Since The Times of Israel’s initial investigation into “The Wolves of Tel Aviv” — the appalling forex and binary options scam in Israel — we have been contacted by dozens of ex-employees and victims of the industry seeking to share their experiences. We’ll get to the victims in more detail in subsequent articles. This Q and A focuses on the cunning processes by which the ostensible “investors” — actually naive marks who are being inveigled into gambling in a rigged casino — are reeled in and fleeced.

Joshua, a new immigrant from the United States, recently worked as a “conversion agent” for a mid-sized binary options firm outside Tel Aviv. His job was to call people around the world and persuade them to “trade” on an online binary options platform — to give him their cash — by promising them high profits when, in fact, he told us, every single client with whom he worked ultimately lost all of their money.

 It is estimated that many hundreds of thousands of customers around the world have been defrauded in similar ways over the past several years, all with the seemingly tacit consent of Israeli regulatory and law-enforcement authorities — the ongoing tacit consent of the Israeli authorities.

The company Joshua worked for continues to defraud people daily from its offices in Ramat Gan.

How did you get involved in binary options?

My job at the time was ending and I was frantically looking for something else. My wife was pregnant. I had to get some kind of job. I had lots of experience in sales because I had worked in my family’s business, an insurance agency. Once I sent my CV to online trading companies, I got calls from one binary options company after another. I chose one.

Who were your customers?

Mostly Indians and Nigerians. You were lucky if you got a European customer, especially a German. They were the most eager to trade, and they deposited money in euros or pounds rather than dollars, which was better for us.

We weren’t allowed to sell to Americans or Israelis. I remember we had trouble with one Iranian guy. Because of the sanctions, the credit card companies wouldn’t work with them, so we had to tell him that we couldn’t “help” him.

How much money did people give you?

Our minimum deposit started out as $200. Later we wouldn’t allow anyone to get started for less than $250. Some people in places like India and Nigeria borrowed money from family and friends. Some of them are desperate. They think, “this is my chance to get rich,” and they’re willing to take the risk.

Not everyone deposits. You spend 2-3 minutes on the phone with each person and after 20 or 30 people, one will deposit.

I could call 250 people a day. My mouth was tired afterwards. Maybe I got 12 deposits a day, anywhere from $250 to $1,000. The retention agents could get more money (from clients who had already made their initial deposit, and were now on board). They could get $5,000 or $10,000, especially from Europeans and Canadians.

I remember one client in particular, a guy from Pakistan. He was about to get married and he borrowed money to invest so he could have a nice wedding.

He gave me $500, which is a lot of money in Pakistan. We spoke on Skype, he gave me his credit card information and it went through. Two or three days later he had lost all his money trading. He asked me, “What’s going on?”

I was told not to respond. I was told to block him on Skype.

 How did you find leads?

The marketing campaigns were really good, really persuasive. We’d create this fictional celebrity who would talk about binary options and promise that you’d make money. He promised that if you lost on your first ten trades he would refund your money. We also had very good search engine optimization.

If you Googled the name of my company, you would see great-looking, legitimate-looking third party websites that say, “you’ve got to watch out for scams, but this company in my experience gives the best results.”

When the lead came up on on our screen it would say which marketing campaign they came from. We had been briefed on all new campaigns, so we would basically repeat the same message.

What did you tell customers to get them to deposit money?

We told them anything. We would ask, “How much money do you want to make?” They’d say, “I want to make a million.” So we’d say, “It will take you about 6-7 months, but we’ll help you.”

Our customers were very hopeful or excited because we would psych them up. I was always taught that when you’re on the phone with someone and trying to sell, make sure you’re talking with a smile because they can hear it. We geared them up, we developed a real relationship with them.

What happened after a client made a deposit?

After the initial deposit the client was sent to the retention team. If the client was using a robot (a computer program that trades for clients, supposedly to eliminate the psychological pitfalls of trading), they would say, “There’s this new robot and it’s been having a really high success rate for each trade but in order to qualify you need to deposit x number of dollars.”

Otherwise the retention agent might say, “I specialize in gold, I’ve been watching it. If you put $1,000 on this trade right now, you’ll get good results. I tell all my clients to do it and I’m doing it myself.” Some of the best retention agents could attract deposits of tens of thousands of dollars per day.

If a trade is successful, clients earn between 60 and 80 percent of the amount they put on the trade. If it isn’t, they lose it all. People gradually lose all their money. But the managers also keep track of the success of every account. If a customer is doing well, the managers will change the probabilities for that account; they will make it less likely for that person’s trades to be successful.

But what if the customer predicted that gold will go up and they’re right?

Then we come up with some excuse. We say in our terms and conditions that the rates at the end of the trade may not actually be the rate at time trade closed, that there is delayed reporting. (Other ex-employees of binary options companies have detailed other ruses to The Times of Israel. According to one ex-employee of a firm that employs over 1,000 people in a high-rise office building in Tel Aviv, losses are guaranteed because the “dealing room” at the binary options firm controls the trading platform — like the crooked ownership of a rigged casino manipulating the roulette wheel. Among the numerous ruses employed to guarantee customers ultimately lose their money, as detailed by this ex-employee: encouraging customers to make bad trades; showing customers inaccurate figures; not allowing customers to trade on certain assets; creating “mock” traders to suggest that a certain trade is popular; selling clients’ assets unbidden; making “trades” unbidden.)

How did you get customers to keep putting money in?

Some agents are good judges of character. We also look at their houses on Google maps to assess how much money they have and how far we can push them. If they agree to a bonus (an ostensible gift of funds from the company), they’re stuck because they agreed (in accepting the bonus) to trade multiple times its value. A large percentage of people take the bonus. Eventually people get tapped out, though, and want to leave. We never kept the customers for very long.

What if the client said, I’m done, give me what’s left of my money?

If they had accepted a bonus, that meant they agreed to do a certain amount of trades, so we said sorry. The client would start swearing and we would hang up the phone and never take their calls again.

Did any customers withdraw money?

No. I never saw a single scenario where someone withdrew their money.

I remember one time we received too many credit card chargebacks. I guess customers were realizing this is a scam and reversing the charges. We couldn’t take credit card payments for a while.

The managers were freaking out. They gave us lists of idle accounts, and told us to clean them out. We called the people and said, “You know you’ve got 200 euros here and it will cost you a fee to withdraw it, it’s not worth it. Why don’t you use a new trading robot that’s been really successful?” The customers would sign up to use the trading robot and in a couple days their money would be gone.

What made you decide to quit?

I started to look for a new job about two weeks into it. During my lunch break I’d be on Facebook job groups. My wife would see how shaken I was when I came home. After about six weeks I told my wife, “Even if it means we’re going to starve I can’t do this job anymore.” It was destroying me. I felt awful about myself.

They have huge employee turnover. People hate what they’re doing. It’s clear to me why the industry is always looking for people.

I’d say the managers are not in the same category. They’re excited, they give out alcohol and bring in food, put on music. Some of the managers make phone calls themselves. They’re really into it and don’t think they’re doing anything wrong.

Did you get a payslip?

No, I never did. They deposited my salary directly into my bank account.

How many people do you think work in the industry in Israel?

Thousands. There’s a new binary company all the time. It’s got to be 10,000, maybe more. I actually remember some people from abroad with British accents came to our office to learn how to set this up elsewhere. So our managers were explaining, you have to have Internet at this speed, and this is how you train the agents. Apparently this is an export industry and Israel is exporting its expertise in binary options.

Did you tell anyone about your experience after you left?

I had a wife and a baby and I worried about getting sued if I said anything publicly about the company. But I was hoping that [it would come to light] and then I would try to explain what happened to me.

Did you go to the police?

No, it’s not deemed illegal here. I tried to figure out how they’re able to operate in Israel. It’s only illegal to market to Israeli citizens. It’s immoral and it should be illegal. I remember my wife and I were being interviewed to live in a religious community. I had already left the company but the rabbi asked me about it. After I told him, his response was, “There are Jews doing this?”