Monday, 6 January 2020

Traffic Monsoon - Official Claims Information

The Claims Portal is now live.

To submit a Proof of Claim electronically, please click on the “File a Claim” icon. 

You must file your claim by 11:59pm on April 10th, 2020.

Regardless of previous forms you may have filled in, this form MUST be completed or you will get NO money.

This is the receivers general information if you have any queries:

Peggy Hunt, Esq
Traffic Monsoon Receiver
Dorsey & Whitney LLP
111 S. Main Street, Suite 2100
Salt Lake City, UT 84111-2176

Traffic Monsoon Receivership Hotline
Toll-free in North America 888-522-8926
Outside of North America +1-503-520-4483


Summary of Case
On July 26, 2016, the Securities and Exchange Commission filed a Complaint in the United States District Court for the District of Utah against Traffic Monsoon, LLC, a Utah limited liability company, and Charles David Scoville (the “Defendants”). See SEC v. Traffic Monsoon, LLC et al., Case No. 2:16-cv-00832-JNP (D. Utah). The SEC claims, among other things, that between October 2014 and July 26, 2016, the Defendants engaged in securities fraud and operated a Ponzi scheme. It is alleged that the Defendants took approximately $207 million from over 162,000 investors through the solicitation of a revenue sharing product known as an “AdPack”. The Court also entered a Temporary Restraining Order and Order Freezing Assets which was subsequently amended, and an Order Appointing Receiver, appointing Peggy Hunt of Dorsey & Whitney LLP, as the receiver for the assets of Traffic Monsoon and Mr. Scoville, pending a determination as to whether a preliminary injunction should be entered in this case. At that time, the Receiver promptly took control of known assets and commenced an investigation.
Mr. Scoville thereafter contested the entry of a preliminary injunction, and filed a Motion to Set Aside the Receivership. An evidentiary hearing on those matters was scheduled to commence on November 1, 2016 (the “Preliminary Injunction Hearing”). Prior to the Preliminary Injunction Hearing, the Receiver filed two Declarations summarizing her investigation as of October 2016 as follows: Declaration of Receiver Peggy Hunt (Communications) and Declaration of Peggy Hunt (Business Operations). At the preliminary injunction hearing, the Court received evidence from both the SEC and Mr. Scoville over a two-day period, and then heard several hours of legal argument.
On March 28, 2017, the Court entered a Preliminary Injunction, a Memorandum Decision and Order Granting a Preliminary Injunction and Denying the Defendants’ Motion to Set Aside the Receivership, and an Amended Order Appointing Receiver. You should review each of these documents. The Court held, among other things, that the SEC had made a showing that it was likely to prevail in establishing that Traffic Monsoon was operated as a Ponzi scheme. The Court has enjoined the Defendants from operating Traffic Monsoon or a business model substantially similar to Traffic Monsoon’s sale of AdPacks. The Court has also frozen all assets and stayed all litigation. Finally, the Court has rejected Mr. Scoville’s request to set aside the receivership, and has appointed Ms. Hunt to serve as Receiver for the purpose of marshalling and preserving all of Traffic Monsoon’s assets and all of Mr. Scoville’s assets that were obtained directly or indirectly from Traffic Monsoon.
Mr. Scoville appealed the District Court’s orders, and on January 24, 2019, the Court of Appeals for the Tenth Circuit filed its Opinion affirming the District Court in all respects. The Tenth Circuit held that (1) U.S. securities laws apply to offers to sell, and sales of, AdPacks to Traffic Monsoon members located outside of the United States, (2) AdPacks are securities, and (3) it is likely that the SEC can prove that Mr. Scoville’s and Traffic Monsoon’s conduct violated security law anti-fraud provisions –specifically, that the District Court did not abuse its discretion in determining that the SEC is likely to prove that Traffic Monsoon was operated as a Ponzi scheme.
After obtaining numerous extensions of time, Mr. Scoville filed a Petition for a Writ of Certiorari in the U.S. Supreme Court on June 21, 2019. On November 4, 2019, Mr. Scoville’s Petition for a Writ of Certiorari was denied.