Traffic Monsoon Is A Ponzi Scheme SEC Acts
Back in July of 2015 I reported the following about Traffic Monsoon and Charles Scoville:
In my opinion, Traffic Monsoon is running a Ponzi scheme. They are using new money from advertisers to pay previous advertisers. With near worthless traffic, there is little or no reason for someone to buy Traffic Monsoon ads unless they want to be part of the revenue sharing program. Traffic Monsoon is operated by a serial scammer that consistently has problems with his payment processors. Avoid the Traffic Monsoon scam.
The SEC has now stepped in and has asked for a temporary restraining order against the company. They claim it is a Ponzi scheme that took in $207 million from more than 160,000 investors around the world.
Here are the details of the SEC action:
Many scammers have supported this Ponzi scheme and viciously attacked me for speaking the truth about it. Here is one example of the promoters of this scam:
This scam comes to an end today!
Here are the details of the complaint filed by the SEC:
This matter involves an ongoing Ponzi scheme and offering fraud operated by Charles David Scoville (“Scoville”) and Traffic Monsoon, LLC (“Traffic Monsoon”), headquartered in Murray, Utah. Scoville formed Traffic Monsoon in October 2014.
Since inception, defendants have taken in from investors approximately $207 million in sales of a product called the “Banner AdPack” (“AdPack”). Over 162,000 investors throughout the world have invested in AdPacks. As of the beginning of 2016, Traffic Monsoon was taking in approximately $25 million in cash each month.
Defendants solicit investors through Traffic Monsoon’s website and through YouTube videos featuring Scoville. The website states that Traffic Monsoon’s mission is “to provide high quality ad services for affordable prices, and share revenues for a perfect winning combination that will lead to the ultimate success of our customers.”
Defendants market Traffic Monsoon as a successful Internet advertising services company. They represent that it is a combination of an Internet traffic exchange, where users browse each others’ websites, and a pay-per-click program, where users are paid to click on others’ website banner ads. Defendants represent that its profit is derived from seven different highly desirable advertising products.
In reality, Traffic Monsoon’s advertising business is a illusion designed to obscure the fact that it is offering and selling a security in a pure Ponzi scheme. Over 99% of Traffic Monsoon’s revenue comes from the sale of AdPacks. The company has virtually no other revenue from any other source. All payments to investors are made out of these funds.
As of May 16, 2016, Traffic Monsoon had sold 15,225,689 AdPacks. For each such AdPack, however, it must deliver 1,000 visitors, amounting to 15 billion visitors total. As of July 24, 2016, however, the Traffic Monsoon website states that the company had “delivered 1,618,996,340 visitors to our member’s [sic] websites to date.” This is only about a tenth of what would be required by Scoville’s own program.
On January 11, 2016, PayPal notified Scoville that it was blocking any transfers of funds out of PayPal, while still allowing member funds to be deposited. On February 11, 2016, PayPal notified Scoville that it was freezing the Traffic Monsoon account completely for a period of 180 days.
Scoville did not disclose the PayPal freeze to investors until February 11, 2016, when he posted a news release on the Traffic Monsoon website and also posted another video on YouTube. During the intervening month, because PayPal was allowing investor funds in but not allowing them to be withdrawn, members who bought advertising services and transferred funds to Traffic Monsoon had no idea their funds would be frozen. Scoville, however, was aware of this fact.
The PayPal freeze expired on July 11, 2016.
Scoville has never disclosed to investors, whether on the Traffic Monsoon website or on YouTube, that the PayPal freeze has expired, and has never informed members that they can request that their AdPack purchases be reversed. Since the freeze was lifted he has been withdrawing funds, apparently for his own benefit, as quickly as possible.
In order to halt the ongoing fraud being perpetrated on investors, the Commission seeks a civil injunctive order against Traffic Monsoon and Scoville against further violations of the federal securities laws, as well as disgorgement, prejudgment interest and civil penalties from Traffic Monsoon and Scoville. The Commission also seeks emergency relief in the form of an ex parte temporary restraining order, a preliminary injunction, an ex parte asset freeze and order appointing a receiver over Traffic Monsoon and its customer funds, and the funds of Scoville, and an order prohibiting the destruction of documents, accelerating discovery, and requiring an accounting.
Murray. U.S. District Judge Jill Parrish has granted the restraining order of the SEC, freezing the assets of Scoville and Traffic Monsoon, which is sitting at about $60 million in cash in the United States, Canada and the United Kingdom.