Stipulated Final Judgment and Order for Permanent Injunction as to Defendant Scott Gunn

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

FEDERAL TRADE COMMISSION,

Plaintiff,

RAYMOND URSO, et al

Defendants.

Case No. 97-2680
CIV-Ungaro-Benages
Magistrate Judge Bandstra

Stipulated Final Judgment and Order for Permanent Injunction as to Defendant Scott Gunn

On August 19, 1997, plaintiff, the Federal Trade Commission ("FTC" or "Commission"), filed its complaint for a permanent injunction and other relief in this matter, pursuant to Sections 13(b) and 19(a) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b(a), charging defendant Scott Gunn, aka Scott Goodson, aka Scott Gates, ("Stipulating Defendant") with violations of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). On August 19, 1997, this Court issued an ex parte Temporary Restraining Order pursuant to Rule 65 of the Federal Rules of Civil Procedure, Fed. R. Civ. P. 65, that, inter alia, froze the Stipulating Defendant's assets. On September 15, this Court entered a stipulated preliminary injunction against the Stipulating Defendant.

The Commission, by and through its counsel, and the Stipulating Defendant, by and through his counsel, have agreed and stipulated to the entry of this Stipulated Final Judgment and Order for Permanent Injunction ("Final Order") by this Court. Therefore, the Stipulating Defendant and the Commission having requested the Court to enter this Final Order, the Court makes the following findings of fact and orders the following:

FINDINGS

This Court has jurisdiction over the subject matter of this case and of the parties hereto;
The Commission's complaint states a claim upon which relief may be granted against the Stipulating Defendant under Section 5(a) of the FTC Act, 15 U.S.C. § 45(a);
The Stipulating Defendant waives any claim he may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action;
The Stipulating Defendant has waived all rights to seek appellate review or otherwise challenge or contest the validity of this Final Order;
Entry of this Final Order is in the public interest.

DEFINITIONS

For purposes of this Final Order, the following definitions shall apply:

"Stipulating Defendant" means Scott Gunn, aka Scott Goodson, aka Scott Gates, and his successors, assigns, affiliated entities, agents, servants, employees, and those persons in active concert or participation with him who receive actual notice of this Final Order by personal service or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device.
"Defendants" means the individuals and corporate entities named in connection with FTC v. Raymond Urso et al., CIV 97-2780, (S.D. Fla. 1997). These are Raymond Urso, Bernard Koenig, Marcia Koenig, Jeffrey Shoobs, David Bennett, Scott Gunn, Susan Perkins, Bridgeport & Associates, Inc., Prestige Advertising, Inc. dba Prestige Fragrances, Inc., National Bureau of Better Business, Inc., and Maria K Associates, Inc.
"Business opportunity" or "Business venture" means any written or oral business arrangement, however denominated, whether or not covered by the Franchise Rule, which consists of the payment of any consideration for: a) the right or means to offer, sell, or distribute goods or services (whether or not identified by a trademark, service mark, trade name, advertising, or other commercial symbol); and b) assistance to any person in connection with or incident to the establishment, maintenance, or operation of a new business or the entry by an existing business into a new line or type of business.
“Franchise,” "Franchisee," and "Franchisor" are defined as in Section 436.2(a) of the FTC’s Trade Regulation Rule entitled "Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures" ("Franchise Rule"), 16 C.F.R. § 436.2(a), a copy of which is attached to this Final Order.
"Assets" means all real and personal property of the Stipulating Defendant, or held for the benefit of the Stipulating Defendant, including but not limited to "goods," "instruments," "equipment," "fixtures," "general intangibles," "inventory," "checks," or "notes," (as these terms are defined in the Uniform Commercial Code), and all cash, wherever located.
"Telemarketing" is defined in Section 310.2(u) of the Telemarketing Sales Rule, 16 C.F.R. § 310.2(u), a copy of which is attached to this Final Order.

ORDER

CONDUCT PROHIBITIONS

IT IS THEREFORE ORDERED that the Stipulating Defendant is hereby permanently restrained and enjoined from engaging, participating, or assisting in any manner or in any capacity whatsoever in the business of telemarketing, whether directly, indirectly, in concert with others, or through any intermediary, business entity, or device.

II.

IT IS FURTHER ORDERED that the Stipulating Defendant is hereby permanently restrained and enjoined from engaging, participating or assisting in any manner or in any capacity whatsoever in the promoting, marketing, offering for sale, or selling of any business opportunities, franchises, or business ventures, whether directly, indirectly, in concert with others, or through any intermediary, business entity, or device.

III.

IT IS FURTHER ORDERED that, in connection with the promotion, marketing, offering for sale, or sale of any goods or services, the Stipulating Defendant is hereby permanently restrained and enjoined from making, or assisting others in making, either orally or in writing, expressly or by implication, any false or misleading statements or representations of material fact to any person, including but not limited to representations about the following:

A. The income, profits, or sales volume a purchaser can achieve through the use of the goods or services;

B. The income, profits, or sales volume achieved by other consumers who have used the goods or services;

C. The cost of the goods or services or the cost to use the goods or services;

D. The length of time that it may or will take to recoup the cost of the goods or services;

E. The Stipulating Defendant's true identity in the course of his business dealings or in publicly filed documents, including but not limited to the use of any fictitious, false, or assumed title or name, other than his own proper name.

IV.

IT IS FURTHER ORDERED that Stipulating Defendant is further permanently restrained and enjoined from operating corporate defendants Bridgeport & Associates, Inc. (“Bridgeport”), Prestige Advertising, Inc. dba Prestige Fragrances (“Prestige”), Maria K Associates, Inc. (“Maria K”), and the National Bureau of Better Business, Inc. (“NBBB”). The Stipulating Defendant is further permanently restrained and enjoined from engaging in any business activities with any other individual named as a defendant in the Commission's action, which includes Raymond Urso, Bernard Koenig, Marcia Koenig, Jeffrey Shoobs, David Bennett, and Susan Perkins, as well as any former or current individuals employed by these defendants, including but not limited to Ed Jacobs, Mike Barth, Mike Noble, and Giovanni Mastromonaco.

IT IS FURTHER ORDERED that the Stipulating Defendant is further permanently restrained and enjoined from selling, renting, leasing, transferring, or otherwise disclosing the name, address, telephone number, credit card number, bank account number, e-mail address, or other identifying information of any person who paid any money to any of the named defendants, at any time prior to the entry of this Final Order, in connection with the selling of display-rack business opportunities. Provided, however, that the Stipulating Defendant may disclose such identifying information to a law enforcement agency or as required by any law, regulation, or court order.

JUDGMENT

VI.

IT IS FURTHER ORDERED that the Judgment in the amount of three hundred and fifty thousand dollars ($350,000) is entered against the Stipulating Defendant and his heirs, assigns, and beneficiaries; provided, however, that upon payment by the Stipulating Defendant of one thousand dollars ($1,000), the Commission will consider this Judgment satisfied as to the Stipulating Defendant; provided further that this Judgment shall be subject to the reopening conditions set forth in Paragraph VII.

Payment made by the Stipulating Defendant pursuant to this Paragraph shall be used to provide consumer redress and/or disgorgement and for paying any attendant expenses of administering the receivership estate or distribution of funds. If the Commission determines, in its sole discretion, that consumer redress is wholly or partially impracticable, any funds not so used shall be deposited into the United States Treasury. No portion of the payment as herein provided shall be deemed a payment of any fine, penalty, forfeiture, or punitive assessment.

VII.

IT IS FURTHER ORDERED that the Court's approval of the Judgment against the Stipulating Defendant contained in Paragraph VI is expressly premised upon the truthfulness, accuracy, and completeness of the financial statement of the Stipulating Defendant, which has been submitted to the Commission. If, upon motion by the Commission, this Court finds that the Stipulating Defendant's financial statement either failed to disclose any material asset or source of income or materially misrepresented the value of any asset or source of income, or contained any other material misrepresentation or omission, the entire amount of the Judgment set forth in Paragraph VI ($350,000) will be rendered immediately due and payable by the Stipulating Defendant.

Provided, however, that in all other respects this Final Order shall remain in full force and effect unless otherwise ordered by this 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 Commission and/or the receiver may initiate to enforce this Final Order. Solely for the purposes of reopening or enforcing this Final Order under this Paragraph, the Stipulating Defendant waives any right to contest any of the allegations in the Complaint filed in this matter.

VIII.

IT IS FURTHER ORDERED that the freeze of the Stipulating Defendant's assets shall be lifted in order to permit the Stipulating Defendant to pay the judgment amount contained in Paragraph VI of this Final Order.

RECORD KEEPING

IX.

IT IS FURTHER ORDERED that, in order to facilitate the Commission's monitoring of compliance with the provisions of this Final Order, the Stipulating Defendant shall, for five (5) years after the date of entry of this Order:

A. Notify the Commission in writing, within thirty days after entry of this Final Order and every year thereafter, of his current residence address and employment status, including the name and business address of his current employer(s), if any;

B. Notify the Commission in writing within thirty days of any change in his residential address(es). Such notification shall include his new address(es) and telephone number(s);

C. Notify the Commission in writing within thirty days of any change in his employment status. Such notice shall include the name(s), address(es), and telephone number(s) of his new employer(s), a statement of the nature of the business(es), and a statement of his duties and responsibilities in connection with the business(es);

D. Notify the Commission in writing contemporaneously with the effective date of any proposed change in the structure of any business entity owned or controlled by him, such as creation, incorporation, dissolution, assignment, sale or creation of subsidiaries, or any other changes that may affect compliance obligations arising out of this Final Order;

E. After receiving reasonable notice from the Commission, permit duly authorized representatives of the Commission access during normal business hours to any office of any company or any person under his control, to inspect and copy all documents belonging to him and all documents of any company owned or controlled by him, in whole or in part, relating in any way to any conduct subject to this Final Order; and

F. Refrain from interfering with duly authorized representatives of the Commission who wish to interview his employers, agents and employees relating in any way to any conduct subject to this Final Order.

Provided, that the Commission may otherwise monitor the Stipulating Defendant's compliance with this Final Order by all lawful means available, including the taking of depositions, the issuance of subpoenas or other requests for production of documents, and the use of investigators posing as consumers or suppliers.

IT IS FURTHER ORDERED that the Stipulating Defendant shall, within sixty (60) days after entry of this Final Order, file with the Commission a preliminary report and on the one hundred-fiftieth (150th) day following entry of this Final Order file a supplemental report, in writing, setting forth in detail the manner and form in which he has complied with this Final Order.

XI.

IT IS FURTHER ORDERED that all notices required of the Stipulating Defendant by this Final Order shall be made to the following address:

Associate Director
Division of Marketing Practices
Federal Trade Commission
Room 238
6th Street & Pennsylvania Avenue, N.W.
Washington, D.C. 20580

XII.

IT IS FURTHER ORDERED that each party to this Final Order shall bear its own costs and attorney fees incurred in connection with this action; provided, however, in the event the Commission initiates proceedings to enforce the provisions of this Final Order and provided further the Court determines that the Stipulating Defendant has violated any term or provision of this Final Order, the Stipulating Defendant shall pay the costs and attorney fees incurred by the Commission in connection with proceedings to enforce this Final Order.

XIII.

IT IS FURTHER ORDERED that, notwithstanding any other provision of this Order, the Stipulating Defendant agrees that, if the Stipulating Defendant fails to meet the payment obligations set forth in Paragraph IV, the Stipulating Defendant shall pay the costs and attorney fees incurred by the Commission and its agents in any attempts to collect amounts due pursuant to this Final Order. The Stipulating Defendant further agrees that the facts as alleged in the Complaint shall be taken as true in any subsequent litigation filed by the Commission to enforce its rights pursuant to this Final Order, including but not limited to a nondischargeability complaint in any subsequent bankruptcy proceeding.

XIV.

IT IS FURTHER ORDERED that, within five (5) business days after receipt by the Stipulating Defendant of this Final Order as entered by the Court, the Stipulating Defendant shall submit to the Commission a truthful sworn statement that shall acknowledge receipt of this Final Order.

XV.

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for the purpose of enabling any of the parties to this Final Order to apply to the Court at any time for such further orders or directives as may be necessary or appropriate for the interpretation or modification of this Final Order, for the enforcement of compliance therewith or the punishment of violations thereof.

SO ORDERED, this _____day of _________, 1997, at __________.m.

__________________________________
Ursula Ungaro-Benages
United States District Judge

REVIEWED, STIPULATED AND AGREED TO BY:

_________________________________Dated: _____________
Scott Gunn, Defendant

_________________________________Dated:______________
Stanley Riskin on behalf of Defendant
Scott Gunn

_________________________________Dated:______________
Richard Quaresima
Mona S. Spivack

Attorneys for Plaintiff
Federal Trade Commission
6th & Pennsylvania Ave., Rm. 238
Washington, DC 20580
202-326-3130, 3795
FAX: 202-326-3395