Federal Trade Commission v. Federal Check Processing, Inc. et al

Filing 188

JUDGMENT AND PERMANENT INJUNCTION. Signed by William M. Skretny, United States District Judge on 10/12/2016. (MEAL) - CLERK TO FOLLOW UP -

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
FEDERAL TRADE COMMISSION,
Plaintiff,

JUDGMENT
AND PERMANENT INJUNCTION
14-CV-122S

v.
FEDERAL CHECK PROCESSING, INC., et al.,
Defendants, and
EMPOWERED RACING LLC
Relief Defendant.

Plaintiff Federal Trade Commission (“FTC”) commenced this civil action on
February 24, 2014, pursuant to Section 13(b) of the Federal Trade Commission Act
(“FTC Act”), 15 U.S.C. § 53(b), and Section 814(a) of the Fair Debt Collection Practices
Act (“FDCPA”), 15 U.S.C. § 1692l(a). On motion by the FTC, on February 24, 2014,
this Court entered an ex parte temporary restraining order (“TRO”) with asset freeze,
appointment of a receiver, and other equitable relief against Defendants Federal Check
Processing, Inc., Federal Recoveries, LLC, Federal Processing, Inc., Federal
Processing Services, Inc., United Check Processing, Inc., Central Check Processing,
Inc., Central Processing Services, Inc., Nationwide Check Processing, Inc., American
Check Procesing, Inc. (a/k/a American Check Processing, Inc.), State Check
Processing, Inc., Check Processing, Inc., US Check Processing, Inc., Flowing Streams,
F.S., Inc., Mark Briandi, and William Moses, and Relief Defendant Empowered Racing
LLC. On March 5, 2014, this Court extended the TRO until March 20, 2014. On March

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17, this Court extended the TRO until March 24, 2014. On March 24, 2014, this Court
entered a Stipulated Preliminary Injunction against the Defendants.
On August 26, 2015, the FTC moved for summary judgment pursuant to Federal
Rule of Civil Procedure 56 on all counts against Defendants Federal Check Processing,
Inc., Federal Recoveries, LLC, Federal Processing, Inc., Federal Processing Services,
Inc., United Check Processing, Inc., Central Check Processing, Inc., Central Processing
Services, Inc., Nationwide Check Processing, Inc., American Check Procesing, Inc.
(a/k/a American Check Processing, Inc.), State Check Processing, Inc., Check
Processing, Inc., US Check Processing, Inc., Flowing Streams, F.S., Inc. (collectively,
the “Corporate Defendants”), Mark Briandi, William Moses (the Corporate Defendants,
Briandi and Moses, individually, collectively, or in any combination hereinafter referred
to as the “Defendants”), and the Relief Defendant, Empowered Racing LLC.
On April 13, 2016, the Magistrate Court recommended granting the FTC’s motion
for summary judgment in its entirety. (Dkt. No. 168). On August 12, 2016, the Court,
having considered the arguments, memoranda, and exhibits in support of the FTC’s
Motion for Summary Judgment, and all other pleadings and files in this action, including
the Defendants’ objections to the Report and Recommendation, ADOPTED the
Magistrate Court’s Report and Recommendation and GRANTED the FTC’s motion in its
entirety. (Dkt. 186.) Pursuant to the Order adopting the Magistrate Court’s Report and
Recommendation, the FTC filed a Proposed Final Order for Judgment and Permanent
Injunction with this Court (Dkt. 187), to which Defendants made no objection.
IT IS FURTHER ORDERED AS FOLLOWS:

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FINDINGS
The Court finds:
1.

This is an action by the FTC instituted under Section 13(b) of the FTC Act, 15
U.S.C. § 53(b), and Section 814(a) of the FDCPA, 15 U.S.C. § 1692l(a). The
Complaint seeks both permanent injunctive relief and equitable monetary relief
for the Defendants’ alleged deceptive acts or practices as alleged therein.

2.

The FTC has the authority under Sections 13(b) of the FTC Act, and Section 814
of the FDCPA, to seek the relief it has requested, and the Complaint states a
claim upon which relief can be granted against Defendants.

3.

This Court has jurisdiction over the subject matter of this case and has
jurisdiction over each Defendant pursuant to pursuant to 28 U.S.C. §§ 1331,
1337(a), and 1345, and 15 U.S.C. §§ 45(a), 53(b), and 1692l.

4.

Venue in the Western District of New York is proper 28 U.S.C. §§ 1391(b) and
(c), and 15 U.S.C. § 53(b).

5.

The FTC is an independent agency of the United States Government created by
statute.

15 U.S.C. §§ 41 et seq.

The FTC is charged, inter alia, with

enforcement of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits
unfair or deceptive acts or practices in or affecting commerce, and the FDCPA,
15 U.S.C. § 1692-1692p, which prohibits abusive, deceptive and unfair collection
practices. The FTC is authorized to initiate federal district court proceedings, by
its own attorneys, to enjoin violations of the FTC Act and the FDCPA, and to
secure such equitable relief as may be appropriate in each case, including

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equitable monetary relief such as disgorgement, restitution, and rescission of
contracts. 15 U.S.C. §§ 53(b), 56(a)(2)(A), 56(a)(2)(B), 57b, and 1692l(a).
6.

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

7.

Defendants are “debt collectors” collecting “debts” as those terms are defined in
section 803 of the FDCPA, 15 U.S.C. § 1692a.

8.

Defendants have received revenues of at least $10,852,396 as a direct result of
their violations of Section 5 of the FTC Act and the FDCPA.

9.

Defendants have operated as a common enterprise in engaging in violations of
the FTC Act and the FDCPA.

Defendants have shared office space and

employees, have been commonly controlled, and have participated in a common
scheme to deceive and abuse consumers.
10.

At all times material to the Complaint, acting alone or in concert with others,
Defendant William Moses formulated, directed, controlled, or participated in the
acts and practices of the Corporate Defendants.

He also had actual or

constructive knowledge of the violative acts and practices set forth in findings 1216 below. Acting alone or in concert with others, he directly participated in and
had actual or constructive knowledge of the deceptive and abusive acts and
practices of the Corporate Defendants, including the acts and practices alleged in
the FTC’s Complaint, and thus is jointly and severally liable for these acts and
practices.
11.

At all times material to the Complaint, acting alone or in concert with others,
Defendant Mark Briandi formulated, directed, controlled, or participated in the

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acts and practices of the Corporate Defendants.

He also had actual or

constructive knowledge of the violative acts and practices set forth in findings 1216 below. Acting alone or in concert with others, he directly participated in and
had actual or constructive knowledge of the deceptive and abusive acts and
practices of the Corporate Defendants, including the acts and practices alleged in
the FTC’s Complaint, and thus is jointly and severally liable for these acts and
practices.
12.

In numerous instances in connection with the collection of purported consumer
debts, Defendants have represented, directly or indirectly, expressly or by
implication, that: (a) consumers have committed check fraud or another criminal
act; (b) Defendants are going to have a consumer arrested or imprisoned; (c)
Defendants are affiliated with government entities, including law enforcement
agencies; (d) Defendants have filed, or intend to file, a lawsuit against a
consumer; or (e) Defendants are going to garnish a consumer’s wages, levy a
consumer’s bank account, or seize a consumer’s property. In truth and in fact, in
numerous instances: (a) consumers have not committed check fraud or another
criminal act; (b) Defendants cannot have the consumer arrested or imprisoned;
(c) Defendants are not affiliated with any government entities; (d) Defendants
have not filed, and do not have the authority or intention to file at the time, a
lawsuit against the consumer; and (e) non-payment of a purported debt will not
result in the garnishment, attachment, or seizure of the consumer’s wages or
property. Therefore, Defendants’ representations were false or misleading, and

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constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act,
15 U.S.C. § 45(a).
13.

In numerous instances, during telephone calls to consumers who previously had
told Defendants that they did not owe the debt that Defendants were attempting
to collect, Defendants have represented, directly or indirectly, expressly or by
implication, that the consumers owed the debt. In truth and in fact, in numerous
instances, Defendants have not had a reasonable basis for these representations
at the time the representations were made.

Therefore, Defendants’

representations constitute deceptive acts or practices in violation of section 5(a)
of the FTC Act, 15 U.S.C. § 45(a).
14.

In numerous instances, in connection with the collection of debts, Defendants,
directly or indirectly, have used false, deceptive, or misleading representations or
means, including, but not limited to: (a) falsely representing that the Defendants
are affiliated with the United States or any State, including government law
enforcement agencies; (b) falsely representing the character, amount, or legal
status of a debt, in violation of Section 807(2) of the FDCPA, 15 U.S.C.
§ 1692e(2); (c) falsely representing or implying that non-payment of a debt will
result in the arrest or imprisonment of a person or the seizure, garnishment, or
attachment of a person’s property or wages, when such action is not lawful or
when Defendants have no intention of taking such action; (d) threatening to take
action that is not lawful or that Defendants do not intend to take, such as filing a
lawsuit, in violation of Section 807(5) of the FDCPA, 15 U.S.C. § 1692e(5); (e)
falsely representing or implying that a consumer has committed any crime or

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other conduct in order to disgrace the consumer; (f) using a false representation
or deceptive means to collect or attempt to collect a debt, or to obtain information
concerning a consumer; and (g) failing to disclose in the initial communication
with a consumer that Defendants are debt collectors attempting to collect a debt
and that any information obtained will be used for that purpose, in violation of
Sections 807(1-2, 4-5, 7, 10-11) of the FDCPA, 15 U.S.C. § 1692e(1-2, 4-5, 7,
10-11).
15.

On numerous occasions, in connection with the collection of debts, Defendants
have communicated with third parties for purposes other than acquiring location
information about a consumer, without having obtained directly the prior consent
of the consumer or the express permission of a court of competent jurisdiction,
and when not reasonably necessary to effectuate a post judgment judicial
remedy, in violation of Section 805(b) of the FDCPA, 15 U.S.C. § 1692c(b).

16.

In numerous instances, in connection with the collection of debts, Defendants
have failed to provide consumers, either in the initial communication with a
consumer or in a written notice sent within five days after the initial
communication, with statutorily-required information about the debt and the right
to dispute the debt in violation of Section 809(a) of the FDCPA, 15 U.S.C.
§ 1692g(a).

17.

The Relief Defendant, Empowered Racing, has received, directly or indirectly,
funds and other assets from Defendants in the amount of $92,000 that are
traceable to funds obtained from consumers through Defendants’ deceptive,
abusive, and unlawful acts and practices described herein.

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18.

Relief Defendant, Empowered Racing, is not a bona fide purchaser with legal
and equitable title to funds or other assets obtained from consumers through
Defendants’ deceptive, abusive, and unlawful acts and practices described
herein. Relief Defendant will be unjustly enriched if it is not required to disgorge
the funds or the value of the benefit it received as a result of Defendants’
deceptive, abusive, and unlawful acts and practices.

19.

Relief Defendant, Empowered Racing, holds funds and assets in constructive
trust for the benefit of consumers harmed by Defendants.

20.

Based on the record before this Court, the Court finds that there is no genuine
issue as to any material fact, and the FTC is entitled to judgment as a matter of
law against Defendants pursuant to Federal Rule of Civil Procedure 56.

21.

Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to issue
injunctive and other relief against violations of the FTC Act and, in the exercise of
its equitable jurisdiction, to award redress and restitution to remedy the injury to
consumers, to order disgorgement of profits resulting from Defendants’ unlawful
acts or practices, and issue other ancillary equitable relief.

22.

The danger of future violations by Defendants justifies the issuance of injunctive
relief. Specifically, it is proper in this case to issue a permanent injunction that:
(a) permanently bans Defendants from engaging in debt collection activities or
assisting others who do; (b) prohibits Defendants from misrepresenting any fact
material to a consumer’s decision to purchase financial-related products or
services; (c) prohibits Defendants from disclosing, using, or benefitting from
customer information of any person that any Defendant obtained before the entry

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of this Order in connection with the provision of debt collection products or
services; and (d) provides such other ancillary relief as is necessary to assist the
FTC and the Court in monitoring Defendants’ compliance with such a permanent
injunction.
23.

Defendants have received at least $10,852,396 that was derived unlawfully from
payments by consumers as a direct result of Defendants’ violations of Section
5(a) of the FTC Act and the FDCPA.

24.

It is proper in this case to enter a monetary judgment in the amount of
$10,852,396 against Defendants, jointly and severally, as equitable monetary
relief in the form of restitution, rescission of contracts, and disgorgement for their
violations of Section 5 of the FTC Act and the FDCPA.

25.

Because these funds were fraudulently derived, Defendants did not acquire good
title to these funds. Accordingly, Defendants held those funds in constructive
trust on behalf of the injured consumers.

26.

This action and the relief awarded herein are in addition to, and not in lieu of,
other remedies that may be provided by law, including both civil and criminal
remedies.

27.

Pursuant to Federal Rule of Civil Procedure 65(d) the provisions of this Order are
binding upon each Defendant, their successors and assigns, and their officers,
agents, employees, and attorneys, and upon those persons or entities in active
concert or participation with them who receive actual notice of this Order by
personal service or otherwise.

28.

Entry of this Order is in the public interest.

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DEFINITIONS
1.

“Corporate Defendants” means Federal Check Processing, Inc. (a New York
corporation), Federal Recoveries, LLC (a New York limited liability company),
Federal Processing, Inc. (a New York corporation), Federal Processing Services,
Inc., (a New York corporation), United Check Processing, Inc. (a New York
corporation), Central Check Processing, Inc. (a New York corporation), Central
Processing Services, Inc. (a New York Corporation), Nationwide Check
Processing, Inc., a/k/a National Processing Services (a Colorado Corporation),
American Check Procesing, Inc., a/k/a American Check Processing, Inc. (a New
York corporation), State Check Processing, Inc. (a New York corporation), Check
Processing, Inc. (a New York corporation), US Check Processing, Inc., a/k/a U.S.
Check Processing, Inc. (a New York Corporation), Flowing Streams, F.S., Inc. (a
New York corporation), and their successors, assigns, affiliates, or subsidiaries,
and each of them by whatever names each might be known.

2.

“Credit repair services” means using any instrumentality of interstate commerce
or the mails to sell, provide, or perform any service, in return for the payment of
money or other valuable consideration, for the express or implied purpose of (i)
improving any consumer’s credit record, credit history, or credit rating, or (ii)
providing advice or assistance to any consumer with regard to any activity or
service described in clause (i).

3.

“Debt” means any obligation or alleged obligation to pay money arising out of a
transaction, whether or not such obligation has been reduced to judgment.

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4.

“Debt collection activities” means any activities of a debt collector to collect or
attempt to collect, directly or indirectly, a debt owed or due, or asserted to be
owed or due, another.

5.

“Debt collector” means any person who uses any instrumentality of interstate
commerce or the mails in any business the principal purpose of which is the
collection of any debts, or who regularly collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed or due another. The term
also includes any creditor who, in the process of collecting its own debts, uses
any name other than its own which would indicate that a third person is collecting
or attempting to collect such debts. The term also includes any person to the
extent such person receives an assignment or transfer of a debt in default solely
for the purpose of facilitating collection of such debt.

6.

“Defendants” means the Individual Defendants and the Corporate Defendants,
individually, collectively, or in any combination, and each of them by whatever
names each might be known.

7.

“Financial-related product or service” means any product, service, plan, or
program represented, expressly or by implication, to:
A.

provide to any consumer, arrange for any consumer to receive, or assist
any consumer in receiving, an extension of consumer credit;

B.

provide to any consumer, arrange for any consumer to receive, or assist
any consumer in receiving, credit repair services;

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C.

provide to any consumer, arrange for any consumer to receive, or assist
any consumer in receiving, any secured or unsecured debt relief product
or service;

8.

“Individual Defendants” means Mark Briandi and William Moses.

9.

“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.

10.

“Receiver” means William J. Brown.

11.

“Receivership Entities” means the Corporate Defendants, and any successors,
assigns, affiliates, and subsidiaries that conduct any business related to the
Defendants’ debt collection business and that the Receiver has reason to believe
are owned or controlled in whole or in part by any of the Defendants.

12.

“Relief Defendant” means Relief Defendant Empowered Racing LLC (a New
York limited liability company), and its successors, assigns, affiliates, or
subsidiaries, and each of them by whatever names each might be known.

13.

“Secured or unsecured debt relief product or service” means, with respect to
any mortgage, loan, debt, or obligation between a person and one or more
secured or unsecured creditors or debt collectors, any product, service, plan, or
program represented, expressly or by implication, to: (A) negotiate, settle, or in
any way alter the terms of payment or other terms of the mortgage, loan, debt, or
obligation, including but not limited to, a reduction in the amount of interest,
principal balance, monthly payments, or fees owed by a person to a secured or
unsecured creditor or debt collector; (B) stop, prevent, or postpone any mortgage

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or deed of foreclosure sale for a person’s dwelling, any other sale of collateral,
any repossession of a person’s dwelling or other collateral, or otherwise save a
person’s dwelling or other collateral from foreclosure or repossession; (C) obtain
any forbearance or modification in the timing of payments from any secured or
unsecured holder of any mortgage, loan, debt, or obligation; (D) negotiate,
obtain, or arrange any extension of the period of time within which the person
may (i) cure his or her default on the mortgage, loan, debt, or obligation, (ii)
reinstate his or her mortgage, loan, debt, or obligation, (iii) redeem a dwelling or
other collateral, or (iv) exercise any right to reinstate the mortgage, loan, debt, or
obligation or redeem a dwelling or other collateral; (E) obtain any waiver of an
acceleration clause or balloon payment contained in any promissory note or
contract secured by any dwelling or other collateral; or (F) negotiate, obtain, or
arrange (i) a short sale of a dwelling or other collateral, (ii) a deed-in-lieu of
foreclosure, or (iii) any other disposition of a mortgage, loan, debt, or obligation
other than a sale to a third party that is not the secured or unsecured loan holder.
The foregoing shall include any manner of claimed assistance, including, but not
limited to, auditing or examining a person’s application for the mortgage, loan,
debt, or obligation.
14.

The terms “and” and “or” shall be construed conjunctively or disjunctively as
necessary to make the applicable phrase or sentence inclusive rather than
exclusive.

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ORDER
BAN ON DEBT COLLECTION ACTIVITIES
I.

IT IS THEREFORE ORDERED that the Defendants, whether acting directly or
through an intermediary, are permanently restrained and enjoined from:
A.

Participating in debt collection activities; and

B.

Advertising, marketing, promoting, offering for sale, selling, or buying, any
consumer or commercial debt or any consumer information relating to a
debt.
PROHIBITED MISREPRESENTATIONS RELATING TO FINANCIAL
RELATED PRODUCTS OR SERVICES

II.

IT IS FURTHER ORDERED that the Defendants and their officers, agents,
employees, and attorneys, and those persons or entities in active concert or
participation with any of them who receive actual notice of this Order by personal
service, facsimile transmission, email, or otherwise, whether acting directly or
through any corporation, subsidiary, division, or other device, in connection with
the advertising, marketing, promotion, offering for sale or sale of any financialrelated product or service, are hereby permanently restrained and enjoined from:
A.

Misrepresenting or assisting others in misrepresenting, expressly or by
implication, any material fact, including but not limited to:
1.

The terms or rates that are available for any loan or other extension
of credit;

2.

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

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3.

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

4.

Any aspect of any secured or unsecured debt relief product or
service, including but not limited to, the amount of savings a
consumer will receive from purchasing, using, or enrolling in such
secured or unsecured debt relief product or service; the amount of
time before which a consumer will receive settlement of that
consumer’s debts; or the reduction or cessation of collection calls;

5.

That a consumer will receive legal representation;

6.

That any particular outcome or result from a financial-related
product or service is guaranteed, assured, highly likely or probable,
or very likely or probable;

7.

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 provided to the consumer; and

8.

Any other fact material to consumers concerning any financialrelated product or service, such as: the total costs; any material
restrictions, limitations, or conditions; or any material aspect of its
performance, efficacy, nature, or central characteristics; and

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B.

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

PROHIBITION AGAINST DISCLOSING CONSUMER INFORMATION
III.

IT IS FURTHER ORDERED that the Defendants and their officers, agents,
employees, and attorneys, and those persons or entities in active concert or
participation with any of them who receive actual notice of this Order by personal
service, facsimile transmission, email, or otherwise, whether acting directly or
through any corporation, subsidiary, division, or other device, are permanently
restrained and enjoined from directly or indirectly:
A.

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

B.

Disclosing, using, or benefitting from consumer 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 that any Defendant obtained prior to entry
of this Order in connection with the collection or attempted collection of
any debt.

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C.

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

D.

Provided, however, that consumer 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.
MONETARY RELIEF

IV.

IT IS FURTHER ORDERED that
A.

Judgment in the amount of TEN MILLION, EIGHT HUNDRED FIFTYTWO

THOUSAND,

THREE

HUNDRED

NINETY-SIX

DOLLARS

($10,852,396) is entered in favor of the FTC against Defendants as
equitable monetary relief, with post-judgment interest at the legal rate.
Defendants are ordered to pay to the FTC $10,852,396. Such payment
must be made within fifteen (15) business days of entry of this Order by
electronic fund transfer in accordance with the instructions provided by a
representative of the FTC.

The monetary judgment set forth in this

Section IV is enforceable against any asset owned jointly by, on behalf of,
for the benefit of, or in trust by or for, any Defendant, whether held as
tenants in common, joint tenants with or without the right of survivorship,
tenants by the entirety, and/or community property.
B.

Judgment in the amount of NINETY-TWO THOUSAND DOLLARS
($92,000) is entered in favor of the FTC against Relief Defendant as
equitable monetary relief, with post-judgment interest at the legal rate.

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Relief Defendant is ordered to pay to the FTC $92,000. Such payment
must be made within fifteen (15) business days of entry of this Order by
electronic fund transfer in accordance with the instructions provided by a
representative of the FTC.

The monetary judgment set forth in this

Section IV is enforceable against any asset owned jointly by, on behalf of,
for the benefit of, or in trust by or for, the Relief Defendant, whether held
as tenants in common, joint tenants with or without the right of
survivorship, tenants by the entirety, and/or community property.
C.

All funds paid pursuant to this Order shall be deposited into a fund
administered by the FTC or its agents to be used for equitable relief,
including, but not limited to, consumer redress, any attendant expenses
for the administration of redress, and to satisfy any Court authorized
payments to the Permanent Receiver. In the event that direct redress to
consumers is wholly or partially impracticable, or funds remain after
redress is completed, the FTC may apply any remaining funds for such
other equitable relief (including consumer information remedies) as it
determines to be reasonably related to Defendants’ practices alleged in
the Complaint.

Any funds not used for such equitable relief shall be

deposited to the United States Treasury as equitable disgorgement.
Defendants shall have no right to challenge the FTC’s choice of remedies
under this Section. Defendants shall have no right to contest the manner
of distribution chosen by the FTC.

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D.

Defendants relinquish all dominion, control, and title to the funds paid to
the fullest extent permitted by law. Defendants shall make no claim to or
demand for return of the funds, directly or indirectly, through counsel or
otherwise.

E.

The judgment entered pursuant to this Section is equitable monetary
relief, solely remedial in nature, and not a fine, penalty, punitive
assessment, or forfeiture.

F.

In accordance with 31 U.S.C. § 7701, Defendants are hereby required,
unless they have done so already, to furnish to the FTC their taxpayer
identifying numbers and/or social security numbers, which shall be used
for the purposes of collecting and reporting on any delinquent amount
arising out of this Order.

G.

Pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. §
1681b(1), any consumer reporting agency may furnish a consumer report
concerning any Defendant to the FTC, which shall be used for purposes of
collecting and reporting on any delinquent amount arising out of this
Order.
TURNOVER OF FROZEN ASSETS

V.

IT IS FURTHER ORDERED that:
A.

In partial satisfaction of the monetary judgment against Defendants set
forth in Section IV of this Order, any financial or brokerage institution,
escrow agent, title company, commodity trading company, business entity,
or person, whether located within the United States or outside the United

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States, that holds, controls or maintains accounts or assets of, on behalf
of, or for the benefit of, any Defendant shall turn over such account or
asset to the FTC within five (5) business days of receiving notice of this
Order by any means, including but not limited to via facsimile.

In

particular:
1.

All financial institutions holding accounts in the name of, or for the
benefit of, any Receivership Entity within ten (10) business days
from receipt of a copy of this Order, transfer to the Receiver or his
designated agent all funds, if any, in such accounts, including, but
not limited to:
a.

Key Bank, N.A., shall, within ten (10) business days from
receipt of a copy of this Order, transfer to the Receiver or his
designated agent all funds held in account number
xxxxxxxx3216 in the name of William J. Brown, as Receiver
for Federal Recoveries LLC;

b.

RBS Citizens Bank, N.A., shall, within ten (10) business
days from receipt of a copy of this Order, transfer to the
Receiver or his designated agent, all funds, if any, in account
numbers xxxx4466 in the name of Federal Recoveries, LLC,
xxxx4695 in the name of Federal Processing Inc., xxxx5313
in the name of Federal Processing Inc., xxxx2614 in the
name of Flowing Streams FS Inc., xxxx7188 in the name of
Promised Land Properties, and xxxx6823 in the name of

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Check Processing Inc.

These funds shall be considered

assets of the receivership estate.
2.

RBS Citizens Bank, N.A., shall, within ten (10) business days from
receipt of a copy of this Order, transfer to the FTC or its designated
agent all funds, if any, in account numbers xxxx7481 in the name of
William D. Moses, xxxx1316 in the name of William D. Moses, and
xxxx6491 in the name of William D. Moses.

3.

Electronic Merchant Systems shall, within ten (10) business days
from receipt of a copy of this Order, transfer to the Receiver or his
designated agent all funds held in account number xxxx1907 in the
name of Federal Processing. These funds shall be considered
assets of the receivership estate.

4.

Billing Tree shall, within ten (10) business days from receipt of a
copy of this Order, transfer to the Receiver or his designated agent
all funds held in account numbers xxxx3164 in the name of Federal
Recoveries, LLC, and xxxx6310 in the name of Federal Recoveries,
LLC. These funds shall be considered assets of the receivership
estate.

5.

Merchant-e Solutions shall, within ten (10) business days from
receipt of a copy of this Order,

transfer to the Receiver or his

designated agent all funds held in account number xxxx6310 in the
name of US Federal Recoveries. These funds shall be considered
assets of the receivership estate.

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6.

M&T Bank shall, within ten (10) business days from receipt of a
copy of this Order, transfer to the FTC or its designated agent all
funds held in account number xxxx8213 in the name of William D.
Moses.

7.

Lake Shore Savings Bank shall, within ten (10) business days from
receipt of a copy of this Order, transfer to the FTC or its designated
agent all funds held in account number xxxx7839 in the name of
William D. Moses.

8.

KeyBank, N.A., shall, within ten (10) business days from receipt of
a copy of this Order, transfer to the FTC or its designated agent all
funds held in account number xxxx8840 in the name of William D.
Moses.

9.

RBS Citizens Bank, N.A., shall, within ten (10) business days from
receipt of a copy of this Order, transfer to the Receiver or his
designated agent all funds, if any, in account numbers xxxx2681 in
the name of Empowered Racing, LLC.

B.

In order to partially satisfy the monetary judgment set forth in Section IV of
this Order, Defendant Mark Briandi shall, within ten (10) business days
from receipt of a copy of this order, surrender to the Receiver in the
manner the Receiver reasonably requests title to the 2014 Mercedes-Benz
GL450 listed on the March 21, 2014 financial statement that Briandi
provided to the FTC. The vehicle shall be considered an asset of the
receivership estate.

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C.

In order to partially satisfy the monetary judgment set forth in Section IV of
this Order, Defendant William Moses shall, within ten (10) business days
from receipt of a copy of this order, surrender to the Receiver in the
manner the Receiver reasonably requests title to the following vehicles
listed on the March 20, 2014 financial statement that Defendant Moses
provided to the FTC: (i) the 2011 Chevrolet Camaro; (ii) the 2013 Toyota
Tundra; and (iii) the Motorcycle listed as having an acquisition cost of
$8500 and a current value of $5000. The vehicles shall be considered
assets of the receivership estate.

D.

In order partially to satisfy the monetary judgment set forth in Section IV of
this Order, each Defendant shall provide an accounting of, and turn over
to the FTC, within fifteen (15) business days following the entry of this
Order, up to the amount of the monetary judgment, all assets, real and
personal, where ever located within the United States held either: (a) by
such Defendant, (b) for such Defendant’s benefit, or (c) under such
Defendant’s direct or indirect control, jointly or singly, including, but not
limited to, all assets placed in trust by, for, for the benefit of, on account of,
or on behalf of any Defendant.

E.

Defendants shall cooperate with the Receiver in the preparation and
completion of any tax returns for the Receivership Entities which the
Receiver may file.

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CONTINUATION OF RECEIVER
VI.

IT IS FURTHER ORDERED that William J. Brown shall continue as a permanent
receiver over the Receivership Defendants with full powers of a permanent
receiver, including but not limited to those powers set forth in the Stipulated
Preliminary Injunction entered by the Court in this matter on March 24, 2014, and
including full liquidation powers.

The Receiver is directed to wind up the

Receivership Defendants and liquidate all assets within 120 days after entry of
this Order, but any party or the Receiver may request that the Court extend the
Receiver’s term for good cause. Upon termination of the receivership and final
payment to the Receiver of all approved fees, costs, and expenses, the Receiver
shall turn over to the FTC or its designated agent all remaining assets in the
receivership estate.
ORDER ACKNOWLEDGMENTS
VII.

IT IS FURTHER ORDERED that the Defendants obtain acknowledgments of
receipt of this Order:
A.

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

B.

For 5 years after entry of this Order, the Individual Defendants for any
business that any of the Individual Defendants, individually or collectively
with any other Defendant, is the majority owner or directly or indirectly
controls, and the Receivership Defendants, must deliver a copy of this
Order to: (1) all principals, officers, directors, and LLC managers and

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members; (2) all employees, agents, and representatives who participate
in conduct related to the subject matter of the Order; and (3) any business
entity resulting from any 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. To all others, delivery must occur before
they assume their responsibilities.
C.

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

VIII.

IT IS FURTHER ORDERED that the Defendants make timely submissions to the
FTC:
A.

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

Each Defendant must: (a) identify the primary physical, postal, and
email and telephone number, as designated points of contact,
which representatives of the FTC may use to communicate with
such Defendant; (b) identify all of that 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 products and services offered, the means of
advertising, marketing, and sales, and the involvement of any other
Defendant (which the Individual Defendant must describe if he

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knows or should know due to his own involvement); (d) describe in
detail whether and how that 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 FTC;
2.

Additionally, each Individual Defendant must:

(a) identify all

telephone numbers and physical, postal, email, and Internet
addresses, including all residences; (b) identify all business
activities, including any business for which the Individual Defendant
performs services whether as an employee or otherwise and any
entity in which the Individual Defendant has any ownership interest;
and (c) describe in detail the Individual Defendant’s involvement in
each

such

business,

including

title,

role,

responsibilities,

participation, authority, control, and any ownership.
B.

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

Each Defendant must report any change in: (a) any designated
point of contact; or (b) the structure of any Corporate Defendant or
any entity that such Defendant has any ownership interest in or
directly or indirectly controls that may affect compliance obligations
arising under this Order, including:

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creation, merger, sale, or

dissolution of the entity or any subsidiary, parent, or affiliate that
engages in any acts or practices subject to this Order.
2.

Additionally, each Individual Defendant must report any change in:
(a) name, including aliases or fictitious name, or residence address;
or (b) title or role in any business activity, including any business for
which the Individual Defendant performs services whether as an
employee or otherwise and any entity in which the Individual
Defendant has any ownership interest, and identify its name,
physical address, and Internet address, if any.

C.

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

D.

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

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DC

20580.

The subject line must begin:

FTC v. Federal Check

Processing, et al., Matter Number X140029.
RECORDKEEPING
IX.

IT IS FURTHER ORDERED that the Defendants must create certain records for
20 years after entry of the Order, and retain each such record for 5 years.
Specifically, the Corporate Defendants and the Individual Defendants for any
business in which the Individual Defendants, individually or collectively with any
other Defendant, is a majority owner or directly or indirectly controls, must
maintain the following records:
A.

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

B.

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

name, addresses, and

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

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 FTC; and

E.

A copy of each advertisement or other marketing material.

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COMPLIANCE MONITORING
X.

IT IS FURTHER ORDERED that, for the purpose of monitoring the Defendants’
compliance with this Order, including the financial representations upon which
part of the judgment was suspended 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
FTC, each Defendant must: submit additional compliance reports or other
requested information, which must be sworn under penalty of perjury;
appear for depositions; and produce documents, for inspection and
copying. The FTC 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 FTC is authorized to communicate
directly

with

each

Defendant.

The

Defendants

must

permit

representatives of the FTC 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 FTC may use all other lawful means, including posing, through its
representatives, as consumers, suppliers, or other individuals or entities,
to the Defendants or any individual or entity affiliated with the Defendants,
without the necessity of identification or prior notice. Nothing in this Order

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limits the FTC’s lawful use of compulsory process, pursuant to Sections 9
and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1.
D.

Upon written request from a representative of the FTC, any consumer
reporting agency must furnish consumer reports concerning the Individual
Defendants, pursuant to Section 604(1) of the Fair Credit Reporting Act,
15 U.S.C. §1681b(a)(1).
ENTRY OF JUDGMENT

XI.

IT IS FURTHER 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 this Order as a final judgment as to defendants Federal
Check Processing, Inc., Federal Recoveries, LLC, Federal Processing, Inc.,
Federal Processing Services, Inc., United Check Processing, Inc., Central Check
Processing, Inc., Central Processing Services, Inc., Nationwide Check
Processing, Inc., a/k/a National Processing Services, American Check
Procesing, Inc., a/k/a American Check Processing, Inc., State Check Processing,
Inc., Check Processing, Inc., US Check Processing, Inc., a/k/a U.S. Check
Processing, Inc., Flowing Streams, F.S., Inc., Mark Briandi, and William Moses.

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RETENTION OF JURISDICTION
XII.

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
purposes of construction, modification, and enforcement of this Order.
IT IS SO ORDERED, this 12th day of October, 2016.

/s/William M. Skretny
William M. Skretny
United States District Judge

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