web analytics

US Imposes $75m Fine On Kingpin Behind Israeli Binary Scam

US  Commodities and Futures Trading CommissionThe United States government is asking a Florida court to impose a $75 million fine on alleged binary options fraudster Michael Shah.

According to the Commodities and Futures Trading Commission (CFTC) motion, Shah worked with several call centers in Russia to steer many people into fraudulent binary options websites that were based in Israel.

The $75 million fine is the largest fine that has ever been requested by the CFTC. It reflects the scale of the damages that Shah who was a kingpin in the Israeli binary options scam has caused.

Israel: A Hot Bed For Binary Options Fraud

The Israeli participation in binary options fraud is widespread and has lasted for a decade. It has gotten so bad that the Israeli government banned the industry outright in October 2017 after a comprehensive report by The Times of Israel. However, the government has not moved to prosecute any of these fraudsters while many of them still continue to operate in Israel and other countries.

Wealth Recovery International

The motion for the fine was made on July 12 and was targeted against Shah and his company Zilmil Inc. The CFTC asked for summary judgement – which allows the case to be decided without the need for a jury trial since all of the facts are indisputable. The total breakdown of the fine is $18,671,793.97 to pay back the defrauded money and a civil monetary penalty of $56,015,381.91.

The CFTC created a very detailed case against Shah that had overwhelming proof of his involvement. In addition, the case outlined Israel's fraudulent binary options industry in detail. The description of Shah's activities shows how online marketers will promote just about anything in return for large commissions using their network of websites.

Fake Testimonies Used To Drive Online Traffic

As proof of Shah's deliberate participation in the scam, the filing had numerous quotes of Shah saying that he knew that the binary options schemes that he was offering were all scams. He was also quoted as saying that he knew that the scams were ruining the lives of his victims.

Shah's modus operandi was to encourage people to entrust their money to illegal binary options trading websites that claimed to have foolproof trading systems that would earn them millions. This was done by creating fake video testimonials and by creating hundreds of fake pages that made these systems look a sure thing. Affiliates were also recruited to promote the trading systems and websites by creating sales funnels toward them.

Shah's lawyer has filed a counter motion denying all of these allegations and saying that the CFTC does not have enough evidence to connect his client to the binary options fraud. He also states that the CFTC has no jurisdiction over activities that happen outside of the United States.

Related Articles

Indian Central Bank To Clampdown on Banking Malpractices

The Reserve Bank of India (RBI) is taking a number of steps to counter reports of large-scale money laundering and

Deutsche Bank Fined $156.6m For Alleged FX Trading Violations

The U.S. Federal Reserve is fining Deutsche Bank AG $156.6 million for having violated foreign exchange regulations, as a part

US Banks Charging Customers High Fees For ATM Transactions

A new report from Bankrate.com shows that U.S banks have raised ATM transaction fees for the last eleven consecutive years