LOSING EVERYTHING
Binary option trading scam drives man to suicide
Frederick Turbide sent a photo of his suicide note to an overseas investment dealer just before Christmas in a desperate last attempt to recover his missing life savings.
Over the previous few months, the 61-year-old Edmonton businessman had lost more than $300,000 in the murky world of binary option trading, and was hoping against hope the dealer he knew as Julian Wellington could somehow make it right.
“He said everything was on the line, and if he wasn’t able to put the money back that he anticipated this was the letter he was leaving behind,” son Tom Ferreira says.
“He was sick that whole week, sleep deprived …. The next thing I know is I got a text message, all the kids did, saying, ‘Stop what you’re doing now, go home, be with your mom. It’s going to be a sad day.’ ”
A short time later, on Dec. 21, Turbide went into the garage of his Highlands home and fatally shot himself.
The popular co-owner of promotional products company Novel Notion Advertising Inc. was the latest victim of a financial crime that has grown steadily in Canada over the past two years.
Binary options are essentially bets on whether the value of a stock or other asset will reach a certain price within a specified time, which can be as short as 60 seconds.
Guess right and you receive a big payout, typically boosting your money by at least 50 per cent. Guess wrong, and you lose it all.
“It just became, in my opinion, the No. 1 investment fraud targeting Canadians,” says Jason Roy, manager of investigations at the Manitoba Securities Commission and chair of a national binary options task force.
“The individuals that are running these schemes see it as a very effective, easy way to steal money from Canadians, and it’s working … There are literally hundreds of boiler rooms that are targeting consumers.”
Clearly, the odds are heavily stacked against the customer even on legitimate binary options trades, and the vast majority aren’t legitimate, run out of other countries — mostly Israel — because no one in Canada is licensed to sell them.
Canadian authorities have a hard time investigating offshore operations. Roy can’t say why these firms often set up in Israel, and there aren’t reliable statistics on how many people they dupe annually.
His group went to a summit on the issue in The Hague, Netherlands, earlier this year, attended by police and regulators from Europe and North America.
The task force is also working with credit card firms to stop payments to binary options companies, and taking other steps Roy wouldn’t outline for security purposes.
Last year, the Alberta Securities Commission received 114 calls about binary options, up from 19 in 2015, and the average victim in the province lost $20,000.
Maria Chaves-Turbide, Turbide’s wife for 21 years, thinks her husband was lured into the field last fall by one of the many Internet ads promising investors easy money, while Ferreira suspects it was through an acquaintance.
No one knows what really happened, since he kept everything secret.
His losses included $20,000 from their home-equity line of credit that Chaves-Turbide, 62, understood was being invested in mutual funds.
She only learned he was entwined in binary options when the children looked through his computer after he died.
She’s not sure why he got in so deep. The company they both owned was doing well and he didn’t have a lot of experience with the stock market.
The man she describes as a kind, generous personality, who gave jobs, food and money to people down on their luck, appeared happy last fall and promised a Christmas surprise for their four adult children from Chaves-Turbide’s previous marriage.
“We wanted to retire. We were tired. We put in a lot of time and effort to getting the business started,” she says.
“I didn’t think much about it when he asked to take the (line-of-credit) money out. I thought ‘He’s getting informed, it’s in a safe place,’ and then I just let it go.”
But the profits he thought he was generating after his first $2,500 turned out to be fiction.
Transcripts of dozens of breezy Skype conversations with Wellington — supposedly based in Toronto and the United Kingdom — show Turbide working to get more money into his investment account even when his credit card company balked.
“G-OD is with us. I’m taking you to 250k,” Wellington wrote Dec. 12 to convince the man he called his brother to put in the extra cash.
While Turbide admitted, “I will be at the end of my rope after this 20k,” he’s still a believer, telling Wellington “It is amazing that we both feel so strong about ‘trust’ we have with each other.”
But on Dec. 21, the news turned bad. Turbide had apparently been told of big losses and wrote to his “angel” that he had never been under such stress and he prayed Wellington would come through.
“(Oh) my god Julian tell me this is not true … i am at the end of myself Julian, this is too much. please tell me all is good pleas(e) Julian.”
His final message turned angry, damning Wellington and another man for pushing further investments when they knew Turbide needed the cash that day to pay bills.
“i am going to take a shower then go to my garage to finish myself off. i am giving you 1 hour to call me with positive result(s) to put back the money i lost into my account, don’t trick me this time Julian.”
Traders often lead on clients by putting “bonuses” into their accounts.
Only the fine print shows they must trade 20 to 40 times the entire account before the bonus can be withdrawn, and companies can keep topping up the amount or reveal other rules so it’s practically impossible to collect any cash.
Ferreira, 35, is furious that even when this group knew Turbide was talking of killing himself they didn’t try to alert anyone.
“Somebody tells you they’re going to take their life, and you don’t do as much as pick up the phone and make an anonymous call?”
The family recently hired Tel Aviv lawyer Haggai Carmon to see what can be done. He says he has already identified the individuals involved, who generally hide behind a string of companies and fictitious names.
“The entire binary option is not a stock trade. It’s a gamble, a game of chance … (using) fast-talking brokers who are really not brokers, they’re people off the street who are well trained by fraudsters,” Carmon says. “The house always wins.” Although Israel tightened the rules for binary options companies last year, the country’s securities regulators don’t feel they have the power to intervene in activities overseas, Carmon says.
He says he has handled four cases similar to Turbide’s in which he recovered $2 million without bringing a lawsuit, and has several others on the go.
While Carmon won’t reveal his methods, he says he worked for the American government for 20 years chasing criminals and going undercover.
“I’m really ashamed of my countrymen. This is one reason I rolled up my sleeves and became active, because it fosters anti-Israel sentiment and anti-Semitism,” he says.
“I’m cautiously optimistic, but I’m determined. When I’m determined, people should be aware. I sound like a nice person, but I’m not. I bite.”
Back in Edmonton, Ferreira is hopeful Carmon will recover something, but isn’t expecting much success.
He and his mother just want the perpetrators exposed and everyone alerted about the dangers of dabbling in this sort of unregulated Internet investment.
Their other message is that people who are victimized shouldn’t try to spare others from stress by keeping the bad news to themselves.
“It’s really difficult trying to mourn the death of my husband, a man I love, and thinking about him having to go through this alone …. He must have felt so betrayed. He didn’t talk to anyone. He bore the weight all alone,” Chaves-Turbide says tearfully.
“If he had come to me and said something … I would have supported him. I would have been angry — ‘Holy crow, what did you get into?’ — but I know his nature. He’s always giving.”