Traffic Monsoon was operated by Charles Scoville, as a combination "internet traffic exchange and pay-per-click program" that solicited money from all over the world. It accepted money from at least 162000 investors primarily in US, India, and Russia by claiming to be a "highly successful advertising company", when in reality, more than 99% of the revenue was paid into the system by new investors, making it a classic Ponzi scheme. Traffic Monsoon LLC is a Utah company. Scoville is believed to be in Dubai. SEC's motion to have an temporary freeze and receiver to take over the company has been granted.
Traffic Monsoon's primary product (which accounted for 99.6% of all revenue) is the "Adpack". At $50 each, purchaser is supposed to get 20 clicks on the banner (either they provide, or they can use one provided by Traffic Monsoon) and 1000 visitors from the traffic exchange, as well as "share in Traffic Monsoon's profit". In reality, TM was never able to fulfill the visitor promise. By its own counter, it can only provide about 1/10th of the visitors. In reality, TM operated as a $50 in, $55 out HYIP.
Those that track scams, such as the MLMSkeptic, would notice that this is structurally IDENTICAL to 12DailyPro (2005-2006) or Ad Surf Daily (2006-2008), both were also prosecuted as autosurf ponzi schemes.
What's more interesting is Charles Scoville himself has been observed operating several predecessors to Traffic Monsoon. There's TVIBUX, and there's AdHitsProfits, both are slight variations on the same ideas. Neither, however, made it big to hundreds of millions of dollars.
But first, let's explain what an autosurf is, and what an investment autosurf.
What is an autosurf?
Autosurf is a type of Internet website traffic exchagne that automatically rotate advertised websites in the web browser. Imagine leaving a browser window open to constantly display banners from all the other websites, which changes periodically. Each "view" earns you a "credit" which allows your site's banner some display time in other people's browser window.
Autosurf can operate as a "ponzi scheme" even if no money changes hands, if overall credits earned is in excess of total pageviews delivered, thus ensuring that there will always be credits left over.
Autosurf that involve money are known as Investment autosurfs.
What is an Investment Autosurf?
An investment autosurf are de facto Ponzi schemes. They are usually advertised as "buy X dollar worth of ad credits, watch banners, get X+Y dollars back". The first one to make it big in the US is called "12DailyPro", which promised up to 12% daily for 12 days, and took in millions of dollars in 2005. It received a cease and desist notice in 2006 from the SEC, accusing it of being a ponzi scheme, as 95% of the program's funds came from new members. Paying off old members with new members is a hallmark of Ponzi schemes.
Charis Johnson accepted a settlement and the scheme was quickly closed in March 2006. Charis Johnson was defended by Noell Tin, who would later defend another big-time Ponzi operator, Paul Burks of Zeek Rewards.
Investment Autosurf Ponzi Example: Ad Surf Daily
Among the members who joined 12DailyPro was a guy called "Thomas Anderson Bowdoin Jr." better known as "Andy Bowdoin". Six months after 12DailyPro closed, Andy Bowdoin launched his own version, called "Ad Surf Daily".
In ASD, you buy "ad package" from ASD for $1, which supposedly makes your website viewable to toher members of ASD on their custom "rotator". You get get "rebate up to 150%" by viewing other member's website(s) for a few minutes per day. ASD supposedly takes 60% of that day's "sales" and divides it up to all the ad units purchased and distributes them as "rebates", though members are encouraged to leave the rebates in their account so they can buy MORE adpacks with them and generate more rebates. And if a member has no website to advertise, Andy has two websites that can be advertised (and the member would still earn a rebate).
Other than small variations in numbers, structurally this is the same as Traffic Monsoon. You can read more about Ad Surf Daily here. Andy Bowdoin eventually plead guilty to wire fraud in 2013 (despite repeated claims that he'll fight the charges, and even promoted other suspect schemes before his plea) and is currently serving time in Florida Federal Penitentiary.
So basically, Traffic Monsoon is the latest variation of a scam that has been around for more than a decade.