Federal Trade Commission v. American Financial Support Services Inc. et al

Filing 145

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI 144 filed by Judge James V. Selna. IT IS ORDERED that Stipulating Defendants are perm anently restrained and enjoined, whether acting directly or through an intermediary, from advertising, marketing, promoting, offering for sale, or selling, or Assisting Others in the advertising, marketing, promoting, offering for sale, or selling, o f any Debt Relief Product or Service. IT IS FURTHER ORDERED that: A. Judgment in the amount of Forty-Three Million Three Hundred Thirty-Seven Thousand Two Hundred Ninety-Two Dollars and Eighty-Three Cents ($43,337,292.83) is entered in favor of the Commission against Stipulating Defendants, jointly and severally, as equitable monetary relief. (See document for details.) (es)

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1 2 3 4 5 6 STEPHEN T. FAIRCHILD WA Bar No. 41214; sfairchild@ftc.gov RICHARD MCKEWEN WA Bar No. 45041; rmckewen@ftc.gov FEDERAL TRADE COMMISSION 915 Second Avenue, Suite 2896 Seattle, WA 98174 Tel.: (206) 220-6350; Fax: (206) 220-6366 7 ROBERT J. QUIGLEY, Local Counsel CA Bar No. 302879; rquigley@ftc.gov 9 FEDERAL TRADE COMMISSION 10990 Wilshire Boulevard, Suite 400 10 Los Angeles, CA 90024 11 Tel.: (310) 824-4300; Fax: (310) 824-4380 8 12 Attorneys for Plaintiff 13 14 15 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 16 17 FEDERAL TRADE COMMISSION, Civ. No. 8:19-cv-02109-JVS (ADSx) 18 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Plaintiff, 19 20 v. 21 AMERICAN FINANCIAL SUPPORT SERVICES INC., et al., 22 23 24 25 26 27 28 Defendants. 1 Plaintiff, the Federal Trade Commission (“Commission” or “FTC”), filed its 2 Complaint for Permanent Injunction and Other Equitable Relief (“Complaint”), for 3 a permanent injunction and other equitable relief in this matter, pursuant to 4 Sections 13(b) and 19 of the Federal Trade Commission Act (“FTC Act”), 15 5 U.S.C. §§ 53(b), 57b. The Commission and Defendants Carey G. Howe, Anna C. 6 Howe, Shunmin Hsu, Ruddy Palacios, and Oliver Pomazi (each a “Stipulating 7 Defendant,” and collectively, “Stipulating Defendants”) stipulate to the entry of 8 this Stipulated Order for Permanent Injunction and Monetary Judgment as to 9 Defendants Carey G. Howe, Anna C. Howe, Shunmin Hsu, Ruddy Palacios, and 10 Oliver Pomazi (“Order”) to resolve all matters in dispute in this action between 11 them. 12 THEREFORE, IT IS ORDERED as follows: 13 FINDINGS 14 1. This Court has jurisdiction over this matter. 15 2. The Complaint charges that Defendants participated in deceptive acts or 16 practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, and the 17 Telemarketing Sales Rule, 16 C.F.R. pt. 310, in the marketing and sale of student 18 loan debt relief services. 19 3. Stipulating Defendants neither admit nor deny any of the allegations in the 20 Complaint, except as specifically stated in this Order. Only for purposes of this 21 action, Stipulating Defendants admit the facts necessary to establish jurisdiction. 22 4. Stipulating Defendants waive and release any claim that they may have 23 under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the 24 prosecution of this action through the date of this Order, and agree to bear their 25 own costs and attorney fees. Furthermore, Stipulating Defendants waive and 26 release any claims that they may have against the Commission, the Receiver, and 27 their agents that relate to this action. 28 1 5. Stipulating Defendants and the Commission waive all rights to appeal or 2 otherwise challenge or contest the validity of this Order. DEFINITIONS 3 For the purpose of this Order, the following definitions apply: 4 5 A. “Assisting Others” includes: 6 1. 7 responding to consumer complaints; 8 2. 9 provision of, any advertising or marketing material, including any telephone 10 sales script, direct mail solicitation, or the design, text, or use of images of 11 any Internet website, email, or other electronic communication; 12 3. 13 provision of, any marketing support material or service, including web or 14 Internet Protocol addresses or domain name registration for any Internet 15 websites, affiliate marketing services, or media placement services; 16 4. 17 customers; or 18 5. 19 B. “Debt Relief Product or Service” means: 20 1. 21 Person and one or more creditors or debt collectors of (a) secured loans or 22 (b) unsecured student loans, any Product or Service represented, expressly or 23 by implication, to: performing customer service functions, including receiving or formulating or providing, or arranging for the formulation or formulating or providing, or arranging for the formulation or providing names of, or assisting in the generation of, potential performing marketing, billing, or payment services of any kind. With respect to any mortgage, loan, debt, or obligation between a 24 a. 25 sale for a Person’s dwelling, any other sale of collateral, any 26 repossession of a Person’s dwelling or other collateral, or otherwise 27 28 stop, prevent, or postpone any mortgage or deed of foreclosure 1 save a Person’s dwelling or other collateral from foreclosure or 2 repossession; 3 b. 4 settle, or in any way alter any terms of the mortgage, loan, debt, or 5 obligation, including a reduction in the amount of interest, principal 6 balance, monthly payments, or fees owed by a Person to a creditor or 7 debt collector of secured loans or unsecured student loans; 8 c. 9 payments from any secured, or unsecured student loan, holder or 10 servicer of any mortgage, loan, debt, or obligation; 11 d. 12 within which a Person may (i) cure his or her default on the mortgage, 13 loan, debt, or obligation, (ii) reinstate his or her mortgage, loan, debt, 14 or obligation, (iii) redeem a dwelling or other collateral, or (iv) 15 exercise any right to reinstate the mortgage, loan, debt, or obligation 16 or redeem a dwelling or other collateral; 17 e. 18 contained in any promissory note or contract secured by any dwelling 19 or other collateral; or 20 f. 21 other collateral, (ii) a deed-in-lieu of foreclosure, or (iii) any other 22 disposition of a mortgage, loan, debt, or obligation other than a sale to 23 a third party that is not the secured, or unsecured student loan, holder. negotiate, obtain, or arrange a modification, or renegotiate, obtain any forbearance or modification in the timing of negotiate, obtain, or arrange any extension of the period of time obtain any waiver of an acceleration clause or balloon payment negotiate, obtain, or arrange (i) a short sale of a dwelling or 24 The foregoing shall include any manner of claimed assistance, including 25 auditing or examining a Person’s application for the mortgage, loan, debt, or 26 obligation. 27 // 28 // 1 2. With respect to any loan, debt, or obligation between a Person and one 2 or more creditors or debt collectors of unsecured student loans, any Product 3 or Service represented, expressly or by implication, to: 4 a. 5 obligations; or 6 b. 7 or more new loans, debts, or obligations. repay one or more unsecured student loans, debts, or combine unsecured student loans, debts, or obligations into one 8 C. 9 or general partnership, corporation, or other business entity. “Person” means any individual, group, unincorporated association, limited 10 D. “Product or Service” means any good or service, including any plan or 11 program. 12 E. “Stipulating Defendants” means Carey G. Howe, Anna C. Howe, Shunmin 13 “Mike” Hsu, Ruddy Palacios a/k/a Ruddy Barahona, and Oliver Pomazi, and any 14 other names by which they might be known, individually, collectively, or in any 15 combination. 16 17 18 ORDER I. BAN ON DEBT RELIEF PRODUCTS AND SERVICES IT IS ORDERED that Stipulating Defendants are permanently restrained and 19 enjoined, whether acting directly or through an intermediary, from advertising, 20 marketing, promoting, offering for sale, or selling, or Assisting Others in the 21 advertising, marketing, promoting, offering for sale, or selling, of any Debt Relief 22 Product or Service. 23 24 II. PROHIBITION AGAINST MISREPRESENTATIONS IT IS FURTHER ORDERED that Stipulating Defendants, Stipulating 25 Defendants’ officers, agents, employees, and attorneys, and all other Persons in 26 active concert or participation with any of them, who receive actual notice of this 27 Order, whether acting directly or indirectly, in connection with the advertising, 28 marketing, promoting, offering for sale, or selling of any Product or Service, are 1 permanently restrained and enjoined from misrepresenting, or Assisting Others in 2 misrepresenting, expressly or by implication: 3 A. 4 exchange, or repurchase policy, including the likelihood of a consumer obtaining a 5 full or partial refund, or the circumstances in which a full or partial refund will be 6 granted to the consumer; 7 B. 8 connected to any other Person; government entity; public, non-profit, or other non- 9 commercial program; or any other program; 10 C. 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 11 Product or Service; 12 D. that any Person providing a testimonial has purchased, received, or used the 13 Product or Service; 14 E. that the experience represented in a testimonial of the product, service, plan, 15 or program represents the Person’s actual experience resulting from the use of the 16 product, service, plan, or program under the circumstances depicted in the 17 advertisement; or 18 F. any other fact material to consumers concerning any Product or Service, 19 such as: the total costs; any material restrictions, limitations, or conditions; or any 20 material aspect of its performance, efficacy, nature, or central characteristics. 21 III. PROHIBITION AGAINST UNSUBSTANTIATED CLAIMS 22 IT IS FURTHER ORDERED that Stipulating Defendants, Stipulating 23 Defendants’ officers, agents, employees, and attorneys, and all other Persons in 24 active concert or participation with any of them, who receive actual notice of this 25 Order, whether acting directly or indirectly, in connection with the promoting or 26 offering for sale of any Product or Service, are permanently restrained and 27 enjoined from making any representation or Assisting Others in making any 28 representation, expressly or by implication, about the benefits, performance, or 1 efficacy of any Product or Service, unless the representation is non-misleading, 2 including that, at the time such representation is made, they possess and rely upon 3 competent and reliable evidence that is sufficient in quality and quantity based on 4 standards generally accepted in the relevant fields, when considered in light of the 5 entire body of relevant and reliable evidence, to substantiate that the representation 6 is true. IV. 7 INJUNCTION RELATING TO TELEMARKETING 8 IT IS FURTHER ORDERED that Stipulating Defendants, Stipulating 9 Defendants’ officers, agents, and employees, and all other Persons in active 10 concert or participation with any of them, who receive actual notice of this Order, 11 whether acting directly or indirectly, in connection with telemarketing, advertising, 12 marketing, promoting, offering for sale, or selling of any Product or Service, are 13 hereby permanently restrained and enjoined from: 14 A. Misrepresenting, directly or by implication, in the sale of goods or services 15 any material aspect of the performance, efficacy, nature, or central characteristics 16 of goods or services that are the subject of a sales offer; and 17 B. Violating the FTC’s Telemarketing Sales Rule, 16 C.F.R. pt. 310, a copy of 18 which is attached as Attachment A. 19 V. MONETARY JUDGMENT AND PARTIAL SUSPENSION 20 IT IS FURTHER ORDERED that: 21 A. Judgment in the amount of Forty-Three Million Three Hundred Thirty- 22 Seven Thousand Two Hundred Ninety-Two Dollars and Eighty-Three Cents 23 ($43,337,292.83) is entered in favor of the Commission against Stipulating 24 Defendants, jointly and severally, as equitable monetary relief. 25 B. In partial satisfaction of the judgment imposed by Subsection A, the 26 Stipulating Defendants are each ordered to pay to the Commission the following 27 amounts: 28 Carey G. Howe and Anna C. Howe: $133,496.42 1 Shunmin Hsu: $43,252.16 2 Ruddy Palacios: $260,582.00 3 Oliver Pomazi: $54,505.00 4 which, as Stipulating Defendants stipulate, their undersigned counsel will hold in 5 escrow for no purpose other than payment to the Commission. In addition, 6 Stipulating Defendants shall cause to be paid to the Commission all funds held in 7 their counsel’s client trust account pursuant to the Court’s order of January 27, 8 2020 (Doc. 116). Such payments must be made within seven (7) days of entry of 9 this Order by electronic fund transfer in accordance with instructions provided by a 10 representative of the Commission. Upon such payments and, if applicable, all 11 additional payments, asset transfers, and delivery of proof of deeds of trust 12 pursuant to Subsection C below, the remainder of the judgment is suspended, 13 subject to the Subsections below. 14 C. In addition to making the payments required by Subsection B, the following 15 Stipulating Defendants shall make an additional deferred payment in the amounts 16 listed below. To secure the deferred payments, the Stipulating Defendants hereby 17 grant the FTC a lien and security interest in the real property indicated: 18 19 20 21 22 23  Carey G. Howe and Anna C. Howe: $80,302.00 (8282 Valencia Drive, Huntington Beach, California 92647)  Shunmin Hsu: $237,840.76 (12602 Barrett Lane, North Tustin, California 92705)  Ruddy Palacios: $24,958.29 (1912 Alcor Street, Lomita, California 90717) 24 Within thirty (30) days of entry of this Order, each of these Stipulating Defendants 25 shall either record and deliver to the FTC a deed of trust in the real property in the 26 amount indicated, or pay the FTC the full amount of the deferred payment. Any 27 Stipulating Defendant who records and delivers to the FTC a deed of trust must 28 1 pay the FTC the full amount of the deferred payment no later than one-hundred 2 eighty (180) days following entry of this Order. Each Stipulating Defendant represents and acknowledges that, as to that 3 4 Stipulating Defendant’s above-listed property, the FTC is relying on the material 5 representations that the Stipulating Defendant is the sole owner of the property or 6 is otherwise empowered to obtain a voluntary lien and deed of trust thereon; title to 7 the property is marketable; and the property is not encumbered by any other lien, 8 mortgage, deed of trust, assignment, pledge, security interest, or other interest not 9 identified in the Financial Attestations listed in Subsection D below. Stipulating 10 Defendants shall maintain in good working order, keep in the same condition, 11 cause existing insurance coverage for the property to remain in force, and take no 12 action to diminish the value of the property, including any structures, fixtures, and 13 appurtenances thereto, as of the date Stipulating Defendants executed their 14 Financial Attestations listing the value of such property. Stipulating Defendants 15 shall be responsible for paying all fees, costs, or other expenses related to 16 recording the voluntary lien and deed of trust described above. 17 Within ten (10) days of the full payment of a Stipulating Defendant’s 18 payment obligation under this Subsection C, the FTC will execute and deliver to 19 such Stipulating Defendant a fully executed conveyance releasing the FTC’s lien 20 and security interest in the subject property, which upon the Stipulating 21 Defendant’s receipt may be immediately perfected by recordation. 22 D. In the event that any Stipulating Defendant fails to make a required payment 23 when due under Subsection B or C, the entire judgment amount, less any amount 24 previously paid, shall immediately become due and payable by that Stipulating 25 Defendant. Interest computed at the rate prescribed under 28 U.S.C. § 1961, as 26 amended, shall immediately begin to accrue on the unpaid balance. Time is of the 27 essence for the payments specified in this Section. 28 1 E. The Commission’s agreement to the suspension of part of the judgment is 2 expressly premised upon the truthfulness, accuracy, and completeness of 3 Defendants’ sworn financial statements and related documents (collectively, 4 “Financial Attestations”) submitted to the Commission or attached to this Order, 5 namely: 6 1. 7 signed on November 16, 2019; 8 2. 9 Form signed on February 14, 2020, including the additional items; 10 3. 11 Disclosure Form signed on March 19, 2020, including the attachments; 12 4. 13 Disclosure Form signed on July 1, 2020; 14 5. the Declaration of Carey G. Howe executed on July 24, 2020; 15 6. the Declaration of Anna C. Howe executed on July 21, 2020; 16 7. the Financial Statement of Individual Defendant Shunmin Hsu signed 17 on November 17, 2019, including the attachments; 18 8. 19 on February 12, 2020, including the additional items; 20 9. 21 signed on July 2, 2020; 22 10. the Declaration of Shunmin Hsu executed on July 23, 2020; 23 11. the Financial Statement of Individual Defendant Ruddy Palacios 24 signed on November 18, 2019, including the attachments; 25 12. 26 on February 13, 2020, including the additional items; 27 13. 28 signed on June 30, 2020; the Financial Statement of Individual Defendant Carey G. Howe the Addendum to Carey G. Howe’s Individual Financial Disclosure the Second Addendum to Carey G. Howe’s Individual Financial the Third Addendum to Cary G. Howe’s Individual Financial the Addendum to Shunmin Hsu’s Financial Disclosure Form signed the Second Addendum to Shunmin Hsu’s Financial Disclosure Form the Addendum to Ruddy Palacios’s Financial Disclosure Form signed the Second Addendum to Ruddy Palacios’s Financial Disclosure form 1 14. the Payoff Statement for Ruddy Palacios dated June 11, 2020; 2 15. the Declaration of Ruddy Palacios executed on July 24, 2020; 3 16. the Financial Statement of Individual Defendant Oliver Pomazi signed 4 on November 15, 2019; 5 17. 6 on February 12, 2020, including the additional items; and 7 18. 8 signed on July 2, 2020. 9 F. the Addendum to Oliver Pomazi’s Financial Disclosure Form signed the Second Addendum to Oliver Pomazi’s Financial Disclosure Form The suspension of the judgment will be lifted as to any Stipulating 10 Defendant if, upon motion by the Commission, the Court finds that Stipulating 11 Defendant failed to disclose any material asset, materially misstated the value of 12 any asset, or made any other material misstatement or omission in the Financial 13 Attestations identified above. 14 G. If the suspension of the judgment is lifted, the judgment becomes 15 immediately due as to that Stipulating Defendant in the amount specified in 16 Subsection A above (which the parties stipulate only for purposes of this Section 17 represents the consumer injury alleged in the Complaint), less any payment 18 previously made pursuant to this Section, plus interest computed from the date of 19 entry of this Order. 20 VI. ADDITIONAL MONETARY PROVISIONS 21 IT IS FURTHER ORDERED that: 22 A. Stipulating Defendants relinquish dominion and all legal and equitable right, 23 title, and interest in all assets transferred pursuant to this Order and may not seek 24 the return of any assets. 25 B. The facts alleged in the Complaint will be taken as true, without further 26 proof, in any subsequent civil litigation by or on behalf of the Commission, 27 including in a proceeding to enforce its rights to any payment or monetary 28 1 judgment pursuant to this Order, such as a nondischargeability complaint in any 2 bankruptcy case. 3 C. 4 an action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy 5 Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect 6 for such purposes. 7 D. 8 Numbers (Social Security Numbers or Employer Identification Numbers), which 9 Stipulating Defendants previously submitted to the Commission, may be used for The facts alleged in the Complaint establish all elements necessary to sustain Stipulating Defendants acknowledge that their Taxpayer Identification 10 collecting and reporting on any delinquent amount arising out of this Order, in 11 accordance with 31 U.S.C. § 7701. 12 E. All money paid to the Commission pursuant to this Order may be deposited 13 into a fund administered by the Commission or its designee to be used for 14 equitable relief, including consumer redress and any attendant expenses for the 15 administration of any redress fund. If a representative of the Commission decides 16 that direct redress to consumers is wholly or partially impracticable or money 17 remains after redress is completed, the Commission may apply any remaining 18 money for such other equitable relief (including consumer information remedies) 19 as it determines to be reasonably related to Defendants’ practices alleged in the 20 Complaint. Any money not used for such equitable relief is to be deposited to the 21 U.S. Treasury as disgorgement. Stipulating Defendants have no right to challenge 22 any actions the Commission or its representatives may take pursuant to this 23 Subsection. 24 F. The asset freeze imposed by the preliminary injunction order entered on 25 December 17, 2019 (Doc. 79), is modified to permit the payments identified in 26 Section V.B–C. The asset freeze shall otherwise remain in full force and effect 27 until the completion of all such payments, after which the asset freeze shall be 28 dissolved as to the Stipulating Defendants. 1 G. Upon completion of all payments identified in Section V.B–C, the Court’s 2 order of January 27, 2020, is dissolved. 3 VII. CUSTOMER INFORMATION 4 IT IS FURTHER ORDERED that Stipulating Defendants, their officers, 5 agents, employees, and attorneys, and all other Persons in active concert or 6 participation with any of them, who receive actual notice of this Order, whether 7 acting directly or indirectly, in connection with the advertising, marketing, 8 promoting, offering for sale, or selling of any Product or Service, are permanently 9 restrained and enjoined from directly or indirectly: 10 A. failing to provide sufficient customer information to enable the Commission 11 to efficiently administer consumer redress. If a representative of the Commission 12 requests in writing any information related to redress, Stipulating Defendants must 13 provide it, in the form prescribed by the Commission, within 14 days; 14 B. disclosing, using, or benefitting from customer information, including the 15 name, address, telephone number, email address, social security number, other 16 identifying information, or any data that enables access to a customer’s account 17 (including a credit card, bank account, or other financial account), that any 18 Defendant obtained prior to entry of this Order in connection with the sale and 19 marketing of student loan debt relief services; and 20 C. failing to destroy such customer information in all forms in their possession, 21 custody, or control within 30 days after receipt of written direction to do so from a 22 representative of the Commission. 23 Provided, however, that customer information need not be disposed of, and 24 may be disclosed, to the extent requested by a government agency or required by 25 law, regulation, or court order. 26 // 27 // 28 // 1 VIII. COOPERATION IT IS FURTHER ORDERED that Stipulating Defendants must fully 2 3 cooperate with representatives of the Commission and the Receiver in this case and 4 in any investigation related to or associated with the transactions or the 5 occurrences that are the subject of the Complaint. Stipulating Defendants must 6 provide truthful and complete information, evidence, and testimony. Stipulating 7 Defendants must appear and cause their employees, representatives, or agents to 8 appear for interviews, discovery, hearings, trials, and any other proceedings that a 9 Commission or Receiver’s representative may reasonably request upon five (5) 10 days written notice, or other reasonable notice, at such places and times as a 11 Commission or Receiver’s representative may designate, without the service of a 12 subpoena. 13 14 IX. ORDER ACKNOWLEDGMENTS IT IS FURTHER ORDERED that Stipulating Defendants obtain 15 acknowledgments of receipt of this Order: 16 A. Each Stipulating Defendant, within 7 days of entry of this Order, must 17 submit to the Commission an acknowledgment of receipt of this Order sworn 18 under penalty of perjury, in the form attached to this Order. 19 B. For 15 years after entry of this Order, each Stipulating Defendant for any 20 business that such Stipulating Defendant, individually or collectively with any 21 other Defendants, is the majority owner or controls directly or indirectly, must 22 deliver a copy of this Order to: (1) all principals, officers, directors, and LLC 23 managers and members; (2) all employees having managerial responsibilities for 24 the conduct specified in Section IV and all agents and representatives who 25 participate in the conduct specified in Section IV; (3) any payment processor or 26 lead broker or generator used by the business; and (4) any business entity resulting 27 from any change in structure as set forth in the Section titled Compliance 28 Reporting. Delivery must occur within 7 days of entry of this Order for current 1 personnel. For all others, delivery must occur before they assume their 2 responsibilities. 3 C. 4 copy of this Order, that Stipulating Defendant must obtain and deliver to the 5 Commission, within 30 days, a signed and dated acknowledgment of receipt of this 6 Order, in the form attached to this Order. From each individual or entity to which a Stipulating Defendant delivered a X. 7 IT IS FURTHER ORDERED that Stipulating Defendants make timely 8 9 COMPLIANCE REPORTING submissions to the Commission: 10 A. One year after entry of this Order, each Stipulating Defendant must submit a 11 compliance report, sworn under penalty of perjury. In the compliance report, each 12 Individual Defendant must: 13 1. 14 Internet addresses, including all residences, as designated points of contact, 15 which representatives of the Commission may use to communicate with 16 Stipulating Defendant; 17 2. 18 Stipulating Defendant performs services whether as an employee or 19 otherwise and any entity in which such Stipulating Defendant has any 20 ownership interest, including the names, telephone numbers, and physical, 21 postal, email, and Internet addresses of all such businesses; 22 3. 23 and services offered, the means of advertising, marketing, and sales, and the 24 involvement of any other Defendant (which Stipulating Defendants must 25 describe if they know or should know due to their own involvement) 26 3. 27 such business, including title, role, responsibilities, participation, authority, 28 control, and any ownership; identify all telephone numbers and all physical, postal, email and identify all business activities, including any business for which such describe in detail the activities of each business, including the goods describe in detail such Stipulating Defendant’s involvement in each 1 4. describe in detail whether and how that Stipulating Defendant is in 2 compliance with each Section of this Order; and 3 5. 4 this Order, unless previously submitted to the Commission. provide a copy of each Order Acknowledgment obtained pursuant to 5 B. 6 submit a compliance notice, sworn under penalty of perjury, within 14 days of any 7 change in the following: For 15 years after entry of this Order, each Stipulating Defendant must 8 1. 9 designated point of contact; or (b) the structure of any entity that Stipulating 10 Defendant has any ownership interest in or controls directly or indirectly that 11 may affect compliance obligations arising under this Order, including: 12 creation, merger, sale, or dissolution of the entity or any subsidiary, parent, 13 or affiliate that engages in any acts or practices subject to this Order. 14 2. 15 (a) name, including aliases or fictitious name, or residence address; or (b) 16 title or role in any business activity, including any business for which such 17 Stipulating Defendant performs services whether as an employee or 18 otherwise and any entity in which such Stipulating Defendant has any 19 ownership interest, and identify the name, physical address, and any Internet 20 address of the business or entity. Each Stipulating Defendant must report any change in: (a) any Additionally, each Stipulating Defendant must report any change in: 21 C. Each Stipulating Defendant must submit to the Commission notice of the 22 filing of any bankruptcy petition, insolvency proceeding, or similar proceeding by 23 or against such Stipulating Defendant within 14 days of its filing. 24 D. Any submission to the Commission required by this Order to be sworn under 25 penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, 26 such as by concluding: “I declare under penalty of perjury under the laws of the 27 United States of America that the foregoing is true and correct. Executed on: 28 1 _____” and supplying the date, signatory’s full name, title (if applicable), and 2 signature. 3 E. 4 submissions to the Commission pursuant to this Order must be emailed to 5 DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to: 6 Associate Director for Enforcement, Bureau of Consumer Protection, Federal 7 Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The 8 subject line must begin: FTC v. American Financial Support Services Inc., et al., 9 X200005. Unless otherwise directed by a Commission representative in writing, all XI. 10 11 RECORDKEEPING IT IS FURTHER ORDERED that Stipulating Defendants must create certain 12 records for 15 years after entry of the Order, and retain each such record for 5 13 years. Specifically, each Stipulating Defendant for any business that such 14 Stipulating Defendant, individually or collectively with any other Defendants, is a 15 majority owner of or controls directly or indirectly, must create and retain the 16 following records: 17 A. accounting records showing the revenues from all goods or services sold; 18 B. personnel records showing, for each person providing services, whether as 19 an employee or otherwise, that person’s: name; addresses; telephone numbers; job 20 title or position; dates of service; and (if applicable) the reason for termination; 21 C. records of all consumer complaints and refund requests, whether received 22 directly or indirectly, such as through a third party, and any response; 23 D. all records necessary to demonstrate full compliance with each provision of 24 this Order, including all submissions to the Commission; and 25 E. a listing of all payment processors and lead brokers or generators used in the 26 conduct of the business. 27 // 28 // 1 XII. COMPLIANCE MONITORING 2 IT IS FURTHER ORDERED that, for the purpose of monitoring Stipulating 3 Defendants’ compliance with this Order, including the Financial Attestations upon 4 which part of the judgment was suspended and any failure to transfer any assets as 5 required by this Order: 6 A. 7 Commission, each Stipulating Defendant must: submit additional compliance 8 reports or other requested information, which must be sworn under penalty of 9 perjury; appear for depositions; and produce documents for inspection and Within 14 days of receipt of a written request from a representative of the 10 copying. The Commission is also authorized to obtain discovery, without further 11 leave of court, using any of the procedures prescribed by Federal Rules of Civil 12 Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69. 13 B. For matters concerning this Order, the Commission is authorized to 14 communicate directly with each Stipulating Defendant. Such Stipulating 15 Defendant must permit representatives of the Commission to interview any 16 employee or other person affiliated with any Stipulating Defendant who has agreed 17 to such an interview. The person interviewed may have counsel present. 18 C. The Commission may use all other lawful means, including posing, through 19 its representatives, as consumers, suppliers, or other individuals or entities, to 20 Stipulating Defendants or any individual or entity affiliated with Stipulating 21 Defendants, without the necessity of identification or prior notice. Nothing in this 22 Order limits the Commission’s lawful use of compulsory process, pursuant to 23 Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1. 24 D. Upon written request from a representative of the Commission, any 25 consumer reporting agency must furnish consumer reports concerning Stipulating 26 Defendants, pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. 27 § 1681b(a)(1). 28 // 1 2 XIII. DISPOSITION OF APPEALS IT IS FURTHER ORDERED that, within three (3) business days after entry 3 of this Order, Stipulating Defendants shall move to dismiss, with prejudice and 4 without seeking attorney’s fees and costs, their appeals in the Ninth Circuit Court 5 of Appeals arising from this Court’s entry of a Preliminary Injunction, Ninth 6 Circuit Case Nos. 20-55091 and 20-55092. 7 XIV. RETENTION OF JURISDICTION 8 IT IS FURTHER ORDERED that this Court retains jurisdiction of this 9 matter for purposes of construction, modification, and enforcement of this Order. 10 11 SO ORDERED this 9th day of September, 2020. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 _______________________________ HON. JAMES V. SELNA UNITED STATES DISTRICT JUDGE 1 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 2 3 FEDERAL TRADE COMMISSION, 4 Plaintiff, 5 v. 6 7 8 AMERICAN FINANCIAL SUPPORT SERVICES INC., et al., 9 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ACKNOWLEDGEMENT BY AFFIDAVIT OF RECEIPT OF ORDER BY DEFENDANT Defendants. 10 11 Civ. No. 8:19-cv-02109-JVS (ADSx) 1. My name is ___________________________. I am a U.S. citizen over the age of eighteen, and I have personal knowledge of the facts set forth in this Acknowledgement. 2. I was a Defendant in Federal Trade Commission v. American Financial Support Services Inc., et al., which is the court case listed near the top of this page. 3. On ___________________, 2020, I received a copy of the Stipulated Order for Permanent Injunction and Monetary Judgment as to Defendants Carey G. Howe, Anna C. Howe, Shunmin Hsu, Ruddy Palacios, and Oliver Pomazi, which was signed by the Honorable James V. Selna and entered by the Court on _____________, 2020. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on _________________, 2020, at __________________. _________________________ [Defendant] 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 State of ______________, City of ____________ Subscribed and sworn to before me this ____ day of _______, 20__. ______________________ Notary Public My commission expires: ______________________ 1 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 2 3 FEDERAL TRADE COMMISSION, 4 Plaintiff, 5 v. 6 7 8 AMERICAN FINANCIAL SUPPORT SERVICES INC., et al., 9 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ACKNOWLEDGEMENT BY DECLARATION OF RECEIPT OF ORDER BY A NON-PARTY Defendants. 10 11 Civ. No. 8:19-cv-02109-JVS (ADSx) 1. I, __________________________________, received a copy of the Stipulated Order for Permanent Injunction and Monetary Judgment as to Defendants Carey G. Howe, Anna C. Howe, Shunmin Hsu, Ruddy Palacios, and Oliver Pomazi in the case of Federal Trade Commission v. American Financial Support Services Inc., et al., on _______________________, 20___. 2. I was not a Defendant in that court case. My title or relationship with Defendant(s) ________________________________________ is: __________________________________________________________________. 3. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on _________________, 20___, at _______________________ [place]. Signed: _________________________ 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 ATTACHMENT A STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 1 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 2 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 3 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 4 include a payment order cleared through an Automated Clearinghouse (ACH) Network or subject to the Truth in Lending Act, 15 U.S.C. 1601 et seq., and Regulation Z, 12 CFR part 1026. (dd) Seller means any person who, in connection with a telemarketing transaction, provides, offers to provide, or arranges for others to provide goods or services to the customer in exchange for consideration. (ee) State means any state of the United States, the District of Columbia, Puerto Rico, the Northern Mariana Islands, and any territory or possession of the United States. (ff) Telemarketer means any person who, in connection with telemarketing, initiates or receives telephone calls to or from a customer or donor. (gg) Telemarketing means a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call. The term does not include the solicitation of sales through the mailing of a catalog which: contains a written description or illustration of the goods or services offered for sale; includes the business address of the seller; includes multiple pages of written material or illustrations; and has been issued not less frequently than once a year, when the person making the solicitation does not solicit customers by telephone but only receives calls initiated by customers in response to the catalog and during those calls takes orders only without further solicitation. For purposes of the previous sentence, the term "further solicitation" does not include providing the customer with information about, or attempting to sell, any other item included in the same catalog which prompted the customer's call or in a substantially similar catalog. (hh) Upselling means soliciting the purchase of goods or services following an initial transaction during a single telephone call. The upsell is a separate telemarketing transaction, not a continuation of the initial transaction. An "external upsell" is a solicitation made by or on behalf of a seller different from the seller in the initial transaction, regardless of whether the initial transaction and the subsequent solicitation are made by the same telemarketer. An "internal upsell" is a solicitation made by or on behalf of the same seller as in the initial transaction, regardless of whether the initial transaction and subsequent solicitation are made by the same telemarketer. [75 FR 48516, Aug. 10, 2010, as amended at 80 FR 77557, Dec. 14, 2015] STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 5 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 6 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 7 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 8 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 9 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 10 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 11 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 12 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 13 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 14 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 15 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 16 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 17 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 18 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 19 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 20 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 21 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 22 STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, AND OLIVER POMAZI Attachment A - page 23

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