Federal Trade Commission v. Emerica Media Corporation et al
Filing
265
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO DEFENDANT ROBERT BRAACH. Signed by Judge Dana L. Christensen on 1/30/2017. Mailed to Sann. (TAG)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION
FEDERAL TRADE COMMISSION,
CV 13-03-M-DLC
Plaintiff,
vs.
AMERICAN EVOICE, LTD., EMERICA
MEDIA CORPORATION, FONERIGHT,
INC., GLOBAL VOICE MAIL, LTD.,
HEARYOU2, INC., NETWORK
ASSURANCE, INC., SECURATDAT,
INC., TECHMAX SOLUTIONS, INC.,
VOICE MAIL PROFESSIONALS, INC.,
STEVE V. SANN, TERRY D. LANE,
a/k/a TERRYD. SANN, NATHANM.
SANN, ROBERT M. BRAACH,
STIPULATED ORDER FOR
PERMANENT INJUNCTION
AND MONETARY
JUDGMENT AS TO
DEFENDANT ROBERT
BRAACH
Defendants.
and
BIBLIOLOGIC, LTD.,
Relief Defendant.
Plaintiff Federal Trade Commission ("FTC") or "Commission") filed its
Complaint (Doc. 1) for permanent injunction and other equitable relief in this
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matter pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC
Act"), 15 U.S.C. § 53(b), against Defendants American eVoice, Ltd.; Emerica
Media Corp.; FoneRight, Inc.; Global Voice Mail, Ltd.; HearYou2, Inc.; Network
Assurance, Inc.; SecuratDat, Inc.; Techmax Solutions, Inc.; Voice Mail
Professionals, Inc.; Steven V. Sann; Terry D. Lane (alk/a Terry D. Sann); Nathan
M. Sann; and Robert M. Braach ("Defendants"); and Relief Defendant Bibliologic,
Ltd.
Plaintiff FTC and Defendant Robert M. Braach stipulate to the entry of this
this Stipulated Permanent Injunction ("Order") to resolve all matters in dispute in
this action between them.
THEREFORE, IT IS ORDERED as follows:
FINDINGS
1.
This Court has jurisdiction over this matter.
2.
The FTC's Complaint charges that Defendants engaged in deceptive
and unfair acts or practices in violation of Section 5 of the FTC Act,
15 U.S.C. § 45, by placing unauthorized charges on consumers'
telephone bills ("cramming").
3.
Defendant Braach neither admits nor denies any of the allegations in
the Complaint, except as specifically stated in this Order. Only for
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purposes of this action, Defendant Braach admits the facts necessary
to establish jurisdiction.
4.
Defendant Braach waives any claim that he may have under the Equal
Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution
of this action through the date of this Order, and agrees to bear his
own costs and attorney fees.
S.
Defendant Bras.ch waives all rights to appeal or otherwise challenge
or contest the validity of this Order.
DEFINIDONS
For purposes ofthis Order, the following definitions shall apply:
1.
"Clearly and Conspicuously" means that a required disclosure is
difficult to miss (i.e., easily noticeable) and easily understandable by
ordinary consumers, including in all of the following ways:
a. In any communication that is solely visual or solely audible, the
disclosure must be made through the same means through which
the communication is presented. In any communication made
through both visual and audible means, such as a television
advertisement, the disclosure must be presented simultaneously in
both the visual and audible portions of the communication even if
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the representation requiring the disclosure is made in only one
means.
b. A visual disclosure, by its size, contrast, location, the length of
time it appears, and other characteristics, must stand out from any
accompanying text or other visual elements so that it is easily
noticed, read, and understood.
c. An audible disclosure, including by telephone or streaming video,
must be delivered in a volume, speed, and cadence sufficient for
ordinary consumers to easily hear and understand it.
d. In any communication using an interactive electronic medium,
such as the Internet or software, the disclosure must be
unavoidable.
e. The disclosure must use diction and syntax understandable to
ordinary consumers and must appear in each language in which the
representation that requires the disclosure appears.
f. The disclosure must comply with these requirements in each
medium through which it is received, including all electronic
devices and face-to-face communications.
g. The disclosure must not be contradicted or mitigated by, or
inconsistent with, anything else in the communication.
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h. When the representation or sales practice targets a specific
audienc~
such as children, the elderly, or the terminally ill,
"ordinary consumers" includes reasonable members of that group.
2.
"Corporate Defendants" means American eVoice, Ltd.; Emerica
Media Corp.; FoneRight, Inc.; Global Voice Mail, Ltd.; HearYou2,
Inc.; Network Assurance, Inc.; SecuratDat, Inc.; Techmax Solutions,
Inc.; Voice Mail Professionals, Inc., as well as any affiliates,
subsidiaries, successors, or assigns, and any fictitious business entities
or business names created or used by these entities, or any of them.
3.
"Defendants" means the Individual Defendants and the Corporate
Defendants, individually, collectively, or in any combination.
4.
"Individual Defendants" means Steven V. Sann; Terry D. Lane
(a/k/a Terry D. Sann); Nathan M. Sann; and Robert M. Bras.ch.
S.
"Person" means a natural person, an organization or other legal
entity, including a corporation, partnership, sole proprietorship,
limited liability company, association, cooperative, or any other group
or combination acting as an entity.
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ORDER
I. PROBIBmON AGAINST TELEPHONE BILLING
IT IS THEREFORE ORDERED that Defendant Braach is pennanently
restrained and enjoined from placing charges on any person's telephone bill,
whether directly or through an intermediary, including by providing any
advertising, marketing, financial, or technical assistance to other persons to place
charges on any person's telephone bill.
D. PROHIBITION AGAINST BILLING WITHOUT AUTHORIZATION
IT IS FURTHER ORDERED that Defendant Braach and his officers,
agents, servants, 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, are permanently restrained and enjoined from (a)
representing or assisting others in representing, expressly or by implication, that a
consumer is obligated to pay any charge for goods or services, or (b) causing or
assisting others in causing any charge to be billed to a consumer's account, unless:
A.
the consumer provides express verifiable authorization to be charged;
and
B.
all material texms of the offer for which the consumer is billed,
including the number and amount of each charge and the account to
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which each charge will be billed, have been clearly and conspicuously
disclosed prior to the authorization of the charge and in close
proximity to any request that the consumer provide his or her name,
address, telephone number, email address, account number or any
other payment infonnation.
ID. PROBIBmON AGAINST USE OF CONSUMER INFORMATION
IT IS FURTHER ORDERED that Defendant Braach and his officers,
agents, servants, 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, are hereby 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), that any Defendant obtained prior to entry of
this Order in connection with the placement of charges on consumers'
telephone bills; and
B.
failing to destroy such customer information in all fonns in their
possession, custody, or control within 30 days after receipt of written
direction to do so from a representative of the Commission.
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Provided, however, that customer infonnation 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.
IV. MONETARY JUDGMENT AND PARTIAL SUSPENSION
IT IS FURTHER ORDERED that:
A.
Judgment in the amount of seventy-one million, forty thousand, fortyfive dollars and twenty~one cents ($71,040,045.21) is hereby entered
in favor of the Commission against Defendant Breach, jointly and
severally, as equitable monetary relief.
B.
Defendant Braach is ordered to pay to the Commission Seventy-Five
Thousand dollars ($75,000.00). Such payment must be made within 7
days of entry of this Order by electronic fund transfer in accordance
with instructions provided by a representative of the Commission.
C.
Upon the payment required by Section IV.B, the remainder of the
monetary judgment is suspended, subject to Sections IV.D through
IV.Gbelow.
D.
The Commission's agreement to the suspension of part of the
monetary judgment is expressly premised upon the truthfulness,
accuracy, and completeness of the Defendant Breach's sworn
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financial statements and related documents (collectively, "financial
representations") submitted to the Commission, namely:
1.
Financial Statement of Defendant Braach signed on January 25,
2013, including attachments;
2.
Emails from Counsel for Defendant Breach to Counsel for the
FTC dated March 31, 2015; April 15, 2016; May 16, 2016; and
July 20, 2016, and attachments thereto;
3.
Testimony given by Defendant Braach in his depositions on
May 11, 2016, and August 16, 2016.
E.
The suspension of the judgment will be lifted as to Defendant Braach
if, upon motion by the Commission, the Court finds that Defendant
Braach failed to disclose any material asset, materially misstated the
value of any asset, or made any other material misstatement or
omission in the financial representations identified above.
F.
The suspension of the judgment will be lifted as to Defendant Braach
if he defaults on any of his obligations under this Section IV.
0.
If the suspension of the judgment is lifted as Defendant Braach, the
judgment becomes immediately due as to him in the amount specified
in Section IV.A above (which the parties stipulate, only for purposes
of this Section, represents the consumer injury alleged in the
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Complaint), less any payments previously made pmsuant to this
Section, plus interest computed from the date of entry of this Order.
V. ADDITIONAL MONETARY PROVISIONS
IT IS FURTHER ORDERED that:
A.
Defendant Braach relinquishes dominion and all legal and equitable
right, title, and interest in all assets transferred pursuant to this Order
and may not seek the return of any assets.
B.
The facts alleged in the Complaint will be taken as true, without
further proof, in any subsequent civil litigation by or on behalf of the
Commission, including in a proceeding to enforce its rights to any
payment or monetary judgment pursuant to this Order, such as a
nondischargeability complaint in any bankruptcy case.
C.
The facts alleged in the Complaint establish all elements necessary to
sustain an action by the Commission pursuant to Section 523(a)(2)(A)
of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order will
have collateral estoppel effect for such purposes.
D.
Defendant Braach acknowledges that his Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification
Numbers), which Defendant Breach previously submitted to the
Commission, may be used for collecting and reporting on any
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delinquent amount arising out of this Order, in accordance with 31
u.s.c. § 7701.
E.
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
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 if 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 into the U.S. Treasury as
disgorgement. Defendant Braach has no right to challenge any
actions the Commission or its representatives may talce pursuant to
this Section V.E.
VI. MODIFICATION OF ASSET FREEZE
IT IS FURTHER ORDERED that the freeze imposed on Defendant
Braach's assets pursuant to the Stipulated Preliminary Injunction entered on May
8, 2013 (DE 56) is modified to pennit the payment required by Section IV of this
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Order. Upon completion of the payment required by Section IV, the asset freeze
shall be dissolved.
VD. COOPERATION
IT IS FURTHER ORDERED that Defendant Braach must fully cooperate
with representatives of the Commission in this case and in any investigation related
to or associated with the transactions or the occurrences that are the subject of the
Complaint. Defendant Braach must provide truthful and complete infonnation,
evidence, and testimony. Defendant Braach must appear for interviews, discovery,
hearings, trials, and any other proceedings that a Commission representative may
reasonably request upon 5 days written notice, or other reasonable notice, at such
places and times as a Commission representative may designate, without the
service of a subpoena.
VIII. ORDER ACKNOWLEDGMENTS
IT IS FURTHER ORDERED that Defendant Braach obtains
acknowledgments of receipt of this Order.
A.
Defendant Braach, 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.
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B.
For S years after entry of this Order, Defendant Braacb, for any
business that he, individually or collectively with any other
Defendants, is the majority owner or controls directly or indirectly,
must deliver a copy of this Order to: (1) all principals, officers,
directors, and LLC managers and members; (2) all employees, agents,
and representatives who participate in activity relating to the
placement of charges on consumers' telephone bills; and (3) any
business entity resulting from any change in structure as set forth in
the Section IX below. Delivery must occur within 7 days of entry of
this Order for CUITellt personnel. For all others, delivery must occur
before they assume their responsibilities.
IX. COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Defendant Braach makes timely
submissions to the Commission.
A.
One year after entry of this Order, Defendant Braach must submit a
compliance report, sworn under penalty of perjury.
I.
Defendant Braach must:
a. identify all of his telephone numbers and all of his physical,
postal, email and Internet addresses, including residences;
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b. 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 him·
'
c. identify all of his business activities, including any business
for which he performs services whether as an employee or
otherwise and any entity in which he has any ownership
interest;
d. identify all of his businesses by all of their names, telephone
numbers, and physical, postal, email, and Internet addresses;
e. describe in detail his involvement in each such business,
including title, role, responsibilities, participation, authority,
contxol, and any ownership;
f. describe the activities of each business, including the goods
and services offered, the means of advertising, marketing,
sales, methods of payment, and the involvement of any other
Defendant (which Defendant Braach must describe if he
knows or should know due to his own involvement);
g. describe in detail whether and how he is in compliance with
each Section of this Order; and
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h. 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, Defendant Braach must submit
a compliance notice, sworn under penalty of perjury, within 14 days
of any change in the following:
1.
any designated point of contact;
2.
name, including aliases or fictitious name, or residence address;
3.
title or role in any business activity, including any business for
which he performs services whether as an employee or
otherwise and any entity in which he has any ownership
interest, and identify the name, physical address, and any
Internet address of the business or entity.
4.
the structure of any entity that he has any ownership interest in
or controls directly or indirectly that may affect 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;
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C.
Defendant Braach must submit to the Commission notice of the filing
of any bankruptcy petition, insolvency proceeding, or similar
proceeding by or against him within 14 days of its filing.
D.
Any submission to the Commission required by this Order to be
swom 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 [date] at [location]."
and supplying the date, location, 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 DEbrief@ftc.gov (with '~FTC v. American eVoice,
Xl30020" in the subject line) 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
RE: FTC v. American eVoice, Xl30020
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X. RECORDKEEPING
IT IS FURTHER ORDERED that Defendant Braach must create certain
records for 20 years after entry of this Order, and retain each such record for 5
years. Specifically, Defendant Braach, for any business that he, individually or
collectively with any other Defendants, is a majority owner or controls directly or
indirectly, must create and retain the following records:
A.
accounting records showing the revenues from all goods or services
sold or billed;
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.
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XL COMPLIANCE MONITORING
IT IS FURTHER ORDERED that, for purposes of monitoring Defendant
Braach,s compliance with this Order, including the financial representations
identified in Section IV.D and the payment required by Section IV.B of this Order:
A.
Within 14 days of receipt of a written request from a representative of
the Commission, Defendant Braach must: submit additional
compliance reports or other requested infonnation, which must be
sworn 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 Defendant Braach. Defendant Braach
must pennit 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
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individuals or entities, to Defendant Braach or any individual or
entity affiliated with Defendant Braach, 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-l.
XII. RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this
matter for purposes of construction, modification, and enforcement of this Order.
IT IS SO ORDERED.
Dated this
3D~ay of January, 201
Dana L. Christensen, Chief Judge
United States District Court
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