Legal & compliance

Californian charged over $16m binary options fraud

2 minutes read
A man accused of illegally operating binary options affiliate websites from California has been charged by US authorities.

A man accused of illegally operating binary options affiliate websites from California has been charged by US authorities.

Jason Scharf’s sites, believed to have generated $16m (€14m) from 8,000 customers, were said to be illicitly referring clients to binary options brokers via several offshore businesses.

Scharf, of Valley Village, California, was charged by the US Commodity Futures Trading Commission (CFTC) over his involvement with CIT Investments LLC in Nevada, Brevspand EOOD in Bulgaria, CIT Investments Ltd in the Marshall Islands, CIT Investments Ltd in Anguilla and A & J Media Partners, Inc, which is a California corporation.

Scharf and his associates are said to have begun their illicit operations in 2014 and are accused of scamming potential customers through fraudulent ad campaigns to purchase binary options trading systems. Clients that showed an interest in the product were redirected to the binary options brokers like those operated by Scharf.

They were then asked to open binary options accounts with false claims of outsized profits and “guaranteed returns” in trading binary options.

James McDonald, the CFTC director of enforcement, said: “The CFTC continues to be committed to rooting out and prosecuting binary options fraud in our markets. As alleged, the fraudulent scheme here involved false claims of outsized profits, fake testimonials, and ‘guaranteed’ returns.

“The scheme, as alleged, was massive, resulting in the misappropriation of over $16m from more than 8,000 customers. This action should send a message to would-be fraudsters that the sort of conduct alleged here will not be tolerated. We thank our international law enforcement partners for their assistance in this case.”

A court hearing has been scheduled for July 26 to enter an order for a preliminary injunction against the defendants.

Related article: German authorities limit CFD customer losses

IMAGE: geralt/Pixabay

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