The United States Commodity Futures Trading Commission (CFTC) has marked some progress in its action against a number of entities and individuals involved in a large-scale binary options scheme.
According to recent filings with the Texas Western District Court, the CFTC has obtained entries of default as against Leeav Peretz, Nati Peretz, Blue Moon Investments Ltd, and Orlando Union Inc. The orders were issued as the defendants had failed to answer, plead, or otherwise defend in a timely manner.
Let’s recall that the action names 10 defendants – six individuals and four companies. They are charged with operating a fraudulent binary options trading scheme that received over $165 million in connection with illegal, off-exchange binary option transactions on currency pairs, oil, and other commodities.
The complaint charges that from at least May 1, 2013 through April 29, 2018, three Canadian brothers—defendants David Cartu, Jonathan Cartu, and Joshua Cartu—marketed, offered, and sold illegal, off-exchange binary options to retail customers on websites under the BeeOptions, Glenridge Capital, and Rumelia Capital binary option brands.
The Cartu brothers, along with a pair of Canadian brothers living in Israel – defendants Leeav Peretz and Nati Peretz – operated call centers primarily located in Israel that targeted and victimized U.S. residents by promising “quick” returns of “between 60-85%” by trading binary options.
The CFTC complaint alleges that, beginning on or before September 26, 2015, the binary option transactions offered by BeeOptions, Glenridge Capital, and Rumelia Capital were executed on an internet-based trading platform developed and operated by the Cartu brothers and Masten. As alleged in the complaint, customers of the Cartu brands, and later customers of other binary options brands operated by third-parties, accessed the Cartu platform through each individual binary brand’s website.
The complaint charges that the Cartu brothers and Masten, acting through the defendant entities, controlled these transactions and manipulated the results of some trades to force customer losses and generate profits for themselves.
As alleged in the complaint, the Cartu brothers also operated Greymountain Management Limited, a now-defunct “payment processor” that maintained its principal place of business in Ireland. The Cartu brothers used Greymountain to facilitate the transfer of funds from customers in the U.S. and elsewhere for illegal, off-exchange binary option transactions.
Through Greymountain and other related entities, the Cartu brothers processed over $165 million in credit card payments for binary option transactions. The complaint further alleges that Masten and SignalPush provided trade signals and auto-trader services to customers, and failed to register with the CFTC as required.
Blue Moon Investments Ltd. was incorporated in the Seychelles on December 6, 2012. Throughout the Relevant Period, Blue Moon was used for the operation of the Cartu Platform, including opening accounts and/or entering into agreements on behalf of the Cartu Platform; and to transfer, hold, and conceal funds obtained in connection with the fraudulent binary options scheme. Blue Moon has never been registered with the Commission in any capacity.
Orlando Union Inc. was incorporated in Belize on October 18, 2010. Throughout the Relevant Period, Orlando Union was used for the operation of the Cartu Platform, including opening accounts and/or entering into agreements on behalf of the Cartu Platform; and to transfer, hold, and conceal funds obtained in connection with Defendants’ fraudulent binary options scheme and to open accounts and/or enter into agreements on behalf of the Cartu Platform. Orlando Union has never been registered with the Commission in any capacity.
In its continuing litigation against the defendants, the CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution for the benefit of customers, permanent registration and trading bans, and a permanent injunction from future violations of the Commodity Exchange Act.