SEC seeks Scoville default judgment + Receiver updates
As requested by the SEC, on April 2nd the court clerk recorded entry of default against Charles Scoville.
Later that same day the SEC filed for default judgment.
The SEC are seeking a disgorgement judgment of $2.4 million dollars, plus $110,893 in prejudgment interest and a to be determined civil penalty.
Despite being served as part of the Traffic Monsoon fraud case filed in 2016, to date Scoville (right) has failed to respond to the SEC’s complaint.
Should the SEC be granted default judgment, Scoville would also be barred from committing further acts of securities fraud.
Apart from an bizarre letter addressed to the Judge Parrish back in January, Scoville has failed to file anything since his lawyers walked out on him late last year.
As far as we know, Scoville is still sitting in a Utah prison cell after pleading guilty to attempted child sexual abuse charges.
In related news, on April 3rd the Traffic Monsoon Receiver has filed her Eight Status Report.
In the report the Receiver reveals over half a million emails have been sent out to Traffic Monsoon victims regarding the Claims Portal.
As of March 31st, 2020, 14,063 Proofs of Claim have been submitted.
Many have agreed to the Receiver’s claim amount, but others have asserted claims in excess of the claim amount, which will require necessary review and reconciliation in the coming months.
With respect to the Traffic Monsoon net-winner class-action, Imtiaz Aslam remains the sole individual defendant yet to be served.
Aslam (aka Immy Aslam) is from the UK and is Traffic Monsoon’s top net-winner, pocketing $5,095,096 off an initial $10,825 investment.
None of the Named Defendants have responded to the Complaint, and the Receiver is in the process of obtaining Certificates of Default and Default Judgments against the Named Defendants who have been served and failed to respond.
A law firm has been retained in the UK to pursue anticipated judgment against seven of Traffic Monsoon’s top net-winners.
With respect to collecting judgement from Traffic Monsoon net-winners in Canada, the Receiver is waiting
until after the Claims Bar Date, at which point the Receiver will review the filed Proofs of Claim and determine whether the amounts claimed justify spending more time and funds pursuing international defendants.
One of the yet to be solved mysteries remaining is what happened to the proceeds of Scoville’s UK flat sale.
In November 2017, Scoville’s Manchester flat was sold to John Hitchen for £280,000.
Scoville denies selling the flat, despite documents related to the sale bearing his signature.
This prompted a lengthy Receivership investigation, through which the UK law firm that brokered the sale was subpoenaed.
The UK law firm complied with the subpoena and produced the relevant documents to the Receiver.
Upon reviewing the documents, the Receiver determined that the person who, purporting to be Charles Scoville, communicated with the UK law firm and personally directed the sale of the Manchester Flat was not actually Charles Scoville.
There is suspicion Imtiaz Aslam might have been impersonating Scoville (which given their proximity during Traffic Monsoon I agree is highly likely), but as of yet no individual has been identified.
The Receiver also learned the proceeds of the sale of Manchester Flat went to an account in the name of Charles Scoville at Santander Bank in the UK.
The Receiver issued a subpoena to Santander Bank’s U.S. entity requesting information about this account, and was informed that she would need to subpoena Santander Bank’s UK entity.
The Receiver anticipates asking the Court to send another Letter of Request to the English Court requesting issuance of a subpoena to Santander Bank in the UK to obtain information about this account and where the sale proceeds may have gone.
I imagine what this will come down to is who opened the Santander Bank account and where the money was then transferred.
Sounds to me if there’s a criminal case to be investigated here but whether UK authorities will pursue the matter is unclear.
April 10th is the Traffic Monsoon victim claims bar date. As it stands the Receivership is sitting on $53 million, the majority of which will be paid out to victims with valid claims.
Pending a ruling on the SEC’s default judgment motion, stay tuned…
Update 28th April 2020 – On April 21st the court clerk recorded entry of default against Scoville.
The next move from the SEC will be a motion for default judgment. As at the time of this update that hasn’t happened yet.
Update 30th May 2020 – On May 27th the SEC filed for default judgment against Scoville. A decision on the motion remains pending.