Charles Scoville & Traffic Monsoon Charged In Ponzi Scheme
On July 26, 2016 the Securities and Exchange Commission (“SEC”) announced that it obtained an asset freeze against the operator of an international Ponzi scheme that raised more than $207 million from investors worldwide, primarily in the U.S., India, and Russia.
In a complaint filed in federal court in Salt Lake City on July 26, the SEC alleges that Traffic Monsoon LLC and Charles Scoville, the company’s only member operated an Internet-based Ponzi scheme that they falsely represented to investors was an advertising company. According to the SEC complaint, Scoville began operating Traffic Monsoon in October 2014 as a combination Internet traffic exchange and pay-per-click program and recruited more than 162,000 investors around the world. According to the complaint, although Traffic Monsoon markets itself as a highly successful company, nearly all of its revenue is generated by other investors, not its products or services. The complaint alleges that more than 99% of Traffic Monsoon’s revenue is derived from new investor funds, making claims that it is a successful advertising business merely an illusion.
The SEC’s complaint alleges that Traffic Monsoon and Scoville violated Sections 5(a), 5(c) and 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder. Among other things, the SEC’s complaint seeks permanent injunctions, prohibiting further violations of the laws charged, disgorgement of ill-gotten gains plus prejudgment interest and civil penalties from Traffic Monsoon and Scoville.
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