(Adds details from trial, allegations, case citation)
By Tova Cohen and Jonathan Stempel
TEL AVIV/NEW YORK, Aug 8 (Reuters) - A U.S. jury has convicted Lee Elbaz, the former chief executive of Israel-based Yukom Communications, of orchestrating what prosecutors called a scheme to defraud investors through the sale of $145 million of financial instruments known as “binary options.”
Elbaz, 38, an Israeli citizen, was found guilty of three counts of wire fraud and one count of conspiracy on Wednesday by a federal jury in Greenbelt, Maryland, after a three-week trial.
Binary options involve placing bets on whether the value of a financial asset - such as a currency, commodity or stock - will rise or fall in a fixed time, sometimes as short as a minute.
Elbaz and some of her associates were accused of misleading investors who used the BinaryBook and BigOption websites, which promoted binary options, by misrepresenting the potential returns, suitability and liquidity of their investments.
The indictment referred to “call scripts” in which prospective investors were told that many clients were already achieving double-digit returns “on a monthly basis.”
Prosecutors also said people involved in the scheme lied about their qualifications and names, and concealed how BinaryBook’s and BigOption’s owners profited even when investors lost money.
Barry Pollack, a lawyer for Elbaz, said in an email on Thursday that the jury “got it wrong” and that his client would appeal.
Elbaz could face up to 20 years in prison on each count at her scheduled Dec. 9 sentencing, though she would likely receive a lesser punishment.
Five other defendants have pleaded guilty and are scheduled to be sentenced in the next four weeks, according to the U.S. Department of Justice. Others have also been charged.
Elbaz was arrested in September 2017 upon arriving at New York’s John F. Kennedy International Airport from Tel Aviv, and was indicted the following March.
A Reuters special report in 2016 shed light on the rapid rise of the industry in Israel.
London-based lawyers said hundreds of their clients were duped out of vast sums of money by some Israeli firms.
The case is U.S. v. Elbaz, U.S. District Court, District of Maryland, No. 18-cr-00157. (Reporting by Tova Cohen in Tel Aviv and Jonathan Stempel in New York; Editing by Mark Heinrich and Sonya Hepinstall)