Federal Trade Commission v. A1 Docprep Inc. et al

Filing 67

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AGAINST BLOOM LAW GROUP PC, ALSO D/B/A HOME SHIELD NETWORK AND KEEP YOUR HOME USA filed by Judge S. James Otero:. Judgment in the amount of $9,131,712.00 is entered in favor of the Commission against Stipulating Defendant as equitable monetary relief. (SEE DOCUMENT RE OTHER SPECIFICS, INSTRUCTIONS AND DEADLINES AND COMPLIANCE THEREOF). (lc)

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K. MICHELLE GRAJALES
[e-mail]
LISA ANNE ROTHFARB
[e-mail]
FEDERAL TRADE COMMISSION
600 Pennsylvania Ave., NW
Mail Stop: CC-10232
Washington, DC 20580
[phone]

May 7, 2018
VC
P

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JOHN D. JACOBS, Cal. Bar No. 134154
[e-mail]
FEDERAL TRADE COMMISSION
10990 Wilshire Blvd., Ste. 400
Los Angeles, CA 90024
Tel: [phone]; Fax: [phone]
Attorneys for Plaintiff

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

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FEDERAL TRADE COMMISSION,
Plaintiff,

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vs.

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Defendants.

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Case No. CV17-07044-SJO (JCX)
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[Proposed] STIPULATED ORDER
FOR PERMANENT INJUNCTION
AND MONETARY JUDGMENT
AGAINST BLOOM LAW GROUP
PC, ALSO D/B/A HOME SHIELD
NETWORK AND KEEP YOUR
HOME USA

Plaintiff, the Federal Trade Commission (“Commission” or “FTC”), filed its
Complaint for Permanent Injunction and Other Equitable Relief (“Complaint”),
pursuant to Sections 13(b) of the Federal Trade Commission Act (“FTC Act”), 15

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U.S.C. § 53(b), the Telemarketing and Consumer Fraud and Abuse Act

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(“Telemarketing Act”), 15 U.S.C. §§ 6101-6108, and the 2009 Omnibus

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Appropriations Act, Public Law 111-8, Section 626, 123 Stat. 524, 678 (Mar. 11,

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2009) (“Omnibus Act”), as clarified by the Credit Card Accountability

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Responsibility and Disclosure Act of 2009, Public Law 111-24, Section 511, 123

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Stat. 1734, 1763-64 (May 22, 2009) (“Credit Card Act”), and amended by the

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Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-

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203, Section 1097, 124 Stat. 1376, 2102-03 (July 21, 2010) (“Dodd-Frank Act”),

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12 U.S.C. § 5538. The FTC and Defendant Bloom Law Group PC, also d/b/a

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Home Shield Network and Keep Your Home USA (“Stipulating Defendant”),

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stipulate to the entry of this Stipulated Order for Permanent Injunction and

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Monetary Judgment (“Order”) to resolve all matters in dispute in this action

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between them.
THEREFORE, IT IS ORDERED as follows:

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FINDINGS

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1.

This Court has jurisdiction over this matter.

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2.

The Complaint charges that Stipulating Defendant participated in deceptive

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acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45(a), the

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Telemarketing Sales Rule, 16 C.F.R. § 310, and the Mortgage Assistance Relief

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Services Rule (“MARS Rule” or “Regulation O”), 12 C.F.R. Part 1015, formerly

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codified as 16 C.F.R. Part 322, in connection with the marketing and sale of

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student loan debt relief services and mortgage assistance relief services.

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3.

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Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action

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through the date of this Order, and agrees to bear its own costs and attorney fees.

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4.

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challenge or contest the validity of this Order.

Stipulating Defendant waives any claim that it may have under the Equal

Stipulating Defendant and the FTC waive all rights to appeal or otherwise

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DEFINITIONS

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A.

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“Assisting others” includes:
performing customer service functions, including receiving or

responding to consumer complaints;
2.

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formulating or providing, or arranging for the formulation or

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provision of, any advertising or marketing material, including any telephone sales

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script, direct mail solicitation, or the design, text, or use of images of any Internet

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website, email, or other electronic communication;
3.

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formulating or providing, or arranging for the formulation or

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provision of, any marketing support material or service, including web or Internet

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Protocol addresses or domain name registration for any Internet websites, affiliate

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marketing services, or media placement services;
4.

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providing names of, or assisting in the generation of, potential

customers;

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5.

performing marketing, billing, or payment services of any kind; or

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6.

acting or serving as an owner, officer, director, manager, or principal

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of any entity.

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B.

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Project Uplift Students and Project Uplift America, Bloom Law Group PC, also

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d/b/a Home Shield Network and Keep Your Home USA, and their successors and

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assigns, as well as any subsidiaries, and any fictitious business entities or business

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names created or used by these entities, or any of them, and Homan Ardalan,

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individually, collectively, or in any combination.

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C.

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program represented, expressly or by implication, to:

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“Defendants” means A1 DocPrep Inc., Steamlined Marketing, also d/b/a

“Financial product or service” means any product, service, plan, or
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provide any consumer, arrange for any consumer to receive, or assist

any consumer in receiving, a loan or other extension of credit;
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provide any consumer, arrange for any consumer to receive, or assist
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any consumer in receiving, credit, debit, or stored value cards;
3.

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improve, repair, or arrange to improve or repair, any consumer’s

credit record, credit history, or credit rating; or
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provide advice or assistance to improve any consumer’s credit record,

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credit history, or credit rating.

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D.

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including a corporation, partnership, proprietorship, association, cooperative, or

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any other group or combination acting as an entity.

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E.

“Receiver” means Robb Evans and Associates, LLC.

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F.

“Secured or unsecured debt relief product or service” means:

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“Person” means a natural person, organization, or other legal entity,

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With respect to any mortgage, loan, debt, or obligation between a

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person and one or more secured or unsecured creditors or debt collectors, any

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product, service, plan, or program represented, expressly or by implication, to:
a.

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stop, prevent, or postpone any mortgage or deed of foreclosure

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sale for a person’s dwelling, any other sale of collateral, any repossession of a

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person’s dwelling or other collateral, or otherwise save a person’s dwelling or

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other collateral from foreclosure or repossession;
b.

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negotiate, obtain, or arrange a modification, or renegotiate,

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settle, or in any way alter any terms of the mortgage, loan, debt, or obligation,

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including a reduction in the amount of interest, principal balance, monthly

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payments, or fees owed by a person to a secured or unsecured creditor or debt

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collector;

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c.

obtain any forbearance or modification in the timing of

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payments from any secured or unsecured holder or servicer of any mortgage, loan,

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debt, or obligation;

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d.

negotiate, obtain, or arrange any extension of the period of time

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within which a person may (i) cure his or her default on the mortgage, loan, debt,

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or obligation, (ii) reinstate his or her mortgage, loan, debt, or obligation, (iii)
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redeem a dwelling or other collateral, or (iv) exercise any right to reinstate the

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mortgage, loan, debt, or obligation or redeem a dwelling or other collateral;
e.

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obtain any waiver of an acceleration clause or balloon payment

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contained in any promissory note or contract secured by any dwelling or other

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collateral; or
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negotiate, obtain, or arrange (i) a short sale of a dwelling or

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other collateral, (ii) a deed-in-lieu of foreclosure, or (iii) any other disposition of a

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mortgage, loan, debt, or obligation other than a sale to a third party that is not the

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secured or unsecured loan holder.

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The foregoing shall include any manner of claimed assistance, including auditing

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or examining a person’s application for the mortgage, loan, debt, or obligation.
2.

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With respect to any loan, debt, or obligation between a person and one

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or more unsecured creditors or debt collectors, any product, service, plan, or

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program represented, expressly or by implication, to:

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a.

repay one or more unsecured loans, debts, or obligations; or

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b.

combine unsecured loans, debts, or obligations into one or more

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new loans, debts, or obligations.

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G.

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Shield Network and Keep Your Home USA, and its successors and assigns, as well

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as any subsidiaries, and any fictitious business entities or business names created

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or used by these entities.

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H.

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conducted to induce the purchase of goods or services by use of one or more

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telephones, and which involves a telephone call, whether or not covered by the

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Telemarketing Sales Rule.

“Stipulating Defendant” means Bloom Law Group PC, also d/b/a Home

“Telemarketing” means any plan, program, or campaign which is

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I.

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BAN ON SECURED AND UNSECURED

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DEBT RELIEF PRODUCTS AND SERVICES
IT IS ORDERED that Stipulating Defendant is permanently restrained and

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enjoined from advertising, marketing, promoting, offering for sale, or selling, or

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assisting others in the advertising, marketing, promoting, offering for sale, or

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selling, of any secured or unsecured debt relief product or service.

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II.

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BAN ON TELEMARKETING

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IT IS FURTHER ORDERED that Stipulating Defendant is permanently

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restrained and enjoined from participating or assisting others in telemarketing,

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whether directly or through an intermediary.

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III.

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PROHIBITION AGAINST MISREPRESENTATIONS

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RELATING TO FINANCIAL PRODUCTS AND SERVICES

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IT IS FURTHER ORDERED that Stipulating Defendant, Stipulating

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Defendant’s officers, agents, employees, and attorneys, and all other persons in

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active concert or participation with any of them, who receive actual notice of this

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Order, whether acting directly or indirectly, in connection with the advertising,

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marketing, promoting, offering for sale, or selling of any financial product or

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service, are permanently restrained and enjoined from misrepresenting, or assisting

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others in misrepresenting, expressly or by implication:

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A.

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including:

the terms or rates that are available for any loan or other extension of credit,

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closing costs or other fees;

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2.

the payment schedule, monthly payment amount(s), any balloon

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payment, or other payment terms;
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the interest rate(s), annual percentage rate(s), or finance charge(s), and
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whether they are fixed or adjustable;
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the loan amount, credit amount, draw amount, or outstanding balance;

the loan term, draw period, or maturity; or any other term of credit;
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the amount of cash to be disbursed to the borrower out of the

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proceeds, or the amount of cash to be disbursed on behalf of the borrower to any

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third parties;
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whether any specified minimum payment amount covers both interest

and principal, and whether the credit has or can result in negative amortization; or
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that the credit does not have a prepayment penalty or whether

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subsequent refinancing may trigger a prepayment penalty and/or other fees;

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B.

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history, credit rating, or ability to obtain credit, including that a consumer’s credit

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record, credit history, credit rating, or ability to obtain credit can be improved by

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permanently removing current, accurate negative information from the consumer’s

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credit record or history;

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C.

that a consumer will receive legal representation; or

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D.

any other fact material to consumers concerning any good or service, such

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as: the total costs; any material restrictions, limitations, or conditions; or any

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material aspect of its performance, efficacy, nature, or central characteristics.

the ability to improve or otherwise affect a consumer’s credit record, credit

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IV.

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PROHIBITION AGAINST MISREPRESENTATIONS

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RELATING TO ANY PRODUCTS OR SERVICES

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IT IS FURTHER ORDERED that Stipulating Defendant, Stipulating

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Defendant’s officers, agents, employees, and attorneys, and all other persons in

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active concert or participation with any of them, who receive actual notice of this

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Order, whether acting directly or indirectly, in connection with the advertising,
marketing, promoting, offering for sale, or selling of any product, service, plan, or

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program, are permanently restrained and enjoined from misrepresenting, or

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assisting others in misrepresenting, expressly or by implication:

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A.

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exchange, or repurchase policy, including the likelihood of a consumer obtaining a

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full or partial refund, or the circumstances in which a full or partial refund will be

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granted to the consumer;

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B.

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connected to any other person; government entity; public, non-profit, or other non-

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commercial program; or any other program;

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C.

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product, service, plan, or program; or

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D.

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as: the total costs; any material restrictions, limitations, or conditions; or any

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material aspect of its performance, efficacy, nature, or central characteristics.

any material aspect of the nature or terms of any refund, cancellation,

that any person is affiliated with, endorsed or approved by, or otherwise

the nature, expertise, position, or job title of any person who provides any
any other fact material to consumers concerning any good or service, such

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V.

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PROHIBITION AGAINST UNSUBSTANTIATED CLAIMS

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IT IS FURTHER ORDERED that Stipulating Defendant, Stipulating

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Defendant’s officers, agents, employees, and attorneys, and all other persons in

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active concert or participation with any of them, who receive actual notice of this

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Order, whether acting directly or indirectly, in connection with the sale of any

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financial product or service, are permanently restrained and enjoined from making

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any representation or assisting others in making any representation, expressly or by

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implication, about the benefits, performance, or efficacy of any financial product

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or service, unless the representation is non-misleading, and, at the time such

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representation is made, Stipulating Defendant possesses and relies upon competent

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and reliable evidence that is sufficient in quality and quantity based on standards
generally accepted in the relevant fields, when considered in light of the entire

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body of relevant and reliable evidence, to substantiate that the representation is

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true.

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VI.

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MONETARY JUDGMENT AND PARTIAL SUSPENSION
IT IS FURTHER ORDERED that:

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A.

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Thousand, Seven Hundred and Twelve Dollars ($9,131,712 ) is entered in favor of

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the Commission against Stipulating Defendant as equitable monetary relief.

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B.

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Wells Fargo, N.A., shall, within 10 business days from receipt of a copy of this

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Order, transfer to the Receiver or its designated agent, all funds in account number

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XXXXXX6749 (in the name Bloom Law Group P.C., DBA Rodeo Law Group,

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CA IOLTA Acct), and all funds in account number XXXXXX6731 (in the name

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Bloom Law Group P.C.).

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C.

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execute any instrument or document presented by the Receiver, and do whatever

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else the Receiver deems necessary or desirable to effect the transfers required by

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Section VI.B. Upon such transfers, the property shall be assets of the receivership

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estate.

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D.

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remainder of the judgment is suspended as to the Stipulating Defendant, subject to

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the Subsections below.

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E.

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expressly premised upon the truthfulness, accuracy, and completeness of

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Stipulating Defendant’s sworn financial statements and related documents

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Judgment in the amount of Nine Million, One Hundred Thirty-one

In partial satisfaction of the judgment against the Stipulating Defendant,

Stipulating Defendant shall cooperate fully with the Receiver and shall

Upon the completion of all transfers described in Section VI.B above, the

The Commission’s agreement to the suspension of part of the judgment is

(collectively, “financial representations”) submitted to the Commission, namely:
1. The Financial Statement of Stipulating Defendant, signed on October 9,
2017, including the attachments; and
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2. Corporate tax returns of the Stipulating Defendant for the years 2015 and

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2016.

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F.

The suspension of the judgment will be lifted as to Stipulating Defendant if,

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upon motion by the Commission, the Court finds that Stipulating Defendant failed

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to disclose any material asset, materially misstated the value of any asset, or made

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any other material misstatement or omission in the financial representations

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identified above.

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G.

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immediately due as to the Stipulating Defendant in the amount specified in

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Subsection A above (which the parties stipulate only for purposes of this Section

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represents the consumer injury alleged in the Complaint), less any payment

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previously made pursuant to this Section, plus interest computed from the date of

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entry of this Order.

If the suspension of the judgment is lifted, the judgment becomes

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VII.

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ADDITIONAL MONETARY PROVISIONS
IT IS FURTHER ORDERED that:

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A.

Stipulating Defendant relinquishes dominion and all legal and equitable

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right, title, and interest in all assets transferred pursuant to this Order and may not

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seek the return of any assets.

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B.

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proof, in any subsequent civil litigation by or on behalf of the Commission,

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including in a proceeding to enforce its rights to any payment or monetary

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judgment pursuant to this Order, such as a nondischargeability complaint in any

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bankruptcy case.

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C.

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an action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy

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Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect

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for such purposes.

The facts alleged in the Complaint will be taken as true, without further

The facts alleged in the Complaint establish all elements necessary to sustain

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D.

Stipulating Defendant acknowledges that its Taxpayer Identification

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Number, which Stipulating Defendant previously submitted to the Commission,

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may be used for collecting and reporting on any delinquent amount arising out of

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this Order, in accordance with 31 U.S.C. §7701.

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E.

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into a fund administered by the Commission or its designee to be used for

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equitable relief, including consumer redress and any attendant expenses for the

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administration of any redress fund. If a representative of the Commission decides

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that direct redress to consumers is wholly or partially impracticable or money

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remains after redress is completed, the Commission may apply any remaining

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money for such other equitable relief (including consumer information remedies)

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as it determines to be reasonably related to Stipulating Defendant’s practices

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alleged in the Complaint. Any money not used for such equitable relief is to be

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deposited to the U.S. Treasury as disgorgement. Stipulating Defendant has no

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right to challenge any actions the Commission or its representatives may take

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pursuant to this Subsection.

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F.

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VI. B above. Otherwise the asset freeze is kept in place until the completion of the

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transfers identified in VI.B. After the completion of the transfers identified in

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Subsection VI.B, the asset freeze is dissolved as to the Stipulating Defendant.

All money paid to the Commission pursuant to this Order may be deposited

The asset freeze is modified to permit the transfers identified in Subsection

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VIII.

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COOPERATION

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IT IS FURTHER ORDERED that Stipulating Defendant must fully

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cooperate with representatives of the Commission in this case and in any

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investigation related to or associated with the transactions or the occurrences that

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are the subject of the Complaint. Stipulating Defendant must provide truthful and
complete information, evidence, and testimony. Stipulating Defendant must cause
its officers, employees, representatives, or agents to appear for interviews,
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discovery, hearings, trials, and any other proceedings that Commission

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representative may reasonably request upon 5 days written notice, or other

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reasonable notice, at such places and times as a Commission representative may

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designate, without the service of a subpoena.

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IX.

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CUSTOMER INFORMATION

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IT IS FURTHER ORDERED that Stipulating Defendant, Stipulating

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Defendant’s officers, agents, employees, attorneys, and all other persons or entities

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in active concert or participation with any of them, who receive actual notice of

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this Order, are permanently restrained and enjoined from directly or indirectly:

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A.

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to efficiently administer consumer redress. If a representative of the Commission

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requests in writing any information related to redress, Stipulating Defendant must

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provide it, in the form prescribed by the Commission, within 14 days.

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B.

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name, address, telephone number, email address, social security number, FSA ID,

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other identifying information, or any data that enables access to a customer’s

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account (including a student loan account, credit card, bank account, or other

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financial account), that any Defendant obtained prior to entry of this Order in

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connection with the marketing or sale of secured or unsecured debt relief products

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or services; and

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C.

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custody, or control within 30 days after receipt of written direction to do so from a

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representative of the Commission.

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failing to provide sufficient customer information to enable the Commission

disclosing, using, or benefitting from customer information, including the

failing to destroy such customer information in all forms in their possession,

Provided, however, that customer information need not be disposed of, and

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may be disclosed, to the extent requested by a government agency or required by

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law, regulation, or court order.

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X.

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CONTINUATION OF RECEIVERSHIP
IT IS FURTHER ORDERED that Robb Evans & Robb Evans and

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Associates, LLC, shall continue as a Permanent Equity Receiver with full powers

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of a permanent receiver, as set forth by Section XIV of the Preliminary Injunctions

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(Dkt. Nos. 35, 36),

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XI.

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ORDER ACKNOWLEDGMENTS
IT IS FURTHER ORDERED that Stipulating Defendant obtain

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acknowledgments of receipt of this Order:

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A.

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the Commission an acknowledgment of receipt of this Order sworn under penalty

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of perjury.

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B.

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copy of this Order to: (1) all principals, officers, directors, and LLC managers and

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members; (2) all employees, agents, and representatives who participate in conduct

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related to the subject matter of the Order; and (3) any business entity resulting

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from any change in structure as set forth in the Section titled Compliance

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Reporting. Delivery must occur within 7 days of entry of this Order for current

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personnel. For all others, delivery must occur before they assume their

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responsibilities.

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C.

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copy of this Order, Stipulating Defendant must obtain, within 30 days, a signed

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and dated acknowledgment of receipt of this Order.

Stipulating Defendant, within 7 days of entry of this Order, must submit to

For 5 years after entry of this Order, Stipulating Defendant, must deliver a

From each individual or entity to which Stipulating Defendant delivered a

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XII.

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COMPLIANCE REPORTING

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IT IS FURTHER ORDERED that Stipulating Defendant make timely

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submissions to the Commission:

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A.

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compliance report, sworn under penalty of perjury in which Stipulating Defendant

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must: (a) identify the primary physical, postal, and email address and telephone

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number, as designated points of contact, which representatives of the Commission

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may use to communicate with Stipulating Defendant; (b) identify all of Stipulating

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Defendant’s businesses by all of their names, telephone numbers, and physical,

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postal, email, and Internet addresses; (c) describe the activities of each business,

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including the goods and services offered, the means of advertising, marketing, and

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sales, and the involvement of any other Defendant; (d) describe in detail whether

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and how that Defendant is in compliance with each Section of this Order; and (e)

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provide a copy of each Order Acknowledgment obtained pursuant to this Order,

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unless previously submitted to the Commission.

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B.

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compliance notice, sworn under penalty of perjury, within 14 days of any change

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in: (a) any designated point of contact; or (b) the structure of Stipulating

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Defendant or any entity that Stipulating Defendant has any ownership interest in or

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controls directly or indirectly that may affect compliance obligations arising under

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this Order, including: creation, merger, sale, or dissolution of the entity or any

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subsidiary, parent, or affiliate that engages in any acts or practices subject to this

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Order.

One year after entry of this Order, Stipulating Defendant must submit a

For 20 years after entry of this Order, Stipulating Defendant must submit a

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C.

Stipulating Defendant must submit to the Commission notice of the filing of

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any bankruptcy petition, insolvency proceeding, or similar proceeding by or

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against such Defendant within 14 days of its filing.

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D.

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penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746,

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such as by concluding: “I declare under penalty of perjury under the laws of the

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United States of America that the foregoing is true and correct. Executed on:

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_____” and supplying the date, signatory’s full name, title (if applicable), and

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signature.

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E.

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submissions to the Commission pursuant to this Order must be emailed to

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[e-mail] or sent by overnight courier (not the U.S. Postal Service) to:

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Associate Director for Enforcement, Bureau of Consumer Protection, Federal

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Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The

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subject line must begin: FTC v. A1 DocPrep, et al., X170055.

Any submission to the Commission required by this Order to be sworn under

Unless otherwise directed by a Commission representative in writing, all

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XIII.

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RECORDKEEPING
IT IS FURTHER ORDERED that Stipulating Defendant must create certain

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records for 20 years after entry of the Order, and retain each such records for 5

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years. Specifically, Stipulating Defendantfor any business that such Defendant,

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individually or collectively with any other Defendants, is a majority owner or

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controls directly or indirectly, must create and retain the following records:

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A.

accounting records showing the revenues from all goods or services sold;

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B.

personnel records showing, for each person providing services, whether as

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an employee or otherwise, that person’s: name; addresses; telephone numbers; job

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title or position; dates of service; and (if applicable) the reason for termination;

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C.

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directly or indirectly, such as through a third party, and any response;

records of all consumer complaints and refund requests, whether received

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D.

all records necessary to demonstrate full compliance with each provision of

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this Order, including all submissions to the Commission; and

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E.

a copy of each unique advertisement or other marketing material.

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XIV.

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COMPLIANCE MONITORING
IT IS FURTHER ORDERED that, for the purpose of monitoring Stipulating

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Defendant’s compliance with this Order, including the financial representations

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upon which part of the judgment was suspended and any failure to transfer any

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assets as required by this Order:

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A.

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Commission, Stipulating Defendant must: submit additional compliance reports or

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other requested information, which must be sworn under penalty of perjury; appear

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for depositions; and produce documents for inspection and copying. The

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Commission is also authorized to obtain discovery, without further leave of court,

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using any of the procedures prescribed by Federal Rules of Civil Procedure 29, 30

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(including telephonic depositions), 31, 33, 34, 36, 45, and 69.

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B.

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communicate directly with Stipulating Defendant. Stipulating Defendant must

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permit representatives of the Commission to interview any employee or other

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person affiliated with any Stipulating Defendant who has agreed to such an

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interview. The person interviewed may have counsel present.

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C.

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its representatives as consumers, suppliers, or other individuals or entities, to

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Stipulating Defendant or any individual or entity affiliated with Stipulating

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Defendant, without the necessity of identification or prior notice. Nothing in this

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Order limits the Commission’s lawful use of compulsory process, pursuant to

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Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1.

Within 14 days of receipt of a written request from a representative of the

For matters concerning this Order, the Commission is authorized to

The Commission may use all other lawful means, including posing, through

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XV.

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RETENTION OF JURISDICTION

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IT IS FURTHER ORDERED that this Court retains jurisdiction of this

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matter for purposes of construction, modification, and enforcement of this Order.

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7th
May
SO ORDERED, this __________ day of ____________________, 2018, at
4:00
______ o’clock xxx
a.m./p.m.
________________________________
Hon. S. James Otero
United States District Judge
Central District of California

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