Federal Trade Commission v. MOBE Ltd. et al

Filing 260

ORDER adopting 259 REPORT AND RECOMMENDATIONS re 257 Renewed MOTION for entry of default judgment and permanent injunction against 9336-0311 Quebec Inc., MOBE Inc., MOBE Ltd., MOBE Pro Limited, MOBEProcessing.com, Inc., MOBETraining.com, Inc., Matt Lloyd Publishing.com. Signed by Judge Roy B. Dalton, Jr. on 4/13/2020. (BIA) (ctp)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
FEDERAL TRADE COMMISSION,
Plaintiff,
v.

Case No. 6:18-cv-862-Orl-37DCI

MOBE LTD.;
MOBEPROCESSING.COM, INC.;
TRANSACTION MANAGEMENT
USA, INC.; MOBETRAINING.COM,
INC.; 9336-0311 QUEBEC INC.; MOBE
PRO LIMITED; MOBE INC.; MOBE
ONLINE LTD.; MATT LLOYD
PUBLISHING.COM PTY LTD.;
MATTHEW LLOYD MCPHEE; and
SUSAN ZANGHI,
Defendants.

ORDER
Before the Court is Plaintiff Federal Trade Commission’s

(“FTC” or

“Commission”) Renewed Motion and Memorandum of Law in Support of Entry of
Default Judgment and Permanent Injunction Against the MOBE Corporate Defendants.
(Doc. 257 (“Motion”).) The FTC filed a Complaint for Permanent Injunction and Other
Equitable Relief for violations of the Federal Trade Commission Act (“FTC Act”) against
twelve defendants, including corporate Defendants MOBE Ltd., MOBEProcessing.com,
Inc., Transaction Management USA, Inc., MOBETraining.com, Inc., 9336-0311 Quebec
Inc., MOBE Pro Limited, MOBE Inc., MOBE Online Ltd., MattLloydPublishing.com Pty
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Ltd. (collectively “MOBE Corporate Defendants” or “Defaulting Defendants”),
alleging they engaged in a scheme to defraud consumers.

(Doc. 1 (“Complaint”).)

Despite being properly served and having notice of this action, the MOBE Corporate
Defendants failed to timely answer or otherwise respond to the Complaint. (Doc. 71.) So
pursuant to Federal Rule of Civil Procedure 55(a), the Clerk of Court entered defaults
against the MOBE Corporate Defendants. (Docs. 150–158.) The FTC now moves this
Court for entry of a default judgment on all counts of the Complaint against the
Defaulting Defendants, seeking injunctive, ancillary, and equitable monetary relief. (Doc.
257, pp. 9–17.) On referral, U.S. Magistrate Judge Daniel C. Irick recommends the Court
grant the Motion, finding default judgment appropriate and the relief requested in the
Motion is consistent with the relief pled in the Complaint. (Doc. 259 (“R&R”).)
The parties did not object to the R&R, and the time for doing so has now passed.
As such, the Court has examined the R&R only for clear error. See Wiand v. Wells Fargo
Bank, N.A., No. 8:12-cv-557-T-27EAJ, 2016 WL 355490, at *1 (M.D. Fla. Jan. 28, 2016); see
also Macort v. Prem, Inc., 208 F. App’x 781, 784 (11th Cir. 2006). Finding none, the R&R is
due to be adopted in its entirety.
It is ORDERED and ADJUDGED:
1.

U.S. Magistrate Judge Daniel C. Irick’s Report and Recommendation (Doc.
259) is ADOPTED, CONFRIMED, and made a part of this Order.

2.

Plaintiff Federal Trade Commission’s Renewed Motion and Memorandum
of Law in Support of Entry of Default Judgment and Permanent Injunction
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Against the MOBE Corporate Defendants (Doc. 257) is GRANTED.
3.

The Clerk is DIRECTED to close the file.

4.

A permanent injunction is ORDERED:
I.

D EFINITIONS

For the purpose of this Order, the following definitions apply:
1.

“Business Coaching Program” means any program, plan, or product,
including those related to work-at-home opportunities, that is represented,
expressly or by implication, to train or teach a participant or purchaser how
to establish a business or earn money or other consideration through a
business or other activity.

2.

“Corporate Defendant(s)” means MOBE Ltd., MOBEProcessing.com, Inc.,
Transaction Management USA, Inc., MOBETraining.com, Inc., 9336-0311
Quebec Inc., MOBE Pro Limited, MOBE Inc., MOBE Online Ltd., Matt
Lloyd Publishing.com Pty Ltd., and each of their subsidiaries, affiliates,
successors, and assigns.

3.

“Defaulting Defendants” means all of the Corporate Defendants,
individually, collectively or in any combination.

4.

“Defendant(s)” means all of the Corporate Defendants and Individual
Defendants, individually, collectively, or in any combination.

5.

“Individual Defendant(s)” means Matthew Lloyd McPhee, Susan Zanghi,
and Russell W. Whitney, Jr., individually, collectively, or in any
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combination.
6.

“Investment Opportunity” means anything, tangible or intangible, that is
offered, offered for sale, sold, or traded based wholly or in part on
representations, either express or implied, about past, present, or future
income, profit, or appreciation.

7.

“Receiver” means the permanent receiver appointed in this action, Mark J.
Bernet, Esq., and any deputy receivers that the receiver names.

8.

“Receivership Entities” means Corporate Defendants as well as any other
entity that has conducted any business related to Defendants’ marketing
and sale of Business Coaching Programs or Investment Opportunities to
consumers, including receipt of Assets derived from any activity that is the
subject of the Complaint in this matter, and that the Receiver determines is
controlled or owned by any Defendant.
PERMANENT BAN ON SALE OR MARKETING OF BUSINESS COACHING PROGRAMS

II.

AND INVESTMENT O PPORTUNITIES

It is ORDERED that Defaulting Defendants are permanently restrained and
enjoined from:
A.

Creating, advertising, marketing, promoting, offering for sale, or selling, or
assisting others in creating, advertising, marketing, promoting, offering for
sale, or selling any Business Coaching Program or any Investment
Opportunity;
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B.

Holding, directly or through a third-person, any ownership or other
financial interest in any business entity that is creating, advertising,
marketing, promoting, offering for sale, or selling, or that assists others in
creating, advertising, marketing, promoting, offering for sale, or selling any
Business Coaching Program, any Investment Opportunity, or any product
to assist in the creation or development of a Business Coaching Program or
an Investment Opportunity.
III.

PROHIBITION AGAINST MISREPRESENTATIONS

It is ORDERED that Defaulting Defendants, their officers, agents, employees, and
attorneys, and all other persons in active concert or participation with any of them, who
receive actual notice of this Order, whether acting directly or indirectly, in connection
with the advertising, marketing, promoting, or offering for sale of any goods or services,
are permanently restrained and enjoined from misrepresenting or assisting others in
misrepresenting, expressly or by implication:
A.

That consumers who purchase Defaulting Defendants’ goods or services
will earn or are likely to earn substantial income;

B.

That purchases of Defaulting Defendants’ goods or services are refundable
without conditions; and

C.

Any other fact material to consumers concerning any good or service, such
as: the total costs; any refund policy; any material restrictions, limitations,
or conditions; or any material aspect of its performance, efficacy, nature, or
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central characteristics.
IV.

MONETARY JUDGMENT

It is ORDERED:
A.

Judgment is hereby entered in favor of the FTC against the Defaulting
Defendants, jointly and severally, in the amount of Three Hundred
Eighteen Million, Five Hundred Twelve Thousand, Three Hundred
Thirty Six Dollars ($318,512,336), which is the amount of injury suffered
by consumers and the amount of unjust enrichment obtained by
Defaulting Defendants in connection with the practices alleged in
Counts I and II of the Complaint. This monetary judgment, less any
amount previously paid by any other Defendant, shall become
immediately due and payable by Defaulting Defendants upon entry of
this Final Order. Interest computed at the rate prescribed under 28
U.S.C. § 1961(a), as amended, shall immediately begin to accrue on the
unpaid balance;

B.

All funds paid to the Commission shall be made by wire transfer in
accordance with directions provided by the Commission, or as
otherwise agreed to by the Commission;

C.

All money paid to the Commission pursuant to this Order may be
deposited into a fund administered by the Commission or its designee
to be used for equitable relief, including consumer redress and any
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attendant expenses for the administration of any redress fund. If a
representative of the Commission decides that direct redress to
consumers is wholly or partially impracticable or money remains after
redress is completed, the Commission may apply any remaining money
for such other equitable relief (including consumer information
remedies) as it determines to be reasonably related to Defendants’
practices alleged in the Complaint.

Any money not used for such

equitable relief is to be deposited to the U.S. Treasury as disgorgement.
Defaulting Defendants have no right to challenge any actions the
Commission or its representatives may take pursuant to this Subsection.
D.

No portion of any payment under the Judgment herein shall be deemed
a payment of any fine, penalty or punitive assessment.

E.

Plaintiff is entitled to exercise any and all rights and remedies against
Defaulting Defendants and their assets to collect the judgment and
interest thereon, less any amounts already paid by Defaulting
Defendants or any other Defendant.
V.

TURNOVER OF ASSETS H ELD BY THIRD PARTIES

It is ORDERED that in order to partially satisfy the monetary judgment set forth
in Section IV above, any law firm, financial or brokerage institution, escrow agent, title
company, commodity trading company, automated clearing house, payment processor,
person or entity served with a copy of this Final Order, that holds, controls, or maintains
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custody of any account or asset of MOBE Ltd., MOBEProcessing.com, Inc., Transaction
Management USA, Inc., MOBETraining.com, Inc., 9336-0311 Quebec Inc., MOBE Pro
Limited, MOBE Inc., MOBE Online Ltd., and MattLloydPublishing.com Pty Ltd., whether
real or personal, whether located within the United States or outside the United States,
shall turn over such account or asset to the FTC or to its designated agent within ten (10)
business days of receiving notice of this Final Order by any means, including but not
limited to via email or facsimile.
The accounts and assets to be turned over to the Commission or its designee,
pursuant to this Section include, without limitation, the following:
A.

All funds held in any account in the name of or on behalf of any Defaulting
Defendant at the time of entry of the Temporary Restraining Order (Doc. 13
(“TRO”));

B.

All other funds that the Receiver has obtained from accounts previously in
the name of or held on behalf of any Defaulting Defendant;

C.

All assets owned by any Defaulting Defendant;

D.

All funds associated with credits, debits, or charges made by or on behalf
of any Defaulting Defendant, including reserve funds held by payment
processors, credit card processors, merchant banks, acquiring banks,
independent sales organizations, third party processors,

payment

gateways, insurance companies, or other entities, including, without
limitation:
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1.

Funds held or controlled by Credicorp Bank, S.A. (“Credicorp”),
including the approximately $660,000 (USD) held in the merchant
reserve accounts of MOBE Inc., as of the time of Credicorp’s notice
of the TRO;

2.

Funds held or controlled by Transact Europe JSC or Transact Europe
EAD (collectively, “Transact Europe”), including the approximately
$200,000 (USD) held in the merchant reserve accounts of MOBE Pro
Limited, as of the time of Transact Europe’s notice of the TRO.

E.

All shares or equitable interest or title in real estate property, assets or
interest held by or maintained for the benefit of any of the Defaulting
Defendants.
VI.

LIFTING OF ASSET FREEZE AS TO D EFAULTING D EFENDANTS

It is ORDERED that the freeze of Defaulting Defendants’ assets shall remain in
effect as set forth in Sections III and IV of the Revised Preliminary Injunction entered on
September 10, 2018 (Doc. 107), until the Commission has received the total amount
required by Section IV above, provided, however, that Defaulting Defendants may
transfer funds to the extent necessary to make all payments required by Section IV. Upon
payment to the Commission of the total amount required by Section IV above, the freeze
against the assets of Defaulting Defendants shall be lifted permanently.
VII.

COMPLETION OF RECEIVERSHIP

It is ORDERED that the appointment of Mark J. Bernet, Esq. as Receiver over the
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MOBE Corporate Defendants, pursuant to Section XII of the Revised Preliminary
Injunction (Doc. 107), is hereby continued as modified by this Section. The Receiver is
hereby directed and authorized to accomplish the following within twelve (12) months
of entry of this Order, which time may be extended at the request of the Receiver or any
party for good cause shown:
A.

Complete, as necessary, the liquidation of the assets of the Defaulting
Defendants;

B.

Prepare and submit a final report describing the Receiver’s activities
pursuant to this Order, and a final application for compensation and
expenses; and

C.

Distribute to the Commission any remaining liquid assets at the conclusion
of the Receiver’s duties, in partial satisfaction of the monetary judgment set
forth in this Order.

Upon completion of the above tasks, the duties of the Receivership over the
Defaulting Defendants shall terminate, and the Receiver shall be discharged as to the
Defaulting Defendants.
VIII. CUSTOMER INFORMATION
It is ORDERED that Defaulting Defendants, their officers, agents, employees, and
attorneys, and all other persons in active concert or participation with any of them, who
receive actual notice of this Order are permanently restrained and enjoined from directly
or indirectly:
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A.

Failing to provide sufficient customer information to enable the
Commission to efficiently administer consumer redress. If a representative
of the Commission requests in writing any information related to redress,
Defaulting Defendants must provide it, in the form prescribed by the
Commission, within 14 days;

B.

Disclosing, using, or benefitting from customer information, including the
name, address, telephone number, email address, Social Security number,
other identifying information, or any data that enables access to a
customer’s account (including a credit card, bank account, or other financial
account), that any Defaulting Defendant obtained prior to entry of this
Order in connection with any activity that pertains to the sale of any
Business Coaching Program or Investment Opportunity; and

C.

Failing to destroy such customer information in all forms in their
possession, custody, or control within 30 days after receipt of written
direction to do so from a representative of the Commission.

Provided, however, that customer information need not be disposed of, and may
be disclosed, to the extent requested by a government agency or required by law,
regulation, or court order.
IX.

O RDER ACKNOWLEDGMENTS

It is ORDERED that Defaulting Defendants obtain acknowledgments of receipt of
this Order:
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A.

Each Defaulting Defendant, within 7 days of entry of this Order, must
submit to the Commission an acknowledgment of receipt of this Order
sworn under penalty of perjury.

B.

For 20 years after entry of this Order, each Corporate Defendant must
deliver a copy of this Order to: (1) all principals, officers, directors, and
LLC managers and members; (2) all employees having managerial
responsibilities for conduct related to the subject matter of the Order
and all agents and representatives who participate in conduct related to
the subject matter of the Order; and (3) any business entity resulting
from any change in structure as set forth in the Section titled Compliance
Reporting. Delivery must occur within 7 days of entry of this Order for
current personnel.

For all others, delivery must occur before they

assume their responsibilities.
C.

From each individual or entity to which a Defaulting Defendant
delivered a copy of this Order, that Defaulting Defendant must obtain,
within 30 days, a signed and dated acknowledgment of receipt of this
Order.
X.

COMPLIANCE REPORTING

It is ORDERED that Defaulting Defendants make timely submissions to the
Commission:
A.

One year after entry of this Order, each Defaulting Defendant must submit
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a compliance report, sworn under penalty of perjury:
1.

Each Defaulting Defendant must: (a) identify the primary physical,
postal, and email address and telephone number, as designated
points of contact, which representatives of the Commission may use
to communicate with that Defaulting Defendant; (b) identify all of
that Defaulting Defendant’s businesses by all of their names,
telephone numbers, and physical, postal, email, and Internet
addresses; (c) describe the activities of each business, including the
goods and services offered, the means of advertising, marketing, and
sales, and the involvement of any other Defendant; (d) describe in
detail whether and how that Defaulting Defendant is in compliance
with each Section of this Order; and (e) provide a copy of each Order
Acknowledgment

obtained pursuant to this Order,

unless

previously submitted to the Commission.
B.

For 20 years after entry of this Order, each Defaulting Defendant must
submit a compliance notice, sworn under penalty of perjury, within 14 days
of any change in the following:
1.

Each Defaulting Defendant must report any change in: (a) any
designated point of contact; or (b) the structure of any Corporate
Defendant or any entity that a Defaulting Defendant has any
ownership interest in or controls directly or indirectly that may affect
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compliance obligations arising under this Order, including:
creation, merger, sale, or dissolution of the entity or any subsidiary,
parent, or affiliate that engages in any acts or practices subject to this
Order.
C.

Each Defaulting Defendant must submit to the Commission notice of the
filing of any bankruptcy petition, insolvency proceeding, or similar
proceeding by or against such Defaulting Defendant within 14 days of its
filing.

D.

Any submission to the Commission 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 by concluding: “I declare under penalty of perjury
under the laws of the United States of America that the foregoing is true
and correct. Executed on: _____” and supplying the date, signatory’s full
name, title (if applicable), and signature.

E.

Unless otherwise directed by a Commission representative in writing, all
submissions to the Commission pursuant to this Order must be emailed to
[e-mail] or sent by overnight courier (not the U.S. Postal Service)
to: Associate Director for Enforcement, Bureau of Consumer Protection,
Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington,
DC 20580. The subject line must begin: FTC v. MOBE, et al. (MOBE), No.
X180034.
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XI.

RECORDKEEPING

It is ORDERED that Defaulting Defendants must create certain records for 20
years after entry of the Order and retain each such record for 5 years. Specifically,
Corporate Defendants must create and retain the following records:
A.

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

B.

Personnel records showing, for each person providing services, whether as
an employee or otherwise, that person’s:

name; addresses; telephone

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

Records of all consumer complaints and refund requests, whether received
directly or indirectly, such as through a third party, and any response;

D.

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

E.

A copy of each unique advertisement or other marketing material.
XII.

COMPLIANCE MONITORING

It is ORDERED that, for the purpose of monitoring Defaulting Defendants’
compliance with this Order and any failure to transfer any assets as required by this
Order:
A.

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

each Defaulting Defendant must: submit

additional

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

For matters concerning this Order, the Commission is authorized to
communicate directly with each Defaulting Defendant.

Defaulting

Defendants must permit representatives of the Commission to interview
any employee or other person affiliated with any Defendant who has
agreed to such an interview. The person interviewed may have counsel
present.
C.

The Commission may use all other lawful means, including posing through
its representatives as consumers, suppliers, or other individuals or entities,
to Defaulting Defendants or any individual or entity affiliated with
Defaulting Defendants, without the necessity of identification or prior
notice.

Nothing in this Order limits the Commission’s lawful use of

compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C.
§§ 49, 57b-1.
XIII. ENTRY OF JUDGMENT
It is ORDERED that there is no just reason for delay of entry of this judgment, and
that, pursuant to Federal Rule of Civil Procedure 54(b), the Clerk immediately shall enter
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this Order as a final judgment as to the Defaulting Defendants.
XIV. RETENTION OF JURISDICTION
It is ORDERED that this Court shall retain jurisdiction of this matter for purposes
of construction, modification, and enforcement of this Final Order.
DONE AND ORDERED in Chambers in Orlando, Florida, on April 13, 2020.

Copies to:
Counsel of Record
Pro Se Parties

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