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PayPal accused of aiding a massive Ponzi scheme

Victims of an alleged Ponzi scheme have accused PayPal Holdings for allowing the fraud to continue, as it had processed transactions worth more than $100 million related to the Ponzi scheme. PayPal had earlier banned the involved organization that was running the internet advertising “pay-to-click” program. However, the same organization had started using PayPal again for this specific scheme and PayPal failed to act in time. Due to this, more than $100 million worth of investors’ money was siphoned off through PayPal. These points have been mentioned in the complaint filed with the federal court in San Jose, California.

The main accused in the Ponzi scheme, Charles David Scoville, is under investigation in a case that was filed by the US Securities and Exchange Commission. The commission had alleged that Scoville and his business Traffic Monsoon took in nearly $207 million from more than 162,000 investors worldwide. These investors had purchased advertising products from Traffic Monsoon. It was promised to them that Traffic Monsoon will help increase traffic to their website and clicks on banners of their website. Based on the complaint, the Utah federal court had ordered the freezing of Traffic Monsoon’s assets.

Meanwhile PayPal said that the accusations are baseless and it is looking forward to refuting these claims.

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