The US Department of Justice (DoJ) has issued an official announcement detailing the doings of a certain individual who engaged in providing binary options to US residents. The scheme was allegedly executed by Blake Kantor, also known as “Bill Gordon”.
According to the indictment, Kantor established a binary options brokerage called Blue Bit Banc in March 2014. The deferent used around $10,000 to start the operation which eventually evolved into a firm that solicited $2.1 million from 713 investors between 2014 and 2017.
As explained by the DoJ, Kantor did not inform his clients that the software he used to run his binary options brokerage was shifting the odds against their interest.
Data was allegedly fraudulently altered leading to a long-term expected value of the investments of Blue Bit Banc clients of zero. To continue operating the scheme, Kantor allegedly opened bank accounts, using the data of other people in St. Kitts and Nevis.
Cryptocurrency Scheme
To further the scheme, Kantor proceeded with telling investors that a cryptocurrency called ATM Coin is going to Yield them substantial amounts of money. The perpetrator of the scheme proceeded to alter lists of customers of his binary options brokerage after realizing that FBI agents were investigating his involvement with the product which, by then, was long-forbidden in the US.
“As alleged, Kantor used a computer program to generate manipulated data to cheat hundreds of investors out of their hard-earned savings,” United States Attorney Donoghue stated.
“To cover-up his fraudulent scheme, Kantor then lied to the FBI and ordered the alteration of documents that would assist agents in identifying his victims. We will continue to work closely with our law enforcement partners to vigorously prosecute individuals who defraud the investing public and obstruct law enforcement’s ability to detect and prosecute financial crimes,” Donoghue continued.
FBI Assistant Director-in-Charge Sweeney elaborated: “The all-or-nothing option Kantor’s victims were offered at the onset of their investment had a predetermined ending, one in which they stood to face significant financial losses, as alleged. The odds were stacked against them from the beginning, while Kantor had everything to gain. The FBI will continue to be a major force in confronting those who think they can evade the law and make an easy profit off the misfortune of others.”
Kantor faces a maximum prison term of 20 years each for conspiracy to commit wire fraud and obstruction of an official proceeding. He is also facing five years on the false statements charge.
