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CFTC charges Jason Scharf, Citrades, and associates with Binary Options Fraud

Discussion in 'Forex Articles' started by AsstModerator, Jul 19, 2017.

  1. AsstModerator

    AsstModerator FPA Forums and Reviews Admin

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    CFTC charges
    Jason Scharf, Citrades, and associates

    with
    Binary Options Fraud

    Some days it feels like the scammers never get caught and punished. Today is not one of those days. Today, a major scammer has a date with justice.

    The CFTC just made the announcement. Jason Scharf of Citrades (formerly CitiTrader) and some of his associates have been charged with Binary Options Fraud. Some of the companies involved have been charged with "Participating in Massive Fraud". Not just fraud, but Massive fraud. :)

    Before showing you everything the CFTC had to say, I want to share some other information with you. Jason and his employees have an interesting history related to clients and to the FPA.

    It started when FPA member berrien2012 complained about CitiTrader stealing profits because "investigations" resulted in winning trades being cancelled. A new member called Mike_123 dropped into the thread to defend CitiTrader. In his first post, he sounded like an employee of CitiTrader. In his second post, he claimed to be a client of CitiTrader for many years. When Pharaoh pointed out the inconsistency, Mike_123 replied...

    "First things first, I wish I was a Cititrader employee. However, you are correct, I didnt understand the first post. I have not had any issues with money with holding though. After my bonus ran out, I would receive my money promptly."

    Mike must have had a magic lamp with a genie in it. His wish to be a CitiTrader employee was fullfilled and backdated to when he created his FPA account. When I checked his account, it turned out that he registered from a CitiTrader.com email address with the name Rome on it. You can Click Here to see the thread and Mike/Rome's lies.

    I emailed Jason Scharf about this abuse by an employee, he claimed that none of his employees would ever do this and asked for proof. When I told him the email address and the IP (66.214.179.253), he claimed to have fired Rome.


    While CitiTrader employee Rome was spamming one thread, FPA member Weiniwinslow had opened another thread. She said CitiTrader was blocking her withdrawal because they had altered the age limit of what was considered to be a minor. She said their TOS originally said they accepted clients 18 years old and up, but raised the limit to 21 when she tried to withdraw her profits. She was 19 at the time. Click Here to read her thread.

    I asked Jason Scharf to look into this. Across several emails, he made these statements...

    "We have no reason to change out terms and conditions like that."

    "our age limit is 21 its a fact, it was not changed."

    "these terms were never changed"


    Here is a copy of the TOS taken from Google's webcache before the age was raised from 18 to 21. I sent Jason Scharf a copy of the original terms which clearly said the age limit was 18, not 21.

    CitiTrader-OriginalAgeLimit.

    Jason then promised to post in Weiniwinslow's thread. Instead, he changed his mind, accused her of being a little crazy, and then tried to discuss advertising his company at the FPA. I ignored his veiled bribe attempt and continued to try to get him to post in the thread to address his client's issues.

    Then, one of Jason's employees threatened to come to the FPA and expose Weiniwinslow's private information. Jason denied that his employee made any threat and claimed the statement was false. I had to point out what the attachment in the thread began with...

    "I will gladly post your personal information... "

    Jason Scharf stalled saying he was busy and also asked what I would do if I were in his shoes. I told him...

    "If I were in your shoes...

    I'd tell my staff to make themselves unavailable to Weini and forward all communications on the issue to me. Dealing with a client who already has a lawyer is a very delicate thing. Since my company is already in a compromised position due to the definition of who is a minor being changed, this issue should be handled at the highest level.

    I would require all existing staff and new hires to undergo training about how to deal with clients and the public, including websites, in ways that would not risk my company's integrity and reputation. I'd then test my front line support with some special "clients" who are really just there to see if support personnel can remain professional in high stress situations.

    I would make certain that all communications between myself and Weini and her lawyer were done by email to reduce any chance of miscommunications.

    I would invite the person on my staff who convinced me that the terms of service were not changed to come into my office. I would ask that person to explain why Google's cache shows that the definition of "minor" on my website was 18 years old not that long ago. I would tell the person that, because of those assurances, I emailed the FPA and wrote, "our age limit is 21 its a fact, it was not changed." I would give that person 1 hour to find out who changed the terms , when the terms were changed, and why they were changed. I would make the person or persons behind the change responsible for fixing all the issues this has caused, even if it means paying Weini's withdrawal and legal fees out of that person's salary."

    Jason thanked me for my advice, but chose to ignore it. It also turned out that someone named Rome was hiring freelancers to spam the FPA and attack Weiniwinslow.

    Jason denied everything and claimed the people leaving the fake posts were real clients. He told me I was making false accusations and had no right to ban his claimed clients from expressing their opinions. I sent him a link to this...

    CitiTrader-PaidSpam.

    You can Click Here to see samples of some of the spam Jason's employee Rome bought.

    Jason Scharf had now been caught in multiple lies. He'd claimed his terms of service had always defined a minor as being under 21. He'd claimed he'd fired his personal spammer Rome. He'd claimed spam came from clients. He'd promised again and again to post in Weiniwinslow's thread, but didn't do so. He'd claimed none of his employees had threatened to disclose Weiniwinslow's personal information. To show how professional he was, he decided to claim the FPA had it in for his company instead of acknowledging or fixing any problems he or his staff had created.


    In a related conversation, I asked Jason Scharf if his company still had a US address. He wrote back...

    "Cititrader does not have, nor has ever had offices in the US.

    I have no idea what you are talking about."

    I sent him a partial address and even a photo of the house. He continued to claim he had no idea what I was talking about. Then I pointed out the domain registration of CitiTrader.us ...

    Administrative Contact Name: Jason Scharf
    Administrative Contact Organization: A & J Media
    Administrative Contact Address1: 5534 Alcove
    Administrative Contact City: Valley Village
    Administrative Contact State/Province: California
    Administrative Contact Postal Code: 91607
    Administrative Contact Country: United States
    Administrative Contact Country Code: US
    Administrative Contact Phone Number: +972.527475447
    Administrative Contact Email: jbscharf@gmail.com


    Once again, Jason Scharf didn't seem to value the truth.


    There were other incidents, including Traders Court cases and an eventual Scam label applied to Citrades/CitiTrader over 2 years ago. Eventually Weiniwinslow's issue was partly resolved, but only after she agreed to remove nearly everything she posted. Cases like that are why I had to restrict removal of facts. I think the information above gives a clear picture of how the Citrades/Citrader was being run. Jason also is behind autotradingbinary.com and a number of other domains.


    I have a feeling we may see some additional charges again Jason Scharf in the near future.

    This post is getting too long. I'll put the CFTC press release in the next post.
     
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  2. AsstModerator

    AsstModerator FPA Forums and Reviews Admin

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    CFTC Charges California Resident Jason B. Scharf, His Worldwide Web of Companies, and Florida-Based Affiliate Marketers Michael Shah and Zilmil, Inc. with $16 Million Binary Options Fraud Scheme

    CFTC Complaint Charges Numerous Companies, Including CIT Investments LLC, Brevspand EOOD, CIT Investments Ltd., CIT Investments Ltd., and A & J Media Partners, Inc., with Participating in Massive Fraud

    Federal Court Issues Emergency Order Freezing Assets of Scharf, Shah & Zilmil; Order Grants the CFTC Immediate Access to Their Books and Records


    Washington, DC – The Commodity Futures Trading Commission (CFTC) today announced that a federal district court has unsealed a civil CFTC Complaint with the Middle District of Florida on July 10, 2017, charging Jason B. Scharf of Valley Village, California, a worldwide web of companies he controlled, including CIT Investments LLC, a Nevada limited liability corporation; Brevspand EOOD, a Bulgarian business entity; CIT Investments Ltd., a Marshall Islands business entity; CIT Investments Ltd., an Anguillan business entity; and A & J Media Partners, Inc., a California corporation, together with affiliate marketers Michael Shah and his company Zilmil, Inc., both of Jacksonville, Florida, with unlawfully soliciting and accepting more than $16 million in connection with illegal binary options contracts. Scharf also does business as Citrades.com and AutoTrading Binary.com, according to the Complaint.

    In addition, the Complaint charges Scharf, Shah, and Zilmil with acting as Futures Commission Merchants (FCM) and Commodity Trading Advisors (CTA) without being registered with the CFTC, as required.

    On July 12, 2017, U.S. District Court Judge Brian J. Davis entered a Statutory Restraining Order freezing the assets of Scharf, Shah, and Zilmil, prohibiting them from destroying their books and records, and granting the CFTC immediate access to those records. The Court has scheduled a hearing for July 26, 2017 to determine whether to enter an order for preliminary injunction against the Defendants and also to determine, among other things, whether the court should continue the freeze on Defendants’ assets.

    James McDonald, the CFTC’s Director of Enforcement, stated:

    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.” And the scheme, as alleged, was massive, resulting in the misappropriation of over $16 million 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.​

    Scharf’s Website Citrades.com Claims: “The Most Profitable Click You Will Ever Make.”

    Binary options are transactions that allow customers to make predictive trades as to whether the price of a certain commodity will rise or fall by a certain date and time. As alleged in the CFTC’s Complaint, binary options must be traded on a registered board of trade in order to be lawfully offered in the United States. The Complaint alleges that neither Scharf, Shah, nor Zilmil executes transactions on a registered board of trade and none has ever been registered with the CFTC in any capacity.

    The Complaint alleges that since at least January 2014 and continuing to the present, Shah and Zilmil have attracted potential customers through fraudulent ad campaigns to purchase binary options trading systems, and steer interested customers to binary options websites like those operated by Scharf. According to the Complaint, Scharf and his companies then fraudulently solicit customers to open binary options accounts with false claims of outsized profits and “guaranteed returns” trading binary options, bolstered by fake testimonials of purportedly successful customers. The Complaint further alleges that once customers fund binary options accounts, they do not get their money back. Instead, the Complaint alleges that the funds are routed through numerous foreign corporations and overseas accounts before being spent on business and personal expenses, and compensating Shah and Zilmil.

    Misappropriation of Customer Funds

    According to the Complaint, the Defendants’ binary options scam has been extremely lucrative. As alleged, Scharf and his companies have misappropriated more than $16 million from at least 8,000 victims, most of them located in the United States.

    In its continuing litigation, the CFTC seeks restitution to defrauded customer, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and permanent injunctions from future violations of the Commodity Exchange Act and CFTC Regulations, as charged.

    The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.

    The CFTC appreciates the assistance of the Anguilla Financial Services Commission and the Financial Supervision Commission of the Republic of Bulgaria.

    The CFTC also thanks the IRS - Criminal Investigation, Cincinnati Field Office, and the FBI Cleveland Division, as well as the Jacksonville Sheriff’s Office for their substantial assistance on this matter.

    CFTC Division of Enforcement staff members responsible for this case are Ashley Burden, Heather Dasso, Melissa Cavers, Eric Schleef, Joseph Konizeski, Scott Williamson and Rosemary Hollinger.



    Link to the original CFTC press release about Jason Scharf and associates
     
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  3. Chwalala

    Chwalala Recruit

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    Thanks for the info....finally these scammers will be paying the ultimate price...
     
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  4. Coldfear

    Coldfear Recruit

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    Good work but they still got a really long way to go before they catch them all.
     
  5. richard56

    richard56 Recruit

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    Thanks FPA .....:)
    always been a forerunner. Therefore I'm always checking a company here before what y'r talking about it.
    Keep on going.
     
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  6. Pertti

    Pertti Sergeant

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    The head of ISA Shmuel Hauser has said "Everyone involved in binary options fraud will pay a heavy price"
     
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  7. keremg

    keremg Recruit

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    FPA does trully a great job! Thanks a lot for making a great contribution in protecting traders from getting scammed!
     
    jokondo likes this.
  8. honeybee1

    honeybee1 Sergeant

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    Hi there,
    it surely takes its time, or "the mills of justice are milling slow" - as it is being said here, ...but it is good see that things are moving... :)
    best Hb1& co.
     
  9. Pertti

    Pertti Sergeant

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    The wheels of justice are rolling but they are rolling slow. Finally they are crashing the guilty ones. If nothing unacceptable happens this will be the case. Even if they have loads of money I dont believe in corruption in Israel when we are talking about things on this level. This is one of the main things now in Knesset. The first vote was to ban all binary options for good. The vote was 31-0

    ISA and Knesset know that fraudulent binary options industry harms the reputation of Israel more than anything ever before. They also know it creates more antisemitism than nothing else.

    I have a little jewish blood too from my mother and I know people from Israel so I know this.
     
  10. Tryingtrader

    Tryingtrader Sergeant

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    Thanks for the summary and for bringing this to the attention of FPA members, many will be encouraged that at last legal action is being taken to bring some of these scamming bandits to account. There are so many more thoroughly crooked operators yet to be brought to book for blatantly stealing the money innocent victims thought they were investing. Let us hope this prosecution is successful and provides much needed encouragement for other prosecutions to follow swiftly.
     

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