FTC Report Highlights Battle to Detect and Prosecute Violators of FTC-Obtained Court Orders

A Federal Trade Commission law enforcement initiative launched five years ago to detect and prosecute violators of FTC-obtained court orders has resulted in 27 civil and/or criminal contempt prosecutions. As a result of these prosecutions, 12 defendants have been convicted, serving a combined 28 years of incarceration or home detention, and almost $4 million in penalties, fines and redress have been ordered. A report released today highlighting the first five years of the FTC initiative called "Project Scofflaw" describes these and other results. The report also discusses Project Scofflaw's origins, model order language that helps the FTC monitor order compliance, and the ongoing cooperation and coordination between the FTC and the Department of Justice, which brings criminal contempt matters on the Commission's behalf.

According to Howard Beales, Director of the FTC's Bureau of Consumer Protection, "Project Scofflaw signals to would-be scofflaws that they risk incarceration if they violate FTC-obtained court orders. When we obtain an order, we expect defendants to comply and conform their behavior to the law. Those that don't can expect to hear from us."

The FTC's Bureau of Consumer Protection established "Project Scofflaw" in 1996 to institutionalize Commission procedures designed to detect recidivists and deter violations through civil and criminal contempt actions. As noted in the report, during the first five years, 27 defendants have been prosecuted criminally for violating preliminary or final orders, or civilly for violating final orders. DOJ and the U.S. Attorney's Offices have successfully prosecuted criminally 12 of these defendants for engaging in conduct that was banned; failing to post bonds; or making prohibited misrepresentations. In eight of these cases, an FTC staff attorney was designated as a Special Assistant U.S. Attorney to assist DOJ or the prosecuting U.S. Attorney's Office. Eleven defendants have been prosecuted for civil contempt, and four others are under indictment or awaiting sentencing.

The Commission vote authorizing staff to issue the Project Scofflaw Report was 5-0.

Copies of the Project Scofflaw Report are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC Matter No. P964910)