In its latest enforcement action against binary options fraud, the Ontario Securities Commission (OSC) has charged three Canadian-Israeli brothers with defrauding over 700 Ontarian investors out of more than $1.4 million.
Joshua Cartu, Jonathan Cartu, and David Cartu allegedly operated two binary options brands, Beeoptions and Glenridge Capital, from a Call Center they established in Israel. The now-shuttered facility, which is understood to have operated from the Tel Aviv area, went by the name of Tracy PAI Management Limited (Tracy PAI).
According to the complaint, from 2014 through 2017, the two brands received about $225 million from investors worldwide, including Canada. Once the money was “invested,” the defendants usually refused to allow these clients to withdraw their money.
The regulator said the call center in Israel functioned as a “boiler room,” a type of fraud that involves cold calling potential investors offering to sell them exotic financial products.
A global crackdown on binary fraud
As was customary, sales staff at Cartu Brands lied about their names, location, titles, experience, and the fact that they made profits when the traders lost their balance.
The OSC further alleged that a company known as UKTVM Ltd. (UKTVM) was established in the UK to process Payments for BeeOptions.com and Glenridgecapital.com. At a later date, processing was carried out by a company called Greymountain Management, which was incorporated in Ireland and acquired credit card payments for binary options companies.
“The Respondents hired, supervised and paid the staff who engaged in a wide range of activities constituting trading, and acts in furtherance of trading, in the Cartu Brands, including: soliciting deposits from investors to trade binary options, facilitating trades through the Respondents' online platforms, and discouraging investors from withdrawing their funds from binary options trading accounts,” the OSC further states.
Today’s action is the latest in a global crackdown on binary options operatives after a series of reports uncovered massive fraud in the shady industry that had been centered in Israel. In August, a federal judge convicted Yukom CEO Lee Elbaz of three counts of wire fraud and one of conspiracy to commit wire fraud in connection with binary options. Elbaz was sentenced to a prison term of 22 years.
Elbaz, who proudly called herself a “money-making machine,” trained employees to lie to investors and rig the odds against them, while falsely guaranteeing returns of up to 40 percent.
