A group of Italian Traffic Monsoon investors fell for the old “pay your upline instead of the company” MLM Ponzi ruse.

The upline was Fabiano Santos, aka Maurizio Longo, who directed his victims to invest upwards of $1 million through his shell company Advertising Corp.

Doubling down on his fraud, Santos filed investor claims with the Receivership on behalf of his downline.

Santos’ victims also filed claims, creating a headache for the Receiver.

The problem with paying your upline to get into an MLM Ponzi scheme is the company has no record of funds invested.

The books and records of the Receivership Estate show that Santos paid Traffic Monsoon cash in excess of $1.1 million.

Santos submitted several Proofs of Claim against the Receivership Estate which were Disputed Investor Claims.

Additionally, the Italian Investors each timely submitted Proofs of Claim against the Receivership Estate based on monies they paid to Santos. The Italian Investor Claims assert claims totaling $1,120,862.81.

Thus when a Receivership takes over a Ponzi scheme and pieces together records, they’re unable to verify claims from otherwise legitimate victims.

There are no records showing that the Italian Investors paid Traffic Monsoon any monies and thus the Italian Investor Claims are Disputed Investor Claims.

The Santos dispute was first raised back in early 2021. The Receiver and her team have been working to sort through the mess since.

Santos’ claims were eventually “disallowed in their entirety”. The Receiver then determined

although there is no record that the Italian Investors paid cash to Traffic Monsoon, the Italian Investor Claims should be allowed because they have adequately demonstrated that they are the bona fide victims of the Traffic Monsoon Ponzi scheme.

That brings us to the settlement reached between the Italian investors and the Receiver.

As per the terms of the proposed settlement:

  1. three duplicate/amended Italian investor claims will be withdrawn;
  2. the remaining claims will be converted to USD and paid out as an approved claim; and
  3. the settlement will resolve any outstanding claim disputes between the investors and the Receiver.

I don’t have an exact number but looking at the submitted claims, the settlement appears to cover twenty-seven Italian Traffic Monsoon victims.

The disputed claims were filed across March and April 2020 as part of the Traffic Monsoon Receivership claims process. Together the claims total $1.12 million.

The Receiver filed the proposed settlement with Italian investors on September 12th. At time of publication court approval remains pending.

According to the Receiver, Fabiano Santos “is currently under criminal investigation in Italy for fraud”. That was first disclosed in 2021 but there have been no updates since.