UNITED STATES OF AMERICA In the Matter of LS ENTERPRISES, LLC, a limited liability company, also doing business as FREEPROMO.COM, ENTERPRISE PUBLICATIONS, and LRS PUBLICATIONS, and INTERNET PROMOTIONS, LLC, a limited liability company, also doing business as CYBERPROMOTERS.COM, and LOUIS SALATTO, individually and as the principal member of the limited liability company. FILE NO. 972-3149 The Federal Trade Commission has conducted an investigation of certain acts and practices of LS Enterprises, LLC, a limited liability company, also doing business as Freepromo.com, Enterprise Publications, and LRS Publications; Internet Promotions. LLC, a limited liability company, also doing business as Cyberpromoters.com; and Louis Salatto, individually and as the principal member of the limited liability companies ("proposed respondents"). Proposed respondents, having been represented by counsel, are willing to enter into an agreement containing a consent order resolving the allegations contained in the attached draft complaint. Therefore, IT IS HEREBY AGREED by and between LS Enterprises, LLC, by its duly authorized principal member, Internet Promotions, LLC, by its duly authorized principal member, and Louis Salatto, individually and as the principal member of the limited liability companies, and counsel for the Federal Trade Commission that: 1.a. Proposed respondent LS Enterprises, LLC is a Connecticut limited liability company with its principal office or place of business at 1204 Main Street, Suite 380, Branford, Connecticut 06405. 1.b. Proposed respondent Internet Promotions, LLC is a Connecticut limited liability company with its principal office or place of business at 1204 Main Street, Suite 380, Branford, Connecticut 06405. 1.c. Proposed respondent Louis Salatto is the principal member of LS Enterprises, LLC and Internet Promotions, LLC. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of the companies. His place of residence is 13 Branhaven Drive, East Haven, Connecticut 06513. 2. Proposed respondents admit all the jurisdictional facts set forth in the draft complaint. 3. Proposed respondents waive:
4. This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this agreement is accepted by the Commission, it, together with the draft complaint, will be placed on the public record for a period of sixty (60) days and information about it publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify proposed respondents, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision in disposition of the proceeding. 5. This agreement is for settlement purposes only and does not constitute an admission by proposed respondents that the law has been violated as alleged in the draft complaint, or that the facts as alleged in the draft complaint, other than the jurisdictional facts, are true. 6. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of Section 2.34 of the Commission's Rules, the Commission may, without further notice to proposed respondents, (1) issue its complaint corresponding in form and substance with the attached draft complaint and its decision containing the following order in disposition of the proceeding, and (2) make information about it public. When so entered, the order shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time provided by statute for other orders. The order shall become final upon service. Delivery of the complaint and the decision and order to proposed respondents' address as stated in this agreement by any means specified in Section 4.4(a) of the Commission's Rules shall constitute service. Proposed respondents waive any right they may have to any other manner of service. The complaint may be used in construing the terms of the order. No agreement, understanding, representation, or interpretation not contained in the order or in the agreement may be used to vary or contradict the terms of the order. 7. Proposed respondents have read the draft complaint and consent order. They understand that they may be liable for civil penalties in the amount provided by law and other appropriate relief for each violation of the order after it becomes final. ORDER DEFINITIONS For purposes of this order, the following definitions shall apply: 1. "Unsolicited commercial E-Mail product or service" shall mean any software program capable of sending E-Mail messages in an automated manner to E-Mail addresses contained on a list, the service of sending E-Mail messages through use of such a software program, or any other product or service whose purpose is to assist in the dissemination of unsolicited commercial messages by electronic mail via the Internet or proprietary online services. 2. "Unsolicited commercial E-Mail" shall mean any E-Mail message that consists of or contains a communication advertising, promoting, soliciting, offering, or offering to sell any product, any service, or any form of donation or charitable contribution, not requested by the addressee or recipient or sent pursuant to a pre-existing business or personal relationship between the sender and the addressee or recipient of the E-Mail. 3. "Business opportunity" and "work-at-home opportunity" shall mean an activity engaged in for the purpose of making a profit. 4. "Competent and reliable scientific evidence" shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results. 5. Unless otherwise specified, "respondents" shall mean LS Enterprises, LLC, a limited liability company, its successors and assigns and its officers; Internet Promotions, LLC, a limited liability company, its successors and assigns and its officers; Louis Salatto, individually and as the principal member of the limited liability companies; and each of the above's agents, representatives, and employees. 6. "Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44. I. IT IS ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promotion, offering for sale, sale, or distribution of any unsolicited commercial E-Mail product or service, or any product or service concerning business opportunities or work-at-home opportunities, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication:
II.
unless the representation is true and, at the time it is made, respondents possess and rely upon competent and reliable evidence that substantiates the representation. III. IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promotion, offering for sale, sale, or distribution of any product or service, shall not send or distribute any unsolicited commercial E-Mail containing any misrepresentations including, but not limited to, misrepresentations in:
IV. IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promotion, offering for sale, sale, or distribution of any product or service, shall not make any representation, in any manner, expressly or by implication, about the benefits, performance, efficacy, or success rate of such product or service, unless such representation is true and, at the time the representation is made, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation. V. IT IS FURTHER ORDERED that respondents, directly or through any corporation, subsidiary, division, or other device, are permanently enjoined from advertising, promoting, offering for sale, selling, or distributing any unsolicited commercial E-Mail product or service via any media, or any other product or service via unsolicited commercial E-Mail, unless they first obtain a performance bond in the principal amount of $100,000. A. Each bond shall be conditioned upon compliance with Section 5 of the FTC Act, 15 U.S.C. § 45, and with the provisions of this Order. Each bond shall be deemed continuous and remain in full force and effect as long as respondents continue to advertise, offer for sale, sell, or distribute any unsolicited commercial E-Mail product or service via any media, or any other product or service via unsolicited commercial E-Mail, and for at least three (3) years after respondents have ceased to engage in any such activity. Each bond shall cite this Order as the subject matter of the bond, and shall provide surety thereunder against financial loss due, in whole or in part, to any violation of Section 5 of the FTC Act, to any violation of the provisions of this Order, or to any other cause attributable to respondents' advertising, offering for sale, selling, or distributing any unsolicited commercial E-Mail product or service via any media, or any other product or service via unsolicited commercial E-Mail; B. Each bond shall be an insurance agreement providing for financial loss issued by a surety company that is admitted to conduct business in each of the states in which respondent does business and that holds a Federal Certificate of Authority As Acceptable Surety On Federal Bond and Reinsuring. Respondents shall be deemed to be doing business in each state in which they, or any entity through which they advertise, offer for sale, sell, or distribute any unsolicited commercial E-Mail product or service via any media, or any other product or service via unsolicited commercial E-Mail, maintain an office or contact any consumer. Such bond shall be in favor of both (a) the FTC for the benefit of consumers injured due, in whole or in part, to any violation of Section 5 of the FTC Act, to any violation of the provisions of this Order, or to any other cause attributable to respondents' advertising, offering for sale, selling, or distributing any unsolicited commercial E-Mail product or service via any media, or any other product or service via unsolicited commercial E-Mail, and (b) any consumer so injured. Each bond shall be executed in favor of the FTC or in favor of any injured consumer if the FTC or the consumer demonstrates to any court of competent jurisdiction, by a preponderance of evidence, that respondents violated any condition of the bond; C. Respondents shall not disclose the existence of any bond to any consumer or other purchaser or prospective purchaser of any product or service without simultaneously making the following disclosure:
The required disclosure shall be set forth in a clear and conspicuous manner, enclosed in a box containing only the required disclosure, separated from all other text on the page, in 100% black ink against a light background, in print at least as large as that of any other text on the page; D. Respondents shall provide a copy of each bond required by this Part to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580, at least ten (10) days prior to the commencement of any activity or business for which the bond is required; and E. The bond required by this Part shall be in addition to, and not in lieu of, any other bond required by law. VI. IT IS FURTHER ORDERED that respondent LS Enterprises, LLC, and its successors and assigns, respondent Internet Promotions, LLC, and its successors and assigns, and respondent Louis Salatto shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying:
VII. IT IS FURTHER ORDERED that respondent LS Enterprises, LLC, and its successors and assigns, respondent Internet Promotions, LLC, and its successors and assigns, and respondent Louis Salatto shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order and shall, for five (5) years after the date of issuance of this order, maintain and upon request make available to the Federal Trade Commission such signed and dated statements. Respondents shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities. VIII. IT IS FURTHER ORDERED that respondent LS Enterprises, LLC, and its successors and assigns, and respondent Internet Promotions, LLC, and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the company that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company or corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the company name or address. Provided, however, that, with respect to any proposed change in the company about which respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580. IX. IT IS FURTHER ORDERED that respondent Louis Salatto, for a period of ten (10) years after the date of issuance of this order, shall notify the Commission of the discontinuance of his current business or employment, or of his affiliation with any new business or employment. The notice shall include respondent's new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580. X. IT IS FURTHER ORDERED that respondent LS Enterprises, LLC, and its successors and assigns, respondent Internet Promotions, LLC, and its successors and assigns, and respondent Louis Salatto shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order. XI. This order will terminate twenty (20) years from the date of its issuance, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:
Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. Signed this day of , 19 LS ENTERPRISES, LLC By: LOUIS SALATTO INTERNET PROMOTIONS, LLC By: LOUIS SALATTO LOUIS SALATTO, individually JOHN T. DUGAN APPROVED: ANDREW D. CAVERLY |