In Atmosphere Of Murkiness, Are Violations Of The Traffic Monsoon Asset Freeze Taking Place?

EDITOR’S NOTE: Traffic Monsoon is a Utah company. The firm also has purported business operations in the United Kingdom and Dubai. Details about the offshore operations are murky.

A claim from an apparent Traffic Monsoon affiliate appeared Monday (April 3) on Facebook that “Allied Wallet is making refunds of [Traffic Monsoon]  purchases made by credit cards or debit cards. Many people are getting this [sic] refunds.”

In the same thread on the TrafficMonsoonupdates Facebook site, a poster claimed, “I received this in my bank today . . . 10.04% of my initial deposit to TM.” The apparent partial refund was marked “AW*TRAFFICM.”

In July, U.S. District Judge Jill N. Parrish ordered all assets of Traffic Monsoon and operator Charles Scoville frozen. An October report by court-appointed receiver Peggy Hunt said that Allied Wallet had claimed it had approximately $7 million in Traffic Monsoon funds on deposit when the SEC filed its Ponzi action against the “program.”

The asset freeze imposed by Parrish was further reinforced last week when she issued a preliminary injunction at the request of the SEC.

From the preliminary injunction, which names Allied Wallet and other Traffic Monsoon vendors, including PayPal, Payza, Solid Trust Pay and JPMorgan Chase Bank (italics added):

Each of the financial or brokerage institutions, debtors, and bailees, or any other person or entity holding Defendants’ Assets shall hold or retain within their control and prohibit the withdrawal, removal, transfer, or other disposal of any such assets, funds, or other properties.

Why, then, are Traffic Monsoon members claiming Allied Wallet is issuing at least partial refunds? And if the refunds are taking place, are they in violation of the asset freeze?

Allied Wallet did not respond to a request for comment Monday. Neither did the SEC or Hunt.

But the docket of the SEC’s case against Traffic Monsoon now shows that Hunt filed a notice of a subpoena naming Allied Wallet on Tuesday. How things would proceed was not immediately clear.

Hunt previously informed the court about a statement Scoville allegedly made about how Traffic Monsoon hooked up with Allied Wallet prior to the SEC action via a company that purportedly was given to him.

From the statement, as contained in a transcript filed by Hunt last year (italics added):

Well, the thing is is Traffic Monsoon in the UK was kind of formed in a way because, when we were in Dubai, that’s when we got set up with someone who knew people inside of Allied Wallet to help us get an Allied Wallet account set up. And when we were setting up Allied Wallet, Allied Wallet required us to have a registration in the UK.

Scoville went on to say, “We had somebody who was there with us who said, I’ve got a UK company. We can change it to the Traffic Monsoon, and then we could use that registration so you can use Allied Wallet. So that’s Taheer and Amir, both of them are on that business registration, but technically they don’t own any of the company.”

And, according to the transcript, Scoville said, “they were just giving me a company that they had already registered as a speedy process of just making sure that we have a business registration in the UK. But they put me on as the owner.”

Scoville, according to the transcript, grew to have doubts about the U.K. operation because he could not confirm that staff or security personnel for which he was paying 6,000 pounds per month actually were working at the U.K. office of his own company.

From the transcript (italics added):

I went over there, and apparently, the person at the front desk didn’t know who I was, who asked to see the people that were working for Traffic Monsoon, and they said that there’s nobody there. So I don’t know all of the ins and outs of what’s going on there. I may have been scammed. I don’t know.

Parrish has found that Traffic Monsoon operated as a Ponzi scheme, according to court documents. Scoville has said he will file an appeal.