As of May 10th, court documents show 12,500 Traffic Monsoon victims have secured approval for claims totaling $33,383,808. This marks a significant step in the long-running effort to recover funds from the collapsed online advertising platform, which federal authorities identified as a Ponzi scheme.
The receivership, however, still faces $182.8 million in disputed claims. Many claimants failed to provide sufficient proof for their submissions. The Receiver filed omnibus objections against these. A large number of claimants either did not respond to the objections or agreed to lower their requested amounts. If the court approves the "No Response Claims Motion," 5,596 contested proofs, originally over $90.6 million, will shrink to just $3,038,419.33 in allowed claims.
Around 500 disputed proofs remain unresolved, accounting for approximately $3.25 million. Another 4,500 proofs require resolution. This group includes a clearly malicious $99 trillion claim. Excluding that outlier, the remaining proofs total roughly $88.9 million. The Receiver and her team continue to review these claims and file objections as necessary. The goal is to reduce contested claims enough to propose a workable Plan of Distribution.
The Receiver's report also details claims from Italian investors who funneled money into Traffic Monsoon through Fabiano Santos and his entity, Advertising Corp. Santos currently faces a criminal fraud investigation in Italy. Despite being identified as a "net-winner" in the scheme, Santos submitted several proofs of claim. All but one, a claim for $1,000,000, have faced objections from the Receiver. To ensure any accepted claims genuinely benefit victims, the Receiver collaborates with an attorney in GT's Milan office. They are evaluating the connection between Santos, the Italian investors, and the Traffic Monsoon operation.
The Receivership Estate has moved to recover additional funds from Allied Wallet, a payment processor. The Receiver asserts a claim against Allied Wallet exceeding $1.8 million. This amount stems from fees and charges debited from Traffic Monsoon's account before and after the federal case began. Allied Wallet disputed these claims, arguing the fees were contractually and legally permissible. The parties attempted a consensual resolution. But Allied Wallet subsequently ceased operations and entered liquidation. The Receiver's team now works with the liquidator on the Estate's claims. A formal claim was submitted during the reporting period and is under review.
Payza, another payment processor used by Traffic Monsoon, was shut down by the Department of Justice. In 2018, co-founders Firoz and Ferhan Patel were indicted on money laundering charges. Last year, a federal court sentenced Firoz Patel to three years in prison, while Ferhan Patel received an eighteen-month sentence. The Receiver continues to work with the Department of Justice on matters related to both Payza and Traffic Monsoon.
Regarding the sale of a Manchester flat owned by Traffic Monsoon's operator, Charles Scoville, the Receiver has traced the proceeds. Money from the flat was deposited into Santander Bank in the United Kingdom. She has identified the recipients of these funds. The Receiver and her team are now evaluating potential claims related to this transaction. They are weighing who received the money and whether pursuing recovery efforts would be financially viable for the Estate.
As of March 31st, 2021, the Traffic Monsoon Receiver holds $51.5 million designated for distribution to those with allowed claims. The process of resolving contested claims is ongoing. The Receiver aims to complete this phase quickly to propose a Plan of Distribution for court approval.