Pyramid Frauds | Ponzi Schemes
In previous articles dealing with Pyramid and Ponzi frauds, Colin Parker of Kangs Solicitors discussed the issues that arise when presented with money making schemes ‘appearing too good to be true’.
The Fraud | Kangs Solicitors Fraud Team
The article on ‘Pyramid Schemes’ stated:
‘Pyramid schemes have existed for at least a century, they appear in different guises, but all have one common feature, they are illegal’.
In dealing with ‘Ponzi Schemes’ it was stated:
‘There are probably thousands of such frauds running at any given time and, especially, during bad economies and recessions when people are desperate for easy money and victims are abundant’.
A Recent Pyramid Scheme Case | Defence Solicitors
A total of 162,000 ‘investors’ worldwide, many in the UK, lost an estimated £160 million in ‘Traffic Monsoon’ having been drawn into this Ponzi Scheme, which appeared to them to be completely innocent. ‘Traffic Monsoon’, which has only recently been shut down, was driven worldwide by Charles Scoville from the USA.
How Did Traffic Monsoon Work | Kangs Fraud Solicitors
The claim was that:
‘Traffic Monsoon’ was ‘a specialized advertising & revenue sharing company that allows international participation of individuals & groups’ and that ‘high quality advertising’ was provided for people seeking for a way to earn money online’.
‘Members’ had to buy ‘AdPacks’ which opened the door to simple online advertising.
Having paid a comparatively modest sum of £38 for a single ‘AdPack’ each ‘member’ simply had to click on 50 banner adverts each day, holding on each one for five seconds. It was this online traffic that ‘members’ were told would generate income.
The reward was supposedly ‘the easiest grand you will ever make’.
The ‘rewards’ grew by purchasing further ‘Adpacks’.
‘Traffic Monsoon’s’ website shows a sophisticated ‘Calculator’ explaining how income would grow by the purchase of further packs supported by endorsements from those who received money back from the company in its early days.
At a seminar in London in January of this year, one speaker claimed that more than half the world’s population had joined.
The Reality | Kangs Solicitors
The truth was that over 99% of ‘Traffic Monsoon’s’ revenue simply derived from the sale of ‘ADPacks’ and that payments made to ‘investors’ only arose from these receipts.
There was no value at all in the supposed advertising and the early payments out were made from money receipts from subsequent unfortunate ‘investors’ anxious to join the scheme.
PayPal became involved in blocking payments from the fund but Scoville did not inform ‘investors’, who, for over a month, continued ‘investing’ money totally unaware money could not be withdrawn from the fund.
PayPal’s freeze ended on July 11th. Subsequently, Scoville made more than 256 withdrawal requests amounting to more than nineteen million pounds, according to Securities and Exchange Commission.
Whilst predominantly a ‘Ponzi Fraud’, the Traffic Monsoon scam contained features similar to those contained in a ‘Pyramid Fraud’ to the extent that it was contended that the more effort exerted into the scheme the more the likelihood that a greater number of customers would be attracted.
Who Benefitted ? | Solicitors Defending Fraud Allegations
Scoville recently posted on his Facebook page:
‘For those of you who read the report and wonder why I moved funds from the business account to my personal… it truly was to protect those funds’
The authorities believe that Scoville, has a track record of involvement in running similar schemes, and that he may return with yet another ‘quick money making scheme’ also aimed worldwide including the UK.
How Can We Help?| Kangs Solicitors
Here at Kangs Solicitors we are able to offer a wealth of experience having advised clients who have become involved in both Ponzi and Pyramid Frauds from all angles.
Should you require any guidance and advice concerning Ponzi or Pyramid fraud activity then please do not hesitate to contact any of the following on behalf of Kangs Fraud Team:
Colin Parker
cparker@kangssolicitors.co.uk
Tel: 0121 449 9888 | 020 7936 6396
Hamraj Kang
hkang@kangssolicitors.co.uk
Tel: 07976 258171 | 020 7936 6396 | 0121 449 9888
John Veale
jveale@kangssolicitors.co.uk
Tel: 0121 449 9888 | 020 7936 6396
