Partner Kenneth Dante Murena, as the Court-appointed Receiver and with the assistance of his attorneys, Partner Russell Landy and Of Counsel Casandra Perez Murena, recovered more than $10 million and achieved a 100% restitution distribution to nearly 150 worldwide victims of the binary options trading and affiliate marketing fraud underlying Commodity Futures Trading Commission (“CFTC”) v. Jason B. Scharf, et al., the first binary options trading fraud enforcement action filed by the CFTC.
The CFTC filed its complaint on July 10, 2017, alleging unlawful activities by Jason B. Scharf of Valley Village, California, and a network of companies under his control, including CIT Investments LLC, Brevspand EOOD, CIT Investments Ltd. (Marshall Islands and Anguilla), and A & J Media Partners, Inc. The complaint also implicated affiliate marketers Michael Shah and his company Zilmil, Inc. The defendants were accused of engaging in illegal, off-exchange retail transaction swaps and commodity option transactions while fraudulently soliciting millions of dollars from customers for investments in binary options.
Binary options, as described in the CFTC’s complaint, allow customers to predict whether the price of a specific commodity will rise or fall by a set date and time. However, these transactions must be traded on a registered board of trade to be legally offered in the United States. The defendants in this case ignored these legal requirements, causing significant harm to investors.
The defendants’ fraudulent scheme involved false and misleading claims about the profitability of binary options products and refusals to return customer account balances. Websites controlled by the defendants, such as Citrades.com and AutoTradingBinary.com, played a central role in deceiving investors around the globe.
On July 12, 2017, Judge Brian J. Davis of the U.S. District Court for the Middle District of Florida issued a Statutory Restraining Order freezing the assets of the defendants, prohibiting the destruction of records, and granting the CFTC access to their documents. Further, the Court appointed Kenneth Dante Murena as Receiver for the entity defendants and the assets of the individual defendants, directing and authorizing him to, among other things, marshal the assets and records of the defendants and formulate and implement a claims process and distribution plan for the benefit of the defrauded victims.
This case involved nearly 150 defrauded investors from around the world – including the United States, England, Scotland, Canada, Australia, South Africa, the Philippines, Namibia, Croatia, Spain, Uruguay, and the United Arab Emirates. The extensive efforts of the Receiver and his team of attorneys and forensic accountants to untangle the web of deceit, marshal funds and other assets from various sources, and prosecute fraudulent transfer actions spanning several years, resulted in recoveries in excess of $10 million. The Receiver then implemented the Court-approved claims process and distribution plan to confirm the investors’ losses and distribute the recovered funds to the investors holding verified claims. The Receiver distributed millions of dollars to all claimants with verified claims, resulting in a 100% return of the amounts these victims had lost in the multi-million dollar binary options trading and affiliate marketing fraudulent scheme – a rare and remarkable result in any government enforcement action and receivership.
At Damian | Valori | Culmo, we are dedicated to seeking justice for victims and accountability for perpetrators in complex, far-reaching cases like this one. Achieving 100% restitution for defrauded investors underscores our commitment to serving the public interest and upholding the law, and we are honored to have made a meaningful difference for the many victims of this fraudulent scheme.
