A massive binary options fraud targeting U.S. residents has landed five entities and four individuals in court, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) in the Northern District of Illinois. The scheme allegedly ran from March 2014 through the present, accumulating over $103 million from unsuspecting investors.
The defendants operated through websites using names like BigOption, BinaryBook, and BinaryOnline, falsely presenting binary options as legitimate trades tied to market conditions. In reality, the CFTC alleges these were manipulated “book entries” designed to guarantee customer losses. The defendants profited directly from these losses, operating on the opposite side of each trade.
The complaint details a systematic deception, including false claims of profitability – with approximately 95% of customers losing money – and misrepresentation of the brokers’ qualifications and location. Brokers were allegedly pressured to aggressively solicit deposits, as evidenced in an email from defendant Shahar Elbaz, stating, “We are the money makers and no one can stop us!” and urging brokers to “Take It!” from potential investors.
The CFTC also alleges a complex network of offshore entities and bank accounts were used to conceal the true nature of the operation and misappropriate customer funds. Manipulative tactics, such as deceptive “bonuses” and “risk free” trades, were also employed to further inflate profits at the expense of investors.
The enforcement action reflects the CFTC’s commitment to pursuing fraudulent activity, even when originating overseas. Director of Enforcement James McDonald stated the agency’s efforts to hold wrongdoers accountable “do not stop at our shores.” The CFTC is seeking to hold the defendants liable for fraud and enjoin them from further violations, aiming to protect U.S. customers and ensure accountability at all levels of the scheme.
Source: CFTC.gov
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