An Israeli lawyer linked to a high-profile binary options fraud scheme is under investigation in the UK for possible money laundering and conspiracy to defraud, the Financial Times can reveal.
Moshe Strugano, 50, had provided a legal opinion used by the operators of the websites BinaryBook and BigOption to underpin the sale to US investors of risky financial products called binary options, which have been the target of a global crackdown by regulators.
Last year, the former chief executive of a company behind those websites was sentenced to 22 years in prison for defrauding US and other investors. US prosecutors said the scheme “targeted and defrauded thousands of victims” including retirees and military veterans.
Mr Strugano was arrested in early 2019 by City of London police and released on bail, according to UK court records and a person familiar with the matter. A police spokesperson said their investigation was ongoing.
“The City of London police is currently conducting a number of enquiries to assist with the Crown Prosecution Service’s decision on charging advice for a number of individuals who are under investigation in this case,” the spokesperson told the Financial Times.
Mr Strugano had been arrested on suspicion of money laundering and conspiracy to defraud, according to a public court listing at London’s Westminster Magistrates’ Court, and released on police bail without charge, pending further enquiries.
Further details of the suspected offences under investigation and the identities of any other suspects were not available. Earlier this month, the Crown Prosecution Service said no charges had been brought but declined to comment further.
The US takedown of BinaryBook and BigOption resulted in the convictions of six individuals and indictments against a further 15 people. Mr Strugano was not charged or accused of wrongdoing in that case.
Binary options allowed investors to wager on whether stocks or other assets would go up or down over a fixed period. Regulators in the US, Europe and Israel have sought to stamp out the products, likening them to unregulated gambling and warning of the risks of fraud.
US prosecutors said investors bought more than $100m worth of binary options through BinaryBook and BigOption after they were misled about the expected returns and their ability to withdraw funds from their accounts.
Lee Elbaz, the former chief executive of Yukom Communications, an Israeli sales and marketing company at the centre of the scheme, was convicted at trial last summer in Maryland and sentenced to 22 years in prison.
Part of the defence case was that Elbaz had relied on legal opinions indicating that BinaryBook and BigOption were lawfully selling to investors in the US. One of those opinions was from Mr Strugano, though the document was ultimately not introduced at trial.
His April 2016 opinion issued to the parent entity of Yukom, a UK-registered holding company called WSB Investment Ltd, was dated two days after the US Commodity Futures Trading Commission had warned the public that BinaryBook had not registered with the agency despite conducting activities that appeared to require registration.
Mr Strugano had claimed online that he was joining Elbaz’s defence team last year, though he did not appear on the federal court docket. Elbaz has appealled against her sentence and her conviction.
Mr Strugano’s personal website says he got his law degree from the University of East London before working for JPMorgan and then for an unnamed private investment company. It adds he is “committed to help others and to do his part for the environment”.
His Tel Aviv-based law firm, Moshe Strugano & Co, “specialises in registering and establishing companies around the world” as well as obtaining permits for binary options firms, according to its website.
Mr Strugano and a US lawyer who has represented him did not respond to messages seeking a comment.