URGENT >> BULLETIN >> MOVING: Judge Maintains Traffic Monsoon Receivership And Asset Freeze, Grants SEC’s Request For Preliminary Injunction

URGENT >> BULLETIN >> MOVING: A federal judge in Utah has denied the request of Charles Scoville and Traffic Monsoon to set aside the Traffic Monsoon receivership and has granted the SEC’s motion for a preliminary injunction that continues an asset freeze ordered in July 2016.

“The evidence clearly points to the fact that Traffic Monsoon’s explosive growth was driven by members purchasing and repurchasing AdPacks in order to obtain the incredible returns on their investment, not by intense demand for Traffic Monsoon’s services,” U.S. District Judge Jill N. Parrish ruled. “Indeed, many AdPack purchasers had no interest in the website visits Traffic Monsoon offered, and Traffic Monsoon only ever delivered a fraction of the clicks it promised to deliver. In short, the economic reality of the AdPack purchases is that they were investments.”

From a footnote in the judge’s ruling (italics added/light editing performed):

One of the unique aspects of Traffic Monsoon that differentiates it from other Ponzi schemes is that members had to continually reinvest in the scheme by rolling over the profit from fully matured AdPacks into the purchase of new AdPacks. This amounted to a shell game in which an initial investment of a sum of money would continually cycle among the members’ accounts.

A large portion of an initial investment would be distributed to other members as either revenue sharing or a commission. Then the members that received the revenue sharing payments or commissions would reinvest it by rolling it over into new AdP[a]ck purchases. Under this system, the same dollar could be distributed to member accounts as revenue sharing or a commission many times, until either Traffic Monsoon withdrew it as profit or a member withdrew it from his or her account.

This explains why the members had a relatively small amount in their accounts when the court entered the TRO—$34.2 million—while the number of outstanding AdPacks, if allowed to mature, would amount to $243.9 million. So long as the members, encouraged by a continual flow of money into their accounts, reinvested most of their money rather than withdrawing it, a relatively small amount of money continually redistributed among the members through revenue sharing could fuel much greater expectations as to the near-future value of the AdPacks.

But once the money ceased to continually recycle among the member accounts, as happened when the court entered the TRO, there wasn’t enough money to pay what experience had led the members to believe their AdPack investment would be worth after a short 55-day wait. That is why Traffic Monsoon had only about $60 million in assets to cover outstanding AdPacks that would be worth $243.9 million if they had matured, even though member account balances amounted to only $34.2 million.

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4 Responses to “URGENT >> BULLETIN >> MOVING: Judge Maintains Traffic Monsoon Receivership And Asset Freeze, Grants SEC’s Request For Preliminary Injunction”

  1. Her ruling was no surprise to those of us who knew all along TM was a Ponzi, but to the faithful this was a blow as they thought Charles and TM would win. Mainly because Charles kept lying to them telling them TM was not a Ponzi and they had won the hearing.

    Now comes the SEC responding to Charles’ attorneys Motion to Dismiss, as they have 28 days to respond. I hope they respond quickly so it also can be denied and then start the civil trial.

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  2. You mean the criminal trial
    looks like the civil one has been won by the SEC

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  3. Civil trial isn’t even on the docket yet. This is all pre trial, with more to go.
    SCAMville won’t go to jail till @2020 (barring plea bargain s)

    Civil trip guilt then criminal. You think these con artists are shameless beggars now, the expensive part hasn’t even started.

    David E:
    You mean the criminal trial
    looks like the civil one has been won by the SEC

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  4. ??? This is still pre trial. Civil Trial isn’t even on docket yet then criminal.

    David E:
    You mean the criminal trial
    looks like the civil one has been won by the SEC

      (Quote)

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