Federal Trade Commission v. Hope for Car Owners, LLC et al

Filing 46

DEFAULT JUDGMENT and ORDER FOR PERMANENT INJUNCTION against Hope for Car Owners, LLC signed by Judge Garland E. Burrell, Jr on 2/21/13. (Manzer, C)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA
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FEDERAL TRADE COMMISSION,

Case No. 2:12-cv-00778-GEB-EFB

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Plaintiff,

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DEFAULT JUDGMENT AND
ORDER FOR PERMANENT
INJUNCTION AS TO DEFENDANT
HOPE FOR CAR OWNERS, LLC

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v.

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HOPE FOR CAR OWNERS, LLC, et al.,

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Defendants.

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Plaintiff Federal Trade Commission (“FTC”) commenced this civil action on March

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27, 2012, pursuant to Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), to obtain preliminary

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and permanent injunctive and other equitable relief for Defendants’ alleged violations of

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Section 5 of the FTC Act, 15 U.S.C. § 45, in connection with the marketing and sale of motor

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vehicle loan assistance relief services. See Dkt. No. 1. On April 4, 2012, the Court issued a

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Temporary Restraining Order. See Dkt. No. 17. On April 16, 2012, this action was referred to

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the Magistrate Judge pursuant to Local Rule 302(c)(21). See Dkt. No. 22 at 11; see also 28

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U.S.C. § 636(c). On June 7, 2012, the Magistrate Judge recommended that a preliminary

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injunction be entered against Hope for Car Owners, LLC (“Hope for Car Owners”). See Dkt.
No. 29. On July 21, 2012, the Court adopted the Magistrate Judge’s findings and
recommendation and granted the FTC’s motion for preliminary injunction. See Dkt. No. 30.
Defendant Hope for Car Owners failed to file an answer or otherwise defend this
action, and the Clerk entered default against Hope for Car Owners on June 5, 2012. See Dkt.
No. 28. The FTC and defendant Patrick Freeman stipulated to the entry of a final order, which
order was entered by the Court on November 30, 2012. See Dkt. No. 40. The FTC now

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Default Judgment and Final Order

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having filed its Motion for Entry of Default Judgment and Order for Permanent Injunction and

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Other Equitable Relief Against the remaining defendant, Hope for Car Owners, LLC, and the

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Court having considered the FTC’s Motion, and supporting exhibits, and the entire record in

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this matter, the FTC’s Motion is hereby granted, and IT IS HEREBY ORDERED,

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ADJUDGED, AND DECREED as follows:

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FINDINGS
1.

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§ 53(b). The Complaint seeks both permanent injunctive relief and equitable monetary

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relief for Hope for Car Owners’ deceptive acts or practices as alleged therein.
2.

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1331, 1337(a) and 1345.
3.

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This Court has jurisdiction over the subject matter of this case and has jurisdiction
over Hope for Car Owners pursuant to 15 U.S.C. §§ 45(a) and 53(b), and 28 U.S.C. §§

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This is an action by the FTC instituted under Section 13(b) of the FTC Act, 15 U.S.C.

Venue is proper in this District under 15 U.S.C. § 53(b) and 28 U.S.C. § 1391(b) and
(c).

4.

The Complaint states a claim upon which relief may be granted against Hope for Car

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Owners under Sections 5(a) and 13(b) of the FTC Act, 15 U.S.C. §§ 45(a) and 53(b).
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5.

Hope for Car Owners has been properly served with the Summons and Complaint, as

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required by Federal Rule of Civil Procedure 4.
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of the Court properly entered defaults against Hope for Car Owners on June 5, 2012.

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7.

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Because of Hope for Car Owners’ default, the allegations in the Complaint filed in this
action are taken as true.

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Hope for Car Owners has failed to Answer or otherwise defend this action. The Clerk

8.

The FTC is an independent agency of the United States Government created by statute.
15 U.S.C. §§ 41 et seq. The FTC is charged, inter alia, with enforcement of Section
5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or
practices in or affecting commerce. The FTC is authorized to initiate federal district

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court proceedings, by its own attorneys, to enjoin violations of the FTC Act, and to

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secure such equitable relief as may be appropriate in each case, including

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disgorgement. 15 U.S.C. § 53(b).

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9.

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The activities of Hope for Car Owners, as alleged in the Complaint, are in or affecting
commerce, as defined in Section 4 of the FTC Act, 15 U.S.C. § 44.

10.

As alleged in Count I of the Complaint, Hope for Car Owners, in connection with the

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advertising, marketing promotion, offering for sale, or sale of vehicle loan assistance

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relief services, has represented, directly or indirectly, expressly or by implication, that

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it generally will obtain for consumers a renegotiation, settlement, modification, or

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other alteration of the terms of consumers’ vehicle loans that will make consumers’

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vehicle loan payments substantially more affordable. This material representation was

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false or was not substantiated at the time the representation was made. Therefore,

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Hope for Car Owners’ representation is false and misleading and constitutes a

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deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
11.

As alleged in Count II of the Complaint, Hope for Car Owners, in connection with the
advertising, marketing promotion, offering for sale, or sale of vehicle loan assistance

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relief services, has represented, expressly or by implication, that it will give refunds to
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consumers if it fails to obtain for consumers a renegotiation, settlement, modification,
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or other alteration of the terms of consumers’ vehicle loans that will make consumers’
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vehicle loan payments substantially more affordable. In numerous instances, Hope for
Car Owners did not give refunds to consumers when it failed to obtain for consumers a
renegotiation, settlement, modification, or other alteration of the terms of consumers’
vehicle loans that will make consumers’ vehicle loan payments substantially more
affordable. Therefore, Hope for Car Owners’ representation is false and misleading
and constitutes a deceptive act or practice in violation of Section 5(a) of the FTC Act,
15 U.S.C. § 45(a).
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12.

Hope for Car Owners has caused consumer injury in the amount of $362,388.

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13.

The Court finds that, absent a permanent injunction, Hope for Car Owners is likely to

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continue to engage in the activities alleged in the Complaint.
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Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to issue

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injunctive and other relief against violations of the FTC Act and, in the exercise of its

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equitable jurisdiction, to order restitution and the disgorgement of profits resulting

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from Hope for Car Owners’ unlawful acts or practices, and issue other ancillary

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equitable relief.

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15.

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This Court is persuaded that the danger of future violations by Hope for Car Owners
justifies the issuance of injunctive relief. Specifically, it is proper in this case to issue

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a permanent injunction that: (a) permanently bans Hope for Car Owners from

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marketing or selling assistance relief products or services for secured or unsecured

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loans or assisting others who do; (b) prohibits Hope for Car Owners from

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misrepresenting any fact material to a consumer’s decision to purchase financial

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related products or services or other products or services; and (c) provides such other

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ancillary relief as is necessary to assist the FTC and the Court in monitoring Hope for

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Car Owners’ compliance with such a permanent injunction.
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16.

It is proper in this case to enter an equitable monetary judgment against Hope for Car

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Owners for its violations of Section 5 of the FTC Act. The FTC is entitled to
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judgment against Hope for Car Owners in the amount of $362,388, the injury caused to

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consumers by it, even though this amount may exceed its unjust enrichment.

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17.

This Order is in addition to, and not in lieu of, any other civil or criminal remedies that
may be provided by law.

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DEFINITIONS

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1.

“Assisting others” includes, but is not limited to, providing any of the following
goods or services to another person:

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A.

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performing customer service functions, including, but not limited to, receiving
or responding to consumer complaints;

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B.

formulating or providing, or arranging for the formulation or provision of, any

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telephone sales script or any other marketing material, including but not limited

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to, the text of any Internet website, email, or other electronic communication;

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C.

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

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D.

performing marketing services of any kind; or

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E.

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

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entity.
2.

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evidence based on the expertise of professionals in the relevant area, that has been

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conducted and evaluated in an objective manner by persons qualified to do so, using

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“Competent and reliable evidence” means tests, analyses, research, studies, or other

procedures generally accepted in the profession to yield accurate and reliable results.
3.

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“Customer” means any person who has paid, or may be required to pay, for products,
services, plans, or programs offered for sale or sold by any other person.

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4.

“Defaulting Defendant” means Hope for Car Owners, LLC and its successors and

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assigns.
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5.

Federal Rule of Civil Procedure 34(a), and includes writings, drawings, graphs, charts,

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photographs, audio and video recordings, computer records, and any other data

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compilations from which information can be obtained. A draft or non-identical copy is

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a separate document within the meaning of the term.

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“Document” is equal in scope and synonymous in meaning to the usage of the term in

6.

“Financial related product or service” means any product, service, plan, or program

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represented, expressly or by implication, to:

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A.

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provide any consumer, arrange for any consumer to receive, or assist any
consumer in receiving, credit, debit, or stored value cards;

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B.

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improve, or arrange to improve, any consumer’s credit record, credit history, or
credit rating;

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C.

provide advice or assistance to any consumer with regard to any activity or

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service the purpose of which is to improve a consumer’s credit record, credit

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history, or credit rating; or

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D.

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consumer in receiving, a loan or other extension of credit.
7.

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marine equipment; (c) motorcycles; (d) motor homes, recreational vehicle trailers, and

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slide-in campers; and (e) other vehicles that are titled and sold through dealers.
8.

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“Motor vehicle” means (a) any self-propelled vehicle designed for transporting
persons or property on a street, highway, or other road; (b) recreational boats and

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provide any consumer, arrange for any consumer to receive, or assist any

“Motor vehicle loan” means any loan secured by title to a motor vehicle or otherwise
secured by the motor vehicle as collateral.

9.

“Motor vehicle loan assistance relief product or service” means any product,

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service, plan, or program, offered or provided to the consumer in exchange for
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consideration, that is represented, expressly or by implication, to assist or attempt to
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assist the consumer with any of the following:
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A.

vehicle, or otherwise saving the consumer’s motor vehicle from repossession;

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B.

monthly payments, or fees;

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C.

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obtaining any forbearance or modification in the timing of payments from any
motor vehicle loan holder or servicer on any motor vehicle loan;

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negotiating, obtaining, or arranging a modification of any term of a motor
vehicle loan, including a reduction in the amount of interest, principal balance,

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stopping, preventing, or postponing any repossession of the consumer’s motor

D.

negotiating, obtaining, or arranging any extension of the period of time within
which the consumer may (i) cure his or her default on a motor vehicle loan, (ii)

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reinstate his or her motor vehicle loan, (iii) redeem a motor vehicle, or (iv)

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exercise any right to reinstate a motor vehicle loan or redeem a motor vehicle;

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E.

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obtaining any waiver of an acceleration clause or balloon payment contained in
any promissory note or contract secured by any motor vehicle; or

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F.

negotiating, obtaining, or arranging a sale of a motor vehicle or any other

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disposition of a motor vehicle loan other than a sale to a third party that is not

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the motor vehicle loan holder.

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The foregoing shall include any manner of claimed assistance, including, but not

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limited to, auditing or examining a consumer’s motor vehicle loan application.

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10.

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“Person” means a natural person, organization, or other legal entity, including a
corporation, partnership, proprietorship, association, cooperative, or any other group or

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combination acting as an entity.

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ORDER
BAN ON ASSISTANCE RELIEF PRODUCTS AND SERVICES FOR SECURED AND

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UNSECURED LOANS

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I.

IT IS THEREFORE ORDERED that the Defaulting Defendant, whether acting

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directly or through any other person, are permanently restrained and enjoined from:
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A.

Advertising, marketing, promoting, offering for sale, or selling any motor

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vehicle loan assistance relief product or service or any product, service, plan, or
program represented, expressly or by implication, to renegotiate, settle, or in
any way alter the terms of payment or other terms of the debt or obligation,
between a person and one or more secured or unsecured creditors or debt
collectors, including but not limited to, a reduction in the balance, interest rate,
or fees owed by a person to a secured or unsecured creditor or debt collector;
and

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B.

Assisting others engaged in advertising, marketing, promoting, offering for

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sale, or selling any motor vehicle loan assistance relief product or service or

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any product, service, plan, or program represented, expressly or by implication,

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to renegotiate, settle, or in any way alter the terms of payment or other terms of

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the debt or obligation, between a person and one or more secured or unsecured

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creditors or debt collectors, including but not limited to, a reduction in the

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balance, interest rate, or fees owed by a person to a secured or unsecured

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creditor or debt collector.

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PROHIBITED MISREPRESENTATIONS RELATING TO FINANCIAL RELATED

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PRODUCTS OR SERVICES
II.

IT IS FURTHER ORDERED that the Defaulting Defendant and its officers, agents,
servants, employees, and attorneys, and those persons or entities in active concert or
participation with any of them who receive actual notice of this Order by personal
service, facsimile transmission, email, or otherwise, whether acting directly or through
any corporation, subsidiary, division, or other device, in connection with the

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advertising, marketing, promotion, offering for sale or sale of any financial related
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product or service, are hereby permanently restrained and enjoined from:
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A.

Misrepresenting or assisting others in misrepresenting, expressly or by

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implication, any material fact, including but not limited to:
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1.

The terms or rates that are available for any loan or other extension of
credit, including but not limited to:
a.

closing costs or other fees;

b.

the payment schedule, the monthly payment amount(s), or other
payment terms, or whether there is a balloon payment; interest
rate(s), annual percentage rate(s), or finance charge; the loan
amount, the amount of credit, the draw amount, or outstanding

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balance; the loan term, the draw period, or maturity; or any other

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term of credit;

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c.

the savings associated with the credit;

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d.

the amount of cash to be disbursed to the borrower out of the

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

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borrower to any third parties;

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e.

whether the payment of the minimum amount specified each

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month covers both interest and principal, and whether the credit

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has or can result in negative amortization;

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f.

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that the credit does not have a prepayment penalty or that no
prepayment penalty and/or other fees or costs will be incurred if

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the consumer subsequently refinances; and

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g.

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that the interest rate(s) or annual percentage rate(s) are fixed
rather than adjustable or adjustable rather than fixed;

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2.

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Any person’s ability to improve or otherwise affect a consumer’s credit
record, credit history, or credit rating or ability to obtain credit;

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3.

That any person can improve any consumer’s credit record, credit

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history, or credit rating by permanently removing negative information
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from the consumer’s credit record, credit history, or credit rating, even
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where such information is accurate and not obsolete; and

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4.

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B.

That a consumer will receive legal representation;

Advertising or assisting others in advertising credit terms other than those
terms that actually are or will be arranged or offered by a creditor or lender.

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PROHIBITED MISREPRESENTATIONS RELATING TO ANY PRODUCTS OR

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SERVICES

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III.

IT IS FURTHER ORDERED that the Defaulting Defendant and its officers, agents,

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servants, employees, and attorneys, and those persons or entities in active concert or

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participation with any of them who receive actual notice of this Order by personal

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service, facsimile transmission, email, or otherwise, whether acting directly or through

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any corporation, subsidiary, division, or other device, in connection with the

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advertising, marketing, promotion, offering for sale or sale of any product, service,

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plan, or program are hereby permanently restrained and enjoined from misrepresenting
or assisting others in misrepresenting, expressly or by implication, any material fact,
including but not limited to:
A.

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Any material aspect of the nature or terms of any refund, cancellation,
exchange, or repurchase policy, including, but not limited to, the likelihood of a

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consumer obtaining a full or partial refund, or the circumstances in which a full

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or partial refund will be granted to the consumer;

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B.

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

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connected to any other person; government entity; public, non-profit, or other
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non-commercial program; or any other program;
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C.

The nature, expertise, position, or job title of any person who provides any

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product, service, plan, or program;

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D.

consumer;

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E.

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That any person providing a testimonial has purchased, received, or used the
product, service, plan, or program;

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That any person will provide any product, service, plan, or program to any

F.

That the experience represented in a testimonial of the product, service, plan, or
program represents the person’s actual experience resulting from the use of the

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product, service, plan, or program under the circumstances depicted in the

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advertisement;

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G.

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service, plan, or program;

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H.

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I.

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Any material restriction, limitation, or condition on purchasing, receiving, or
using the product, service, plan, or program; or

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The total costs to purchase, receive, or use, or the quantity of, the product,

Any material aspect of the performance, efficacy, nature, or characteristics of
the product, service, plan, or program.

SUBSTANTIATION FOR BENEFIT, PERFORMANCE, AND EFFICACY CLAIMS
IV.

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IT IS FURTHER ORDERED that the Defaulting Defendant and its officers, agents,
servants, employees, and attorneys, and those persons or entities in active concert or

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participation with any of them who receive actual notice of this Order by personal

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service, facsimile transmission, email, or otherwise, whether acting directly or through

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any corporation, subsidiary, division, or other device, in connection with the

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advertising, marketing, promotion, offering for sale, or sale of any product or service

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are hereby permanently restrained and enjoined from making any representation or
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assisting others in making any representation, expressly or by implication, about the
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benefits, performance, or efficacy of such product or service, unless at the time such
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representation is made, the Defaulting Defendant possesses and relies upon competent
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and reliable evidence that substantiates that the representation is true.

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PROHIBITION ON DISCLOSING CUSTOMER INFORMATION

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V.

IT IS FURTHER ORDERED that the Defaulting Defendant and its officers, agents,
servants, employees, and attorneys, and those persons or entities in active concert or
participation with any of them who receive actual notice of this Order by personal
service, facsimile transmission, email, or otherwise, whether acting directly or through

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any corporation, subsidiary, division, or other device, are permanently restrained and

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enjoined from:

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A.

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

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name, address, telephone number, email address, social security number, other

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

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(including a credit card, bank account, or other financial account) of any person

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that any Defendant obtained prior to entry of this Order in connection with the

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advertising, marketing, promotion, offering for sale or sale of any motor

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vehicle loan assistance relief product or service, and

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B.

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failing to dispose of such customer information in all forms in his possession,
custody, or control within thirty (30) days after entry of this Order. Disposal

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shall be by means that protect against unauthorized access to the customer

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information, such as by burning, pulverizing, or shredding any papers, and by

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erasing or destroying any electronic media, to ensure that the customer

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information cannot practicably be read or reconstructed.

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

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disclosed, to the extent requested by a government agency or required by a law,
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regulation, or court order.
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MONETARY JUDGMENT

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VI.

IT IS FURTHER ORDERED that:
A.

Judgment is hereby entered against the Defaulting Defendant in the amount of
THREE HUNDRED SIXTY TWO THOUSAND, THREE HUNDRED AND
EIGHTY EIGHT DOLLARS ($362,388), less the sum of any amounts paid to
the FTC pursuant to judgments in this action relating to other Defendants, with
post-judgment interest at the legal rate. The monetary judgment set forth in

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this Section VI is enforceable against any asset owned by, on behalf of, for the

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benefit of, or in trust by or for, the Defaulting Defendant.

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B.

In order partially to satisfy the monetary judgment set forth in this Section VI,

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Bank of America N.A. shall, within ten (10) business days from receipt of a

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copy of this Order, transfer to the FTC or its designated agent all funds, if any,

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held in account numbers xxxx2073, xxxx2092, and xxxx9643 in the name of

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Hope for Car Owners, LLC.

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C.

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any financial or brokerage institution, escrow agent, title company, commodity

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trading company, business entity, or person, whether located within the United

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States or outside the United States, that holds, controls or maintains accounts or

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assets of, on behalf of, or for the benefit of, the Defaulting Defendant shall turn

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over such account or asset to the FTC or its designated agent within ten (10)

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business days of receiving notice of this Order by any means, including but not

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In order partially to satisfy the monetary judgment set forth in this Section VI,

limited to via facsimile.
D.

Any funds received by the FTC pursuant to this Section shall be deposited into

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a fund administered by the FTC or its agent to be used for equitable relief,
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including but not limited to consumer redress and any attendant expenses for
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the administration of any redress funds. In the event that direct redress to
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consumers is wholly or partially impracticable or funds remain after redress is
completed, the FTC may apply any remaining funds for such other equitable
relief, including but not limited to consumer information remedies, as the FTC
determines to be reasonably related to the practices alleged in the Complaint.
Any funds not used for such equitable relief shall be deposited to the U.S.
Treasury as equitable disgorgement. The Defaulting Defendant shall have no
right to challenge the FTC’s choice of remedies or the manner of distribution.
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E.

The Defaulting Defendant relinquishes all dominion, control, and title to the

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funds paid to the fullest extent permitted by law. The Defaulting Defendant

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shall make no claim to or demand for return of the funds, directly or indirectly,

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through counsel or otherwise

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F.

The judgment entered pursuant to this Section is equitable monetary relief,

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solely remedial and restitutionary in nature, and not a fine, penalty, punitive

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assessment or forfeiture.

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G.

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Upon request, the Defaulting Defendant is hereby required, in accordance with
31 U.S.C. § 7701, to furnish to the FTC its tax identification number, which

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shall be used for purposes of collecting and reporting on any delinquent amount

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arising out of this Order.

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H.

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Pursuant to Section 604(a)(1) of the Fair Credit Reporting Act, 15 U.S.C.
§ 1681b(a)(1), any consumer reporting agency may furnish a consumer report

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concerning the Defaulting Defendant to the FTC, which shall be used for

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purposes of collecting and reporting on any delinquent amount arising out of

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this Order.

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ORDER ACKNOWLEDGMENTS
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VII.

IT IS FURTHER ORDERED that the Defaulting Defendant obtain

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acknowledgments of receipt of this Order:
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A.

the Commission an acknowledgment of receipt of this Order sworn under

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penalty of perjury.

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

B.

For 20 years after entry of this Order, the Defaulting Defendant, must deliver a
copy of this Order to: (1) all principals, officers, directors, and managers; (2)
all employees, agents, and representatives who participate in conduct related to
the subject matter of the Order; and (3) any business entity resulting from any

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change in structure as set forth in the Section titled Compliance Reporting.

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

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To all others, delivery must occur before they assume their responsibilities.

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C.

From each individual or entity to which the Defaulting Defendant delivered a

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copy of this Order, the Defaulting Defendant must obtain, within 30 days, a

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signed and dated acknowledgment of receipt of this Order.

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COMPLIANCE REPORTING
VIII. IT IS FURTHER ORDERED that the Defaulting Defendant make timely
submissions to the FTC:
A.

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One year after entry of this Order, the Defaulting Defendant must submit a
compliance report, sworn under penalty of perjury. The Defaulting Defendant

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must: (a) designate at least one telephone number and an email, physical, and

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postal address as points of contact, which representatives of the FTC may use

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to communicate with the Defaulting Defendant; (b) identify all of the

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

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and physical, postal, email, and Internet addresses; (c) describe the activities of
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each business, including the products and services offered, the means of
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advertising, marketing, and sales, and the involvement of any other Defendant;
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(d) describe in detail whether and how the Defaulting Defendant is in
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compliance with each Section of this Order; and (e) provide a copy of each

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Order Acknowledgment obtained pursuant to this Order, unless previously

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submitted to the FTC.

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B.

For 20 years following entry of this Order, the Defaulting Defendant must
submit a compliance notice, sworn under penalty of perjury, within 14 days of
any change in the following: (a) any designated point of contact; or (b) the
structure of the Defaulting Defendant or any entity that the Defaulting

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Defendant has any ownership interest in or directly or indirectly controls that

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may affect compliance obligations arising under this Order, including:

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creation, merger, sale, or dissolution of the entity or any subsidiary, parent, or

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affiliate that engages in any acts or practices subject to this Order.

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C.

The Defaulting Defendant must submit to the FTC notice of the filing of any

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

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against such Defendant within 14 days of its filing.

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D.

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Any submission to the FTC required by this Order to be sworn under penalty of
perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as

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

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

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

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signature.

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E.

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Unless otherwise directed by a FTC representative in writing, all submissions
to the FTC pursuant to this Order must be emailed to [e-mail] or sent

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by overnight courier (not the U.S. Postal Service) to: Associate Director for

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Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600
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Pennsylvania Avenue NW, Washington, DC 20580. The subject line must
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begin: FTC v. Hope for Car Owners, Matter No. X120016.
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RECORDKEEPING

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IX.

IT IS FURTHER ORDERED that the Defaulting Defendant must create certain
records for 20 years after entry of the Order, and retain each such record for 5 years.
Specifically, the Defaulting Defendant must maintain the following records:
A.

Accounting records showing the revenues from all goods or services sold, all
costs incurred in generating those revenues, and the resulting net profit or loss;

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B.

Personnel records showing, for each person providing services, whether as an

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employee or otherwise, that person’s: name, addresses, and telephone

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numbers; job title or position; dates of service; and, if applicable, the reason for

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termination;

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C.

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through a third party, and any response;

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D.

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E.

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All records necessary to demonstrate full compliance with each provision of
this Order, including all submissions to the FTC;and

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Complaints and refund requests, whether received directly or indirectly, such as

A copy of each advertisement or other marketing material.
COMPLIANCE MONITORING

X.

IT IS FURTHER ORDERED that, for the purpose of monitoring the Defaulting
Defendant’s compliance with this Order, including any failure to transfer any assets as
required by this Order:
A.

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Within 14 days of receipt of a written request from a representative of the FTC,
the Defaulting Defendant must: submit additional compliance reports or other

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requested information, which must be sworn under penalty of perjury; appear
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for depositions; and produce documents, for inspection and copying. The FTC
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is also authorized to obtain discovery, without further leave of court, using any
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of the procedures prescribed by Federal Rules of Civil Procedure 29, 30
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(including telephonic depositions), 31, 33, 34, 36, 45, and 69.

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B.

For matters concerning this Order, the FTC is authorized to communicate
directly with the Defaulting Defendant. The Defaulting Defendant must permit
representatives of the FTC to interview any employee or other person affiliated
with the Defaulting Defendant who has agreed to such an interview. The
person interviewed may have counsel present.

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C.

The FTC may use all other lawful means, including posing, through its

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

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Defaulting Defendant or any individual or entity affiliated with the Defaulting

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

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

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

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RETENTION OF JURISDICTION
XII.

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction, modification, and enforcement of this Order.

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IT IS SO ORDERED.

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Dated: February 21, 2013

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GARLAND E. BURRELL, JR.
Senior United States District Judge

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