UNITED STATES DISTRICT COURT
Plaintiff, Federal Trade Commission ("Commission"), having filed a complaint for a permanent injunction and other relief, including restitution to consumers, pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b, Sections 4(a) and 6(b) of the Telemarketing Act, 15 U.S.C. §§ 6103(a) and 6105(b), and Section 1367 of the Judicial Improvements Act of 1990, 28 U.S.C.§ 1367, having applied for an ex parte temporary restraining order and for an order to show cause why a preliminary injunction should not be granted pursuant to Rule 65(b) of the Federal Rules of Civil Procedure, Fed. R. Civ. P. 65(b), and the Court having considered the pleadings, declarations, exhibits, and memorandum filed in support thereof, it is the finding of this Court that:
For the purpose of this temporary restraining order, the following definitions shall apply:
I. CEASE AND DESIST
IT IS THEREFORE ORDERED that defendants, and their successors and assigns, whether acting directly or through any entity, corporation, subsidiary, division or other device and all persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, are hereby temporarily restrained and enjoined from:
II. ASSET FREEZE
IT IS FURTHER ORDERED that, except as stipulated by the parties or as directed by further order of the Court, defendants and their successors and assigns, whether acting directly or through any entity, corporation, subsidiary, division or other device and all persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, are hereby temporarily restrained and enjoined from transferring, converting, encumbering, selling, concealing, dissipating, disbursing, assigning, spending, withdrawing or otherwise disposing of any funds, real or personal property, accounts, contracts, membership or mailing (including "Email") lists, shares of stock or other assets, or any interest therein, wherever located, that are (a) owned or controlled by either defendant, in whole or in part; or (b) in the actual or constructive possession of either defendant, or (c) owned, controlled by or in the actual or constructive possession of any corporation, partnership or other entity, directly or indirectly owned, managed, controlled by or under common control with either defendant, including, but not limited to, any assets held by or for either defendant or their agent Lottonet at any bank, savings and loan institution, broker-dealer, escrow agent, title company, commodity trading company, precious metal dealer or other financial institution or depository of any kind. The assets affected by this section shall include both existing assets and assets acquired after issuance of this Order, and these defendants shall hold and account for these assets and all payments received by them, including, but not limited to, borrowed funds or property and gifts.
III. DUTIES OF ASSET HOLDERS
IT IS FURTHER
ORDERED that, except as stipulated by the parties or as directed by further order
of the Court, any financial or brokerage institution, business entity or person that
holds, controls or maintains custody of any account or asset, including any membership or
mailing (including "Email") lists, real or personal property of either
defendant, or has held, controlled or maintained custody of any account or asset of either
defendant, specifically including any account or asset maintained by defendants' agent
Lottonet, at any time since March 10, 1999, shall: IV. REPATRIATION OF FOREIGN ASSETS
IV. REPATRIATION OF FOREIGN ASSETS
FURTHER ORDERED that defendants shall: V. MAINTENANCE OF RECORDS
V. MAINTENANCE OF RECORDS
FURTHER ORDERED that defendants and their successors and assigns, whether acting
directly or through any entity, corporation, subsidiary, division or other device are
hereby temporarily restrained and enjoined from: VI. DEFENDANTS' FINANCIAL STATEMENTS
VI. DEFENDANTS' FINANCIAL STATEMENTS
IT IS FURTHER ORDERED that defendants shall, within four (4) business days from service of this Order, prepare and deliver to counsel for plaintiff completed financial statements on the forms attached to this Order. The completed financial statements shall be accurate as of the date of service of this Order upon the defendants.
VII. CONSUMER CREDIT REPORTS
IT IS FURTHER ORDEREDthat 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 plaintiff.
VIII. THIRD PARTY DISCOVERY
IT IS FURTHER ORDERED that the Commission is granted leave, at any time after service of this Order, to take the deposition of any person or entity for the purpose of discovering the nature, location, status, and extent of assets of defendants, and the location of documents reflecting the business transactions of defendants, and to demand the production of documents from any person or entity relating to the nature, status, and extent of the defendants' assets and the location of documents reflecting the business transactions of the defendants; forty-eight (48) hours notice shall be deemed sufficient for any such deposition and five (5) days notice shall be deemed sufficient for the production of any such documents. Expedited discovery for any other purpose shall not be allowed except by order of the Court for good cause shown. The limitations and conditions set forth in Fed. R. Civ. P. 30(a)(2) regarding subsequent depositions of an individual shall not apply to depositions taken pursuant to this paragraph.
IX. CREATION OF OTHER BUSINESSES
IT IS FURTHER ORDERED that defendants are hereby temporarily restrained and enjoined from creating, operating or controlling any business entity, whether newly-formed or previously inactive, including any partnership, limited partnership, joint venture, sole proprietorship or corporation, without first providing the Commission with a written statement disclosing: (1) the name of the business entity; (2) the address and telephone number of the business entity; (3) the names of the business entity's officers, directors, principals, managers, and employees; and (4) a detailed description of the business entity's intended activities.
X. NOTICE TO RELATED PERSONS AND ENTITIES
IT IS FURTHER ORDERED that defendants shall immediately provide a copy of this Order to each affiliate, subsidiary, division, sales entity, successor, assign, officer, director, employee, independent contractor, agent, attorney, and representative, and shall, within ten (10) days from the date of entry of this Order, provide plaintiff with a sworn statement that defendants have complied with this provision of the Order, which statement shall include the names and addresses of each such person or entity who received a copy of the Order.
XI. FILING OF PLEADINGS
IT IS FURTHER ORDEREDthat defendants shall file their opposition, including any declarations, exhibits, memoranda or other evidence on which defendants intend to rely, not less than three (3) business days before the hearing on the order to show cause why a preliminary injunction should not issue. Defendants shall serve copies of all these materials on plaintiff by delivery or facsimile to designated counsel for the Federal Trade Commission, at 915 Second Avenue, Suite 2896, Seattle, Washington 98174, prior to 4:00 p.m. on the day that it is filed.
XII. WITNESSES AT HEARINGS
IT IS FURTHER ORDEREDthat, if any party to this action intends to present the testimony of any witness at the hearing on a preliminary injunction in this matter, that party shall, at least three (3) business days prior to the scheduled date and time of hearing, file with this Court and serve on counsel for the other parties, a statement of the name, address, and telephone number of that witness, and either a summary of the witness' expected testimony or the witness' declaration or affidavit revealing the substance of the witness' expected testimony; and that, after the service of the statement, the served party thereafter shall have two (2) business days from the time of service of the witness information to provide information to the Court and to the serving party for any witness whose testimony the served party intends to present.
IT IS FURTHER ORDEREDthat the Temporary Restraining Order granted herein expires ten (10) days after entry unless, within that time, the Order, for good cause shown, is extended for an additional period not to exceed ten (10) days, or unless it is extended with the consent of the parties.
XIV. SHOW CAUSE
IT IS FURTHER ORDERED that the defendants shall appear before this Court on the _____ day of _______________, at __________ o'clock ___.m., to show cause, if any there be, why this Court should not enter a preliminary injunction, pending final ruling on the Complaint against these defendants, enjoining them from further violations of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a) and Section 310.3(a) of the Telemarketing Sales Rule, 16 C.F.R. § 310.3(a), continuing the relief provided herein and imposing whatever additional relief may be appropriate.
XV. SERVICE OF TRO
IT IS FURTHER ORDEREDthat copies of this Order may be served by first class mail, overnight delivery, facsimile or personally, by employees or agents of the FTC, upon any bank, savings and loan institution, credit union, financial institution, brokerage house, escrow agent, money market or mutual fund, title company, commodity trading company, common carrier, storage company, trustee, commercial mail receiving agency, mail holding or forwarding company, or any other person, partnership, corporation or legal entity that may be in possession of any records, assets, property or property right of any defendant, and other person, partnership, corporation or legal entity that may be subject to any provision of this Order.
XVI. RETENTION OF JURISDICTION
IT IS FURTHER ORDEREDthat this Court shall retain jurisdiction of this matter for all purposes.
Dated this ____ of______________________, 2000.