Federal Trade Commission et al v. Affiliate Strategies, Inc. et al

Filing 395

ORDER FOR PERMANENT INJUNCTION as to defendants Real Estate Buyers Network, LLC and Martin Nossov. See Order for further details. Signed by District Judge Julie A. Robinson on 8/1/2011. (ms)

UNITED STATES DISTRICT COURT
DISTRICT OF KANSAS

FEDERAL TRADE COMMISSION,
STATES OF ILLINOIS, KANSAS,
MINNESOTA, and NORTH CAROLINA,

Case No. 5:09-CV-04104-JAR-KGS
ORDER FOR PERMANENT
INJUNCTION AS TO DEFENDANTS
REAL ESTATE BUYERS NETWORK,
LLC, AND MARTIN NOSSOV

Plaintiffs,
v.
AFFILIATE STRATEGIES, INC., et al.
Defendants.

THIS CAUSE came before the Court upon the motion of Plaintiffs Federal Trade
Commission (“FTC” or “Commission”), and the States of Illinois, Kansas, Minnesota, and North
Carolina (“Plaintiffs”) for summary judgment pursuant to Fed. R. Civ. P. 56(a) against
Defendants Real Estate Buyers Financial Network LLC (“REBFN”), Martin Nossov, Alicia
Nossov, Wealth Power Systems, Aria Financial Services, Justin Ely, and Meggie Chapman.
Summary judgment briefing was completed on February 4, 2011. Having duly
considered Plaintiffs’ motion, Defendants’ opposition thereto, Plaintiffs’ reply, and the entire
record herein, it is ORDERED that Plaintiffs’ motion is GRANTED in part and DENIED in
part as against REBFN and Martin Nossov (collectively referred to hereinafter as “Defendants”)
for the reasons set forth in the Court’s Memorandum Order, issued on July 26, 2011 (Docket
No. 390), which is incorporated herein by reference. AND IT IS FURTHER ORDERED,
ADJUDGED, and DECREED as follows:

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FINDINGS
1.

This Court has jurisdiction of the subject matter of this case and of the parties hereto
pursuant to 15 U.S.C. §§ 45(a), 53(b), 57b, 6102(c), 6105(b), and 28 U.S.C. §§ 1331,
1337(a), and 1345.

2.

Venue is proper in the District of Kansas as to all parties subject to this Order.

3.

The activities of Defendants are in or affecting commerce, as defined in the FTC Act,
15 U.S.C. § 44.

4.

The Second Amended Complaint states a claim upon which relief may be granted against
Defendants under Sections 5(a), 13(b), and 19 of the FTC Act, 15 U.S.C. §§ 45(a), 53(b),
and 57b, the Telemarketing Act, 15 U.S.C. §§ 6101 - 6108, and the Kansas Consumer
Protection Act, K.S.A. 50-623, et seq.; Minn. Stat. §§ 8.01 & 8.31; the Minnesota
Uniform Deceptive Trade Practices Act, Minn. Stat. §§ 325D.43-325D.48; Minn. Stat. §
325F.67; the Minnesota Prevention of Consumer Fraud Act, Minn. Stat. §§ 325F.68325F.70; and Minn. Stat. § 325F.71, subd. 2 (2008); the North Carolina Unfair and
Deceptive Trade Practices Act, N.C. Gen. Stat. §§ 75-1.1, et seq.; and the Illinois
Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 et seq.

5.

Defendants have violated Sections 5(a), 13(b), and 19 of the FTC Act, 15 U.S.C.
§§ 45(a), 53(b), and 57b, the Telemarketing Act, 15 U.S.C. §§ 6101 - 6108; the Kansas
Consumer Protection Act, K.S.A. 50-623, et seq.; Minn. Stat. §§ 8.01 & 8.31; the
Minnesota Uniform Deceptive Trade Practices Act, Minn. Stat. §§ 325D.43-325D.48;
Minn. Stat. § 325F.67; the Minnesota Prevention of Consumer Fraud Act, Minn. Stat.
§§ 325F.68-325F.70; and Minn. Stat. § 325F.71, subd. 2 (2008); the North Carolina
Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. §§ 75-1.1, et seq.; and the
Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 et seq.,
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as alleged in Counts II, III, IV, VII, IX, X, XI, XIII, XIV, XV, XVII, and XVIII against
Defendants contained in Plaintiffs’ Second Amended Complaint.
6.

Entry of this Order for Permanent Injunction (“Order”) is in the public interest. It is also
appropriate in light of Defendants’ violations of Sections 5(a), 13(b), and 19 of the FTC
Act, 15 U.S.C. §§ 45(a), 53(b), and 57b, the Telemarketing Act, 15 U.S.C. §§ 6101 6108; the Kansas Consumer Protection Act, K.S.A. 50-623, et seq.; Minn. Stat. §§ 8.01 &
8.31; the Minnesota Uniform Deceptive Trade Practices Act, Minn. Stat. §§ 325D.43325D.48; Minn. Stat. § 325F.67; the Minnesota Prevention of Consumer Fraud Act,
Minn. Stat. §§ 325F.68-325F.70; and Minn. Stat. § 325F.71, subd. 2 (2008); the North
Carolina Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. §§ 75-1.1 et seq.; and
the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 et
seq.
DEFINITIONS
For the purpose of this Order, the following definitions shall apply:

1.

“Asset” means any legal or equitable interest in, right to, or claim to, any real and
personal property, including, but not limited to, “goods,” “instruments,” “equipment,”
“fixtures,” “general intangibles,” “inventory,” “checks,” “notes” (as these terms are
defined in the Uniform Commercial Code), and all chattel, leaseholds, contracts, mail or
other deliveries, shares of stock, lists of consumer names, accounts, credits, premises,
receivables, funds, reserve funds, and cash, wherever located.

2.

“Assisting others” includes, but is not limited to, providing any of the following goods
or services to another entity: (1) performing customer service functions, including, but
not limited to, receiving or responding to consumer complaints; (2) formulating or
providing, or arranging for the formulation or provision of, any promotional material; (3)
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providing names of, or assisting in the generation of, potential customers; (4) performing
promotional or marketing services of any kind; or (5) providing fulfillment services.
3.

“Clear and conspicuous” statement, or a statement presented “clearly and
conspicuously” means:
a.

in print communications, the message shall be in a type size and location
sufficiently noticeable for an ordinary consumer to read and comprehend it, in
print that contrasts with the background against which it appears;

b.

in oral communications, the message shall be delivered in a volume and cadence
sufficient for an ordinary consumer to hear and comprehend it;

c.

in communications made through an electronic medium (including but not limited
to television, video, radio, and interactive media, including but not limited to the
Internet, online services, and software), the message shall be presented
simultaneously in both the audio and visual portions of the communication. In
any communication presented solely through visual or audio means, the message
may be made through the same means in which the communication is presented.
In any communication disseminated by means of an interactive electronic
medium, including but not limited to software, the Internet, or online services, a
disclosure must be unavoidable and presented prior to the consumer incurring any
financial obligation. Any audio message shall be delivered in a volume and
cadence sufficient for an ordinary consumer to hear and comprehend it. Any
visual message shall be of a size and shade, with a degree of contrast to the
background against which it appears, and shall appear on the screen for a duration
and in a location sufficiently noticeable for an ordinary consumer to read and
comprehend it; and
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d.

regardless of the medium used to disseminate it, the message shall be in
understandable language and syntax. Nothing contrary to, inconsistent with, or in
mitigation of the message shall be used in any communication.

4.

“Corporate Defendant” means Real Estate Buyers Financial Network, LLC and its
successors and assigns.

5.

“Defendants” means the Corporate Defendant and Martin Nossov, individually,
collectively, or in any combination.

6.

“Document” is synonymous in meaning and equal in scope to the usage of the term in
Federal Rule of Civil Procedure 34(a), and includes writings, drawings, graphs, charts,
Internet sites, WebPages, Websites, electronic correspondence, including e-mail and
instant messages, photographs, audio and video recordings, contracts, accounting data,
advertisements (including, but not limited to, advertisements placed on the World Wide
Web), FTP Logs, Server Access Logs, USENET Newsgroup postings, World Wide Web
pages, books, written or printed records, handwritten notes, telephone logs, telephone
scripts, receipt books, ledgers, personal and business canceled checks and check
registers, bank statements, appointment books, computer records, and other data
compilations from which information can be obtained and translated. A draft or nonidentical copy is a separate document within the meaning of the term.

7.

“Individual Defendant” means Martin Nossov.

8.

“Money-Making Opportunities” means any good or service represented to enable
consumers or to assist consumers to earn income, or to obtain grants, monetary
assistance, scholarships, employment, or business opportunities.

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9.

“Negative Option Feature” means, in an offer or agreement to sell or provide any
product or service, a provision under which the consumer’s silence or failure to take an
affirmative action to reject products or services or to cancel the agreement is interpreted
by the seller or provider as acceptance of the offer. Offers or agreements with Negative
Option Features include, but are not limited to: (i) free or introductory price trial offers
in which the consumer receives a product or service for free or at a nominal or
introductory price for an initial period and will incur an obligation to pay or pay a greater
amount for the product or service if he or she does not take affirmative action to cancel,
reject, or return the product or service before the end of that period; (ii) continuity plans
in which, subsequent to the consumer’s agreement to the plan, the seller or provider
automatically ships products to a consumer unless the consumer notifies the seller or
provider within a certain time not to ship the products; and (iii) automatic renewal plans
in which the seller or provider automatically renews the agreement and charges the
consumer unless the consumer cancels before the renewal.

10.

“Plaintiffs” means the Federal Trade Commission, and the States of Kansas, Minnesota,
North Carolina, and Illinois.

11.

“Receiver” means Larry E. Cook.

12.

“Receivership Defendants” means Affiliate Strategies, Inc., Landmark Publishing
Group, LLC (d/b/a G.F. Institute and Grant Funding Institute), Grant Writers Institute,
LLC, Answer Customers, LLC, and Apex Holdings International, LLC.

13.

“Representatives” shall have the same scope as Federal Rule of Civil
Procedure 65(d)(2), and means Defendants’ officers, agents, servants, employees, and

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attorneys, and any other person or entity in active concert or participation with them who
receives actual notice of this Order by personal service or otherwise.
14.

“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, whether or not
covered by the Telemarketing Sales Rule.

15.

“Telemarketing Sales Rule” means the FTC Rule entitled “Telemarketing Sales Rule,”
16 C.F.R. Part 310.
ORDER
I.
PROHIBITION ON VIOLATION OF THE TELEMARKETING SALES RULE
IT IS FURTHER ORDERED that Defendants and their representatives, whether acting

directly or through any entity, corporation, subsidiary, division, affiliate, or other device, are
hereby permanently restrained and enjoined from:
A.

engaging in or assisting others in engaging in violations of the Telemarketing
Sales Rule by, including but not limited to:
1.

misrepresenting, directly or by implication, in the sale of goods or services
any material information about the goods or services Defendants or their
representatives sell;

2.

failing to disclose truthfully and in a clear and conspicuous manner, before
a customer pays for goods or services offered, material information related
to the offer;

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3.

making a false or misleading statement to induce any person to pay for
goods or services; and

B.

if the Commission amends the Telemarketing Sales Rule, in whole or part, failing
to comply fully and completely with all applicable requirements of the amended
Rule, on and after the effective date of any such amended Rule.
II.
PROHIBITED REPRESENTATIONS

IT IS FURTHER ORDERED that Defendants and their Representatives, whether acting
directly or through any entity, corporation, subsidiary, division, affiliate, or other device, in
connection with the advertising, marketing, promotion, offering for sale, or sale of any good or
service, specifically including but not limited to any Money-Making Opportunities, 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.

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 consumer
obtaining a full or partial refund, or the circumstances in which a full or partial
refund will be granted to the consumer;

B.

The total costs to purchase, receive, or use, and the quantity of, the good or
service;

C.

Any material restriction, limitation, or condition to purchase, receive, or use the
good or service;

D.

Any material term, condition, or limitation, of any offer with a Negative Option
Feature; and

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E.

Any material aspect of the performance, efficacy, nature, or characteristics of the
good or service.
III.
SUBSTANTIATION

IT IS FURTHER ORDERED that Defendants and their Representatives, whether acting
directly or through any entity, corporation, subsidiary, division, affiliate, or other device, in
connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or
distribution of any good or service, in or affecting commerce are hereby permanently restrained
and enjoined from making, or assisting others in making, any representation, in any manner,
expressly or by implication, including through the use of endorsements, about the performance
or efficacy of the product or service unless the representation is true, non-misleading, and, at the
time the representation is made, the Defendants possess and rely upon competent and reliable
evidence that substantiates the representation.
IV.
REQUIRED DISCLOSURES
IT IS FURTHER ORDERED that Defendants and their Representatives, whether acting
directly or through any partnership, corporation, subsidiary, division, or other device, in
connection with the manufacturing, labeling, advertising, promoting, marketing, offering for
sale, sale, or distribution of any good or service are hereby permanently restrained and enjoined
from failing to:
A.

Clearly and conspicuously disclose, before consumers are asked to pay money,
submit consideration, or reveal billing information:
1.

All fees and costs;

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2.

All material restrictions, limitations, or conditions applicable to the
purchase, receipt, or use of the goods or services that are part of the offer
(including but not limited to any promotion associated with free goods or
services, or goods or services available on a trial basis);

3.

All material terms and conditions of any cancellation or refund policy,
including but not limited to informing consumers if no cancellations or
refunds are permitted; and

4.

All material terms and conditions of any offer with a Negative Option
Feature, including but not limited to:
a.

The fact that the customer’s account will be charged unless the
customer takes affirmative action to avoid the charges;

b.

The dollar amount of the first payment and when it will be
charged, withdrawn, or become due; the dates or frequency (e.g.,
monthly, quarterly) of all subsequent charges or payment(s); and
the dollar amount or range of costs of all subsequent charges or
payments;

c.

When any trial period begins; the length of any trial period; the
specific steps and means by which a cancellation request must be
submitted; and the date by, or time period within which, a
cancellation request must be received to avoid a charge;

d.

The length of any renewal period; the manner in which a notice not
to ship or renew must be submitted; the date by or time period
within which a notice not to ship or renew must be received to
avoid shipment or renewal (e.g., two weeks after the consumer is
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advised of an upcoming shipment or renewal); and the telephone
number, email address, or street address to which such a notice
must be directed; and
e.

All material conditions, limitations, and restrictions on the ability
of the consumer to use any good or service that is offered as
“free,” “risk-free,” “without obligation,” or “discounted,” or
offered using words of similar import denoting or implying the
absence of any obligation; and

B.

For any transaction involving a service, within the lesser of ten (10) days after the
date of the transaction or half the time of any trial period, send the consumer
written confirmation of the transaction, identified in a clear and conspicuous
manner on the outside of the envelope, via first class mail that includes all the
information required by Subsection A of this Section and a clear and conspicuous
statement of the procedures by which the consumer can cancel or obtain a refund;

C.

For any transaction involving a product, provide written confirmation of the
transaction with the first product shipment that includes all of the information
required by Subsection A of this Section and a clear and conspicuous statement of
the procedures by which the consumer can cancel or obtain a refund; and

D.

At least thirty (30) days prior to renewing a consumer’s membership,
subscription, or agreement to purchase for any service (in the case of a
membership, subscription, or agreement whose term is six (6) months or longer)
and prior to the submission for payment of a consumer’s billing information for
such services, send the consumer written confirmation of such renewal, identified
in a clear and conspicuous manner on the outside of the envelope, via first class
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mail, that includes all of the information required by this Section and a clear and
conspicuous statement of the procedures by which the consumer can cancel such
renewal.
V.
PROHIBITION AGAINST VIOLATION OF CERTAIN STATE LAWS
IT IS FURTHER ORDERED that Defendants and their Representatives, whether acting
directly or through any entity, corporation, subsidiary, division, affiliate, or other device, are
restrained and enjoined from violating:
A.

Illinois laws, including the Illinois Consumer Fraud and Deceptive Business
Practices Act, 815 ILCS 505/2 et seq.;

B.

Kansas laws, including the Kansas Consumer Protection Act, K.S.A. § 50-623 et
seq.;

C.

Minnesota laws, including:
1.

The Minnesota Uniform Deceptive Trade Practices Act, Minn. Stat.
§§ 325D.43 – 325D.48;

2.

Minn. Stat. §§ 325F.67;

3.

The Prevention of Consumer Fraud Act, Minn. Stat. §§ 325F.68 325F.70; and

4.
D.

Minn. Stat. § 325F.71; and

North Carolina laws, including the North Carolina Unfair and Deceptive Trade
Practices Act, N.C. Gen. Stat. § 75-1.1, et seq.

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VI.
CUSTOMER INFORMATION
IT IS FURTHER ORDERED that Defendants and their Representatives, whether acting
directly or through any entity, corporation, subsidiary, division, affiliate, or other device, are
permanently restrained and enjoined from:
A.

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), of any person
which was obtained by any Defendant from any Receivership Defendant prior to
entry of this Order in connection with the marketing and sale of grant-related
goods and services; and

B.

Failing to dispose of such customer information in all forms in Defendants’
possession, custody, or control within thirty (30) days after entry of this Order.
Disposal shall be by means that protect against unauthorized access to the
customer information, such as by burning, pulverizing, or shredding any papers,
and by erasing or destroying any electronic media, to ensure that the customer
information cannot practicably be read or reconstructed.

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 a law, regulation, or court order.

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VII.
COOPERATION WITH PLAINTIFFS AND RECEIVER
IT IS FURTHER ORDERED that Defendants shall, in connection with this action or
any subsequent investigations related to or associated with the transactions or the occurrences
that are the subject of Plaintiffs’ Second Amended Complaint, cooperate in good faith with
Plaintiffs and the Receiver, and appear, or cause each of their officers, employees,
Representatives, or agents to appear, at such places and times as Plaintiffs or the Receiver shall
reasonably request, after written notice, for interviews, conferences, pretrial discovery, review of
documents, and for such other matters as may be reasonably requested by Plaintiffs or Receiver.
If requested in writing by Plaintiffs or the Receiver, Defendants shall appear, or cause each of
their officers, employees, Representatives, or agents to appear and provide truthful testimony in
any trial, deposition, or other proceeding related to or associated with the transactions or the
occurrences that are the subject of the Second Amended Complaint, without service of a
subpoena. Defendants are permanently restrained and enjoined from directly or indirectly doing
any act or refraining from any act whatsoever to interfere with the Receiver managing, or taking
custody, control, or possession of, the assets or documents subject to the receivership; or to
harass or interfere with the Receiver in any way; or to interfere in any manner with the exclusive
jurisdiction of this Court over the assets or documents of the Receivership Defendants; or to
refuse to cooperate with the Receiver or the Receiver’s duly authorized agents in the exercise of
their duties or authority under any order of this Court.

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VIII.
COMPLIANCE MONITORING
IT IS FURTHER ORDERED that, for the purposes of monitoring and investigating
compliance with any provision of this Order:
A.

Within ten (10) business days of receipt of written notice from a representative of
the Commission, Defendants each shall submit additional written reports, which
are true and accurate and sworn to under penalty of perjury; produce documents
for inspection and copying; appear for deposition; and provide entry during
normal business hours to any business location in each Defendant’s possession or
direct or indirect control to inspect the business operation;

B.

In addition, the Commission is authorized to use all other lawful means,
including:
1.

obtaining discovery from any person, without further leave of court, using
the procedures prescribed by Fed. R. Civ. P. 30, 31, 33, 34, 36, 45 and 69;

2.

having their representatives pose as consumers and suppliers to
Defendants, their employees, or any other entity managed or controlled in
whole or in part by any Defendant, without the necessity of identification
or prior notice; and

C.

Defendants each shall permit representatives of the Commission to interview any
employer, consultant, independent contractor, representative, agent, or employee
who has agreed to such an interview, relating in any way to any conduct subject
to this Order. The person interviewed may have counsel present. Provided,
however, that nothing in this Order shall limit the Commission’s lawful use of
compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C.
Page 15 of 22

§§ 49, 57b-1, to obtain any documentary material, tangible things, testimony, or
information relevant to unfair or deceptive acts or practices in or affecting
commerce (within the meaning of 15 U.S.C. § 45(a)(1)).
IX.
COMPLIANCE REPORTING
IT IS FURTHER ORDERED that, in order that compliance with the provisions of this
Order may be monitored:
A.

For a period of eight (8) years from the date of entry of this Order,
1.

The Individual Defendant shall notify the Commission of the following:
a.

Any changes in his residence, mailing addresses, and telephone
numbers, within ten (10) days of the date of such change;

b.

Any changes in his employment status (including selfemployment), and any change in his ownership of more than one
percent of any business entity within ten (10) days of the date of
such change. Such notice shall include the name and address of
each business that he is affiliated with, employed by, creates or
forms, or performs services for; a detailed description of the nature
of the business; and a detailed description of his duties and
responsibilities in connection with the business or employment;
and

c.

Any changes in his name or use of any aliases or fictitious names
within ten (10) days of the date of such change;

2.

Defendants shall notify the Commission of any changes in structure of
Corporate Defendant or any business entity that any Defendant directly or
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indirectly controls, or has a more than one percent ownership interest in,
that may affect compliance obligations arising under this Order, including:
incorporation or other organization; a dissolution, assignment, sale,
merger, or other action; the creation or dissolution of a subsidiary, parent,
or affiliate that engages in any acts or practices subject to this Order; or a
change in the business name or address, at least thirty (30) days prior to
such change, provided that, with respect to any such change in the
business entity about which a Defendant learns less than thirty (30) days
prior to the date such action is to take place, such Defendant shall notify
the Commission as soon as is practicable after obtaining such knowledge.
B.

One hundred eighty (180) days after the date of entry of this Order and annually
thereafter for a period of eight (8) years, each Defendant shall provide a written
report to the Commission, which is true and accurate and sworn to under penalty
of perjury, setting forth in detail the manner and form in which they have
complied and are complying with this Order. This report shall include, but not be
limited to:
1.

For the Individual Defendant:
a.

The Individual Defendant’s then-current residence address,
mailing addresses, and telephone numbers;

b.

The Individual Defendant’s then-current employment status
(including self-employment), including the name, addresses, and
telephone numbers of each business that the Individual Defendant
is affiliated with, employed by, or performs services for; a detailed
description of the nature of the business; and a detailed description
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of the individual Defendant’s duties and responsibilities in
connection with the business or employment; and
c.

Any other changes required to be reported under Subsection A of
this Section.

2.

For all Defendants:
a.

A copy of each acknowledgment of receipt of this Order, obtained
pursuant to the Section titled “Distribution of Order;” and

b.

Any other changes required to be reported under Subsection A of
this Section.

C.

Each Defendant shall notify the Commission of the filing of a bankruptcy petition
by such Defendant within fifteen (15) days of filing.

D.

For the purposes of this Order, Defendants shall, unless otherwise directed by the
Commission’s authorized representatives, send by overnight courier all reports
and notifications required by this Order to the Commission, to the following
address:
Associate Director for Enforcement
Bureau of Consumer Protection
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
RE: FTC v. Affiliate Strategies et al., FTC case no. X090073

Provided that, in lieu of overnight courier, Defendants may send such reports or notifications by
first-class mail, but only if Defendants contemporaneously send an electronic version of such
report or notification to the Commission at: [e-mail].
E.

For purposes of the compliance reporting and monitoring required by this Order,
the Commission is authorized to communicate directly with each Defendant.
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X.
RECORDKEEPING
IT IS FURTHER ORDERED that, for a period of eleven (11) years from the date of
entry of this Order, in connection with the sale of any Money-Making Opportunity, the
Corporate Defendant, and the Individual Defendant, for any business for which he is the majority
owner or directly or indirectly controls, are hereby restrained and enjoined from failing to create
and retain the following records:
A.

Accounting records that reflect the cost of goods or services sold, revenues
generated, and the disbursement of such revenues;

B.

Personnel records accurately reflecting: the name, address, and telephone number
of each person employed in any capacity by such business, including as an
independent contractor; that person’s job title or position; the date upon which the
person commenced work; and the date and reason for the person’s termination, if
applicable;

C.

Customer files containing the names, addresses, phone numbers, dollar amounts
paid, quantity of items or services purchased, and description of items or services
purchased, to the extent such information is obtained in the ordinary course of
business;

D.

Complaints and refund requests (whether received directly or indirectly, such as
through a third party,) and any responses to those complaints or requests;

E.

Copies of all sales scripts, training materials, advertisements, or other marketing
materials; and

F.

All records and documents necessary to demonstrate full compliance with each
provision of this Order, including copies of acknowledgments of receipt of this
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Order required by the Sections titled “Distribution of Order” and
“Acknowledgment of Receipt of Order” and all reports submitted to the
Commission pursuant to the Section titled “Compliance Reporting.”
XI.
DISTRIBUTION OF ORDER
IT IS FURTHER ORDERED that, for a period of eight (8) years from the date of entry
of this Order, Defendants shall deliver copies of the Order as directed below:
A.

Corporate Defendant: The Corporate Defendant must deliver a copy of this Order
to (1) all of its principals, officers, directors, and managers; (2) all of its
employees, agents, and representatives who engage in the sale of any MoneyMaking Opportunity; and (3) any business entity resulting from any change in
structure set forth in Subsection A.2 of the Section titled “Compliance
Reporting.” For current personnel, delivery shall be within five (5) days of
service of this Order upon such Defendant. For new personnel, delivery shall
occur prior to them assuming their responsibilities. For any business entity
resulting from any change in structure set forth in Subsection A.2 of the Section
titled “Compliance Reporting,” delivery shall be at least ten (10) days prior to the
change in structure.

B.

Individual Defendant as control person: For any business that the Individual
Defendant controls, directly or indirectly, or in which such the Individual
Defendant has a majority ownership interest, the Individual Defendant must
deliver a copy of this Order to (1) all principals, officers, directors, and managers
of that business; (2) all employees, agents, and representatives of that business
who engage in the sale of any Money-Making Opportunity; and (3) any business
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entity resulting from any change in structure set forth in Subsection A.2 of the
Section titled “Compliance Reporting.” For current personnel, delivery shall be
within five (5) days of service of this Order upon such Defendant. For new
personnel, delivery shall occur prior to them assuming their responsibilities. For
any business entity resulting from any change in structure set forth in Subsection
A.2 of the Section titled “Compliance Reporting,” delivery shall be at least ten
(10) days prior to the change in structure.
C.

Individual Defendant as employee or non-control person: For any business where
the Individual Defendant is not a controlling person of a business but otherwise
engages in conduct related to the subject matter of this Order, he must deliver a
copy of this Order to all principals and managers of such business before
engaging in such conduct.

D.

Defendants must secure a signed and dated statement acknowledging receipt of
the Order, within thirty (30) days of delivery, from all persons receiving a copy of
the Order pursuant to this Section.
XII.
ACKNOWLEDGMENT OF RECEIPT OF ORDER

IT IS FURTHER ORDERED that each Defendant, within five (5) business days of
receipt of this Order as entered by the Court, must submit to the Commission a truthful sworn
statement acknowledging receipt of this Order.

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XIII.
SEVERABILITY
IT IS FURTHER ORDERED that if any provision in this Order is determined to be
void or unenforceable as to any Defendant, then as to that Defendant that provision shall be
deemed severable from the remaining provisions of this Order, which shall remain in full force
and effect.
XIV.
RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for
purposes of construction, modification, and enforcement of this Order.
SO ORDERED.
Dated: August 1, 2011
S/ Julie A. Robinson
JULIE A. ROBINSON
UNITED STATES DISTRICT JUDGE

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