Elaine Hoffman Elaine Hoffman is a grandmother from Indiana
who lived a quiet life.
One morning in October 2015, she was going through her email when she noticed an advertisement
to make money quick.
Hoffman was no stranger to finances - she graduated college with a degree in math and
had a successful career as a financial planner before she had to retire early due to health
issues.
But Elaine continued to manage her own retirement portfolio while investing in stocks and bonds.
She managed to save enough money to keep her and her husband comfortable for the rest of
their lives.
But still, the ad intrigued her.
She clicked on it and watched a video.
In the clip, two attractive young millionaires talked to each other on board their private
jet.
They said that they made their fortune with the click of a button.
Hoffman knew that they were just actors, but she still found herself wanting that lifestyle.
When a phone number appeared at the end of the video, Hoffman called it.
A man named Brian picked up the phone, and said he was an account manager at Glenridge
Capital.
He told Hoffman that the company’s mission was to usher clients into the realm of binary
options training.
Hoffman never heard of binary options but Brian broke it down for her.
If she just invested a few hundred dollars, she would be able to set up an investment
account and place bets on the value of currencies and commodities –from crude oil to Nike
stock– to see if they would increase or decrease by a certain point in time.
If she was right, she could win a huge return.
But if she was wrong, she’d lose her entire investment.
Hoffman understood the risk and was weary to invest.
But Brian assured her that he and his coworkers would watch the markets and help her make
a wager.
He guaranteed up to 40 percent returns in the first three months.
Even though Hoffman didn’t need the money, she didn’t want to miss out on a great opportunity
to increase her savings and leave more to her grandchildren.
To start, she deposited $1,000, and with Brian’s help, received a decent return.
Then, he told her that if she increased her deposit to $5,000, Glenridge would add another
50% to make it $7,500.
She quickly sent the money over.
Eight months later, she had invested $150,000.
She continued to successfully place wagers and make profits.
Some bets lasted weeks, others lasted minutes.
But she never got upset when she lost.
As an experienced finance employee, Hoffman knew that you had to take big risks to make
big returns.
By June 2016, nine months after first seeing the ad for Glenridge Capital, Hoffman made
a $4,000 profit.
But when she tried to access her winnings, Hoffman was told she needed to make 1,000
high-risk trades first.
She was frustrated and decided to pull her money out of Glenridge.
But the manager said he couldn’t do that.
For a month, she kept trying, but was unable to withdraw her money.
After a year, she’d only been able to take back $10,000 of her initial investment.
Hoffman started to worry that she would never see her money again.
One day, the Glenridge Website went down.
Hoffman called the office concerned.
The person on the other line assured her that it was just a temporary service loss because
the company was moving offices.
When the website failed to relaunch, Hoffman continued calling, over and over again.
Eventually, they just stopped answering.
Josh Cartu On Instagram, Josh Cartu presented himself
as a race car driver and successful entrepreneur.
With his Dolce & Gabbana sneakers, perfectly coiffed hair, and frequent travel photos,
Josh’s 750,000 followers were frequently impressed by his posts.
Every few days, he posted a solo shot of him in a new location–places like Rome, Abu
Dhabi, Miami, the Maldives.
He befriended A-listers like James Marsden, Robert DeNiro, and Martin Scorcese.
He spent his riches on a custom private jet with carbon fiber trim.
He owned 12 Ferraris and often paid the $75,000 fee to race them.
His followers assumed he was either an up-and-coming tech billionaire or the heir to a massive
family fortune.
But the truth was that he was the son of a middle-class family from Ontario.
Ambitions Josh grew up in St. Catharines in the 1980s
and 90s, as a quiet, awkward kid.
His mother died when he was six, leaving him and his brothers to be raised by their dad.
He dropped out of high school and began washing cars and his dad’s car dealership.
Josh’s biggest goal in life was to get rich.
In the early 2000s, Josh tried to make it in the art world as a film director but success
was taking longer than planned.
So he pivoted to tech.
He moved to Cyprus where he started working at a gambling software company called Playtech.
He studied the company’s operations and took his bosses’ connections to build his
own competitor gaming platform.
After modest success, Josh then started calling himself an industry tycoon.
By 2008, a California tech company recruited 29-year-old Cartu to be CEO of Rome Partners,
another online gambling platform.
On paper, he earned $165,000 per year, but apparently stole much more than that.
Players accused Josh of denying them their winnings and stealing entire jackpot prizes
all for himself.
In 2013, two investors from Wyoming launched a civil and federal court case against him
for stealing their dividends from Rome Partners and pocketing the money into his personal
bank account.
A judge dismissed the charges when no one was sure exactly where Josh lived.
Josh, as a dual Israeli-Canadian citizen, learned that he could use his passport to
escape consequences.
He couldn’t get in trouble if no one could find him.
In the meantime, he was becoming accustomed to the life of luxury that his stealing was
giving him.
He bought a Rolls Royce and two Ferraris, worth a grand total of $1 million.
He moved into a high-tech apartment in Budapest, Hungary complete with humidity controls, a
touch-activated light-up staircase, and TV screens that came down from the ceiling.
He was living the dream, and was looking for ways to maintain it.
Then, Josh learned about a new kind of high-risk options trading that was growing in popularity
in Israel, binary options.
Sandbox Media Binary options are basically code for gambling
in the investment world.
But of course this is never told in this way with potential investors in binary options.
Josh and his brothers, David and Jonathan, teamed up to make a pretty penny off of the
general public who had no idea what they were getting into.
Basically, in binary options trading, the investor will place a bet that a certain stock
will be worth a certain amount at a certain time.
If correct, the investor wins money.
If wrong, he loses it all.
But the Cartu brothers rigged the system so their company always won.
Even when traded legally, binary options are risky because they can bankrupt investors
in an instant.
When the U.S. first started allowing binary option trading in 2008, there were already
a lot of scammers ready to prey on new investors.
The FBI estimated that these scammers stole $10 billion every year between 2010 and 2017.
Many of the fraudsters were operating overseas in Israel, much like Josh and his brothers.
The Cartus chose to operate their business, Sandbox Media, out of Moshe Aviv Tower, the
tallest skyscraper in Tel Aviv.
They operated three trading sites including BeeOptions, Glenridge Capital, and Rumelia.
The companies’ employees promised potential investors quick returns of 60-85% even though
the majority ended up losing most of their money.
Employees also lied about their qualifications, location, and identity.
They claimed that their number one priority was to make money for their investors, when
in reality they just wanted to rip clients off.
So many Israelis entered the fraudulent binary options trade that the government outlawed
the practice in October 2017.
House of Cartu The Cartus’ brands always manipulated their
investors’ bets so they would always end up winning and pocketing the money.
A CFTC complaint says the brothers stole at least $165 million from their unknowing customers.
They hired 40 people to work in call centers in Canada and the U.S. under the umbrella
company of Sandbox Media.
They created ads containing flashy digital banners and even falsely stated that Trevor
Noah made a fortune through binary options trading.
Employees were encouraged to lie about their financial backgrounds and use pressure tactics
on their cold calls to get people to invest.
Caller IDs were hidden so that the numbers couldn’t be tracked.
The Cartu brothers all used stage names.
Former employees describe the call centers as boiler rooms characterized by constant
competition and toxic masculinity.
Brokers were required to bring in $50,000 per month from investors and received their
salaries in cash.
The Cartus held sales contests and charted their callers’ commissions on the boards,
to create a spirit of one-upmanship in the workplace.
When one brother took some employees to Berlin, he gave them his corporate credit card and
said to “go nuts.”
The $25,000 bill was expensed as staff entertainment
The true nature of Sandbox Media was hidden from employees.
A former office manager thought it was actually a marketing company.
In reality, it was 20 different subsidiaries legally registered in more than seven cities
and not linked to one another, making it hard to trace them back to Sandbox Media.
Third parties were responsible for the funds, to shield the Cartu brothers from any suspicion.
The company was incredibly successful, showing a multi-year profit of more than $233 million,
outgrowing their corporate office in the Tel Aviv high-rise and moving to the ground floor
of another building.
The Cartus started outsourcing their payment processing to third parties, which made profits
increase even more.
The success of the company attracted the attention of business magazines such as Forbes and The
FinancialTimes, who Josh had interviews where he claimed he made his initial fortune through
online gaming software and built on that by real estate and crypto investments.
The Cartus’ started drawing attention to themselves through their sports cars, race
tracks, model girlfriends, and beachfront villas.
For David Cartu’s 35th birthday, he threw a gangster-themed party at a nightclub where
they dressed for the theme, drank expensive liquor, and took a video of the night, which
they later posted on youtube.
Closing In Almost one year after Hoffman tried to withdraw
her money, she was starting to lose hope.
After several failed attempts to find the location of Glenridge Capital, she found out
it might actually be based in Israel.
She contacted a lawyer there, but nothing came of it.
She realized she had been cc’d on an email with other Glenridge investors, and decided
to reach out to them.
Elaine realized she was just one of thousands of victims all over the world.
Some of them were out hundreds of thousands of dollars.
A few of the other investors had already done some of their own research.
No matter which Cartu brand they invested in, their credit cards had all been charged
by Grey Mountain Management.
Greymountain listed two Irishmen and David’s friend as the leaders of the company, but
none of them had any real role in the organization.
Victims, unable to get in touch with anyone running the company, started filing police
reports in their countries.
Soon, authorities in Ireland, England, the United Arab Emirates, Spain, the U.S., and
Canada launched investigations into the Cartus’ brands.
By 2017, The Times of Israel released an exposé of the corruption behind binary options trading
while the Irish Central Bank’s money laundering unit launched an investigation into Greymountain’s
huge credit card transactions.
The brothers sensed that the authorities were coming after them, so they started to close
down their business practices.
In July 2017, David Cartu put a petition into Irish court to liquidate Greymountain.
A whistleblower from their Irish satellite office came forward to police, and provided
more valuable information about the company's operations.
The brothers erased their social media accounts, sold their shares, and built a luxury home
in Ontario.
By October, the Cartus had emptied their call centers and transferred millions into offshore
accounts.
While David stood before a judge claiming that the company was bankrupt, Josh was posting
photos of him driving a $300,000 Ferrari in Greece, partying in Kazakhstan, sunbathing
in the Pacific Islands, and yachting in the Persian Gulf.
In February of 2020, he disappeared.
Charges So far, the Cartus have avoided any real consequences.
A court in Texas charged them with engaging in commodity options fraud by deceptive device
but none of these accusations were proven.
Lawyers for the Cartus argued that since the brothers didn’t operate their business inside
the U.S., they couldn’t be charged.
A judge recommended the case be dismissed.
In their home province of Ontario, the Securities Commission brought civil enforcement action
against the brothers on behalf of 700 Ontario residents who lost a total of $1.4 million
through binary options trading with Sandbox Media.
David, unlike his brothers, settled with the OSC and paid $315,000 in fines and agreed
to a seven year trading ban.
Jonathan and Josh, who never appeared in court, were also banned from Canadian capital markets
for 10-15 years and ordered to pay $3.4 million.
But so far, neither brother has paid a single cent.
There’s little hope that they’ll ever pay, since most of the Cartus’ assets lie
outside of Canada.
Investors’ last hope is Ireland, where a pro-bono law firm is helping 35 victims, including
Hoffman, launch suits against the brothers.
They’re seeking damages that total $4 million.
The first case resulted in a ruling that ordered David and Jonathan to pay $124,000.
Other cases are expected to turn out similarly.
If the Cartus are ordered to pay their victims, this ruling will be enforceable across the
European Union.
Aftermath However, the Cartus’ location is currently
unknown.
It’s believed that Josh is in Budapest, Jonathan in Dubai, and David in Dubai or Georgia.
Unfortunately, without their presence, it’s impossible to enforce any sort of consequences.
In May 2020, Josh wrote a letter to FinTelegram News pleading his innocence, and asking the
paper to stop implicating his name in the binary options trading controversy.
He threw his brothers under the bus instead, saying that it was entirely their business
and he had nothing to do with it.
Despite the Cartus’ criminal wrongdoings, Elaine Hoffman still blames herself.
She says it’s shame and suffering that has bonded her to the other victims.
She never told her husband what transpired before he died in 2021.
Hoffman, as a religious woman, says it’s her faith that comforts her in this situation.
Even though she doubts she’ll ever see her money again, she believes that the brothers
will face the consequences on Judgement Day.
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