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JTA — They were part of the problem. Now they are spearheading a solution. Owned and staffed in part by former binary options employees, Wealth Recovery International has used its insider knowledge to its advantage.

The company has grown rapidly since it was founded in early , in some cases by helping victims of its own employees. The binary options industry has emerged in Israel over the past decade. According to The Times of Israel, which has been investigating the industry for more than a year , more than Israel-based companies have defrauded hundreds of thousands of people worldwide of billions of dollars — and been blamed for at least one suicide.

Binary options websites allow clients to place what amount to short-term bets on whether a commodity will increase or decrease in value. Posing as investment houses based in financial capitals like London, the Israeli firms have used aggressive sales tactics to maximize deposits and various ploys to avoid withdrawals. Their identities have been obscured by complex corporate structures that span multiple international jurisdictions, including tax havens.

A screenshot from a promotional video for Banc de Binary Youtube. Thousands of olim from the United States and around the world have played a role in helping the binary options companies target foreigners in their native languages. Former employees of several of the companies said more than half their co-workers were olim, and most of them were Americans. Money has been a major draw, with the olim often earning several times what they could otherwise hope to in Tel Aviv, one of the most expensive cities in the world.

The problem is that working in binary made me a terrible person, and it eventually broke me. Trained to lie and apply maximum pressure, salespeople have worked late into the night to hard-sell clients in foreign time zones. Managers have encouraged them to have no mercy, whether the target was a pensioner or a cancer patient.

BinaryBook, which has faced legal action in Britain, did not respond to multiple interview requests. Wealth Recovery and the St. Louis-based Hamm Law Firm have begun preparing a class action lawsuit against another service provider for the brand , Ukom, on behalf of American clients.

In February, weeks after law enforcement officials from North America and Europe held an emergency meeting on binary options fraud in the Hague, the FBI said it was investigating the industry around the world.

The United States in had outlawed the marketing of binary options to its citizens, except on a handful of regulated exchanges. In spring , Israel barred binary options companies from targeting its citizens but did not ban them from operating from here against client-victims abroad. David Horovitz, editor of The Times of Israel left , speaks to the Knesset State Control Committee session on binary options fraud, January 2, At right is English binary options victim Graham Towler, who also addressed the session.

He said the Knesset should launch an investigation into the industry.

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Wealth Recovery has provided alternative employment for a small but growing number of American olim, most of them in their 20s and 30s. Smith and his two co-owners made aliyah, or immigrated to Israel, from the United States, as did most of the people who work for them.

Nearly half the staff, including Smith and another co-founder, came from binary options companies. Others chose to work at Wealth Recovery rather than enter the industry. They have used some of the same marketing and sales tactics for Wealth Recovery as they did at their previous jobs, including going by pseudonyms.

But they said the motive for that has changed from deceiving the client to hiding from the binary options industry, which has threatened those who cross it.

Smith, whom clients have known as Mitch Williams, for the first time opened up about his company under his real name for this article as part of an effort to position himself as a public opponent of the binary options industry, which he said he hopes will offer him another kind of protection. Smith has also begun investing more heavily in advertising and public outreach. He will speak at an anti-fraud conference in Miami later this month, and will sponsor minor league NASCAR driver Stephen Young during a series of races in August.

Young gave Wealth Recovery a discounted rate because he was scammed by binary options companies in the past. Wealth Recovery has amassed intelligence by developing sources within the binary options industry and searching public records.

The top of the FBI website on March 15, , dominated by new binary options fraud warning Screenshot: Israeli attorney Nimrod Assif, who has represented alleged victims of binary options fraud and advocated for immediate government action against the suspected perpetrators, said the recovery industry has fraudulent elements, though he could not comment on specific companies. Assif recommended victims come to experienced lawyers like him, who know how to build a court case using admissible and legally obtained information, but said that what is most important is results.

Second, I know for a fact that there are fraudsters also in this industry. He spent much of his 20s in South Florida running successful scams involving light bulbs, child actors and timeshares, as well as selling subprime mortgages, between stints in rehab for heroin addiction.

He made aliyah in to study at the Orthodox Aish Hatorah yeshiva in Jerusalem, hoping religion would help him live a more virtuous life. But after a couple of months, Smith moved to Tel Aviv and found a job in binary options, gradually moving up in the industry and learning how it really operated.

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The tale goes that after reaching a breaking point at Numaris, the second of two binary options companies he worked for over the course of a year, in January he took a despairing road trip to northern Israel. On the way back from a visit to the gravesite of his favorite Jewish sage, Rabbi Moshe Haim Luzzatto, he picked up a ultra-Orthodox hitchhiker and ended up joining him and his large, impoverished family for havdalah, the ceremony that ends Shabbat.

At the end of the night, the hitchhiker blessed Smith, predicting he would do something unprecedented for the Jewish people. The experience had a profound effect, and when Smith arrived back in Tel Aviv that night during a fierce windstorm, the idea for Wealth Recovery came to him with the slam of the gate of his apartment building. What happens if I get the money back for the people it was taken from? Is there anybody doing this? The late Fred Turbide, who took his own life after he was fleeced by an Israeli binary options firm, with his wife Maria Chaves-Turbide Courtesy.

His first recruit was co-owner Lee Eller, 26, with whom he had worked at Numaris. Having for years bounced between binary options companies while pursuing a career as a musician in Israel, Eller had recently returned home after her mother sustained a brain aneurysm. Eller, a believer in astrology and the metaphysical power of thought, among other spiritual philosophies, blamed her binary options work for the illness. I think you get more of what you ask for, and I was inadvertently asking for that.

Koel was separated from his money by a rotating cast of characters who posed as London-based brokers.

He initially saw large returns, some of which were even paid out to him, but then his account managers began making seemingly senseless losing trades. Koel, a divorced father, said he missed warning signs that he was being defrauded, like the lack of documentation of his transactions, in part because he was intent on earning money to pay for treatment for his youngest son, who had recently been debilitated by a brain aneurysm.

But then things started to go awry. Carmon, also the author of best-selling espionage novels, took about 10 percent up front, and Wealth Recovery collected 20 percent on the backend, which has remained its standard rate.

Koel was overjoyed and still vouches for Wealth Recovery to potential clients. Mitch is a great guy. Mitch can stay at my house any time. Plus, it was Jews who helped me in the end.

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In March , Wealth Recovery moved into its current office, and several months later teamed with a local firm, Birman Law, which moved into an adjoining office. I lost my peace of mind. When her account tanked again last month, the woman said her supposed brokers began pressuring her to deposit even more money, but she had run out of resources.

Now living off help from her family, she said, the woman began looking for lawyers to help her negotiate with Options XO. Wealth Recovery and Birman Law understood my situation right away and were very responsive.

The attorney, Alon Mizrahi of the Tel Aviv firm FWMK, said he had been hired by Toro Media. Mizrahi declined to answer whether Toro Media had a relationship with Options XO. He asked to be emailed further questions so he could check on the answers, but did not respond when sent the email. Various opponents of the binary options industry agreed that Wealth Recovery is on the right side of the fight.

They gave me an introduction that lasted more than four months. In February, Israeli lawyers Carmon and Assif started StopScams.

Like Wealth Recovery, Carmon said the group targets individuals rather than companies, which can disappear, and thus far has settled out of court to get quick results for clients. Yossy Haezrachy, a partner at the Friedman-Haezrachy law firm in Tel Aviv, said the investigative chops of companies like Wealth Recovery make them an asset both to victims of binary options fraud and to lawyers like him who represent such people.

His law firm has filed several cases on behalf of alleged victims with Israeli courts, which Haezrachy said have never ruled on such a case, as far he he knows. But echoing many others, he said only state action would ultimately shut down the industry. As someone with intimate knowledge of how fraud works, Smith said he sees things differently. He predicted binary options companies would survive by moving to different countries and industries, as they have already started doing in anticipation of a crackdown in Israel.

Wealth Recovery has made plans to follow them. Last week, Smith visited Cyprus to look into setting up an office there, and he has been building relationships with lawyers around the world.

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Austin Smith, a co-founder of Wealth Recovery International, speaking at its office in Tel Aviv, Feb. The Times of Israel Current top stories. Mother of Damascus Gate assailant arrested for calls to attack Jews. Saudi king appoints son successor in major royal shakeup.

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