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Investment fraud case in Maryland expands to 4 women from Israel

GREENBELT, MD. — A multimillion-dollar investment fraud scheme has led to federal charges in Maryland against four women who worked for an Israel-based company.

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.

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Authorities say they followed a 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.

A federal trial had been scheduled to start in Maryland on Jan. 8 for Lee Elbaz, an Israeli citizen who served as CEO of Yukom, which provided sales and marketing services for internet-based businesses with the brand names BinaryBook and BigOption. But a judge agreed Dec. 18 to postpone her trial indefinitely. The judge allowed her defense attorneys from a New York law firm to withdraw from the case and be replaced, saying they had failed to properly prepare for trial.

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An investment adviser was convicted Wednesday of charges she defrauded investors out of millions of dollars, some of which she used to pay more than $800,000 for prayers by Hindu priests in India to ward off federal investigators.

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.

Since then, federal prosecutors in Maryland have filed related charges against three other women who worked for Yukom. Shira Uzan and Liora Welles were charged this month with conspiracy to commit wire fraud. The same charge was filed in November against another defendant, Lissa Mel.

Welles and Uzan, both of whom worked under Elbaz as sales representatives, pleaded guilty to the conspiracy charges during separate hearings recently and are scheduled to be sentenced in March. Welles and Uzan acknowledged that they were "directly responsible" for approximately $2.4 million and $1.8 million in investor losses, respectively, according to court filings.

Authorities believe the fraud scheme cost investors tens of millions of dollars. BinaryBook received customer deposits totaling nearly $99 million from the second quarter of 2014 through the fourth quarter of 2016 and returned just under $20 million to its clients during that period, according to records cited in the FBI agent's September 2017 affidavit.

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An email instructed BinaryBook sales representatives to target retirees, Social Security recipients, pension holders and veterans as clients, according to a court filing. Elbaz's indictment says three victims were residents of Gaithersburg, Laurel and Annapolis, Maryland.

The scheme's victims also include Eugene and Penelope Timmons, of Kansas City, Missouri. They dipped into life savings to invest approximately $110,000 through BinaryBook over nearly two years. They lost everything.

Kevin Merrill was arrested Tuesday at his $1.06 million home in Towson. He and his business partner, Jay Ledford, 54, of Texas and Nevada, have been indicted on federal charges of wire fraud, identity theft and money laundering. Both men face more than 200 years in federal prison.

"It was all a mess and a scam," said Eugene Timmons, 82.

The couple thought they were talking to experienced brokers in London. Penelope Timmons, 72, said BinaryBook's website initially created the illusion they were making money.

"We couldn't get our money out. All they kept doing was handing us off to other people," Penelope Timmons said. "Once you realize these people have taken you, it's very demoralizing and discouraging."

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