Shahar Elbaz, Wire Fraud, Maryland 2025
WASHINGTON, D.C. – A U.S. District Court for the Northern District of Illinois has issued a default judgment against five offshore entities and three individuals for fraud related to a global binary options scheme targeting U.S. residents. The judgment, announced by the Commodity Futures Trading Commission (CFTC) on January 29, 2025, finds the defendants liable for violations of the Commodity Exchange Act and CFTC regulations.
The defendants operated through websites using aliases such as BigOption, BinaryBook, and BinaryOnline. Shahar Elbaz, an Israeli citizen, along with two other individuals and five companies, were found to have engaged in fraudulent practices from March 26, 2014, until August 12, 2019, when the CFTC initially filed its complaint.
The court order mandates the defendants, jointly and severally, to pay $112.9 million in restitution and a $338.7 million civil monetary penalty. They are also permanently barred from violating the Commodity Exchange Act, registering with the CFTC, and trading on any CFTC-regulated markets.
The CFTC’s investigation revealed that the defendants made numerous false claims to customers, falsely representing binary option transactions as profitable when the vast majority of customers experienced losses. Brokers misrepresented their identities, expertise, and location. Furthermore, the defendants are accused of misappropriating customer funds and obstructing withdrawal attempts by concealing information about bonuses and risk-free trades. The defendants allegedly manipulated the trading platform to reduce customer winning trades.
This judgment follows a previous settlement with Yakov Cohen, who was ordered to disgorge $7 million in ill-gotten gains. Separately, Cohen pleaded guilty to conspiracy to commit wire fraud and was sentenced to 5.5 years in prison, with an additional $7 million in restitution ordered on January 22, 2025.
Significantly, Shahar Elbaz was previously convicted by a federal jury of wire fraud and conspiracy to commit wire fraud on August 7, 2019, and received a 20-year prison sentence, along with a $28 million restitution order. The case was prosecuted in the U.S. District Court for the District of Maryland.
The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the District of Maryland in this matter. The Enforcement Division staff included Heather Dasso, Elizabeth N. Pendleton, Elizabeth Streit, Scott R. Williamson, and Robert T. Howell.
Source: CFTC.gov
Source: https://www.cftc.gov/PressRoom/PressReleases/9040-25