Tag: ponzi

Freddy David Ponzi Scheme Stopped

Freddy David was sentenced to six years for defrauding 55 victims out of £14.5 million in a Ponzi scheme.

He used the money to fund his gambling habit, as well as paying for holidays abroad and his children’s school fees.

An investigation by the City of London Police’s Fraud Squad found that between 2005 and 2017, David had been running a Ponzi scheme through wealth management company HBFS Financial Services Limited (HBFS), of which he was managing director.

The Financial Conduct Authority (FCA) became suspicious of the HBFS bank accounts and referred it to the City of London Police who worked closely with the FCA to investigate the affairs of HBFS.

This fraud was running in parallel with legitimate HBFS business, with David using the company’s name as a means to defraud victims out of vast sums of money. 55 victims invested a total of £14,545,494.48 with individual investments of between £20,000 and £750,000 per person.

The Scam

David would convince victims, some of whom he knew personally as friends, that their funds were being held in a high interest bank account offering between four and eight percent interest annually and they would be paid interest on a monthly basis.

The investigation found that victims were transferring large sums of money into the HBFS business accounts, under the impression that they were investing in high interest accounts. It was found that large sums of money were being transferred into David’s personal bank accounts for his own use as well as being used to pay other investors their “monthly interest”.

Victims were provided with forged bank documents which supposedly confirmed that the investments had been made and that interest was being accrued each month.

Police Staff Investigator, Katie Watkins, said:

“Freddy David took advantage of individuals who placed significant trust in him. He abused his position and as a consequence this has had a devastating impact on the victims and their families, both financially and psychologically.”

This is an unusual case as normally either the scheme is setup to be a Ponzi or it starts legitimate then circumstances conspire to push it into a Ponzi. However in this case, Freddy David was a respected financier and ran the Ponzi scheme as a side business to bolster his own bank account.

Be careful who you invest money with, even if that person is a friend or works in a legitimate financial services organisation.

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The Traffic Monsoon Ponzi Scheme

Pyramid investment scheme worth £160MILLION shut down after taking money from 162,000 people

Traffic Monsoon, which is run by Charles Scoville, claimed to make people money through online advertising ‘AdPacks’. Mr.  Scoville, an American “entrepreneur” has a history of similar schemes.

The Securities and Exchange Commission stated that “Traffic Monsoon’s advertising business is an illusion designed to obscure the fact that it is offering and selling a pure Ponzi scheme” . “Over 99% of Traffic Monsoon’s revenue comes from the sale of AdPacks”.

“The company has virtually no other revenue from any other source”.


Everyone who joined bought AdPacks at $50 each (£38) and was required to click on 50 banner adverts each day, staying on each for five seconds. It’s this online traffic that members were told would generate income, but it didn’t.

In April, PayPal notified Scoville that his business had the hallmarks of a Ponzi scheme  and in time froze the company’s funds – approximately $61 million. Scoville continued to sell Adpacks even though he couldn’t pay anyone.

The PayPal freeze ended on July 11, and Scoville transferred $25.6 million out of the PayPal account into a separate Traffic Monsoon account and immediately transferred $21 million of those funds into his own personal account.

He attempted to transfer additional funds out of the PayPal account, but PayPal stopped this.

Scovile continues to maintain his company is genuine and posted he on Facebook – “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”.  Some people still believe in him and a petition has been launched on Change.org to raise money for Scoville.

The company has taken in $207 million dollars in actual cash, but on paper Traffic Monsoon had generated $738 million dollars in revenue.  Clearly that extra revenue does not exist and only by continually increasing the number of new members buying adpacks could the scheme continue to pay out, until its inevitable collapse.

Had the SEC of not stepped in, Scoville and the funds may have disappeared.

If you have any experiences with scammers, spammers or time-waster do let me know, by email.