Press "Enter" to skip to content

Analysis and Call for Action – U.S. Government holds Call Center and Boiler Room agents liable for the participation in scam schemes

As the term “criminal organisations” suggests, many people are involved through different hierarchies and responsibilities. It is not only the principals and managers or lieutenants who are responsible for the devastating criminal impact of these organizations. In the case of the gigantic Israeli binary options and broker scam industry, the managers and employees of the boiler rooms must also be held legally responsible. For betraying retail investors with their fake names, false promises, and bold lies. The U.S. authorities have recognized this in the Yukom case. This case will hopefully also be recognised as a precedent in Europe, the EU and Israel.

Retention agents actually stole the money

The former CEO of the Binary Options Fraud Scheme, the Israeli Lee Elbaz, was already convicted by a U.S. jury. She was found guilty of investment fraud and will probably spend many years in prison. Moreover, five other managers and employees had pleaded guilty in this case. In the final step, the U.S. prosecutors have now accused the beneficial owners of the Yukom scheme – Yossi Herzog and Kobi Cohen – as well as the employees of the involved boiler rooms (read U.S. Department of Justice press release here).

According to the U.S. indictment (read here),

  • “Retention Services” were services provided with the objective of obtaining additional deposits from investors who had previously made deposits and preventing those investors from withdrawing their money;
  • “retention agents” or “retention representatives” were boiler room employee responsible for performing retention services. Those guys sometimes referred to themselves as “brokers” or “traders” to their client-victims.

The U.S. prosecutors, in their month-long investigations, have apparently recognized that not only the beneficial owners and managers are responsible for the billions in fraud among retail investors, but also the individual employees (agents) in the boiler rooms. Especially the retention agents. Therefore, these agents are also charged.

U.S. indictment describing the profit for beneficial owners and retention agents
U.S. indictment describing the profit for beneficial owners and retention agents

From FinTelegram’s point of view, the U.S. approach is the only way to prevent such scams and fraud schemes from occurring in the future. Every member of a criminal organization must take responsibility for their actions. Hopefully this will create the awareness that the fraudsters will always be held responsible for their ripped off earnings.

What about Europe and European Union?

The investigating authorities and courts in Europe and Israel must follow the US model. Otherwise, cybercrime will not be prevented and cybercrime (scam) victims will not see justice. Currently, the authorities in Europe and EU are literally lame ducks that apparently have hardly any means to efficiently fight cybercrime.

In the case of investigations against the cybercrime and scam organization of Israeli Gal Barak and his partners Uwe Lenhoff, Gery Shalon and Vladislav Smirnov, managers and employees must also be held accountable. This certainly includes Marina Barak (formerly Marina Andreeva), who, acts as the financial manager of Gal Barak´s cybercrime organization. She manages the laundering and distribution of the stolen money and most probably also manages the bribery efforts right now.

This also includes the managers and employees of the boiler rooms in Bulgarian, Serbia, Bosnia-Herzegovina, and Kosovo. Every single employee must be held accountable for cheating retail investors on the phone and via email with lies and false promises.

Europe (including the EU) still has a long way to go in this respect. So far it has not even been possible to agree that online trading websites like binary options are a fraud. Still some prosecutors or police officers assume that the victims just “gambled” for fun. It is also not possible to agree on coordinated persecution. Individual EU countries like Bulgaria do far too little to take action against cybercrime and scammers. All reasons why we support the EU-Petition against investment scams.

The Yukom case will hopefully set new standards in this respect.

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

© 2020 Financial Intelligence Bureau Ltd