JEFFREY KLURFELD
Regional Director
JEROME M. STEINER, JR.
Attorney

Federal Trade Commission
901 Market St., Suite 570
San Francisco, CA 94103
(415) 356-5270 (voice)
(415) 356-5284 (facsimile)

BLAINE T. WELSH
Assistant United States Attorney
701 E. Bridger Avenue, Suite 800
Las Vegas, NV 89101
(702) 388-6336

UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

FEDERAL TRADE COMMISSION,

Plaintiff,

v.

FANS, INC., et al.,

Defendants.

CV-S-96-191-LDG (RJJ)

STIPULATED FINAL JUDGMENT AND ORDER
FOR PERMANENT INJUNCTION

Plaintiff Federal Trade Commission ("FTC"), having filed its complaint against defendants FANS, Inc., Michael Starrion, and Rena Warden ("Warden") ("defendants"), pursuant to Sections 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), charging defendants with violations of Section 5(a) of the FTC Act, 15 U.S.C.§ 45(a), and of the Telemarketing Sales Rule, 16 C.F.R. Part 310; and

Defendant Warden's motion to set aside the default judgment against her having been granted; and

Plaintiff, by and through its counsel, and defendant Warden, appearing without counsel, having agreed to entry of this Stipulated Final Judgment and Order for Permanent Injunction as to Defendant Rena Warden ("Order") by this Court, without trial or adjudication of any issue of fact or law, and without an admission of any allegation or offense charged in the complaint; and

The said parties having requested the Court to enter this Order, it is therefore ORDERED, ADJUDGED, and DECREED as follows:

FINDINGS

1. This Court has jurisdiction over defendant Warden and the subject matter of this action, and the complaint states a claim upon which injunctive relief may be granted under Sections 5(a) and 13(b) of the FTC Act, 15 U.S.C. §§ 45(a) and 53(b);
2. Defendant Warden has entered into this Order freely and without coercion;
3. Defendant Warden, freely and without coercion, has waived all rights to appeal or otherwise challenge or contest the validity of this Order, and defendant Warden waives any claim under the Equal Access to Justice Act, 28 U.S.C. § 2412, amended by Pub. L. 104-121, 110 Stat. 847, 863-64 (1996);
4. Defendant Warden acknowledges that this Order is expressly premised upon the financial disclosure document provided by her, as more fully described in Paragraph V of this Order; and

5. Entry of this Order is in the public interest.

DEFINITIONS

I.

IT IS THEREFORE ORDERED that for purposes of this Order, the following definitions shall apply:

a. "Telephone premium promotion" means any contact with a consumer by telephone, whether initiated by defendants or by the consumer, soliciting a charitable donation, and offering a premium incentive item or a chance or opportunity to receive a premium incentive item;

b. "Premium incentive item" means any article of merchandise, including but not limited to any award, bonus, gift, prize or any other item offered to consumers to induce a charitable donation;

c. "Charity" means any business, entity, corporation, person or other device that defendants represent to donors or potential donors -- in any manner, directly or by implication -- to be a non-profit entity, pursuant to the Internal Revenue Code or otherwise, or to have a charitable purpose;

d. "Charitable donation" means money, or anything else of value, that any person gives, or in any way transfers, to defendants or charities, and which defendants represent to any person -- in any manner, directly or by implication -- will be provided, in whole or in part, to a charity or for charitable purposes;

e. "Prize promotion" means any telemarketing sweepstakes or other chance promotion or any contest, game of chance or skill in telemarketing, whether or not in connection with the sale of any good or service, where the chance of obtaining a premium incentive item, prize, award, bonus, gift or other item of value is offered. For purposes of this definition, chance exists if a person is guaranteed to receive an item and, at the time of the offer or purported offer, the telemarketer does not identify the specific item that the person will receive;

f. "Telemarketer" means any person who, in connection with telemarketing, initiates or receives telephone calls to or from a customer;

g. "Telemarketing" means a plan, program, or campaign which is conducted to induce the purchase of goods or services by use of one or more telephones and which involves more than one interstate telephone call whether or not covered by the Telemarketing Sales Rule, 16 C.F.R. Part 310. The term does not include the solicitation of sales through the mailing of a catalog which: contains a written description or illustration of the goods or services offered for sale; includes the business address of the seller; includes multiple pages of written material or illustrations; and has been issued not less frequently than once a year, when the person making the solicitation does not solicit customers by telephone but only receives calls initiated by customers in response to the catalog and during those calls takes orders only without further solicitation. For purposes of the previous sentence, the term "solicitation" does not include providing the customer with information about, or attempting to sell, any other item included in the same catalog which prompted the customer's call or in a substantially similar catalog;

h. "Recovery service" means any service provided by any individual or business purportedly to obtain a refund or otherwise recover money or any other item of value for a consumer who paid money in a previous telemarketing transaction, or to recover a premium incentive item for a consumer who never received a promised premium incentive item; and

i. "Assisting and facilitating" means to: (1) supply or arrange to supply any good, service, or premium incentive item; (2) ship or arrange to ship any documentation, good or premium incentive item; (3) perform order verification; (4) perform customer service functions, including, but not limited to, receiving or responding to consumer complaints or inquiries, or accepting or handling any return of another person's goods; (5) formulate or provide or arrange for the formulation or provision of any telephone script, or any other training or promotional material; (6) formulate or mail, or arrange for the formulation or mailing, of any solicitation for any telephone premium promotion, prize promotion, or recovery service; (7) provide or arrange for the provision of credit card merchant accounts or otherwise arranging for receipt of consumers' payments for any telephone premium promotion, prize promotion, or recovery service; (8) provide or arrange for the provision of names of prospective customers ("leads"); or (9) arrange for affiliation with any purportedly non-profit organization.

PRACTICES ENJOINED

II.

IT IS FURTHER ORDERED that, in connection with telemarketing, defendant Warden is permanently enjoined from making, directly or by implication, orally or in writing, any material misrepresentation.

III.

IT IS FURTHER ORDERED that defendant Warden is permanently enjoined from violating any provision of the Telemarketing Sales Rule, 16 C.F.R. Part 310.

IV.

IT IS FURTHER ORDERED that the FTC's agreement to this Order without the payment by defendant Warden of redress to injured purchasers of defendants' services is expressly premised upon the truthfulness, accuracy and completeness of the statement of defendant Warden contained in the Financial Statement executed by her on October 27, 1997, which contains material information upon which the FTC relied in negotiating and agreeing to this Order. If, upon motion by the FTC, this Court finds that this financial reporting document failed to disclose any material asset, or materially misrepresented the value of any asset, or contained any other material misrepresentation or omission, the FTC may request that the Order herein be reopened for the purpose of providing for the payment by defendant Warden of redress to purchasers of defendants' services; provided, however, that in all other respects this Order shall remain in full force and effect unless otherwise ordered by the Court; and provided further, that proceedings instituted under this Paragraph are in addition to and not in lieu of any other civil or criminal remedies as may be provided by law, including any other proceedings the FTC may initiate to enforce this Order. Solely for the purposes of reopening and enforcing this Order under this Paragraph, defendant Warden waives any right to contest any of the allegations in the complaint filed in this matter.

MONITORING AND NOTIFICATION REQUIREMENTS

V.

IT IS FURTHER ORDERED that, within seven (7) days after the date of entry of this Order, defendant Warden shall notify the FTC, in writing, of her current residence address and employment status, including the name and address of her current employer, and for a period of five (5) years from the date of entry of this Order, defendant Warden shall give written notice to the FTC of her affiliation or employment with any business engaged in telemarketing within twenty-one (21) days of the commencement of such affiliation. Such notice shall include the new business' name and address, a statement of the nature of the business and a statement of her duties and responsibilities in connection with the business.

VI.

IT IS FURTHER ORDERED that for a period of five (5) years from the date of entry of this Order, for purposes of determining or securing compliance with this Order, defendant Warden shall, in connection with the business of telemarketing, as defined above:

A. Permit duly authorized representatives of the FTC access during normal office hours to her office(s) and to the offices of any telemarketing business owned, managed or controlled by her, to inspect and copy any document relating to compliance with this Order; and

B. Permit authorized representatives of the FTC to interview defendant Warden and her employees (who may have counsel present) regarding any matter contained in this Order.

Without limiting other lawful remedies available to it, the FTC shall make a written request and provide reasonable notice prior to obtaining such access, and such inspection or interview shall occur without restraint or interference from defendant Warden; and provided further, that the FTC may otherwise monitor defendant Warden's compliance with this Order by all lawful means available, including the taking of depositions and the use of investigators posing as consumers and suppliers.

VII.

IT IS FURTHER ORDERED that, within thirty (30) days after the date of entry of this Order, and annually thereafter for a period of five (5) years, defendant Warden shall provide a verified written report to the FTC setting forth in detail the manner and form in which she has complied with and is complying with this Order.

VIII.

IT IS FURTHER ORDERED that all notices and reports required of defendant Warden by this Order shall be made in writing to the San Francisco Regional Office, Federal Trade Commission, 901 Market Street, Suite 570, San Francisco, California 94103.

OTHER PROVISIONS

IX.

IT IS FURTHER ORDERED that each party shall bear its own costs and attorney's fees.

//

//

//

//

//

//

//

//

//

//

//

X.

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for all purposes, including construction, modification, or enforcement of this Order.

IT IS SO ORDERED.

____________________________
PHILIP M. PRO
United States District Judge

DATED:______________________

The parties hereby stipulate and agree to the terms and conditions set forth above and consent to entry of this Stipulated Final Judgment and Permanent Injunction as to Defendant Rena Warden.