UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
FEDERAL TRADE COMMISSION, Plaintiff,
v.
G. ANDREW WATSON, individually and as an officer of defendant
corporation, and MIDWEST MANAGEMENT ASSOCIATES, INC., a corporation,
Defendants.
Civil Action No. 98 C 1218
Judge Castillo
Magistrate Judge Guzman
Stipulated Permanent Injunction and Final Order
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"),
has filed a complaint for a permanent injunction and other relief pursuant to Sections
13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§
53(b) and 57b, and Section 410(b) of the Credit Repair Organizations Act
("CROA"), 15 U.S.C. § 1679h(b), charging defendants, G. Andrew Watson
("Watson") and Midwest Management Associates, Inc. ("Midwest"), with
deceptive acts or practices in connection with the sale and offering for sale of services
to credit repair clients in violation of Section 5 of the FTC Act, 15 U.S.C. § 45,
and the CROA, 15 U.S.C. 1679h(b), et seq.
The parties have consented to the entry of this Stipulated Permanent Injunction and
Final Order ("Stipulated Order") without a trial or adjudication of any issue of
law or fact herein. The defendants enter into this Stipulated Order without admission of
any fact alleged by the plaintiffs.
NOW, THEREFORE, the defendants and the plaintiff have requested the Court to enter this
Stipulated Order. It is therefore ORDERED, ADJUDGED, AND DECREED as
follows:
FINDINGS
1. This Court has jurisdiction over the subject matter of this case and all parties
hereto.
2. This is an action by the FTC instituted under Sections 13(b) and 19 of the FTC Act,
15 U.S.C. §§ 53(b) and 57b, and Section 410(b) of the CROA, 15 U.S.C. § 1679h(b), et
seq. Pursuant to these sections of the FTC Act and the CROA, the FTC has authority to
seek the relief it has requested.
3. Entry of this Stipulated Order is in the public interest.
4. This Stipulated Order does not constitute, and shall not be interpreted to
constitute, either an admission by the defendants or a finding by the Court that the
defendants have engaged in violations of the FTC Act or the CROA.
5. The defendants have waived all claims under the Equal Access to Justice Act, 28
U.S.C. § 2412, and all rights to seek judicial review, or otherwise to challenge the
validity of this Stipulated Order.
Definitions
1. "Assets" means all real and personal property of defendants Midwest
Management Associates, Inc., or G. Andrew Watson, or held for the benefit of the
defendants, 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), lines of credit, and all cash, wherever located.
2. "Credit Repair Client(s)" means persons who purchased or are obligated to
pay any person who sells, provides, or performs (or represents that such person can or
will sell, provide, or perform) any product or service, in return for the payment of money
or other valuable consideration, for the express or implied purpose of improving any
consumer's credit record, credit history, or credit rating, or for the express or implied
purpose of providing advice or assistance to any consumer with regard to any activity or
service involved in the improvement of any consumer's credit record, credit history, or
credit rating.
3. "Credit Repair Organization," as defined in the CROA, 15 U.S.C.
§ 1679a(3), means any person who uses any instrumentality of interstate commerce or
the mails to sell, provide, or perform (or represents that such person can or will sell,
provide, or perform) any service, in return for the payment of money or other valuable
consideration, for the express or implied purpose of improving any consumer's credit
record, credit history, or credit rating, or for the express or implied purpose of
providing advice or assistance to any consumer with regard to any activity or service
involved in the improvement of any consumer's credit record, credit history, or credit
rating.
4. "Credit Reporting Agency(ies)" means any person which, for monetary fees,
dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the
practice of assembling or evaluating consumer credit information or other information on
consumers for the purpose of furnishing consumers' credit records, credit histories, or
credit ratings to third parties, and which uses any means or facility of interstate
commerce or the mails for the purpose of preparing or furnishing credit records, credit
histories, or credit ratings;
5. "Defendants" means G. Andrew Watson, individually, and Midwest Management
Associates, Inc., and their successors, assigns, officers, agents, servants, employees,
and those persons in active concert or participation with them who receive actual notice
of this Stipulated Order by personal service or otherwise, whether acting directly or
through any entity, corporation, subsidiary, division, or other device.
6. "Document" is synonymous in meaning and equal in scope to the usage of the
term in Federal Rule of Civil Procedure 34(a) and includes writings, drawings, graphs,
charts, photographs, audio and video recordings, computer records, and other data
compilations from which information can be obtained and translated, if necessary, through
detection devices into reasonably usable form. A draft or non-identical copy is a separate
document within the meaning of the term.
7. "Material" means likely to affect a person's choice of, or conduct
regarding, goods or services.
8. "Person" means any individual, group, unincorporated association, limited
or general partnership, corporation, or other business entity.
I.
Prohibited Business Practices Pursuant to the Federal Trade
Commission Act
IT IS THEREFORE ORDERED that the defendants are hereby permanently
restrained and enjoined from:
- A. Representing, directly or by implication, that anyone can improve substantially an
appreciable number of consumers' credit reports or profiles by permanently removing
bankruptcies, liens, judgments, charge-offs, late payments, foreclosures, repossessions,
and other negative information from consumers' credit reports, even where such information
is accurate and not obsolete;
-
- B. Misrepresenting that any consumer's credit reports or profiles can be substantially
improved by permanently removing bankruptcies, liens, judgments, charge-offs, late
payments, foreclosures, repossessions, and other negative information from the consumer's
credit reports;
-
- C. Misrepresenting any fact concerning their ability to perform or provide any
credit-related products or services for consumers, including but not limited to
consolidating debt, obtaining or arranging a loan, or obtaining or arranging any extension
of credit; and
-
- D. Misrepresenting any fact material to a consumer's decision to purchase the
defendants' services or products.
II.
Prohibition on Advance Payments
IT IS FURTHER ORDERED that the defendants are hereby permanently
restrained and enjoined from charging or receiving any money or other valuable
consideration for products or services which the defendants have agreed to perform for the
purpose of improving any consumer's credit record, credit history, or credit rating before
all such services have been fully performed. Provided, however, that
this Section shall not be construed to apply to any payments received by defendant Watson
for the representation of legal clients in bankruptcy cases filed in bankruptcy court that
do not otherwise involve credit repair activities.
III.
Prohibited Business Activities Pursuant to the Credit Repair
Organizations Act
IT IS FURTHER ORDERED that the defendants are hereby permanently
restrained and enjoined from violating the Credit Repair Organizations Act,
("CROA"), 15 U.S.C. §§ 1679 to 1679k, as presently enacted or as it may
hereinafter be amended, by including, but not limited to:
- A. Violating 15 U.S.C. § 1679c(a) by failing to provide consumers with a written
statement of consumer credit file rights under state and federal law at the time and in
the manner prescribed therein;
-
- B. Violating 15 U.S.C. § 1679b(a)(1) by making any untrue or misleading
statement, or counseling or advising any consumer to make any untrue or misleading
statement, with respect to any consumer's credit worthiness, credit standing, or credit
capacity to any consumer reporting agency as defined in 15 U.S.C. § 1681(f), or to
any person who has extended credit to the consumer, or to whom the consumer has applied or
is applying for an extension of credit;
-
- C. Violating 15 U.S.C. § 1679b(a)(3) by making or using any untrue or misleading
representation of the services of a credit repair organization; or
-
- D. Violating 15 U.S.C. §1679d(a), 1679d(b)(4), or 1679e(b), by providing services to
consumers without first having the consumers sign written contracts that:
- (a) include a prescribed statement of the consumer's right to cancel the transaction
within three business days; and
-
- (b) are accompanied by a notice of cancellation in the form and manner prescribed.
IV.
Consumer Redress
IT IS FURTHER ORDERED that:
- A. Defendants Watson and Midwest shall pay to the FTC the sum of twenty-five thousand
dollars ($25,000) ("the total payment owing" or "the funds to be paid by
defendants Watson and Midwest"), as follows:
-
1. Payment of thirteen thousand dollars ($13,000) is due and owing to the FTC
immediately upon the Court signing this Order, with such sum to be made payable to the
"Federal Trade Commission" by certified check only, and to be hand delivered
during business hours either to the Regional Director of the FTC's Regional Office in
Chicago, at the address specified in Section XIV, below, or to the Regional Director's
designated agent; and
2. Payment of twelve thousand dollars ($12,000), or the outstanding balance of the
total payment owing, is due and owing to the FTC on or before July 1, 1999, with such sum
to be made payable to the "Federal Trade Commission" by certified check only,
and to be hand delivered during business hours either to the Regional Director of the
FTC's Regional Office in Chicago, at the address specified in Section XIV, below, or to
the Regional Director's designated agent.
- B. In the event that defendants Watson or Midwest default on their obligations to pay
the FTC pursuant to Subsections A.1 or A.2, above, defendant Watson (or his lawful heirs
then holding title) shall
-
1. arrange forthwith for a licensed real estate professional to use his or her best
efforts, including but not limited to the use of the Multiple Listing Service, to
accomplish an arm's length sale for fair market value, and close said sale by October 1,
1999, of that certain parcel of land situated at 2144 Lincoln Park West, Unit 22A,
Chicago, Illinois 60614 ("the condominium"), also known as Assessor's Parcel
Number 14-33-206-052-1073, the legal description of which is UNIT: 22a; SUBDIVISION: 2144
LINCOLN PARK WEST CONDOMINIUM; SEC/TWN/RNG/MERIDIAN: SEC 33 TWN 40N RNG 14E; ASSESSOR'S
MAP REFERENCE 14-33-NE (A&B); and
2. by October 1, 1999, after giving reasonable notice to the Regional Director of the
FTC's Regional Office in Chicago, or his designated agent, of the date and location of the
closing of the sale of the condominium, pay to the FTC, from the proceeds inuring to
defendant Watson (or to his lawful heirs then holding title) from the sale of the
condominium, either (a) the outstanding balance of the total payment owing to the FTC, or
(b) the sum of one-half of the proceeds inuring to defendant Watson (or to his lawful
heirs then holding title) from the sale of the condominium, whichever of (a) or (b) is
greater; Provided, however, that the proceeds arising from the sale of
the condominium shall equal the difference between (1) the final sale price of the
condominium, i.e., the sum paid to defendant Watson (or to his lawful heirs then
holding title) by the buyer, and (2) the amount owing to any parties with an interest in
the condominium that is prior to the FTC's lien on the condominium, as recorded with the
Cook County, Illinois Recorder of Deeds. Provided, further, that the
proceeds to defendant Watson (or to his lawful heirs then holding title) from the sale of
the condominium shall neither include nor be reduced by any liabilities related to the use
of the condominium or its sale, including but not limited to any commission for the
services of the real estate agency, real estate closing costs or fees, outstanding
balances owed by defendant Watson (or his lawful heirs then holding title) for property
taxes, condominium assessments, transfer fees, seals, or any other costs or fees arising
from the sale of the condominium. Provided, additionally, that defendant
Watson (or his lawful heirs then holding title) shall make the payment required under this
Subsection at the closing of the sale of the condominium, by certified check made payable
to the "Federal Trade Commission."
- C. In the event that Subsection B, above, is triggered, defendant Watson (or his lawful
heirs then holding title) shall refrain from interfering with the sale of the condominium.
Provided, further, that the condominium must not be occupied by July 1, 1999, and
that defendant Watson has represented that the current lease on the condominium expires on
April 30, 1999. The FTC shall be held harmless for any action arising under this
Subsection.
-
- D. In the event that Subsection B, above, is triggered, defendant Watson is prohibited,
without the FTC's prior express approval, from transferring to any other party his
interests in or title to the condominium, except in the manner provided for in Subsection
B.1, above.
-
- E. The funds paid by defendants Watson and Midwest shall be deposited into a redress
fund, administered by the FTC, to be used for equitable relief, including but not limited
to consumer redress and any attendant expenses for the administration of any redress fund.
If the FTC determines, in its sole discretion, that redress to purchasers is wholly or
partially impracticable, any funds not so used shall be paid to the United States
Treasury. Defendants Watson and Midwest shall be notified as to how the funds are
disbursed but shall have no right to contest the manner of distribution chosen by the FTC.
The FTC, in its sole discretion, may use a designated agent to administer consumer
redress. The FTC and defendants Watson and Midwest acknowledge and agree that this
judgment for equitable monetary relief is solely remedial in nature and is not a fine,
penalty, punitive assessment, or forfeiture; and
-
- F. In the event of any default on any obligation to make payment under this Section of
the Stipulated Order, interest, computed pursuant to 28 U.S.C. § 1961(a), shall
accrue from the date of default to the date of payment.
-
- G. Defendants Watson and Midwest are hereby required, in accordance with 31 U.S.C.
§ 7701, to furnish to the FTC their social security number and employer
identification number, respectively, which shall be used for purposes of collecting and
reporting on any delinquent amount arising out of such persons' relationship with the
government.
V.
Cessation of Collections, Notices to Consumers,
Correction of Consumer Reports, and
Treatment of Lawsuits Filed Against Consumers
IT IS FURTHER ORDERED that the defendants shall:
- A. Cease all collection efforts on accounts arising from contracts signed between the
defendants and their credit repair clients prior to the date this
Stipulated Order is entered, if any such efforts have been undertaken;
-
- B. Within ten (10) days after the date this Stipulated Order is entered, or within ten
(10) days of receiving payment, (1) return to credit repair clients all payments, if any,
that have been or may be received by the defendants, directly or indirectly, since the
date the Temporary Restraining Order and Asset Freeze was entered (i.e., February
26, 1998), on accounts arising from contracts signed between the defendants and the credit
repair clients prior to the date this Stipulated Order is entered; and (2) include with
each such returned payment a notice to the credit repair client stating that as a result
of an agreement between the defendants and the plaintiff settling allegations that the
defendants misrepresented their ability to improve any credit repair client's credit
record, credit history, or credit rating, those credit repair clients owe no further
payments;
-
- C. Within ten (10) days after the date this Stipulated Order is entered, mail notices to
all credit repair clients, if any, who have payments that are due, or may become due, on
contracts signed prior to the date this Stipulated Order is entered. Such notices shall
state that as a result of an agreement between the defendants and the plaintiff settling
allegations that the defendants misrepresented their ability to improve any credit repair
client's credit record, credit history, or credit rating, those credit repair clients owe
no further payments;
-
- D. Within thirty (30) days after the date this Stipulated Order is entered, provide a
list of names and addresses of credit repair clients, if any, on whom the defendants have
reported negative credit information, to:
- 1. all credit reporting agencies to whom the defendants have previously reported credit
information, and
-
- 2. all other credit reporting agencies designated by the plaintiff,
- directing those credit reporting agencies to remove any negative credit information
provided by the defendants from those credit repair clients' reports;
-
- E. Within thirty (30) days after the date this Stipulated Order is entered, move for
voluntary dismissal of legal actions filed by the defendants against consumers, if any, in
which the defendants seek to recover money allegedly owed by credit repair clients and
notify the court(s) in such motions that voluntary dismissal is sought pursuant to an
agreement between the defendants and the plaintiff settling allegations that the
defendants misrepresented their ability to improve any credit repair client's credit
record, credit history, or credit rating;
-
- F. Within thirty (30) days after the date this Stipulated Order is entered, file motions
to vacate judgments obtained against consumers in any court, if any, pursuant to legal
actions filed by the defendants against consumers in which the defendants sought to
recover money allegedly owed by credit repair clients, and notify the court(s) that the
motions to vacate are sought pursuant to an agreement between the defendants and the
plaintiff settling allegations that the defendants misrepresented their ability to improve
any credit repair client's credit record, credit history, or credit rating; and
-
- G. Within sixty (60) days after the date this Stipulated Order is entered, provide (1)
the names and addresses of those credit repair clients to whom payments were returned
and/or notices were sent pursuant to Subsections B and C, above, if any; (2) a copy of the
list of credit repair clients' names and addresses provided to credit reporting agencies
pursuant to Subsection D above, if any; (3) copies of the motions to dismiss filed
pursuant to Subsection E above, if any; and (4) copies of the motions to vacate filed
pursuant to Subsection F above, if any, to the address indicated in Section XIV, below.
VI.
Lifting of Asset Freeze
IT IS FURTHER ORDERED that the asset freeze against
defendant Midwest Management Associates, Inc.'s assets, ordered by this Court on February
26, 1998, and extended thereafter, is hereby lifted.
VII.
Right to Reopen
IT IS FURTHER ORDERED that, within three (3) business
days after the date of entry of this Stipulated Order, defendants Watson and Midwest shall
submit to the FTC a truthful sworn statement (in the form shown on Appendix A
to this Stipulated Order) that shall reaffirm and attest to the truthfulness, accuracy,
and completeness of their respective financial statements, namely that of defendant G.
Andrew Watson on February 27, 1998, as amended, and of defendant Midwest Management
Associates on March 2, 1998, as amended. The plaintiff's agreement to this Stipulated
Order is expressly premised upon the financial condition of defendants Watson and Midwest,
as represented in their financial statements, which contains material information upon
which the plaintiff relied in negotiating and agreeing upon this Stipulated Order.
If, upon motion by the plaintiff, this Court finds that defendants Watson
and Midwest failed to file the sworn statement required by this Section, or if defendants
Watson and Midwest failed to disclose any material asset, or materially misrepresented the
value of any asset, or made any other material misrepresentation in or omissions from
their respective financial statements, the plaintiff may either (1) request that the
judgment herein be reopened for the purpose of requiring additional monetary consumer
redress or obtaining other equitable relief in an amount approximately equivalent to any
resulting understatement of assets, overstatement of liabilities, or understatement of net
worth, provided that the total monetary consumer redress ordered against
defendant Watson herein shall not exceed the total amount of the gross receipts (less
refunds issued) arising from the activities described in the Complaint, the total of which
is agreed to be $1,000,000, or (2) seek to obtain other equitable relief.
Provided, however, that in all other respects this judgment shall
remain in full force and effect, unless otherwise ordered by this Court; and provided
further, that proceedings instituted under this Section in that event are in addition to
and not in lieu of any other civil or criminal remedies as may be provided by law,
including but not limited to contempt proceedings, or any other proceedings that the
plaintiff or the United States might initiate to enforce this Stipulated Order.
VIII.
Distribution of Stipulated Order by the Defendants
IT IS FURTHER ORDERED that, for a period of five (5)
years from the date of entry of this Stipulated Order, the defendants shall:
A. Provide a copy of this Stipulated Order to, and obtain a signed and
dated acknowledgment of receipt of same from, each officer or director, each individual
serving in a management capacity, all personnel involved in responding to consumer
complaints or inquiries, and all sales personnel, whether designated as employees,
consultants, independent contractors or otherwise, immediately upon employing or retaining
any such persons, for any business in which
1. any defendant is the majority owner of the business or directly or
indirectly manages or controls the business, and in which
2. the business seeks credit repair clients;
B. Maintain for a period of three (3) years after creation and, upon
reasonable notice, make available to representatives of the FTC the original signed and
dated acknowledgments of the receipt of copies of this Stipulated Order, as required in
Subsection A of this Section.
IX.
Record Keeping Provisions
IT IS FURTHER ORDERED that, for a period of five (5)
years from the date of entry of this Stipulated Order, the defendants, in connection with
any business in which (1) any defendant is the majority owner of the business or directly
or indirectly manages or controls the business, and (2) the business seeks credit repair
clients, are hereby restrained and enjoined from failing to create, and from failing to
retain for a period of three (3) years following the date of such creation, unless
otherwise specified:
A. Books, records and accounts that, in reasonable detail, accurately
and fairly reflect the cost of goods or services sold, revenues generated, and the
disbursement of such revenues;
B. Records accurately reflecting: the name, address, and telephone
number of each person employed in any capacity by such business, including as an
independent contractor; that person's job title or position; the date upon which the
person commenced work; and the date and reason for the person's termination, if
applicable. The business subject to this Section shall retain such records for any
terminated employee for a period of two (2) years following the date of termination;
C. Records containing the names, addresses, phone numbers, dollar
amounts paid, quantity of items or services purchased, and description of items or
services purchased, for all consumers to whom such business has sold, invoiced, or shipped
any goods or services;
D. Records that reflect, for every consumer complaint or refund request,
whether received directly or indirectly, or through any third party:
1. the consumer's name, address, telephone number and the dollar amount
paid by the consumer;
2. the written complaint or refund request, if any, and the date of the
complaint or refund request;
3. the basis of the complaint, including the name of any salesperson
complained against, and the nature and result of any investigation conducted concerning
any complaint;
4. each response and the date of the response;
5. any final resolution and the date of the resolution; and
6. in the event of a denial of a refund request, the reason for the
denial; and
E. Copies of all sales scripts, training materials, advertisements, or
other marketing materials utilized; provided that copies of all sales scripts,
training materials, advertisements, or other marketing materials utilized shall be
retained for (3) years after the last date of dissemination of any such materials.
X.
Compliance Monitoring
IT IS FURTHER ORDERED that, within five (5) business days
after receipt by the defendants of this Stipulated Order as entered by the Court, the
defendants shall submit to the FTC a truthful sworn statement, in the form shown in Appendix
B, that shall acknowledge receipt of this Stipulated Order.
XI.
Compliance Reporting by the Defendants
IT IS FURTHER ORDERED that, in order that compliance with
the provisions of this Stipulated Order may be monitored:
A. For a period of five (5) years from the date of entry of this
Stipulated Order, defendant Watson shall notify the FTC of the following:
1. Any changes in defendant Watson's residence, mailing addresses, or
telephone numbers, within ten (10) days of the date of such change;
2. Any changes in defendant Watson's employment status (including
self-employment) within ten (10) days of such change. Such notice shall include the name
and address of each business that defendant Watson is affiliated with or employed by, a
statement of the nature of the business, and a statement of defendant Watson's duties and
responsibilities in connection with the business or employment; and
3. Any proposed change in the structure of any business entity owned or
controlled by the defendants, such as creation, incorporation, dissolution, assignment,
sale, merger, creation or dissolution of subsidiaries, proposed filing of a bankruptcy
petition, change in the corporate name or address, or any other change that could affect
compliance obligations arising out of this Stipulated Order, thirty (30) days prior to the
effective date of any proposed change; provided, however, that, with respect to
any proposed change in the business about which the defendants learn less than thirty (30)
days prior to the date such action is to take place, the defendants shall notify the FTC
as soon as is practicable after learning of such proposed change.
B. One hundred eighty (180) days after the date of entry of this
Stipulated Order, the defendants shall provide a written report to the FTC, sworn to under
penalty of perjury, setting forth in detail the manner and form in which the defendants
have complied and are complying with this Stipulated Order. This report shall include but
not be limited to:
1. Defendant Watson's then-current residence address and telephone number;
2. Defendant Watson's then-current employment, business addresses and
telephone numbers, a description of the business activities of each employer, and
defendant Watson's title and responsibilities for each employer;
3. A copy of each acknowledgment of receipt of this Stipulated Order
obtained by the defendants pursuant to Section VIII of this Stipulated Order, if any; and
4. A statement describing the manner in which the defendants have complied
and are complying with Sections II, III, and V of this Stipulated Order.
C. Upon written request by a representative of the FTC, the defendants
shall submit additional written reports (under oath, if requested) and produce documents
on fifteen (15) days' notice with respect to any conduct subject to this Stipulated Order.
D. For the purposes of this Stipulated Order, the defendants shall,
unless otherwise directed by the FTC's authorized representatives, mail all written
notifications to the FTC to the address indicated in Section XIV, below.
E. For the purposes of this Section, "employment" includes the
performance of services as an employee, consultant, or independent contractor; and
"employers" include any individual or entity for whom defendant Watson performs
services as an employee, consultant, or independent contractor.
F. For purposes of the compliance reporting required by this Section,
the FTC is authorized to communicate directly with defendant Watson.
XII.
The FTC's Authority to Monitor Compliance
IT IS FURTHER ORDERED that the FTC is authorized to
monitor the defendants' compliance with this Stipulated Order by all lawful means,
including but not limited to the following:
A. The FTC is authorized, without further leave of court, to obtain
discovery from any person in the manner provided by Chapter V of the Federal Rules of
Civil Procedure, Fed. R. Civ. P. 26 - 37, including the use of compulsory process pursuant
to Fed. R. Civ. P. 45, for the purpose of monitoring and investigating the defendants'
compliance with any provision of this Stipulated Order;
B. The FTC is authorized to use representatives posing as consumers and
suppliers to the defendants, the defendants' employees, or any other entity managed or
controlled in whole or in part by the defendants, without the necessity of identification
or prior notice;
C. Nothing in this Stipulated Order shall limit 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, to investigate whether the defendants have violated any provision of this
Stipulated Order or Section 5 of the FTC Act, 15 U.S.C. § 45.
XIII.
Access to Business Premises
IT IS FURTHER ORDERED that, for a period of five (5)
years from the date of entry of this Stipulated Order, for the purpose of further
determining compliance with this Stipulated Order, the defendants shall permit
representatives of the FTC, within three (3) business days of receipt of written notice
from the FTC:
A. Access during normal business hours to any office, or facility
storing documents, of any business in which
1. any defendant is the majority owner of the business or directly or
indirectly manages or controls the business, and in which
2. the business seeks credit repair clients.
In providing such access, the defendants shall permit representatives of
the FTC to inspect and copy all documents relevant to any matter contained in this
Stipulated Order, except those protected by a privilege; and shall permit FTC
representatives to remove documents relevant to any matter contained in this Stipulated
Order, except those protected by a privilege, for a period not to exceed five (5) business
days so that the documents may be inspected, inventoried, and copied; and
B. To interview the officers, directors, and employees, including all
personnel involved in responding to consumer complaints or inquiries, and all sales
personnel, whether designated as employees, consultants, independent contractors or
otherwise, of any business to which Subsection A of this Section applies, concerning
matters relating to compliance with the terms of this Stipulated Order. The persons
interviewed may have counsel present.
Provided that, upon application of the FTC, and for good cause
shown, the Court may enter an ex parte order granting immediate access to the
defendants' business premises for the purposes of inspecting and copying all documents
relevant to any matter contained in this Stipulated Order, except those protected by a
privilege.
XIV.
Notices
IT IS FURTHER ORDERED that all notices required of the
defendants in this Stipulated Order shall be made to the following address:
Regional Director
Federal Trade Commission
55 E. Monroe St., Suite 1860
Chicago, Illinois 60603
Re: FTC v. Watson, et al.
or any such other addresses as the plaintiff shall specify.
XV.
Retention of Jurisdiction
IT IS FURTHER ORDERED that this Court shall retain
jurisdiction of this matter for all purposes. The Clerk's office shall mark the instant
case administratively closed.
The parties agree and stipulate to entry of the foregoing Stipulated
Permanent Injunction and Final Order.
For the FEDERAL TRADE COMMISSION:
DATED: __________________
__________________________
EVAN SIEGEL
Ill. ARDC # 06211459
Attorney for Plaintiff
Federal Trade Commission
55 East Monroe Street, Suite 1860
Chicago, Illinois 60603
(312) 960-5603/5634
For the DEFENDANTS
DATED: __________________
______________________________
MATTHEW F. KENNELLY
Illinois ARDC # 6180755
Attorney for Defendants
Cotsirilos Stephenson Tighe & Streicker, Ltd.
33 N. Dearborn St., Suite 600
Chicago, IL 60602
(312) 263-0345
DEFENDANTS
DATED: _________________
________________________________
G. Andrew Watson
DATED: _________________
________________________________
Midwest Management Associates, Inc.
By G. Andrew Watson, President
and Chief Executive Officer
There being no just reason for delay, the Clerk of Court is hereby
directed to enter this Stipulated Order.
Issued at , .m.
United States District Judge
, 1998 |