Traffic Monsoon Shut Down By SEC and Claims It’s A Ponzi Scheme
The SEC has filed memorandum acompanying their motion for a TRO is around 31 pages long.
When it comes to claiming ROI’s on Adpacks, it can be a very slippery slope…
Once must be registered with the SEC so it’s regulated to do this, but it looks like Traffic Monsoon wasn’t…
Because of that, they are in trouble now…
Let’s see what the SEC claims:
Traffic Monsoon was a 207 million Ponzi scheme
Traffic Monsoon has over 160,000 investor that have invested $207 million dollars.
$60 million dollars is from accounts located in Canada, United States and United Kingdom.
Traffic Monsoon added 175,000 new affiliates every month and 90% of the investors are outside of the US.
When they were in their prime, about $1 million a day was getting invested in late 2015.
By December 2015, Traffic Monsoon affiliates invested $28.94 million dollars.
January 2016 alone, about $26.26 million was invested.
Traffic Monsoon and It’s ROI Obligations
Traffic Monsoon has about $207 million in actual cash.
With the reinvestment’s of funds by affiliates, on paper they have generated around $738.5 million in revenue
This should have generated an ROI of $812.35 million…
I am not sure how Traffic Monsoon would pay that with only $207 million in actual cash since it’s launch.
Traffic Monsoon’s AdPacks Made Up 99% of the Revenue
The problem with leading with these Adpacks is this…
It’s not a real product…
And to give ROI’s on these Adpacks, they need to be regulated by the SEC..
If they were, than Traffic Monsoon wasn’t going to be in this situation.
They claim that the Ad credits and traffic is their product or service.
The reality is that the traffic is from affiliates clicking on ads and forced to watch advertisements…
So the quality of traffic isn’t that great.
I am not trying to be put them down, it’s just the reality.
You would never get good conversions with this traffic anyway.
They should have had more products and services for retail customers instead of just Adpacks.
Paypal Froze $61 million dollars of invested Traffic Monsoon Funds
This was certainly a big hit and this should have been a warning…
As of March 2016, Paypal decided to hold the funds and release them every 180 days.
PayPal completely froze Traffic Monsoon’s account on February 11th. The same day Scoville, for the first time, disclosed the fund freeze to Traffic Monsoon affiliates.
During the intervening month, because PayPal was allowing investor funds in but not allowing them to be withdrawn, members who bought advertising services (including, most prominently, new AdPacks) and transferred funds to Traffic Monsoon had no idea their funds would be frozen.
The SEC’s memorandum reveals the PayPal freeze expired on July 11th.
Instead of paying investors however, Scoville instead began transferring funds to his personal bank account.
Scoville transferred $25.6 million out of the PayPal account into a separate Traffic Monsoon account held at JPMorgan Chase Bank (“Chase”), and immediately transferred $21 million of those funds into his own personal Chase account.
He attempted to transfer additional funds out of the PayPal account, but PayPal
precluded additional transfers.
Sworn testimony by Scoville provided to the SEC, reveals Scoville intended to transfer these funds to “offshore entities”.
Based on these transactions, it is appears that Scoville is making efforts to take control of tens of millions of dollars of investor funds, apparently for his personal use.
Had the SEC of not stepped in, Scoville and the funds would have likely disappeared.
SEC have requested the appointment of a Receiver
With millions of dollars seized and over hundred thousand affiliates, the SEC has requested a Traffic Monsoon Receivership to be established.
The SEC has proposed Mary Margaret Hunt of Dorsey Whitney LLP be appointed Receiver.
In line with other Ponzi scheme Receivership’s, if appointed Hunt will marshal what’s left of Traffic Monsoon’s assets.
She will also investigate the whereabouts of any other funds attached to the scheme, as well as explore the possibility of clawback litigation.
Eventually seized funds will be distributed to Traffic Monsoon victims.
That was off another MLM news blog…
Charles Scoville Vows To Fight For Traffic Monsoon
In a Facebook post published on Charles Scoville’s profile, he claims he will stand up against the SEC’s claims in court of law.
SEC claims that Scoville was in the process of transferring unfrozen Paypal funds to his personal accounts with the intent of then transferring the funds offsore.
This is his post:
PayPal started to release funds.
Fake checks were circulating around using the bank account and routing numbers made available online for customers purchasing services, so I moved the funds out of the business account until I could get to the USA, go into a chase branch, and send those funds to payza.
Then, I was going to surprise members with an early release.
People had been circulating fake checks using bank account and routing number info provided online..
I moved the funds out from the business account into my personal account to avoid those from clearing, also– I intended to send those funds to payza as the note on that transfer indicates.
I just couldn’t make that large of a transfer to pay people what they had earned until I was able to go into a chase branch.
I didn’t pay myself that money. I was positioning that money to be sent to payza, but I wasn’t given a chance to do that because I hadn’t been able to go into a chase branch since I was out of the country.
In response to Traffic Monsoon being a Ponzi scheme, Charles talked about the lack of ROI guarantee will stand up in court:
There’s no promised “returns” as I have always said, and the website and my videos doesn’t say anything of the sort..
I’ve never guaranteed 10% returns.. only that as we sell ad service people who click ads in the traffic exchange can qualify to share in revenues up to a maximum of $55 .. without any time frame affixed whatsoever.
The SEC said that the newly invested funds to pay off existing investors is what makes Traffic Monsoon a Ponzi scheme, but this is what Charles said:
I was definitely sharing profit margins with people as I have outlined. No investment is offered on traffic monsoon as it clearly states.
No promise of returns — only promise of ad service, with an explanation that people can click through ads and qualify to share in the revenues, which couldn’t possibly be guaranteed.
I am not sure if Charles has a lawyer onboard yet, but the court date is set for August 5th where he will talk about lack of ROI guarantee…
In all honesty, once a company gets into the SEC’s bad side, there is no coming out…
This has happened to many companies in the past and none of them are here today…
So the future doesn’t look good for Traffic Monsoon…
What do you guys think?
Traffic Monsoon now a Ponzi scheme?
NEW UPDATE FROM CHARLES AS OF 1 PM July 27, 2016
So it looks like there is hope, glad there is hope for the company.
July 28th Update On Traffic Monsoon
Even though Charles came with a statement that everything is fine and it will work itself out…
The SEC Motion which was filed July 27th, reconfirms the regulators stance that Traffic Monsoon is a Ponzi scheme:
Traffic Monsoon has operated as an internet-based Ponzi scheme that has raised over $200 million from over 160,000 investors throughout the world.
Currently, Traffic Monsoon has approximately $60 million in accounts located in the United States, Canada, and the United Kingdom.
It has offices in Salt Lake City, Utah, and in London, England, presumably where financial and other business records are held. Moreover, it runs a website (trafficmonsoon.com) through which hundreds of thousands of individuals around the world invest their funds.
The website is reportedly operated through servers located in North Carolina.
The Commission respectfully requests that the Court enter an ex parte order appointing a receiver in this action to protect and preserve these assets.
As of right now, Traffic Monsoon and Charles Scoville are prohibited from selling new investments to Traffic Monsoon affiliates and dispersing any personal property they own.
In order to ensure that all assets of the Defendants are properly preserved, and to give effect to the terms and provisions of the TRO, including but not limited to the cessation of investor solicitation through the Traffic Monsoon website and the protection of the servers, business records, and files of Traffic Monsoon and Scoville, the Commission respectfully requests that the Court appoint a Mary Margaret (Peggy) Hunt of Dorsey Whitney LLP as the Receiver over all assets of Traffic Monsoon and Charles Scoville.
The same day the SEC filed their motion, Judge Parrish granted it
Before the Court is an Ex Parte Motion for Appointment of Receiver brought by the Securities and Exchange Commission.
Having considered the Commission’s Motion, the Court makes the following findings:
The Commission has made a sufficient and proper showing that the appointment
of a receiver in this action is necessary and appropriate for the purposes of marshaling and preserving all assets of Traffic Monsoon, LLC and all assets of Charles D. Scoville.
Another thing Judge Parrish said that if a Receivership was not established, that Traffic Monsoon and Scoville:
would likely dissipate or otherwise conceal assets and would likely continue to receive funds from investors.
Because the Traffic Monsoon and Scoville are unlikely to have sufficient assets to satisfy the full value of any judgment obtained in this case, any dissipation of the assets would irreparably harm the investors on whose behalf the Commission brought this suit.
That last statement reveals that the Judge there could be damaged to be awarded against Traffic Monsoon and Scoville at a later date.
Mary Hunt has been appointed Receiver of Traffic Monsoon, with an appointment seeing the Receiver take full control of Traffic Monsoon and Scovilles assets.
The Receiver is authorized to take immediate possession of all assets, bank
accounts or other financial accounts, books and records and all other documents or instruments relating to Traffic Monsoon and Charles Scoville.
The Receiver is authorized to take immediate possession of all personal property
of Traffic Monsoon and Charles Scoville, wherever located, including but not limited to electronically stored information, computers, laptops, hard drives, servers, external storage drives, and any other such memory, media or electronic storage devices, books, papers, data processing records, evidence of indebtedness, bank records and accounts, savings records and accounts, brokerage records and accounts, certificates of deposit, stocks, bonds, debentures, and other securities and investments, contracts, mortgages, furniture, office supplies and equipment.
The Receiver is authorized to take immediate possession of all real property of Traffic Monsoon and Charles Scoville, wherever located.
The Receiver is (also) authorized to open all mail directed to or received by or at the offices or post office boxes of Traffic Monsoon and Charles Scoville, and to inspect all mail opened prior to the entry of this Order, to determine whether items or information therein fall within the mandates of this Order.
Traffic Monsoon and Scoville also have been ordered to:
immediately preserve and turn over to the Receiver forthwith all paper and electronic information of, and/or relating to Traffic Monsoon; such information shall include but not be limited to books, records, documents,accounts and all other instruments and papers
provide any passwords and execute any documents required to access any computer or electronic files in any medium, including but not limited to electronically stored information stored, hosted or otherwise maintained by an electronic data host
provide any information to the Receiver that the Receiver deems necessary to exercising the authority and discharging the responsibilities of the Receiver under this Order, including but not limited to allowing the Receiver to inspect documents and assets and to partition office space and
assist the Receiver in fulfilling her duties and obligations (by responding) promptly and truthfully to all requests for information and documents from the Receiver
Well, all of this just means Charles Scoville has lost control of Traffic Monsoon.
There will be a preliminary injunction hearing for August 5th….
Traffic Monsoon Preliminary Injunction Hearing Rescheduled for Sep 23rd.
Earlier today, I told you that the preliminary hearing is August 5th, but it has been changed to Sepember 23rd.
This is a recent Facebook post by Charles Scoville:
I’ve had a very positive and constructive conversation with the SEC today, and they explained to me they have every intention to work out resolution with me without having to go through litigation.
They said this is their experience almost all the time. They’ve moved the hearing until 23 Sept 2016 to give us plenty of time to work out settlement resolution.
I stressed with them my priority at this point is to make sure that the people who have purchased the adpacks get the money that’s owed to them.
They told me that we’ll sort out the plan for accomplishing that, and I’ll work with the receiver to make sure everyone gets paid what is due through the resolution as quickly as possible.
I outlined a plan for determining amounts to be paid. I told them that speed in getting this done is important, and to place urgency in carrying out this step.
I know people want to get paid as soon as possible, so I even suggested a plan I believe this could be carried out nearly immediately.
The next step is making sure the business can move forward from here without a revenue sharing position, still providing quality services, and still create a way for people to earn money by surfing ads.
I will keep you guys updated if there are any changes.
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