CFTC Files Charges in $20 million international fraud scheme
The Commodity Futures Trading Commission (CFTC) has filed a multi-million-dollar fraud action in the U.S. District Court for the Southern District of Florida. The action charges three individuals and three companies with fraudulently soliciting tens of millions of customers and prospective customers to open and fund off-exchange binary options and digital asset trading accounts. These accounts traded foreign exchange currency pairs, metals, and digital assets through websites operated by unregistered binary options and digital asset brokers.
Fraud involves the U.S., Bulgaria, and Israel
The CFTC complaint charges defendants Daniel Fingerhut of Miami, Florida, and three companies that he worked with, Digital Platinum, Inc. (DPI), a Florida corporation, Digital Platinum, Ltd. (DPL), an Israeli company, and Huf Mediya Ltd. (Huf) a Bulgarian company. The Commission also charges the heads of all three entities, Tal Valariola and Itay Barak of Israel. All reportedly perpetrated two massive fraudulent solicitation schemes – one involving binary options and other various digital assets, including Bitcoin and Ethereum.
Beginning in at least October 2013 and continuing through August 2018, the defendants allegedly created fraudulent marketing materials that promised astronomical profits with no risk of loss. They disseminated tens of millions of solicitations distributed via email spam and videos available online. Over 59,000 customers opened and funded trading accounts through websites operated by unregistered, off-exchange binary options brokers who paid fraudulent binary options affiliate All In Publishing and DPL commissions. The result of these fraudulent marketing campaigns generated payments of over $20 million in commissions to the defendants.
Is it too good to be true if it is too good to be true?
Yes. More often than not.
According to the CFTC, the marketing materials touted fake trading performance using advertised binary options and digital asset trading software and systems. The marketing videos typically featured actors—often posing in front of props such as mansions and private jets—who falsely claimed they had become rich trading.
What happens when you lie under oath?
Nothing good. Fingerhut, specifically, was charged with making materially false or misleading statements to CFTC staff, even while under oath to conceal the extent of his role in the fraud and to avoid producing documents. The complaint is related to a multi-million-dollar retail binary options fraud action filed in September of 2018, in which the CFTC charged 11 individuals and five entities in nationwide binary options fraud ring.
Could this binary options fraud be avoided?
Perhaps, with some due diligence. But these were bad actors on a mission. Fraud. For companies like yours, a vigilant, well-run compliance system can spot irregularities and give an attentive compliance team a chance to nip exposures before they get out of hand. Patrina can help, especially when it comes to email and messaging compliance. We’ve built our business based on helping organizations keep track of “bad apples,” and stay on the “straight and narrow” efficiently and cost-effectively. So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective systems specifically designed for the healthcare, insurance, and financial services community. Be smart. Be covered.Let’s talk.