The Israeli journalist Simona Weinglass has made the worldwide public aware of the gigantic Israeli fraud industry of binary options with her article series “The Wolves of Tel Aviv” 2016. She has stated in her detailed reports that tens of thousands of Israelis have worked in this industry. Mainly in Tel Aviv. The fraud industry was the heart of the Israeli startup miracle. Weinglass has often criticized that Israeli politicians would allow this Israeli industry to rip off hundreds of thousands of victims worldwide. After the collapse of the binary options industry, the former kings of investment scams are at war with the authorities, with FinTelegram but also with themselves. Hopefully, this war will destroy them and bring them to justice!
Prohibition of binary options
Binary options have been prohibited in most jurisdictions since 2018. The booming fraud industry has collapsed since then. This is excellent news for small investors and the financial industry. Authorities, regulators, and courts in North America, Australia, Asia, and Europe are currently working intensively on legal processing.
The U.S. prosecutors and the regulatory authority CFTC are setting the legal standards with the legal proceedings surrounding the Yukom scam (read FinTelegram reports). In the various proceedings, it was established that there really was no real trade in binary options. That was just a Potemkin village. Fictitious profits and bonuses were presented to retail investors in their dashboards.
In Europe, the criminal case around the Wolf of Sofia, Gal Barak, and his partners are currently making the rounds in the various jurisdictions. Uwe Lenhoff, one of Gal Barak‘s partners, is currently in custody. An EU arrest warrant has been issued against Gal Barak. He is currently in Sofia and is to be extradited to Austria. More than a dozen other persons are under investigation. Further arrest warrants and court proceedings will be issued. Gal Barak is also at the centre of a brutal Israeli scammer war.
The Wolf of Sofia – Gal Barak
Since 2015, many Israeli operators of binary options scams have been migrating to Bulgaria and thus to the EU. Perpetrators like Gal Barak, the Wolf of Sofia. He and his team have operated boiler rooms in various countries via their Bulgarian companies E&G Finance EOOD and E&G Bulgaria EOOD, as well as large scams such as XTraderFX, SafeMarkets, OptionStarsGlobal, or Golden Markets.
From 2015, Sofia has become a Tel Aviv branch and the centre of European investment and broker scams. Bulgarian banks such as Investbank have willingly helped the scammers with money laundering. With the stolen money, the scammers have also generously invested in the Bulgarian real estate sector.
Tradologic – The Bulgarian billion-dollar scam hub
In Bulgaria, he most recently also operated Tradologic, one of the leading developers of binary options trading software. Tradologic was also one of the largest white label broker scam operators with allegedly more than 240 licensees, i.e. more than 240 scams powered by Tradologic. Billions were stolen from small investors via Tradologic software.
According to Tradologic‘s 2017 website (see archived website for http://www.tradologic.com), more than $700 million were moved through Tradologic between January 2016 and March 2017 alone. We can, therefore, assume that between 2016 and 2018 more than a billion dollars of funds of retail investors were moved via Tradologic-powered scams. Impressive, isn’t it?
In March 2017 the Tradologic website also listed some of the companies clients (white label operators). All of them were huge scams as we know today. Option888, SpearTrader, OptionBit, OptionStarsGlobal or Binex to name a few. All these Tradologic clients can now be found in the many criminal files of various authorities in different jurisdictions. Tradologic‘s client list is something like the Yellow Pages of the European binary options scams.
The Tradologic War
At some point at the beginning of 2018, the beneficial owners of Tradologic began to fight. It was about money, of course. Millions. Many millions. The lethal dispute broke out between Gal Barak, Vladislav “Vlad” Smirnov, Gery Shalon and Uwe Lenhoff (the “Gal Barak Team”) on the one hand and the Tradologic founder, an Israeli, on the other.
Israeli JP Morgan hacker Gery “Gabi” Shalon and his Russian partner Vlad Smirnov invested in Tradologic in 2014. In 2015 Shalon was arrested in Israel for the JP Morgan hack and other financial crime and was extradited to the USA (read DoJ press release). There he made a Plea deal with the prosecutors, which is still secret today, and allegedly made more than $400 million payments to the U.S. government. Shalon was released from custody in 2016, is still under U.S. surveillance and faces trial.
The Serbian War
A second front was opened with Serbian entrepreneurs. The Gal Barak Team started a dispute with Serbian entrepreneurs and lawyers about the Global Payment Solutions Podgorica DOO. Through this company, the Gal Barak Team wanted to launder money stolen from retail investors via their many scam schemes.
The PandaTS War
The wolf from Sofia, Gal Barak, used the software of PandaTS, also an Israeli company, for his scams in addition to his own Tradologic. In his written statement to the authorities, Gal Barak now accuses PandaTS of being responsible for the actual fraud. In fact, PandaTS should have ensured proper trading with binary options.
According to Gal Barak, his scam sites like SafeMarkets or XTraderFX only acquired the retail investors and their funds and sort of forwarded them to PandaTS. According to Gal Barak, PandaTS would also have been responsible for the payments to the retail investors. Therefore one should also secure the corresponding data at PandaTS, i.e. make a house search. We asked the Israeli PandaTS founder and shareholder Maor Lahav about the allegations. He denies these accusations and also the representation of Gal Barak regarding the role of PandaTS as a sort of OTC broker. The Gal Barak Team has thus opened the third front. So that Google also notices that PandaTS and many others are the bad guys, the Gal Barak Team has opened a series of fake news pages and distributes the corresponding fake reports there. It is war in the Israeli scammer scene.
Let the defrauded investors be the war winners
The dispute escalated on all fronts and was subsequently to become a legal grave for the beneficial owners. Uwe Lenhoff was arrested in early 2019 and an EU arrest warrant was issued against Gal Barak. The Tradologic founder himself also is also a suspect in this multi-jurisdictional criminal case but support the enforcement agencies in their investigations.
The result of this multi-jurisdictional war in the Israeli scammer scene is that authorities, courts, media outlets, and FinTelegram receive a lot of information from all sides. This makes the long overdue criminal investigation possible. We can hope that the trace to the funds can also be pursued. And perhaps also repayments to the injured retail investors. Without this Scammer