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 permanently 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, of 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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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
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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
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12 Attorneys for Plaintiff
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
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17 FEDERAL TRADE COMMISSION,
Civ. No. 8:19-cv-02109-JVS (ADSx)
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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,
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v.
21 AMERICAN FINANCIAL SUPPORT
SERVICES INC., et al.,
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Defendants.
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Plaintiff, the Federal Trade Commission (“Commission” or “FTC”), filed its
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Complaint for Permanent Injunction and Other Equitable Relief (“Complaint”), for
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a permanent injunction and other equitable relief in this matter, pursuant to
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Sections 13(b) and 19 of the Federal Trade Commission Act (“FTC Act”), 15
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U.S.C. §§ 53(b), 57b. The Commission and Defendants Carey G. Howe, Anna C.
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Howe, Shunmin Hsu, Ruddy Palacios, and Oliver Pomazi (each a “Stipulating
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Defendant,” and collectively, “Stipulating Defendants”) stipulate to the entry of
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this Stipulated Order for Permanent Injunction and Monetary Judgment as to
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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.
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THEREFORE, IT IS ORDERED as follows:
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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.
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5.
Stipulating Defendants and the Commission waive all rights to appeal or
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otherwise challenge or contest the validity of this Order.
DEFINITIONS
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For the purpose of this Order, the following definitions apply:
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A.
“Assisting Others” includes:
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1.
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responding to consumer complaints;
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2.
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provision of, any advertising or marketing material, including any telephone
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sales script, direct mail solicitation, or the design, text, or use of images of
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any Internet website, email, or other electronic communication;
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3.
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provision of, any marketing support material or service, including web or
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Internet Protocol addresses or domain name registration for any Internet
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websites, affiliate marketing services, or media placement services;
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4.
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customers; or
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5.
19 B.
“Debt Relief Product or Service” means:
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1.
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Person and one or more creditors or debt collectors of (a) secured loans or
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(b) unsecured student loans, any Product or Service represented, expressly or
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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
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a.
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sale for a Person’s dwelling, any other sale of collateral, any
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repossession of a Person’s dwelling or other collateral, or otherwise
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stop, prevent, or postpone any mortgage or deed of foreclosure
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save a Person’s dwelling or other collateral from foreclosure or
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repossession;
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b.
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settle, or in any way alter any terms of the mortgage, loan, debt, or
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obligation, including a reduction in the amount of interest, principal
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balance, monthly payments, or fees owed by a Person to a creditor or
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debt collector of secured loans or unsecured student loans;
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c.
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payments from any secured, or unsecured student loan, holder or
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servicer of any mortgage, loan, debt, or obligation;
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d.
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within which a Person may (i) cure his or her default on the mortgage,
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loan, debt, or obligation, (ii) reinstate his or her mortgage, loan, debt,
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or obligation, (iii) redeem a dwelling or other collateral, or (iv)
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exercise any right to reinstate the mortgage, loan, debt, or obligation
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or redeem a dwelling or other collateral;
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e.
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contained in any promissory note or contract secured by any dwelling
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or other collateral; or
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f.
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other collateral, (ii) a deed-in-lieu of foreclosure, or (iii) any other
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disposition of a mortgage, loan, debt, or obligation other than a sale to
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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
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The foregoing shall include any manner of claimed assistance, including
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auditing or examining a Person’s application for the mortgage, loan, debt, or
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obligation.
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//
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//
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2.
With respect to any loan, debt, or obligation between a Person and one
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or more creditors or debt collectors of unsecured student loans, any Product
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or Service represented, expressly or by implication, to:
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a.
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obligations; or
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b.
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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
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C.
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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.
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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.
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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
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permanently restrained and enjoined from misrepresenting, or Assisting Others in
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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;
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.
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III.
PROHIBITION AGAINST UNSUBSTANTIATED CLAIMS
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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
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efficacy of any Product or Service, unless the representation is non-misleading,
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including that, at the time such representation is made, they possess and rely upon
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competent and reliable evidence that is sufficient in quality and quantity based on
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standards generally accepted in the relevant fields, when considered in light of the
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entire body of relevant and reliable evidence, to substantiate that the representation
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is true.
IV.
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INJUNCTION RELATING TO TELEMARKETING
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IT IS FURTHER ORDERED that Stipulating Defendants, Stipulating
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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.
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V.
MONETARY JUDGMENT AND PARTIAL SUSPENSION
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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:
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Carey G. Howe and Anna C. Howe:
$133,496.42
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Shunmin Hsu:
$43,252.16
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Ruddy Palacios:
$260,582.00
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Oliver Pomazi:
$54,505.00
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which, as Stipulating Defendants stipulate, their undersigned counsel will hold in
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escrow for no purpose other than payment to the Commission. In addition,
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Stipulating Defendants shall cause to be paid to the Commission all funds held in
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their counsel’s client trust account pursuant to the Court’s order of January 27,
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2020 (Doc. 116). Such payments must be made within seven (7) days of entry of
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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:
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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
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pay the FTC the full amount of the deferred payment no later than one-hundred
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eighty (180) days following entry of this Order.
Each Stipulating Defendant represents and acknowledges that, as to that
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Stipulating Defendant’s above-listed property, the FTC is relying on the material
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representations that the Stipulating Defendant is the sole owner of the property or
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is otherwise empowered to obtain a voluntary lien and deed of trust thereon; title to
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the property is marketable; and the property is not encumbered by any other lien,
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mortgage, deed of trust, assignment, pledge, security interest, or other interest not
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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.
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E.
The Commission’s agreement to the suspension of part of the judgment is
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expressly premised upon the truthfulness, accuracy, and completeness of
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Defendants’ sworn financial statements and related documents (collectively,
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“Financial Attestations”) submitted to the Commission or attached to this Order,
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namely:
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1.
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signed on November 16, 2019;
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2.
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Form signed on February 14, 2020, including the additional items;
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3.
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Disclosure Form signed on March 19, 2020, including the attachments;
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4.
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Disclosure Form signed on July 1, 2020;
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5.
the Declaration of Carey G. Howe executed on July 24, 2020;
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6.
the Declaration of Anna C. Howe executed on July 21, 2020;
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7.
the Financial Statement of Individual Defendant Shunmin Hsu signed
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on November 17, 2019, including the attachments;
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8.
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on February 12, 2020, including the additional items;
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9.
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signed on July 2, 2020;
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10.
the Declaration of Shunmin Hsu executed on July 23, 2020;
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11.
the Financial Statement of Individual Defendant Ruddy Palacios
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signed on November 18, 2019, including the attachments;
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12.
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on February 13, 2020, including the additional items;
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13.
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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
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14.
the Payoff Statement for Ruddy Palacios dated June 11, 2020;
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15.
the Declaration of Ruddy Palacios executed on July 24, 2020;
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16.
the Financial Statement of Individual Defendant Oliver Pomazi signed
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on November 15, 2019;
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17.
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on February 12, 2020, including the additional items; and
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18.
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signed on July 2, 2020.
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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.
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VI.
ADDITIONAL MONETARY PROVISIONS
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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
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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.
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D.
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Numbers (Social Security Numbers or Employer Identification Numbers), which
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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.
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G.
Upon completion of all payments identified in Section V.B–C, the Court’s
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order of January 27, 2020, is dissolved.
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VII. CUSTOMER INFORMATION
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IT IS FURTHER ORDERED that Stipulating Defendants, their officers,
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agents, employees, and attorneys, and all other Persons in active concert or
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participation with any of them, who receive actual notice of this Order, whether
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acting directly or indirectly, in connection with the advertising, marketing,
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promoting, offering for sale, or selling of any Product or Service, are permanently
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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 //
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VIII. COOPERATION
IT IS FURTHER ORDERED that Stipulating Defendants must fully
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3
cooperate with representatives of the Commission and the Receiver in this case and
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in any investigation related to or associated with the transactions or the
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occurrences that are the subject of the Complaint. Stipulating Defendants must
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provide truthful and complete information, evidence, and testimony. Stipulating
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Defendants must appear and cause their employees, representatives, or agents to
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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
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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
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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.
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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.
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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.
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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.
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(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.,
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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
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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.
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_______________________________
HON. JAMES V. SELNA
UNITED STATES DISTRICT JUDGE
1
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
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3
FEDERAL TRADE COMMISSION,
4
Plaintiff,
5
v.
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AMERICAN FINANCIAL SUPPORT
SERVICES INC., et al.,
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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]
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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.,
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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:
_________________________
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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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