DAO Binary Options: Unmasking the GoldmanOption Scam and Its Perpetrators

Binary options scams have left a dark legacy in the financial world, with their peak years being marred by countless fraudulent schemes. Among these was the GoldmanOption scam, operated by the DAO Group Ltd. This relatively small but illustrative scam encapsulates the intricate network of deceptive practices employed by its perpetrators. This article explores the actors, mechanisms, and enablers behind the GoldmanOption scam, shedding light on the tactics that characterized the binary options fraud era.

The Rise and Fall of GoldmanOptions

The GoldmanOption scheme operated for a brief period during the late binary options era. The Czech financial market supervisory authority issued a warning against its operator, DAO Processing Ltd, in October 2016. GoldmanOptions’ Facebook page, created in August 2016, ceased activity shortly after this warning, signaling the scam’s abrupt end. Despite its relatively short lifespan, GoldmanOption’s operational framework and associated network reveal much about the broader binary options scam ecosystem.

The DAO Binary Options Scam and its Perpetrators

At the core of the GoldmanOption scam was DAO Group Ltd, registered in the Marshall Islands. The ultimate beneficial owners (UBOs) of this entity were three Israeli nationals:

1. Orel Asformas (born April 1991)
2. Ariel Hai Mazooz (born September 1983)
3. David Mor (born January 1993)

Supporting the UBOs were two Seychelles citizens, Genevieve Magnan and Jonathan Bibi, who acted as official directors of the DAO Group Ltd. These individuals have been implicated in numerous other scams, with Magnan, in particular, serving as an officer for dozens of fraudulent broker operations.

The scam’s operational structure involved DAO Processing Ltd, a UK-registered entity wholly owned by DAO Group Ltd. Belize citizen Paula Gina Jonch-Olmez was installed as director of DAO Processing Ltd, further adding to the layered complexity of the operation’s offshore structure.

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Offshore Specialists and the Role of Northwestern Management Services

The DAO binary options scam shares commonalities with other schemes linked to the GreyMountain Management (GMM) environment. A key enabler of such operations was Northwestern Management Services Ltd, an offshore specialist company. Northwestern not only established DAO Group Ltd but also provided its trusted agents, Genevieve Magnan and Jonathan Bibi, as officers and trustee shareholders.

Northwestern Management Services’ involvement highlights the recurring patterns within the binary options scam industry, where the use of offshore jurisdictions and nominee directors helped conceal the true identities of the beneficiaries.

This DAO Group Ltd is the sole shareholder of DAO Processing Ltd, registered in the UK, where Belize citizen Paula Gina Jonch-Olmez was installed as director.

Payment Services Providers and Their Role

A critical component of the binary options scams was the integration of payment services providers (PSPs) to facilitate financial transactions and obscure money trails. In the case of the DAO binary options scam, two companies played pivotal roles:

1. Payotech Ltd and PayObin Group:
   • Owned by Eyal Nachum and Tamir Zoltovsky, these entities provided payment services to DAO and other binary options scams.
2. Moneta International UAB:
   • A Lithuanian company that supported DAO’s payment processing. Despite attempts to erase its involvement, evidence links Moneta International to several fraudulent operations.

Moneta International: Efforts to Conceal Involvement

The extent of Moneta International’s complicity in binary options scams becomes apparent through email records and corporate filings. An email from Anat Blutner of Moneta International underscores the company’s role in servicing DAO and other fraudulent entities. Following investigative reports, Tamir Zoltovsky’s name was removed from Moneta’s files in the Lithuanian company registry. However, his wife, Yehudit Rozen, remains listed as a director, suggesting attempts to obfuscate the network’s connections while maintaining operational continuity.

How the Scams Were Designed and Executed

The GoldmanOption scam’s structure reflects a well-orchestrated blueprint commonly employed in binary options fraud. Key elements included:

1. Offshore Incorporation:
   • DAO Group Ltd’s registration in the Marshall Islands and DAO Processing Ltd’s registration in the UK provided jurisdictional layers to complicate enforcement actions.
2. Front Directors:
   • The use of individuals like Paula Gina Jonch-Olmez, Genevieve Magnan, and Jonathan Bibi as directors insulated the true UBOs from scrutiny.
3. Sophisticated Payment Processing:
   • PSPs like Payotech and Moneta International facilitated seamless fund transfers, making it difficult for victims or regulators to trace the money.
4. Marketing and Social Media Presence:
   • Platforms like Facebook were leveraged to lure victims with promises of high returns. The GoldmanOption Facebook page, active for only a few months, exemplifies the transient nature of such schemes.
5. Rapid Shutdowns:
   • The operation’s cessation following the Czech authority’s warning demonstrates the scammers’ agility in avoiding prolonged exposure.

The Israeli Connection

The Israeli masterminds behind the GoldmanOption scam are emblematic of a broader trend within the binary options fraud ecosystem. Israel was a hub for such operations during the binary options boom, with many scams either directly orchestrated or heavily influenced by Israeli nationals. This pattern underscores the need for international cooperation to address the transnational nature of financial fraud.

The Legacy of Binary Options Scams

The GoldmanOption scam, while small in scale, is representative of the binary options industry’s darker side. The reliance on offshore jurisdictions, complicit PSPs, and sophisticated networks of operators enabled fraud on a massive scale. While regulatory crackdowns have curtailed many such schemes, the legacy of binary options scams continues to resonate, with victims often left without recourse.

Lessons and Ongoing Challenges

1. Enhanced Oversight of PSPs:
   • Regulators must ensure stricter monitoring of payment services providers, as they play a critical role in facilitating fraudulent activities.
2. Offshore Jurisdictions:
   • Efforts to combat financial crime must address the misuse of offshore entities, which provide anonymity to fraudsters.
3. International Collaboration:
   • The transnational nature of scams like GoldmanOption necessitates closer cooperation between regulatory and law enforcement agencies across jurisdictions.
4. Education and Awareness:
   • Potential investors need better education about the risks associated with binary options and the warning signs of fraud.

Conclusion

The GoldmanOption scam and its orchestrators provide a stark reminder of the vulnerabilities within global financial systems. The intricate web of offshore entities, complicit directors, and enabling PSPs underscores the challenges regulators face in combating such schemes. By dissecting operations like DAO Group Ltd, authorities and stakeholders can gain insights into preventing future frauds and ensuring greater accountability within the financial sector.