A US federal judge has sentenced Ohio resident Jared Davis, who was found guilty for his participation in a multi-million fraud scheme carried out by Israeli-run binary options websites.
Further, Judge Zouhary sentenced Davis to 30 months in prison, a fine of $300,000, restitution to the IRS, three years of supervised release, and to be jointly liable for the debts of Erie Marketing, LLC.
Back in 2019, the Commodity Futures Trading Commission (CFTC) charged the operator of Option Mint, Option King, and Option Queen brands in a case involving a fraudulent binary options scheme.
Davis has been arrested and charged for allegedly defrauding investors through an elaborate international scheme that he ran out of Sandusky between 2012 and 2016. Davis was taken into custody by agents from the FBI and the IRS at Cleveland Hopkins International Airport back in June 2018.
The CFTC filed its complaint in the US District Court for the Northern District of Ohio charging Davis and his entities with fraud relating to the scheme involved over $10 million in fraudulent solicitations. The agency wanted penalties, disgorgement of ill-gotten gains, and permanent injunctions.
According to the regulator, Davis is indicted on two separate cases that carry over 20 charges, including wire fraud, money laundering, obstruction of justice, tax evasion and other crimes.
False names and qualifications
The court papers show that he was the leader of a binary options scheme that operated under various trade names, all tied to a firm called Erie Marketing LLC. Not only Davis’ business was not registered with the US relevant regulators, but he also wasn’t connecting investors to a legitimate exchange. Instead, he was taking the opposite position, making money only when his investors lost money, similar to a casino or sports bucks.
Davis pleaded guilty in April 2022 to tax evasion after he failed to file personal tax returns for tax years 2014, 2015, and 2016. Court documents state that he used this money to pay employee salaries, facility fees, fees to the companies that supplied the trading platforms.
Davis’ employees also falsely guaranteed profits, lied about their professional qualification, and misrepresented trading terms such as bonuses and risk-free trades.
Judge Zouhary sentenced Erie Marketing, LLC, to serve three years’ probation and to pay a fine of $4.4 million and restitution to all identified victims (a total the United States expects to be $650,000).
Today’s action is the latest in the US crackdown on binary options operatives after a series of reports uncovered massive fraud in the shady industry that had been centered in Israel. A few years ago, Lee Elbaz was convicted by a federal jury in connection with a vast binary options scheme to defraud investors all over the world. The fraud perpetrated by Yukom CEO, however, was more extensive and widespread as they swindled nearly 75,000 investors out of more than $145 million.