Federal Trade Commission v. Health Care One LLC et al
Filing
200
STIPULATED FINAL JUDGMENT AND ORDER FOR PERMANENT INJUNCTION AND OTHER EQUITABLE RELIEF by Judge James V. Selna, in favor of Federal Trade Commission against Mile High Enterprise Inc, Bryan Matthew Loving. See order for more information. Related to: Stipulation for Judgment, 198 .(MD JS-6, Case Terminated). (twdb)
1 FAYE CHEN BARNOUW, CA Bar No. 168631
BARBARA CHUN, CA Bar No. 186907
2 e-mail: fbarnouw@ftc.gov and bchun@ftc.gov
FEDERAL TRADE COMMISSION
3 10877 Wilshire Blvd., Suite 700
Los Angeles, CA 90024
4 Telephone: (310) 824-4343
Facsimile: (310) 824-4380
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6 Attorneys for Plaintiff
FEDERAL TRADE COMMISSION
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
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FEDERAL TRADE COMMISSION,
Plaintiff,
Case no. SACV10-1161-JVS-RNBx
STIPULATED FINAL JUDGMENT
AND ORDER FOR PERMANENT
HEALTH CARE ONE LLC, an Arizona INJUNCTION AND OTHER
EQUITABLE RELIEF AGAINST
limited liability company, also d/b/a
DEFENDANTS MILE HIGH
“HealthcareOne,” “Americans4
ENTERPRISE INC. AND BRYAN
Healthcare,” “Citizens4Healthcare,”
MATTHEW LOVING
“American Eagle Healthcare,”
“EasyLife Healthcare,” “Elite
Healthcare,” “Global Healthcare,” and
“Republic Healthcare”;
v.
AMERICANS4HEALTHCARE INC., a
Delaware corporation;
MICHAEL JAY ELLMAN, an
individual;
ELITE BUSINESS SOLUTIONS, INC.,
a Nevada corporation, also d/b/a
“EasyLife Healthcare,” “Elite
Healthcare” and “Republic Healthcare”;
ROBERT DANIEL FREEMAN, an
individual;
MILE HIGH ENTERPRISE INC., a
Nevada corporation; and
BRYAN MATTHEW LOVING, an
individual;
Defendants.
1
Plaintiff Federal Trade Commission (“FTC” or “Commission”) commenced
2 this civil action on August 3, 2010, pursuant to Sections 13(b) and 19 of the FTC
3 Act, 15 U.S.C. §§ 53(b) and 57b, and the Telemarketing Consumer Fraud and Abuse
4 Prevention Act, 15 U.S.C. §§ 6101-6108, to obtain preliminary and permanent
5 injunctive and other equitable relief for violations of Section 5 of the FTC Act, 15
6 U.S.C. § 45, and the FTC’s Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310,
7 in connection with the marketing and sale of non-insurance healthcare discount
8 programs. On April 21, 2011, the FTC amended its complaint to add Mile High
9 Enterprise Inc. and Bryan Matthew Loving as Defendants. On April 25, 2011, the
10 Court entered a stipulated preliminary injunction against Mile High Enterprise Inc.
11 and Bryan Matthew Loving.
12
The FTC and Defendants Mile High Enterprise Inc. and Bryan Matthew
13 Loving (“Defendants”) have agreed to entry of this “Stipulated Final Judgment and
14 Order for Permanent Injunction and Other Equitable Relief Against Defendants Mile
15 High Enterprise Inc. and Bryan Matthew Loving” (“Order”) to resolve all matters in
16 dispute in this action between them.
17
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED as
18 follows:
FINDINGS OF FACT
19
20
1.
This Court has jurisdiction over the subject matter of this case pursuant
21 to 15 U.S.C. §§ 45(a), 53(b), 57b, 6102(c), and 6105(b), and 28 U.S.C. §§ 1331,
22 1337(a), and 1345.
23
2.
This Court has personal jurisdiction over each of the Defendants.
24
3.
Venue in this District is proper under 15 U.S.C. §§ 53(b), and 28 U.S.C.
25 §§ 1391(b) and (c).
4.
The activities of Defendants, as alleged in the Complaint, are in or
26
27 affecting commerce, as defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
5.
The Complaint states a claim upon which relief may be granted under
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1 Sections 5(a), 13(b), and 19 of the FTC Act, 15 U.S.C. §§ 45(a), 53(b), and 57b, and
2 the FTC’s Telemarketing Sales Rule, 16 C.F.R. Part 310.
3
6.
Defendants have entered into this Order freely and without coercion.
4 Defendants further acknowledge that they have read the provisions of this Order and
5 are prepared to abide by them.
6
7.
Defendants waive all rights to seek judicial review or otherwise
7 challenge or contest the validity of this Order. Defendants further waive and release
8 any claim they may have against the Commission and its employees, representatives,
9 and agents.
10
8.
Defendants waive any claims they may have under the Equal Access to
11 Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the
12 date of the entry of this Order.
13
9.
Nothing herein shall be deemed an admission of wrongdoing, an
14 admission of any allegation in the complaint in this action, or a waiver of any
15 defense or privilege, by Defendants.
16
ORDER
17
DEFINITIONS
18
For purposes of this Order, the following definitions shall apply:
19
1.
“Assisting others” means providing any of the following goods or
20 services to another person or entity:
21
a.
to, receiving or responding to consumer complaints; or
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performing customer service functions, including, but not limited
b.
formulating or providing, or arranging for the formulation or
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provision of, any telephone sales script or any other marketing
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material; or
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c.
customers; or
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providing names of, or assisting in the generation of, potential
d.
performing marketing services of any kind.
3
1
2.
“Assets” means any legal or equitable interest in, right to, or claim to,
2 any real or personal property, including, without limitation, chattels, goods,
3 instruments, equipment, fixtures, general intangibles, leaseholds, mail or other
4 deliveries, inventory, checks, notes, accounts, credits, contracts, receivables, shares
5 of stock, and all cash, wherever located.
6
3.
“Corporate Defendant” means Defendant Mile High Enterprise Inc.
7 and its successors and assigns.
8
4.
“Defendants” means the Individual Defendant and the Corporate
9 Defendant, individually, collectively, or in any combination.
10
5.
The term “document” is equal in scope and synonymous in meaning to
11 the terms “document” and “electronically stored information,” as described and used
12 in Federal Rule of Civil Procedure 34(a), and includes writings, drawings, graphs,
13 charts, photographs, audio and video recordings, computer records, and any other
14 data compilations from which information can be obtained. A draft or non-identical
15 copy is a separate document within the meaning of the term.
16
6.
The term “healthcare-related good or service” includes any program,
17 membership, card, product, or other good or service, which is not insurance, that
18 purports to offer discounts, savings, or benefits on healthcare, or access to such
19 discounts, savings, or benefits.
20
7.
“Individual Defendant” means Defendant Bryan Matthew Loving.
21
8.
The term “insurance” means any good or service that (1) has the effect
22 of transferring or spreading risk; (2) is an integral part of the policy relationship
23 between the insurer and the insured; and (3) is limited to entities within the insurance
24 industry.
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9.
“Material fact” means any fact that is likely to affect a person’s choice
26 of, or conduct regarding, goods or services.
10. “Person” means a natural person, organization, or other legal entity,
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28 including a corporation, partnership, proprietorship, association, cooperative, limited
4
1 liability company, or any other group or combination acting as an entity.
2
11.
“Plaintiff” means the Federal Trade Commission.
3
12.
“Receivership Defendants” means Mile High Enterprise Inc. and
4 Lighthouse Business Solutions LLC, as well as any successors, assigns, affiliates,
5 and subsidiaries that conduct any business related to the Defendants’ “national
6 healthcare discount program” and which the Permanent Receiver has determined are
7 owned or controlled in whole or in part by any of the Defendants.
8
I.
9
BAN RE HEALTHCARE-RELATED GOODS OR SERVICES
10
IT IS THEREFORE ORDERED that Defendants, whether acting directly or
11 through any other person, are hereby permanently restrained and enjoined from:
12
A.
healthcare-related good or service; and
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Advertising, marketing, promoting, offering for sale, or selling any
B.
Assisting others engaged in advertising, marketing, promoting, offering
for sale, or selling any healthcare-related good or service.
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II.
17
PROHIBITION AGAINST MISREPRESENTING
18
OTHER GOODS AND SERVICES
19
IT IS FURTHER ORDERED that Defendants and their officers, agents,
20 servants, employees, and attorneys, and those persons or entities in active concert or
21 participation with any of them who receive actual notice of this Order by personal
22 service or otherwise, whether acting directly or through any corporation, subsidiary,
23 division, or other device, in connection with the advertising, marketing, promotion,
24 offering for sale, or sale of any good or service, other than a healthcare-related good
25 or service, are hereby permanently restrained and enjoined from misrepresenting or
26 assisting others in misrepresenting, expressly or by implication, any material fact,
27 including but not limited to:
A.
That the program offered is insurance;
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1
B.
the federal government;
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That the good or service is affiliated with or endorsed or sponsored by
C.
That any person or entity is an agency of or affiliated with, endorsed or
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approved by, or otherwise connected to the Federal government or a
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state government;
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D.
the consumers;
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E.
F.
G.
Any material restriction, limitation, or condition to purchase, receive, or
use the good or service; and
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The total costs to purchase, receive, or use, and the quantity of, the good
or service;
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Any material aspect of the performance, efficacy, nature, or
characteristics of the good or service;
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That purchase of the good or service will result in substantial savings to
H.
Any material aspect of the nature or terms of any refund, cancellation,
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exchange, or repurchase policy, including, but not limited to, the
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likelihood of a consumer obtaining a full or partial refund, or the
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circumstances in which a full or partial refund will be granted to the
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consumer.
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III.
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PROHIBITION AGAINST VIOLATING
21
THE TELEMARKETING SALES RULE
22
IT IS FURTHER ORDERED that Defendants and their officers, agents,
23 servants, employees, and attorneys, and those persons or entities in active concert or
24 participation with any of them who receive actual notice of this Order by personal
25 service or otherwise, whether acting directly or through any corporation, subsidiary,
26 division, or other device, in connection with the telemarketing of any good or
27 service, other than a healthcare-related good or service, are hereby permanently
28 restrained and enjoined from violating any provision of the Telemarketing Sales
6
1 Rule, 16 C.F.R. Part 310, including, but not limited to:
2
A.
Violating Section 310.3(a)(2)(iii) of the TSR, 16 C.F.R.
3 § 310.3(a)(2)(iii), by misrepresenting, directly or by implication, any material aspect
4 of the performance, efficacy, nature, or central characteristics of the good or service,
5 including:
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1.
That the program offered is insurance;
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2.
That enrollment in the good or service will result in substantial
savings to the consumer;
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3.
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use the good or service as represented; or
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4.
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Any other fact material to a consumer’s decision to purchase any
good or service from Defendants; and
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That consumers who purchase the good or service will be able to
B.
Violating Section 310.3(a)(2)(iv) of the TSR, 16 C.F.R.
14 § 310.3(a)(2)(iv), by misrepresenting, directly or by implication, any material aspect
15 of the nature or terms of the seller’s refund or cancellation policies.
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C.
Violating Section 310.4(b)(1)(v) of the TSR, 16 C.F.R.
17 § 310.4(b)(1)(v), governing the telephonic delivery of prerecorded messages.
18
IV.
19
MONETARY RELIEF
20
IT IS FURTHER ORDERED that:
21
A.
Judgment is hereby entered in favor of the Commission and against
22 Defendants, jointly and severally, in the amount of $8,939,374 (eight million nine
23 hundred thirty-nine thousand three hundred seventy-four dollars), as equitable
24 monetary relief for consumer injury; provided, however, that subject to the
25 provisions of the Section titled “Right to Reopen,” below, this judgment shall be
26 suspended upon Defendants’ completion of the requirements stated in subparagraphs
27 IV.B.-D.
B.
28
Defendants shall transfer $4,200 (four thousand two hundred dollars) to
7
1 the Commission or its designated agent within fifteen (15) business days of entry of
2 this order by the Court, in accordance with instructions provided by a representative
3 of the Commission.
4
C.
Defendants’ attorney Hector Lora shall transfer $27,000 (twenty seven
5 thousand dollars) held in his client trust account on behalf of Defendant Bryan
6 Matthew Loving to the Commission or its designated agent within ten (10) business
7 days of entry of this order by the Court, in accordance with instructions provided by
8 a representative of the Commission.
9
D.
Defendants shall transfer title and physical possession of the following
10 assets to the Receiver within ten (10) business days of entry of this order by the
11 Court, in accordance with instructions provided by a representative of the Receiver:
12
1.
2003 Suzuki GSXR750 motorcycle; and
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2.
2006 Big Dog custom motorcycle.
14
E.
Defendants hereby grant to the FTC all right and claim they currently
15 have to their frozen assets currently in the possession, custody, or control of the
16 Permanent Receiver.
17
F.
In the event of default on any obligation to make payment under this
18 Order, interest, computed pursuant to 28 U.S.C. § 1961(a), shall accrue from the date
19 of default to the date of payment. In the event such default continues for ten (10)
20 calendar days beyond the date the payment is due, the entire amount of the judgment,
21 less any amounts previously paid pursuant to this order, together with interest, shall
22 immediately become due and payable. Defendants shall be jointly and severally
23 liable for all payments required by this Order and any interest on such payments.
G.
All funds paid pursuant to this Order shall be deposited into a fund
24
25 administered by the Commission or its agents to be used for equitable relief,
26 including, but not limited to, redress to consumers, and any attendant expenses for
27 the administration of such equitable relief. In the event that direct redress to
28 consumers is wholly or partially impracticable or funds remain after the redress is
8
1 completed, the Commission may apply any remaining funds for such other equitable
2 relief (including consumer information remedies) as it determines to be reasonably
3 related to Defendants’ practices alleged in the Complaint. Any funds not used for
4 such equitable relief shall be deposited to the United States Treasury as
5 disgorgement. Defendants shall have no right to challenge the Commission’s choice
6 of remedies under this Paragraph. Defendants shall have no right to contest the
7 manner of distribution chosen by the Commission.
8
H.
No portion of any payment under the Judgment herein shall be deemed
9 a payment of any fine, penalty, or punitive assessment.
10
I.
Defendants relinquish all dominion, control, and title to the funds paid
11 to the fullest extent permitted by law. Defendants shall make no claim to or demand
12 for return of the funds, directly or indirectly, through counsel or otherwise.
13
J.
Defendants agree that the facts as alleged in the Complaint filed in this
14 action shall be taken as true without further proof in any bankruptcy case or
15 subsequent civil litigation pursued by the Commission to enforce its rights to any
16 payment or money judgment pursuant to this Order, including but not limited to a
17 nondischargeability complaint in any bankruptcy case. Defendants further stipulate
18 and agree that the facts alleged in the Complaint establish all elements necessary to
19 sustain an action by the Commission pursuant to Section 523(a)(2)(A) of the
20 Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and that this Order shall have collateral
21 estoppel effect for such purposes.
22
K.
In accordance with 31 U.S.C. § 7701, Defendants are hereby required,
23 unless they have done so already, to furnish to the Commission their taxpayer
24 identifying numbers and/or social security numbers, which shall be used for the
25 purposes of collecting and reporting on any delinquent amount arising out of
26 Defendants’ relationship with the government.
27
L.
Defendants agree that they will not, whether acting directly or through
28 any corporation, partnership, subsidiary, division, trade name, device, or other entity,
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1 submit to any federal or state tax authority any return, amended return, or other
2 official document that takes a deduction for, or seeks a tax refund or other favorable
3 treatment for, any payment by Defendants pursuant to this Order.
4
V.
5
RIGHT TO REOPEN
6
IT IS FURTHER ORDERED that:
7
A.
The Commission’s agreement to, and the Court’s approval of, this
8 Order, including, but not limited to, the suspension of the monetary judgment against
9 Defendants, is expressly premised upon the truthfulness, accuracy, and completeness
10 of Defendants’ financial condition, as represented in the following financial
11 statements, including all attachments and supplemental materials, copies of tax
12 returns for Defendants, and correspondence (collectively, “Financial Statements”),
13 all of which the Commission relied upon in negotiating and agreeing to the terms of
14 this Order:
15
1.
Loving, dated May 8, 2011;
16
17
2.
Financial Statement of Mile High Enterprise Inc., dated
November 2, 2010;
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19
Financial Statement of Individual Defendant Bryan Matthew
3.
Financial Statement of Lighthouse Business Solutions LLC, dated
20
August 16, 2010, and signed by Bryan Matthew Loving on March
21
7, 2011;
22
4.
Financial Statement of Corporate Defendant Elite Business
23
Solutions, Inc., dated August 12, 2010 (provided to the FTC on
24
August 17, 2010) (including amended Item 8 provided to the FTC
25
on August 19, 2010);
26
5.
2007 and 2008; and
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Elite Business Solutions, Inc.’s federal tax returns for the years
6.
Elite Business Solutions, Inc.’s balance sheets and profit and loss
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1
2
statements for 2007-2009 and for 2010 as of August 17, 2010.
B.
If, upon motion by the Commission to the Court, the Court finds that
3 any Defendant, in any of the above-referenced Financial Statements, failed to
4 disclose any asset with a value in excess of $1,000, materially misrepresented the
5 value of any asset, or made any other material misrepresentation or omission, the
6 suspension shall be lifted on the monetary judgment in Section IV (“Monetary
7 Relief”), and that judgment amount, less any payments already made to the
8 Commission, shall be immediately due and payable.
9
Provided, however, that in all other respects, this Order shall remain in full
10 force and effect, unless otherwise ordered by the Court; and,
11
Provided further, that proceedings initiated under this provision would be in
12 addition to, and not in lieu of, any other civil or criminal remedies as may be
13 provided by law, including any proceedings that the Commission may initiate to
14 enforce this Order.
15
VI.
16
CONSUMER INFORMATION
17
IT IS FURTHER ORDERED that Defendants and their officers, agents,
18 servants, employees, and attorneys, and those persons or entities in active concert or
19 participation with any of them who receive actual notice of this Order by personal
20 service or otherwise, whether acting directly or through any corporation, subsidiary,
21 division, or other device, are permanently restrained and enjoined from:
22
A.
disclosing, using, or benefitting from customer information, including
23 the name, address, telephone number, email address, social security number, other
24 identifying information, or any data that enables access to a customer’s account
25 (including a credit card, bank account, or other financial account), of any person
26 which any Defendant obtained prior to entry of this Order in connection with the sale
27 or marketing of a healthcare discount program; and
B.
failing to dispose of such customer information in all forms in their
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1 possession, custody, or control within thirty (30) days after entry of this Order.
2 Disposal shall be by means that protect against unauthorized access to the customer
3 information, such as by burning, pulverizing, or shredding any papers, and by
4 erasing or destroying any electronic media, to ensure that the customer information
5 cannot practicably be read or reconstructed.
6
Provided, however, that customer information need not be disposed of, and
7 may be disclosed, to the extent requested by a government agency or required by a
8 law, regulation, or court order.
9
VII.
10
COOPERATION WITH FTC COUNSEL
11
IT IS FURTHER ORDERED that Defendants shall, in connection with this
12 action or any subsequent investigations related to or associated with the transactions
13 or the occurrences that are the subject of the FTC’s Complaint, cooperate in good
14 faith with the FTC and appear (or in the case of Corporate Defendant, cause its
15 officers, employees, representatives, or agents to appear) at such places and times as
16 the FTC shall reasonably request, after written notice, for interviews, conferences,
17 pretrial discovery, review of documents, and for such other matters as may be
18 reasonably requested by the FTC. If requested in writing by the FTC, Defendants
19 shall appear (or in the case of Corporate Defendant, cause its officers, employees,
20 representatives, or agents to appear) and provide truthful testimony in any trial,
21 deposition, or other proceeding related to or associated with the transactions or the
22 occurrences that are the subject of the Complaint, or provide a written declaration or
23 affidavit made under penalty of perjury, without the service of a subpoena.
VIII.
24
25
26
LIFTING OF ASSET FREEZE
IT IS FURTHER ORDERED that the freeze of Defendants’ assets set forth
27 in the Preliminary Injunction, filed by this Court on April 25, 2011, shall be lifted to
28 the extent necessary to turn over Defendants’ assets as required by Section IV
12
1 (“Monetary Relief”) of this Order, and upon completion of the turn-over, shall be
2 lifted permanently.
3
IX.
4
TURNOVER OF ASSETS HELD BY THIRD PARTIES
5
IT IS FURTHER ORDERED that, to partially satisfy the monetary
6 judgment set forth in Section IV (“Monetary Relief”), any law firm, financial or
7 brokerage institution, escrow agent, title company, commodity trading company,
8 automated clearing house, payment processor, business entity, or Person served with
9 a copy of this Order, that holds, controls or maintains custody of any account or asset
10 of, on behalf of, or for the benefit of Defendants, or has held, controlled, or
11 maintained custody of any account or asset of, on behalf of, or for the benefit of
12 Defendants, shall turn over such asset or funds to the Commission, in accordance
13 with instructions provided by a representative of the Commission, within ten (10)
14 business days of receiving notice of this Order by any means, including but not
15 limited to by facsimile.
16
X.
17
ORDER ACKNOWLEDGMENTS
18
IT IS FURTHER ORDERED that Defendants obtain acknowledgments of
19 receipt of this Order:
20
A.
Each Defendant, within seven (7) days of entry of this Order, must
21 submit to the Commission an acknowledgment of receipt of this Order sworn under
22 penalty of perjury.
23
B.
For five (5) years after entry of this Order, each Individual Defendant
24 for any business that such Defendant, individually or collectively with any other
25 Defendant, is the majority owner or directly or indirectly controls, and each
26 Corporate Defendant, must deliver a copy of this Order to: (1) all principals,
27 officers, directors, and managers; (2) all employees, agents, and representatives who
28 participate in conduct related to the subject matter of the Order; and (3) any business
13
1 entity resulting from any change in structure as set forth in the Section titled
2 Compliance Reporting. Delivery must occur within seven (7) days of entry of this
3 Order for current personnel. To all others, delivery must occur before they assume
4 their responsibilities.
5
C.
From each individual or entity to which a Defendant delivered a copy of
6 this Order, that Defendant must obtain, within thirty (30) days, a signed and dated
7 acknowledgment of receipt of this Order.
8
XI.
9
COMPLIANCE REPORTING
10
IT IS FURTHER ORDERED that Defendants make timely submissions to the
11 Commission:
12
A.
One (1) year after entry of this Order, each Defendant must submit a
13 compliance report, sworn under penalty of perjury.
14
1.
Each Defendant must: (a) designate at least one telephone
15
number and an e-mail, physical, and postal address as points of
16
contact, which representatives of the Commission may use to
17
communicate with Defendant; (b) identify all of that Defendant’s
18
businesses by all of their names, telephone numbers, and
19
physical, postal, email, and Internet addresses; (c) describe the
20
activities of each business, including the products and services
21
offered, the means of advertising, marketing, and sales, and the
22
involvement of any other Defendant (which Individual
23
Defendants must describe if they know or should know due to
24
their own involvement); (d) describe in detail whether and how
25
that Defendant is in compliance with each Section of this Order;
26
and (e) provide a copy of each Order Acknowledgment obtained
27
pursuant to this Order, unless previously submitted to the
28
Commission;
14
1
2.
Additionally, each Individual Defendant must: (a) identify all
2
telephone numbers and all email, Internet, physical, and postal
3
addresses, including all residences; (b) identify all titles and roles
4
in all business activities, including any business for which such
5
Defendant performs services whether as an employee or
6
otherwise and any entity in which such Defendant has any
7
ownership interest; and (c) describe in detail such Defendant’s
8
involvement in each such business, including title, role,
9
responsibilities, participation, authority, control, and any
ownership.
10
11
B.
For five (5) years following entry of this Order, each Defendant must
12 submit a compliance notice, sworn under penalty of perjury, within fourteen (14)
13 days of any change in the following:
1.
14
Each Defendant must report any change in: (a) any designated
15
point of contact; (b) the structure of the Corporate Defendant or
16
any entity that Defendant has any ownership interest in or directly
17
or indirectly controls that may affect compliance obligations
18
arising under this Order, including: creation, merger, sale, or
19
dissolution of the entity or any subsidiary, parent, or affiliate that
20
engages in any acts or practices subject to this Order.
2.
21
Additionally, each Individual Defendant must report any change
22
in: (a) name, including aliases or fictitious name, or residence
23
address; or (b) title or role in any business activity, including any
24
business for which such Defendant performs services whether as
25
an employee or otherwise and any entity in which such Defendant
26
has any ownership interest, and identify its name, physical
27
address, and Internet address, if any.
28
C.
Each Defendant must submit to the Commission notice of the filing of
15
1 any bankruptcy petition, insolvency proceeding, or any similar proceeding by or
2 against such Defendant within fourteen (14) days of its filing.
3
D.
Any submission to the Commission required by this Order to be sworn
4 under penalty of perjury must be true and accurate and comply with 28 U.S.C.
5 § 1746, such as by concluding: “I declare under penalty of perjury under the laws of
6 the United States of America that the foregoing is true and correct. Executed
7 on:_____” and supplying the date, signatory’s full name, title (if applicable), and
8 signature.
9
E.
Unless otherwise directed by a Commission representative in writing,
10 all submissions to the Commission pursuant to this Order must be emailed to
11 DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to:
12 Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade
13 Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The subject
14 line must begin: FTC v. Mile High Enterprise Inc. and Bryan Matthew Loving,
15 #X100045.
16
XII.
17
RECORD KEEPING
18
IT IS FURTHER ORDERED that Defendants must create certain records for
19 five (5) years after entry of the Order, and retain each such record for five (5) years.
20 Specifically, Corporate Defendant and each Individual Defendant for any business in
21 which that Defendant, individually or collectively with any other Defendants, is a
22 majority owner or directly or indirectly controls, must maintain the following
23 records:
A.
24
Accounting records showing the revenues from all goods or services
25 sold, all costs incurred in generating those revenues, and the resulting net profit or
26 loss;
27
B.
Personnel records showing, for each person providing services, whether
28 as an employee or otherwise, that person’s: name, addresses, and telephone
16
1 numbers; job title or position; dates of service; and, if applicable, the reason for
2 termination;
3
C.
Customer files, obtained after entry of this Order and to the extent such
4 information is obtained in the ordinary course of business, showing the names,
5 addresses, telephone numbers, dollar amounts paid, and the quantity and description
6 of goods or services purchased;
7
D.
Complaints and refund requests, whether received directly or indirectly,
8 such as through a third party, and any response;
9
E.
All records necessary to demonstrate full compliance with each
10 provision of this Order, including all submissions to the Commission;
11
F.
A copy of all contracts with suppliers, payment processors, and list
12 brokers; and
13
G.
A copy of each advertisement or other marketing material.
14
XIII.
15
COMPLIANCE MONITORING
16
IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants’
17 compliance with this Order, including the financial representations upon which the
18 judgment was suspended and any failure to transfer any assets as required by this
19 Order:
20
A.
Within fourteen (14) days of receipt of a written request from a
21 representative of the Commission, each Defendant must: submit additional
22 compliance reports or other requested information, which must be sworn under
23 penalty of perjury; appear for depositions; and produce documents, for inspection
24 and copying. The Commission is also authorized to obtain discovery, without
25 further leave of court, using any of the procedures prescribed by Federal Rules of
26 Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69.
27
B.
For matters concerning this Order, the Commission is authorized to
28 communicate directly with each Defendant. Defendant must permit representatives
17
1 of the Commission to interview any employee or other person affiliated with any
2 Defendant who has agreed to such an interview. The person interviewed may have
3 counsel present.
4
C.
The Commission may use all other lawful means, including posing,
5 through its representatives, as consumers, suppliers, or other individuals or entities,
6 to Defendants or any individual or entity affiliated with Defendants, without the
7 necessity of identification or prior notice. Nothing in this Order limits the
8 Commission’s lawful use of compulsory process, pursuant to Sections 9 and 20 of
9 the FTC Act, 15 U.S.C. §§ 49, 57b-1.
10
XIV.
11
RETENTION OF JURISDICTION
12
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter
13 for purposes of construction, modification, and enforcement of this Order.
14
XV.
15
ENTRY OF ORDER
16
IT IS FURTHER ORDERED that there is no just reason for delay, and the
17 Clerk of the Court is hereby directed to enter this Order immediately.
18
IT IS SO ORDERED.
19
20
21
22
Dated: December 5, 2011
_____________________________________
Honorable James V. Selna
United States District Judge
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