Federal Trade Commission v. Ivy Capital, Inc. et al

Filing 378

STIPULATED FINAL JUDGMENT and ORDER for MONETARY RELIEF in favor of Federal Trade Commission against Tracy Lyman, S&T Time, LLC. Signed by Judge James C. Mahan on 12/20/12. (Copies have been distributed pursuant to the NEF - MMM)

UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

2
3

FEDERAL TRADE COMMISSION,
Plaintiff,

4

5

v,

6

IVY CAPITAL, INC., et al.•

7
8

Defendants. and
CHERRYTREE HOLDINGS, LLC, et al.,

9

Relief Defendants.
10
II

12

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
-)
)

Case No.2: 11-cv-00283-JCMGWF

STIPULATED FINAL
JUDGMENT AND ORDER
FOR MONETARY RELIEF

Plaintiff, the Federal Trade Commission (the "FTC" or the "commission") filed a

13

complaint for permanent injunction and other equitable relief, including redress to conswners

14

and disgorgement of ill-gotten gains ("complaint"), pursuant to Sections 13(b) and 19 of the

15

Federal Trade Commission Act (the "FTC Act"), 15 U.S.C. §§ 53(b) and 57b, and the

16

Telemarketing and Consumer Fraud Abuse Prevention Act (the "Telemarketing Act"), 15 U.S.C.

17

§§ 6101-6108. The FTC and relief defendants S&T Time, LLC ("S&T Time") and Tracy
r

18

Lyman ("Mrs. Lyman"), by and through their counsel, hereby stipulate to the entry of, and

19

request the court to enter, this stipulated final judgment and order for monetary relief ("order"),

20

to resolve all matters of dispute between them in this action.

21

22
23

24
25

Case 2:11-cv-00283-JCM -GWF Document 356

1
2

THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as
follows:
FINDINGS

3
4

Filed 12/18/12 Page 2 of 17

1. This is an action by the commission instituted under Sections 13(b) and 19 of the

5

FTC Act, 15 U.S.C. §§ 53(b) and 5Th, and the Telemarketing Act, 15 U.S.C. §§

6

6101-6108. The commission has authority to seek the relief contained herein;

7

2. The complaint states a claim upon which relief may be granted under Section 5(a) of

8

the FTC Act, 15 U.S.C. § 45(a), and the FTC's trade regulation rule entitled the

9

Telemarketing Sales Rule (the "TSR"), 16 C.F.R. Part 310;

lO

·11
12

13
14

3. This court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), and
1345, 15 U.S.C. §§ 45(a), 53(b), 57b, 6102(c), and 6105(b);
4. Venue is proper in this district under 28 U.S.C. § 139 1(b) and (c), and 15 U.S.C. §
53(b);
5. The activities of defendants Ivy Capital, Inc., Fortune Learning System, LLC, Vianet,

15

Inc., 3 Day MBA, LLC, Global Finance Group, LLC, Virtual Profit, LLC , ICI

16

Development, LLC, Ivy Capital, LLC, Logic Solutions, LLC, Oxford Debt Holdings,

17

LLC, Revsynergy, LLC, Sell It Vizions, LLC, Kyle G. Kirschbaum, John H.

18

Harrison, and Steve E. Lyman, as alleged inthe complaint are in or affecting

19

commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44;

20

6. Relief defendants S&T Time and Mrs. Lyman (collectively the "settling defendants")

---

21

have entered into this order freely and without coercion, and they acknowledge that

22

they have read the provisions of this order, understand them, and are prepared to

23

abide by them;

24
25

2

Case 2:11-cv-00283-JCM -GWF Document 356

t

Filed 12/18/12 Page 3 of 17

7. The FTC and the settling defendants, by and through their counsel, have agreed that

2

the entry of this order resolves all matters in dispute between them arising from the

3

complaint in this action up to the date of entry of this order;

4

8. This order is for settlement purposes only, and does not constitute and shall not be

5

interpreted to constitute an admission by the settling defendants or a finding that the

6

law has been violated as alleged in the complaint or that the facts alleged in the

7

complaint, other than the jurisdictional facts, are true;

8

9. The settling defendants waive all rights to seek appellate review or otherwise

9

challenge or contest the validity of this order. The settling defendants further waive

10

and release any claim they may have against the FTC, its employees, representatives,

11

or agents concerning the prosecution of this action to the date of this order;

12

10. The settling defendants agree that this order does not entitle them to seek or obtain

13

attorneys' fees as a prevailing party under the Equal Access to Justice Act, 28 U.S.c.

14

§ 2412, concerning the prosecution ofthis action to the date of this order. Each

15

settling party shall bear its own costs and attorneys' fees; and

16

11. Entry ~fthis order is in the public interest.

17DEFINITIONS.
18

For the purpose of this order, the following definitions shall apply:

19

1. "And" and "or" shall be understood to have both conjunctive aI).d disjunctive

20
21

meanings.
2. "Asset" means any legal or equitable interest in, right to, or claim to, any real,

22

'personal, or intellectual property including, but not limited to, chattel, goods,

23

instruments, equipment, fixtures, general intangibles, effects, leaseholds, contracts,

24

mail or other deliveries, shares or stock, securities, inventory, checks, notes, accounts,

25

credits, receivables (as those terms are defined in the Unifonn Commercial Code),
3

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 4 of 17

cash, trusts, including but not limited to asset protection trusts, and reserve funds or
2

other accounts associated with any payments processed on behalf of any defendant,

3

including, but not limited to, such reserve funds held by a payment processor, credit

4

card processor, or bank.

5

3. "Commission" or "FTC" means the Federal Trade Commission.

6

4. "Corporate defendants" mean Ivy Capital, Inc., Fortune Learning System, LLC,

7

Vianet, Inc., 3 Day MBA, LLC, Global Finance Group, LLC, Virtual Profit, LLC ,

8

ICI Development, LLC, Ivy Capital, LLC, Logic Solutions, LLC, Oxford Debt

9

Holdings, LLC, Revsynergy, LLC, and Sell It Vizions, LLC; and their successors,

10
11

assigns, affiliates or subsidiaries.
5. "Defendants" mean the individual defendants and the corporate defendants,

12

individually, collectively, or in any combination. The relief defendants are expressly

13

excluded from this definition.

14

6. "Document" is synonymous in meaning and equal in scope to the usage of the term

IS

in the Federal Rules of Civil Procedure 34(a), and includes writing, drawings, graphs,

16

charts, Internet sites, Web pages, Web sites, electronic correspondence, including e-

17

mail and instant messages, photographs, audio and video recordings, contracts,

18

accounting data, advertisements (including, but not limited to, advertisements placed

19

on the World Wide Web), FTP Logs, Server Access Logs, USENET Newsgroup

20

postings, World Wide Web pages, books, written or printed records, handwritten

21

notes, telephone logs, telephone scripts, receipt books, ledgers, personal and business

22

canceled checks and check registers, bank statements, appointment books, computer

23

records, and other data compilations from which information can be obtained and

24

translated, if necessary, through detection devices into reasonably usable form. A

25

draft or non-identical copy is a separate document within the meaning of the term.
4

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 5 of 17

7. "Individual defendants" mean Kyle G. Kirschbaum, John H. Harrison, and Steven
E. Lyman.

2
3

8. "Material" means likely to affect a person's choice of, or conduct regarding, goods
or services.

4

5

9.

"Person" means a natural person, organization, or other legal entity, including a

6

corporation, partnership, proprietorship, association, cooperative, government or

7

governmental subdivision or agency, or any other group or combination acting as an

8

entity.

9

10. "Relief defendants" mean Cherrytree Holdings, LLC, S&T Time, LLC, Virtucon

10

LLC, Kierston Kirschbaum, Melyna Harrison, and Tracy Lyman.

11

11. "Settling defendants" mean S&T Time, LLC and Tracy Lyman.

12

13

ORDER

14

I.

15

COOPERATION PROVISION

16

IT IS ORDERED that the settling defendants shall, in connection with this action or any

17

.subsequent investigations

18

are the subject of the complaint, cooperate in good faith with the FTC and any other

19
20
21
22
23
24

related to, or associated with, the transactions or the occurrences that

governmental agency or entity, and appear at such places and times as the FTC or any other
governmental agency or entity 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 the FTC or any other governmental agency or entity. If requested in
writing by the FTC or any other governmental agency or entity, the settling defendants shall
appear and provide truthful testimony in any trial, deposition, or other proceeding related to, or

25
5

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 6 of 17

associated with, the trar;tsactions or the occurrences that are the subject of the complaint, without
2

the service of a subpoena upon them.

3

II.
MONETARY RELIEF

4

5

6
7

8
9
10

11
12
13

14

15
16
17

18
19

20
21

22
23

24

IT IS FURTHER ORDERED that judgment is hereby entered in favor of the
commission and against Mrs. Lyman in the amount of five hundred seventy-two thousand, nine
,hundred eleven dollars ($572,911); provided, however, that subject to the provisions of Section
III, this judgment shall be suspended upon Mrs. Lyman's completion of the requirements stated
in subsections A, B and D of this section.
Judgment is further entered in favor of the commission and against S&T Time in the
amount of eight hundred one thousand, six hundred eighty-one dollars and seventy-one cents
($801,681.71); provided, however, that subject to the provisions of Section III, this judgment
shall be suspended.
A. Effective upon the entry of this order, Mrs. Lyman shall surrender to the FTC all
control, title, dominion,and interest in the following assets:
1. All funds held in the Bank of America, N.A. account ending in 0146, in the
name of Steven and/or Tracy Lyman, individu'aIly or jointly;
2. All funds held in the Citibank, N.A. account ending in 5785, in the name of
Steven and/or Tracy Lyman, individually or jointly;
3. The residential property located at 511 Mandalay Court, Henderson, Nevada
89102, identified in Item 22 of the individual fmancial statements signed by
Tracy Lyman, dated March 2,2010 [sic], and Mr. Lyman, dated March 14,
2011;

25
6

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 7 of 17

4. The 2009 Cadillac SUV[VIN Igyec63888r197440] registered to Tracy
2

Lyman identified in Item 21 of the individual financial statement signed by

3

Tracy Lyman, dated March 2, 2010 [sic]; and

4

5. The 2009 Mercedes CIS Sedan [VIN wdddj72x27a083748] registered to Mr.

5

Lyman identified in Item 2-I -of the individual financial statement signed by

6

Tracy Lyman, dated March 2, 2010 [sic].

7

B. To effect the surrender of the funds identified in subsections II.A.1-2, the court

8

directs that the entities holding the funds or their successors shall, within ten (10)

9

business days of the date of entry of this order, remit the funds to the commission by

10

certified check(s) or other guaranteed funds payable to the FTC, Financial

11

Management Office, or by wire transfer in accordance with directions provided by

12

counsel for the commission. To the extent any identified nonparty cannot comply

13

with this subsection without the assistance of one or more of the settling defendants,

14

such party must, within three (3) business days of receiving this order, notifY the

15

settling defendant(s) and counsel for the commission of its inability to comply. Such

16

notification shall specify the actions by the settling defendant(s) that are necessary to

17

comply with this order. The settling defendant(s) shall immediately complete any

18

action necessary to facilitate the identified nonparty's ability to timely comply with·

19

this subsection, and the failure of the settling defendant(s) to complete such action

20

within ten (10) days shall be deemed a violation ofthe order and interest at the rate

21

prescribed in 28 U.S.C. § 1961(a) shall immediately begin to accrue.

22

C. In the event of default on any obligation to make payment under this order, interest,

23

computed pursuant to 28 U.S.C. § 1961(a) shall accrue from the date of default to the

24

date of payment. In the event such default continues for ten (10) calendar days

25

beyond the date the payment is due, the entire amount of the judgment, less any
7

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 8 of 17

amounts previously paid pursuant to this order, together with interest, shall
2

immediately become due and payable. The settling defendants shall be liable for all

3

payments required by this order and any interest on such payments.

4

D. Immediately upon entry of this order, Mrs. Lyman shall deliver possession to the

5

receiver of the assets identified in subsections II.A.3-5 (the "Lyman assets"). The

6

receiver is hereby directed to market and sell the Lyman assets. Mrs. Lyman shall

7

take all steps necessary to assist the receiver in the sale of the Lyman assets and shall

8

not add any encumbrances on the Lyman assets. Any transfer fees, taxes, or other

9

payments mandated from the transferor under law shall be paid from the proceeds of

10

11

each sale at the time such asset is sold.
E. All funds paid pursuant to this order shall be deposited into a fund administered by

12

the commission or its agents to be used for equitable relief, including, but not limited

13

to, redress to consumers, and any attendant expenses for the administration of such

14

equitable relief. In the event that direct redress to consumers is wholly or partially

15

impracticable or funds remain after the redress is completed, the commission may

16

apply any remaining funds for such other equitable relief (including consumer

17

information remedies) as it determines to be reasonably related to the defendants'

18

practices alleged in the complaint. Any funds not used for such equitable relief shall

19

be deposited to the United States Treasury as disgorgement. The settling defendants

20

shall have no right to challenge the commission's shoice of remedies or the manner 0

21

distribution under this subsection.

22
23

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

24

25
8

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 9 of 17

G. The settling defendants relinquish all dominion, control, and title to the funds paid to
2

the fullest extent permitted by law. The settling defendants shall make no claim to or

3

demand for return of the funds, directly or indirectly, through counselor otherwise.

4

H. The settling defendants agree that the facts as alleged in the complaint filed in this

5

action shall be taken as true without·further proof in any bankruptcy case or

6

subsequent civil litigation pursued by the commission to enforce its rights to any

7

payment or money judgment pursuant to this order, including, but not limited to, a

8

nondischargeability complaint in any bankruptcy case. The settling defendants

9

further stipulate and agree that the facts alleged in the complaint establish all

10

elements necessary to sustain an action pursuant to Section 523(a)(2)(A) ofthe

11

Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this order shall have collateral

12

estoppel effect for such purposes.

13

I. In accordance with 31 U.S.C. § 7701, the settling defendants are hereby required,

14

unless they have done so already, to furnish to the commission their taxpayer

15

identifying number and social security number, which shall be used for the purposes

16

of collecting and reporting on any delinquent amount arising out of the settling

17

defendants' relationship with the government.

18

J. The settling defendants agree that they will not, whether acting directly or through

19

any corporation, partnership, subsidiary, division, agent, or other device, submit to

20

any federal or state tax authority any return, amended return, or other official

21

document that takes a deduction for, or seeks a tax refund or other favorable

22

treatment for, any payment made by the settling defendants pursuant to this order.

23

24
25
9

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 10 of 17

III.
RIGHT TO REOPEN
2

IT IS FURTHER ORDERED that:

3

A.

The commission's agreement to and the court's approval of this order are

4

expressly premised upon the truthfulness, accuracy, and completeness of the

5

settling defendants' finanCial statements dated March 2, 2010 [sic] (the "financial

6

statements"), all of which the settling defendants assert are truthful, accurate, and

7

complete. The settling defendants and the commission stipulate that the settling

8

defendants' financial statements provide the basis for the monetary judgment in

9

Section II of this order and that the commission has relied on the truthfulness,

10

II

accuracy, and completeness of the settling defendants' financial statements.

B.

If, upon motion by the commission, this court finds that the settling defendants

12

have: (1) materially misstated in their financial statements, the value of any asset;

13

(2) made any material misrepresentation or ·omitted material information

14

concerning their financial condition by failing to disclose any asset that should

15

have been disclosed in their financial statements; or (3) made any other material

16

misstatement or omission in their fmancial statements, the court shall terminate

17

the suspension of the monetary judgment entered in Section II. The court,

18

without further adjudication, shall enter a modified judgment holding the settling

19

defendants liable to the commission in the amount of one million, three hundred

20

seventy-four thousand, five hundred ninety-two'dollars, and seventy cents

21

($1,374,592.70) for equitable monetary relief, less any amounts turned over to the

22

FTC pursuant to Section II of this order. Upon such reinstatement of the

23

monetary judgment, the court shall make an express determination that the

24

judgment shall become immediately due and payable by the settling defendants

25

and the commission shall be entitled to interest computed from the day of entry of
10

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 11 of 17

this order at the rate prescribed under 28 U.S.C. § 1961, as amended, on the
2

unpaid balance. The commission shall be permitted to execute on the judgment

3

immediately after the suspension is lifted and engage in discovery in aid of

4

execution.

5

c.

The settling defendants acknowledge and agree that: (1) this monetary judgment

6

is equitable monetary relief, solely remedial in nature, and not a fme, penalty,

7

punitive assessment, or forfeiture; (2) any proceedings instituted under this

8

section would be in addition to, and not in lieu of, any other civil or criminal

9

remedies as may be provided by law, including any other proceedings that tl!e

10

FTC may initiate to enforce this order; and (3) all money paid to satisfy the

11

monetary judgment is irrevocably paid for purposes of settlement between the

12

parties.

13

D.

Should this order be modified pursuant to this section, this order, in all other

14

respects, shall remain in full force and effect unless otherwise ordered by the

15

court.

16
17
18

IV.
LIFTING OF ASSET FREEZE
IT IS FURTHER ORDERED that the freeze of the settling defendants' assets set forth

19

in the preliminary injunction, entered by this court on March 25, 2011, shall be lifted to the

20

extent necessary to turn over the settling defendants' assets as required by Section II of this

21

order, and, shall be lifted permanently immediately upon completion ofthe turn-over.

22
23
24

25
11

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 12 of 17

V.
APPOINTMENT OF RECEIVER TO LIQUIDATE ASSETS
2

IT IS FURTHER ORDERED that Robb Evans & Associates, LLC, the receiver

3

appointed by prior orders of this court, is hereby appointed receiver for the purpose of taking the

4

necessary steps liquidate the assets of the settling defendants turned over pursuant to Section II

5

of this order, and pay any net proceeds to the FTC to satisfy the monetary judgment in this order.

6

In carrying out these duties, the receiver shall be the agent ofthis court, shall be accountable

7

directly to this court, and is authorized and directed to:

8
9

A. Perform all acts necessary to protect, conserve, preserve, and prevent waste or dissipation
of the Lyman assets until their sale;

10

B. Sell the Lynian assets without further order of the court;

11

C. Enter into agreements in connection with the reasonable and necessary performance of

12

the receiver's duty to sell the Lyman assets, including, but not limited to, the retention of

13

assistants, agents, or other professionals to assist in the sale of these assets; and

14

15

D. Distribute to the commission, without further order of the court, the funds received from
the sale of the Lyman assets.

16
17
18
19
20
21

22
23

VI.
COMPENSATION OF RECEIVER
IT IS FURTHER ORDERED that the receiver and all personnel hired by the receiver,
including counsel to the receiver and accountants, are entitled to reasonable compensation for the
performance of duties pursuant to this order from the assets no\V held by, in the possession or
control of, or which may be received by, the corporate defendants. The receiver shall apply to
the court for approval of specific amounts of compensation and expenses and must not increase
the hourly rates used as the bases for such fee applications without prior approval of the court.

24

25

12

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 13 of 17

VII.
ORDER ACKNOWLEDGMENTS

2
3

IT IS FURTHER ORDERED that the settling defendants obtain acknowledgments of

4

receipt of this order. Within seven (7) days of entry of this order, each settling defendant must

5

submit to the commission an acknowledgment.of receipt of this order sworn under penalty of .

6

perjury.

7
8
9

VIII.
COMPLIANCE MONITORING
IT IS FURTHER ORDERED that, for the purpose of monitoring the settling

10

defendants' compliance with this order, including the financial representations upon which part

11

of the judgment was suspended and any failure to transfer any assets as required by this order:

12

A. Within fourteen (14) days of receipt of a written request from a representative of the

13

commission, each settling defendant must: submit additional compliance reports or

14

other requested information, which must be sworn under penalty of perjury; appear

15

for depositions; and produce documents, for inspection and copying. The

16

commission is also authorized to obtain discovery, without further leave of court,

17

using any of the procedures prescribed by Federal Rules of Civil Procedure 29, 30

18

(including telephonic depositions), 31, 33, 34, 36,45, and 69, provided that the

19

settling defendants, after attempting to resolve a dispute without court action and for

20

good cause shown, may tile a motion with this court seeking an order including one ..

21

or more of the protections set forth in Rule 26(c).

22

B. For matters concerning this order, the commission is authorized to communicate

23

directly with each settling defendant. The settling defendants must permit

24

representatives of the commission to interview any employee or other person

25
13

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 14 of 17

J

affiliated with any settling defendant who has agreed to such an interview. The

2

person interviewed may have counsel present.

3
4

IX.
RETENTION OF JURISDICTION

5

IT IS FURTHER ORDERED that this court retains jurisdiction of this matter for

6

:purposes of construction, modification, and enforcement of this order.

7

8
9

IT IS SO ORDERED:

10
11

12
13

The Honorable James C. Mahan

14

UNITED STATES DISTRICT JUDGE
December ~ 2012
DATED; ________20,_________

15
16
17
18

19
20

21

22
23

24
25

14

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 15 of 17

Case 2:11-cv-00283-JCM -GWF Document 356

I

FOR THE RELIEF DEFENDANTS:

2

Filed 12/18/12 Page 16 of 17

S&T Time, LLC

:

Trac~~ember

Dared:

7-;<0/ -/2

6

7 .1.4_~~~~~~::""""......".,...,,....-,,

Dated:

:~~Managing Member

- . . - .... H·...:
' ...

9

10

11
12
13

Tracy Lyman
,

.

14
15

16
17

18
19
20

._------_-_'1£.,..;..-A..;..;,:._.-R.-"-. . . . . . _L._. . . . ._'-- Dated:
.. . _-"' . :..

21

JEFFREY WILLIS, ESQ.
CHAD R. FEARS, ESQ ..
CASEY G. PERKINS, EsQ.
SNELL & WILMBRL.L.P.

22

3883 HOWARD HUGHES PARKWAY, SUITE 1100
LAS VEGAS, NEVADA 89169

23

=1/25 fZAYZ...

Attorneys for defendants

24

2S
16

Case 2:11-cv-00283-JCM -GWF Document 356

Filed 12/18/12 Page 17 of 17

Certificate of Service
I hereby certify that on December 18, 2012, I electronically filed the foregoing document
with the clerk of the court using CM/ECF, which will send a notice of electronic filing to all
counsel of record.

/s/ Shameka L. Gainey
Shameka L. Gainey