PayPal Holdings Inc. was accused by victims of an alleged Ponzi scheme of failing to detect the fraud while processing more than $100 million in investments.

Even after the company had banned the operator of the internet advertising “pay-to-click” program from using its services in 2011 over his involvement in a similar scheme, PayPal played “a crucial –- indeed, indispensable –- role” in letting him siphon and steal investor money, according to a complaint in federal court in San Jose, California.

The operator, Charles David Scoville, was sued last year for fraud by the U.S. Securities and Exchange Commission over claims that he and his business, Traffic Monsoon, took in $207 million from more than 162,000 investors worldwide. The investors bought internet advertising products from Traffic Monsoon. In exchange, they were promised visits to their websites and and clicks on banners on their websites.

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The agency won an injunction in Utah federal court freezing Traffic Monsoon’s assets. Traffic Monsoon is appealing the order and argues that because it was selling advertising rather than securities, it couldn’t have violated securities laws, according to a court filing.

The investors suing PayPal, who seek class-action status, say the company served as the payment processor for about $134 million in investments in Traffic Monsoon. They’re seeking at least $5 million in damages.

“We look forward to refuting these claims,” PayPal spokeswoman Ellen Hayes said. “Beyond that, we do not have any further comment on this pending litigation.”

By knowingly allowing the fraud, “PayPal departed from its own policy that prohibits the use of its services for ‘transactions that support pyramid or ponzi schemes,”’ according to the complaint,

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