facing multiple charges, including conspiracy to commit wire fraud, conspiracy to launder money, wire fraud, money laundering and obstruction of justice. His current status is under arrest.
Key Facts
- State: Ohio
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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