UNITED STATES DISTRICT COURT Case No. 00-6462-CIV-Ferguson FEDERAL TRADE COMMISSION, Plaintiff, v. FEDERAL DATA SERVICE, INC., et al., Defendants. STIPULATED FINAL ORDER FOR PERMANENT INJUNCTION AND SETTLEMENT OF CLAIMS The Federal Trade Commission ("Commission") commenced this civil action on April 3, 2000. The defendants, as named in the First Amended Complaint for Injunction and Other Equitable Relief ("Amended Complaint"), are Federal Data Service, Inc., Stephen G. Tate, Spencer P. Golden, and Dawn R. Johnson. The Commission and defendants Federal Data Service, Inc., Stephen G. Tate, Spencer P. Golden, and Dawn R. Johnson hereby stipulate to this Final Order for Permanent Injunction and Settlement of Claims ("Order"). FINDINGS By stipulation of the parties, the Court finds as follows:
9. Pursuant to Federal Rule of Civil Procedure 65(d) the provisions of this Order are binding upon the Defendants, and their officers, agents, servants, employees and attorneys, and upon those persons or entities in active concert or participation with them who receive actual notice of this Order by personal service or otherwise. DEFINITIONS For purposes of this Order, the following definitions shall apply:
ORDER I. PROHIBITED BUSINESS ACTIVITIES IT IS THEREFORE ORDERED that, in connection with the advertising, promotion, offer for sale, or sale of any item, product, good, service, investment opportunity, business opportunity, partnership interest, trust interest or other beneficial interest, the Defendants and any entity through which they do business, and their successors, assigns, officers, agents, servants, employees, and those other persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise are hereby permanently restrained and enjoined from: A. Misrepresenting, directly or by implication, that employment jobs, including but not limited to postal or government wildlife jobs for which little or no experience is required, are available in particular geographic areas; B. Misrepresenting, directly or by implication, that consumers who purchase any employment good or service are likely to obtain permanent employment jobs, including but not limited to postal or government wildlife jobs for which little or no experience is required; C. Misrepresenting, directly or by implication, the salaries for any employment job, including but not limited to postal or government wildlife jobs; D. Misrepresenting, directly or by implication, the terms and conditions of any refund or guarantee policy; E. Misrepresenting, directly or by implication, that consumers have purchased or agreed to purchase any item, product, good or service from any person or entity, and therefore owe money to any person or entity; F. Charging or debiting consumers' credit cards, debit cards or checking accounts without consumers' authorization; G. Misrepresenting, directly or by implication, that consumers can apply for employment jobs, including but not limited to postal or government wildlife jobs, by purchasing any employment good or service; H. Misrepresenting, directly or by implication, the qualifications for any employment job, including but not limited to postal or government wildlife jobs; I. Misrepresenting, directly or by implication, the procedures or testing requirements to apply for any employment job, including but not limited to postal or government wildlife jobs; J. Misrepresenting, directly or by implication, any material fact regarding any item, product, good, or service, or charitable contribution solicited, sold or offered for sale; K. Violating the Telemarketing Sales Rule ("TSR"), 16 C.F.R. Part 310, including any amendments thereto; and L. Assisting others who violate any provision of sub-paragraphs A-K of this Paragraph I. II. BAN ON CERTAIN ACTIVITIES IT IS FURTHER ORDERED that the Defendants are permanently restrained and enjoined from (A) promoting, offering for sale, or selling any employment good or service, and (B) assisting others engaged in the promotion, offer for sale, or sale of any employment good or service. Nothing in this Order shall be read as an exception to this paragraph. III. BOND REQUIREMENT IT IS FURTHER ORDERED that the Defendants, inclusively or in any combination thereof, are hereby permanently restrained and enjoined from (A) engaging in telemarketing, and (B) assisting others engaged in telemarketing, unless they first obtain a performance bond in the principal sum of ONE HUNDRED THOUSAND DOLLARS ($100,000). A. This bond shall be conditioned upon compliance with Section 5 of the FTC Act, 15 U.S.C. § 45(a), with the TSR, 16 C.F.R. Part 310, and with the provisions of this Order. The bond shall be deemed continuous and remain in full force and effect as long as the Defendant continues to engage in conduct that requires the posting of the bond, and for at least three years after the Defendant has ceased to engage in such conduct. The bond shall cite this Order as the subject matter of the bond, and shall provide surety thereunder against financial loss resulting from whole or partial failure of performance due, in whole or in part, to any violation of Section 5 of the FTC Act, the TSR, the provisions of this Order, or to any other violation of law. B. The performance bond required pursuant to this Paragraph III shall be an insurance agreement providing surety for financial loss issued by a surety company that is admitted to do business in each of the states in which the Defendant does business and that holds a Federal Certificate of Authority As Acceptable Surety On Federal Bond and Reinsuring. Such performance bond shall be in favor of both: (1) the Federal Trade Commission for the benefit of any consumer injured as a result of any violation of Section 5 of the FTC Act, the TSR, the provisions of this Order made by the Defendant, his or her agents, or any persons acting in concert with him or her; and (2) any consumer so injured. C. The bond required pursuant to this Paragraph III is in addition to, and not in lieu of, any other bond required by any other federal, state, or local law, or by any other court order not entered in this action, except that, to the extent allowed by law, the bond required pursuant to this Paragraph III may satisfy any performance bond required by any other federal, state or local law where such law requires a performance bond for the amount of $100,000 or less. D. At least ten business days before the commencement of telemarketing, or assisting others engaged in telemarketing, the Defendant shall provide the bond required by this Paragraph III to the Associate Director for Enforcement at the address specified in Paragraph XIII of this Order. E. No Defendant shall disclose the existence of a performance bond required by this Paragraph III to any consumer without also disclosing clearly and prominently, at the same time, the following phrase: "This bond is required by order of the U.S. District Court, in the case FTC v. Federal Data Service, Inc. et al., Case No. 00-6462-CIV-Ferguson (S.D. Fla.), in settlement of allegations of false and misleading representations in the promotion and sale of employment goods and services." The disclosure shall be set forth in a clear and conspicuous manner, separated from all other text, in 100% black ink against a light background, in print at least as large as the main text of the sales material or document, and enclosed in a box containing only the required disclosure. F. If, upon motion by the Commission, the Court finds that a Defendant or any business in which the Defendant engages or participates, has violated Section 5 of the FTC Act, the TSR, or this Order, the Commission may execute against the performance bond required by this Paragraph III. Proceedings instituted under this sub-paragraph F 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 may initiate to enforce this Order. IV. CONSUMER LISTS IT IS FURTHER ORDERED that the Defendants, and their officers, agents, servants, employees, and attorneys, and all persons or entities in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, are permanently restrained and enjoined from hereafter 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 defendant, at any time prior to entry of this Order; provided, however, that a Defendant may disclose such identifying information (i) with the express written consent of the person whose information is disclosed, (ii) to a law enforcement agency, or (iii) as required by any law, regulation, or court order. V. MONETARY RELIEF IT IS FURTHER ORDERED that: A. Within ten business days of the date of entry of this Order, the Defendants shall cause the transfer of the following assets to the Commission or its designated agent:
B. The funds received by the Commission pursuant to this Paragraph V shall be deposited into an account to be maintained by the Commission or its agent. Upon the final disposition of this action, such funds shall be either (1) distributed as redress to consumers, or (2) paid to the U.S. Treasury as equitable disgorgement (if such distribution is deemed impractical). If the Commission in its sole discretion determines that redress is practical, it shall submit a plan for the disbursement of funds to the Court for review and approval; C. Defendants Stephen Tate, Spencer Golden, and Dawn Johnson are hereby required, in accordance with 31 U.S.C. § 7701, to furnish to the Commission their social security number, which shall be used for purposes of collecting and reporting on any delinquent amount arising out of this Order; and D. The Defendants further agree that the facts as alleged in the Amended Complaint shall be taken as true in the event of any subsequent litigation to collect amounts due pursuant to this Order, including but not limited to a nondischargeability complaint in any bankruptcy proceeding. E. The judgment entered pursuant to this Paragraph V is equitable monetary relief, solely remedial in nature, and not a fine, penalty, punitive assessment or forfeiture. VI. ASSET FREEZE IT IS FURTHER ORDERED that, upon entry of this Order and the transfer of all assets as required by Paragraph V, the freeze of the Defendants' assets shall be dissolved. VII. RIGHT TO REOPEN IT IS FURTHER ORDERED that, within five business days after entry of this Order, the Defendants shall each submit to the Commission a truthful sworn statement, in the form shown on Appendix A, that shall acknowledge receipt of this Order and shall reaffirm and attest to the truth, accuracy and completeness of the financial statements previously submitted to the Commission. The Commission's agreement to this Order is expressly premised on the truthfulness, accuracy and completeness of such financial statements. If, upon motion by the Commission (with a copy to the Defendants' counsel of record), the Court finds that any such financial statements contain any material misrepresentation or omission, the Court shall enter judgment against the respective Defendant, in favor of the Commission, in the amount of $5,000,000 (less the amount previously turned over to the Commission pursuant to Paragraph V); provided, however, that in all other respect this Order shall remain in full force and effect unless otherwise ordered by the Court; and, provided further, that proceedings instituted under this provision would be in addition to, and not in lieu of, any other civil or criminal remedies as may be provided by law, including any other proceedings that the Commission may initiate to enforce this Order. For purposes of this Paragraph VII, the Defendants waive any right to contest any of the allegations in the Amended Complaint. VIII. COOPERATION WITH COMMISSION COUNSEL IT IS FURTHER ORDERED that the Defendants shall, in connection with this action or any subsequent investigations related to or associated with the transactions or the occurrences that are the subject of the Commission's Amended Complaint, cooperate in good faith with the Commission and appear at such places and times as the Commission shall reasonably request, after written notice to such defendant and his or her counsel of record, for interviews, conferences, pretrial discovery, review of documents, and for such other matters as may be reasonably requested by the Commission. If requested in writing by the Commission, the Defendants shall appear and provide truthful testimony in any trial, deposition, or other proceeding related to or associated with the transactions or the occurrences that are the subject of the Amended Complaint, without the service of a subpoena. IX. RECORD KEEPING PROVISIONS IT IS FURTHER ORDERED that, for a period of five years from the date of entry of this Order, each Defendant, in connection with any business where (i) that defendant is an officer, director, manager, partner or majority owner, and (ii) the business engages, or assists others engaged in, telemarketing, is hereby restrained and enjoined from: A. Failing to have such business create, and from failing to have such business retain for a period of three years following the date of such creation, unless otherwise specified:
B. Destroying, discarding, mutilating, changing, concealing, altering, transferring, or otherwise disposing of, in any manner, directly or indirectly, any books, records, tapes, discs, accounting data, checks (fronts and backs), correspondence, forms, advertisements, brochures, manuals, electronically stored data, banking records, consumer lists, files, invoices, telephone records, ledgers, payroll records, or other business or financial document of any kind, including information stored in computer-maintained form, in the possession, custody, or control of the Defendant. X. ACCESS TO BUSINESS PREMISES IT IS FURTHER ORDERED that, for a period of five years from the date of entry of this Order, for the purpose of further determining compliance with this Order, each Defendant shall permit representatives of the Commission, within fifteen business days of receipt of written notice from the Commission (with a copy to the Defendant's counsel of record): A. Access during normal business hours to any office, or facility storing documents, of any business where that defendant is an officer, director, manager, partner or majority owner. In providing such access, the Defendants shall permit representatives of the Commission to inspect and copy all documents relevant to any matter contained in this Order; and shall permit Commission representatives to remove documents relevant to any matter contained in this Order for a period not to exceed five business days so that the documents may be inspected, inventoried, and copied. Each Defendant may have counsel present during such access. Provided that, upon application of the Commission and for good cause shown, the Court may enter an ex parte order granting immediate access to any such business premise for the purpose of inspecting and copying all documents relevant to any matter contained in this Order. 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 sub-paragraph A of this Paragraph X applies, concerning matters relating to compliance with the terms of this Order. The person interviewed may have counsel present. XI. AUTHORITY TO MONITOR COMPLIANCE IT IS FURTHER STIPULATED AND ORDERED that the Commission is authorized to monitor the Defendants' compliance with this Order by all lawful means, including but not limited to the following means: A. The Commission 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 the Defendants' compliance with any provision of this Order; B. The Commission is authorized to use representatives posing as consumers and suppliers to the Defendants, their employees, or any other entity managed or controlled in whole or in part by any Defendant, without the necessity of identification or prior notice; and C. Nothing in this Order shall limit the Commission'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 any Defendant has violated any provision of this Order, Section 5 of the FTC Act, 15 U.S.C. § 45, or the TSR, 16 C.F.R. Part 310. XII. SERVICE OF ORDER BY DEFENDANT IT IS FURTHER ORDERED that, for a period of five years from the date of entry of this Order, defendants Stephen Tate, Spencer Golden, and Dawn Johnson shall each: A. Provide a copy of this 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 where (i) he or she is an officer, director, manager, partner or majority owner, and (ii) the business engages in, or assists others engaged in, telemarketing; and B. Maintain for a period of three years after creation, and upon reasonable notice, make available to representatives of the Commission, the original signed and dated acknowledgments of the receipt of copies of this Order, as required in the sub-paragraph A of this Paragraph XII. XIII. REPORTS BY DEFENDANT IT IS FURTHER ORDERED that, in order that compliance with the provisions of this Order may be monitored: A. For a period of five years from the date of entry of this Order, defendants Stephen Tate, Spencer Golden, and Dawn Johnson shall each notify the Commission of the following: (1) any changes in his or her business address, residential address or telephone number, within fifteen calendar days of the date of such change; and (2) any changes in his or her employment status (including self-employment) within fifteen calendar days of such change. Such notice shall include the name and address of each business that the Defendant is employed by, a statement of the nature of the business, and a statement of the Defendant's duties and responsibilities in connection with the business or employment; B. One hundred eighty (180) calendar days after the date of entry of this Order, defendants Stephen Tate, Spencer Golden, and Dawn Johnson shall each submit a written report to the Commission, sworn under penalty of perjury, detailing his or her past and present efforts to comply with this Order. This report shall include but not be limited to:
C. For a period of five years from the date of entry of this Order, upon written request by a representative of the Commission, defendants Stephen Tate, Spencer Golden, and Dawn Johnson shall each submit written reports (under oath, if requested) and produce documents on fifteen calendar days' notice with respect to any conduct subject to this Order; D. For the purposes of this Order, defendants Stephen Tate, Spencer Golden, and Dawn Johnson shall each, unless otherwise directed by the Commission's representatives, address all written communications to the Commission to:
E. For the purposes of this Paragraph XIII, "employment" includes the performance of services as an employee, consultant, independent contractor, or officer or director; and F. For purposes of the compliance reporting required by this Paragraph XIII, the Commission is authorized to communicate directly with any Defendant. XIV. CONTINUATION OF RECEIVERSHIP IT IS FURTHER ORDERED that Gerald Wald, Esq. shall continue as a permanent receiver over the receivership defendant with full powers of a permanent receiver, including but not limited to those powers set forth in the Temporary Restraining Order issued in this matter (as modified by the Second Stipulation Modifying Temporary Restraining Order), and including full liquidation powers. The Receiver is directed to wind up the receivership defendant and liquidate all assets of the receivership estate. Payment of all approved fees and expenses incurred by the Receiver in connection with the receivership shall be made from the assets of the receivership estate; in no event shall the Commission be responsible for the payment of any portion of the Receiver's fees or expenses. The receivership shall terminate upon (1) submission by the Receiver of his final report, (2) payment to the Receiver of his final bill for services rendered in connection with this action, and (3) turnover by the Receiver to the Commission of any remaining receivership assets. XV. RETENTION OF JURISDICTION IT IS FURTHER ORDERED that this Court shall retain jurisdiction over this matter for purposes of the construction, modification and enforcement of this Order. XVI. ENTRY OF THIS FINAL JUDGMENT IT IS FURTHER ORDERED, pursuant to Federal Rule of Civil Procedure 54(b), that there is no just reason for delay and the Clerk of Court immediately shall enter this Order as a final judgment as to defendants Federal Data Service, Inc., Stephen G. Tate, Spencer P. Golden, and Dawn R. Johnson. SO STIPULATED: ______________________________ Dated:__________ ______________________________ Dated:__________ ______________________________ Dated:__________ ______________________________ Dated:__________ ______________________________ Dated:__________ ______________________________ Dated:__________ IT IS SO ORDERED this ______ day of ______________, 2000 at _____________ ________________________________ ATTACHMENT A UNITED STATES DISTRICT COURT Case No. 00-6462-CIV-Ferguson FEDERAL TRADE COMMISSION, Plaintiff, v. FEDERAL DATA SERVICE, INC., et al., Defendants. AFFIDAVIT OF [DEFENDANT] [Defendant], being duly sworn, hereby states and affirms as follows:
I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. Executed on [date], at [city and state]. ___________________________________ State of ____________________, City of ____________________ Subscribed and sworn to before me this _____ day of _________, 2000. _____________________________ Notary Public My Commission Expires: _____________________________ |