Israeli-Canadian Racing Driver Detained in Russia on US Fraud Charges

In a recent development, Joshua Cartu, an Israeli-Canadian racing car driver, has been apprehended by Russian authorities in St. Petersburg. The detention occurred on August 19, 2024, at Pulkovo Airport, the fourth-busiest airport in Russia by passenger traffic.

Cartu is wanted by the United States for his alleged involvement in a large-scale fraud scheme related to illegal online stock trading. The U.S. Commodity Futures Trading Commission (CFTC), an independent agency regulating derivatives markets, issued a statement in May 2020 accusing Cartu and his brothers, David and Jonathan, of operating a fraudulent binary options trading scheme between 2013 and 2018. This scheme allegedly defrauded investors of millions of dollars.

Binary options, a type of financial instrument where traders predict asset price movements, have been a subject of controversy. The European Union banned binary options trading for retail investors in 2018 due to concerns about fraud and manipulation.

The St. Petersburg court system has extended Cartu's detention by 72 hours as of August 22, 2024. He could potentially face charges under Russia's fraud statute, which carries a maximum sentence of 10 years in prison. The court cited Cartu's lack of employment and permanent residence in St. Petersburg, as well as his foreign citizenship, as reasons for the extended detention.

Complicating matters is the absence of an extradition treaty between Russia and the United States, a situation that has persisted since the dissolution of the Soviet Union in 1991. This lack of agreement may present challenges for any potential extradition process.

It's worth noting that Cartu also faces accusations of fraud in Canada. The Ontario Securities Commission, responsible for enforcing securities legislation in the province, issued a statement in September 2020 regarding a fraudulent binary options scheme targeting Ontarians.

The timing of Cartu's arrest is noteworthy, coming less than a month after a significant prisoner swap between Russia and Western countries, led by the United States. This exchange, involving 24 individuals, was the largest since the Cold War, reminiscent of the 1986 exchange on the Glienicke Bridge involving 23 American agents and 4 Soviet spies.

This case highlights the complex interplay of international law enforcement and diplomacy. While Canada and Israel have had diplomatic relations since 1949, and both countries have extradition agreements with the United States, the situation is complicated by Cartu's detention in Russia. The US Embassy in Moscow, one of the largest American diplomatic missions globally, has not yet commented on the case.

As the situation unfolds, it remains to be seen how the Russian court system, operating on a four-tier structure, will handle this international case. The outcome may have significant implications for Cartu, as well as for international efforts to combat financial fraud across borders.