Traffic Monsoon Receivership to continue during appeal
Following the filing of an appeal by Charles Scoville, there’s been some uncertainty as to the status of the court-appointed Receivership.
In particular, whether or not recovery efforts would continue while the appeal was being decided on.
While distribution payments might not be possible pending the outcome of the appeal, the good news is the Traffic Monsoon Receivership will still continue to work towards recovering investor losses.
In a May 4th letter to Traffic Monsoon affiliates, the Receiver revealed plans to release a distribution plan “as quickly as possible”.
Ultimately, I will propose a “plan of distribution” to the Court that will provide for each investor who lost money to receive a share of the cash I am holding.
Please know that I am very committed to proposing a plan of distribution as quickly as possible.
But, sorting out Traffic Monsoon’s business will take some time.
As is common with Ponzi schemes, Charles Scoville kept “no traditional records”. As such the Receiver has to rely on information gleaned from Traffic Monsoon’s affiliate database, which through forensic accounting takes time to piece together.
As Receiver Peggy Hunt explains;
I have taken two primary steps to assist in recreating (Traffic Monsoon’s) books.
First, shortly after the case was filed, I secured Traffic Monsoon’s servers.
The servers contain electronic data of Traffic Monsoon’s transactions with investors.
Second, I have been obtaining financial records held by the payment processors and financial institutions through which Traffic Monsoon did business.
Forensic accountants are using the information … to piece together the monies that were paid to Traffic Monsoon by each investor, and the monies each investor received.
This process is time-consuming due to the sheer volume of information (totaling almost 6 million records).
This news is unlikely to go down well with Traffic Monsoon’s top investors, as they see the marshaling of funds as “stealing” the money they in turn stole from victims.
To date the Traffic Monsoon Receivership has marshaled over $49 million dollars, with that figure expected to rise as the business is further dissected.
Clawback litigation against Traffic Monsoon’s top investors is a very real possibility.
Funds seized by the Receiver have thus far been seized from
- three JP Morgan Chase Bank accounts
- four PayPal accounts
- two Payza accounts (one of which was not disclosed to the Receiver by Scoville)
- one Allied Wallet Account and
- one Solid Trust Pay account
Allied Wallet has informed the Receivership it has another $7 million funds, which the Receiver is working towards recovering.
After Paypal unfroze Traffic Monsoon funds, Scoville began quietly transferring millions to EVP International (Payza).
Scoville transferred $4.25 million dollars, of which only $600,000 has been accounted for.
Scoville insists all the funds were transferred to the seized Payza account, however forensic accounting uncovered a “TM-UK” Payza account.
The existence of the TM-UK account … was never disclosed by Scoville to the Receiver.
The good news is the Receiver was able to seize the TM-UK account and trace the entire $4.25 million amount.
The Receiver continue her investigation to determine, among other things, the identity of the owners of Payza accounts who received the EVP transfers.
Back when Scoville demanded a “living allowance” from the Receiver, the Receiver agreed upon condition that Scoville signed a declaration that swore
neither he nor persons or entities controlled by him received any EVP transfers.
Scoville never signed the declaration…
On the authority side of things, in the Receiver’s May 4th First Status Report, she reveals reviewing reports from the FBI and City of London police.
Whether these reports manifest themselves as criminal charges at a later date remains to be seen.
Meanwhile, in an attempt to secure the millions he stole from Traffic Monsoon affiliates, Scoville’s appeal will continue to play out in the Tenth Circuit.
The Receiver’s Status Reports are due quarterly, with the next one due out in early September.