Federal Trade Commission, v. Handicapped & Disabled Workshops, Inc., et al.,

Filing 71

ORDER Due to its minimal monetary value, the remaining inventory held by the Receiver shall be donated to appropriate charities. From the $419,300.10 held in the Receivership Trust Account, the Receiver may retain $10,000.00 (i) for the pur pose of paying any future unemployment tax liability relating to the filing of the 2008 unemployment tax returns for Corporate Dfts, and (ii) for the purpose of paying CPA Charles Estes for preparing said tax returns. The Receiver's application for receiver fees and costs (Dkt. ## 61 , 68 ) is approved. The Receiver is awarded a total of $44,398.98. The remaining $364,901.12 in the Receivership Trust Account, and any unused portion of the $10,000 retained by the Receiver for tax-related purposes, shall be provided to the FTC for ultimate satisfaction of claims. The Clerk is directed to terminate this action. Signed by Judge David G Campbell on 10/28/09. (NOTE: see attached pdf for complete details) (ESL)

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WO IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA ) ) ) Plaintiff, ) ) vs. ) Handicapped & Disabled Workshops, ) Inc., also formerly known as Handi-Tech ) Company; Handi-Hope Industries, Inc.; ) ) Handi-Ship, LLC; Bruce D. Peeples; ) George Thomas; and Joshua D. ) Abramson, ) ) Defendants. ) Federal Trade Commission, No. CV-08-908-PHX-DGC ORDER Plaintiff Federal Trade Commission ("FTC") filed a complaint alleging that Defendants engaged in a fraudulent telemarketing scheme by, among other things, selling common household products at exorbitant prices based on false statements that the sales would help handicapped employees of Defendants, shipping unordered products to consumers and subsequently mailing invoices demanding payment from the consumers, harassing consumers through repeated and threatening phone calls and letters, and charging consumers' credit cards and bank accounts without authorization. Dkt. #3. The complaint asserts violations of the Federal Trade Commission Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, the FTC's Telemarketing Sales Rules, and the Unordered Merchandise Statute. Dkt. ##3, 48. The FTC seeks injunctive relief, rescission or reformation of contracts, restitution, and disgorgement of ill-gotten monies. Id. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Court entered stipulated final judgments in favor of the FTC and against individual Defendants Bruce Peeples, George Thomas, and Joshua Abramson. Dkt. ##52, 53, 54. The Court entered a stipulated preliminary injunction appointing attorney Matthew Callister as the permanent receiver ("Receiver") over Corporate Defendants Handicapped & Disabled Workshops, Inc., Handi-Hope Industries, Inc., and Handi-Ship, LLC. Dkt. #29. Following the entry of default judgment against Corporate Defendants (Dkt. #47), the Court issued an order directing the Receiver to wind down Corporate Defendants and discharge the receivership (Dkt. #55). The Receiver filed a final report, accounting, and recommendations on March 25, 2009. Dkt. #56. Pursuant to certain orders (Dkt. ##58, 63, 66), the Receiver has filed a first status report (Dkt. #64), a second status report (Dkt. #67), and a supplement to the second status report (Dkt. #69). The Receiver also has filed an application for approval of receiver fees (Dkt. #61) and a supplement to that application (Dkt. #68). On the basis of these filings and the record as a whole, and for good cause appearing: IT IS HEREBY ORDERED: 1. Due to its minimal monetary value, the remaining inventory held by the Receiver shall be donated to appropriate charities. 2. From the $419,300.10 held in the Receivership Trust Account, the Receiver may retain $10,000.00 (i) for the purpose of paying any future unemployment tax liability relating to the filing of the 2008 unemployment tax returns for Corporate Defendants, and (ii) for the purpose of paying CPA Charles Estes for preparing said tax returns. 3. The Receiver's application for receiver fees and costs (Dkt. ##61, 68) is approved. The Receiver is awarded a total of $44,398.98. This amount shall be paid from funds held in the Receivership Trust Account. 4. The remaining $364,901.12 in the Receivership Trust Account, and any unused portion of the $10,000 retained by the Receiver for tax-related -2- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5. purposes, shall be provided to the FTC for ultimate satisfaction of claims. Affected consumers and/or victims of Defendants' misconduct shall be repaid prior to the repayment of any trade creditors or other debts and liabilities incurred by Corporate Defendants before May 15, 2008. The Clerk is directed to terminate this action. DATED this 28th day of October, 2009. -3-

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