COLUMBUS – A federal grand jury has indicted William T. Caniff, Jr., 52, of Toronto, alleging multiple wire fraud and money laundering charges related to a binary options fraud scheme, according to information from the office of Vipal J. Patel, acting United States attorney for the Southern District of Ohio.
Binary options are a type of options contract in which the payout depended on the outcome of a yes / no proposition, usually related to whether the price of a particular asset would rise or fall below a certain amount. A binary option did not give its holder the right to buy or sell the underlying asset. Instead, the holder received a predetermined amount of money or nothing at all.
According to the indictment, it is alleged that Caniff and another person formed Berkley Capital Management, LLC in January 2016, which claimed to be in binary options trading. Berkley Capital Management was the general partner of Bbot 1 LP which formed in January 2016 and of Berkley II LP which formed in August 2017.
Bbot 1 LP and Berkley II LP were created as an investment pool that would provide participants with the ability to trade binary options in a pool with other participants.
According to information from Patel’s office, Caniff would have been the designated trader for Bbot and Berkley II, and Caniff would have opened bank accounts for Berkley Capital Management, Bbot 1 and Berkley II and would have control of the bank accounts.
The indictment alleges that Caniff knowingly made and caused investors to make false representations to fraudulently obtain and hold money, including false representations about the risks of the investments, the expected and actual returns on the investments and how investor funds would be and have been used. Caniff allegedly created or caused to be created false documents in order to mislead investors, including false account statements.
The indictment also alleges that while Bbot and Berkley II received over $ 4 million in investor funds, Caniff only invested $ 85,000 of the funds through Nadex, a binary options exchange. online. According to the indictment, Caniff fraudulently embezzled at least $ 2 million in investor funds for its own benefit and for the benefit of a business partner, the indictment charges.
Patel and Bryant Jackson, special agent in charge of the Internal Revenue Service Criminal Investigation, Cincinnati Field Office, announced the charges.
This case is being pursued by Deputy United States Attorney Peter K. Glenn-Applegate and has been investigated by special agents of the IRS-Criminal Investigation.
The indictment contains allegations and the accused is presumed innocent unless his guilt is proven by a court.