ANDREW J. GUILFORD, District Judge.
On June 12, 2019, Plaintiff, Federal Trade Commission, filed its Complaint for a Permanent Injunction and other Equitable Relief under Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, and the Telemarketing and Consumer Fraud and Abuse Prevention Act ("Telemarketing Act"), 15 U.S.C. §§ 6101-6108 (Docket No. 2). Under Fed. R. Civ. P. 65(b), the FTC also filed an ex parte application for a temporary restraining order, asset freeze, other equitable relief, and an order to show cause why a preliminary injunction should not issue against 8 Figure Dream Lifestyle LLC, JL Net Bargains Inc., Kappy Enterprises LLC, Millionaire Mind Enterprises LLC, OEA LLC (a/d/b/a Online Entrepreneur Academy, d/b/a 14 Day Champion Challenge, d/b/a 14 Day Challenge), Spirit Consulting Group Inc., John A. Bain, Alex Dee, Brian M. Kaplan, and Jerrold S. Maurer (a/k/a Jerry Maurer) (collectively "Defendants"). (Docket No. 3).
The Court granted the application, issuing a temporary restraining order ("TRO") on June 13, 2019, including an asset freeze, expedited discovery, and other equitable relief. (Docket Nos. 28 and 29). The Court ordered Defendants to appear at a hearing on June 24, 2019, to show cause why a preliminary injunction should not issue. On June 21, Defendants moved to continue the show cause hearing to July 8. (Docket No. 31). In response, the Court ordered the parties to appear for a status conference on June 24. (Docket No. 34). At the June 24 status conference, all parties informed the Court that they had stipulated to extend and abide by the TRO until a preliminary injunction hearing. (Docket No. 36). The Court subsequently rescheduled the preliminary injunction hearing for July 19, 2019. (Docket No. 36). Before that hearing, the FTC and Defendant OEA LLC ("OEA") agreed to entry of a preliminary injunction for the duration of this litigation. The terms of the stipulated preliminary injunction are as follows:
A. This Court has jurisdiction over the subject matter of this case, and there is good cause to believe that it will have jurisdiction over all parties hereto and that venue in this district is proper.
B. In order to avoid litigation and as part of the process to settle the action between the FTC and OEA, the FTC and OEA have agreed to entry of this Order.
C. The relief granted by this Order is appropriate equitable relief permitted by the FTC Act and within the inherent equitable powers of the Court. See, e.g., FTC v. H.N. Singer, Inc., 668 F.2d 1107, 1110-13 (9th Cir. 1982) (holding that Section 13(b) of the FTC Act "provides a basis" for a preliminary injunction "freezing assets" and other equitable relief); FTC v. American Nat'l Cellular, Inc., 810 F.2d 1511, 15-12-14 (9th Cir. 1987) (upholding preliminary injunction including asset freeze and appointment of a receiver).
D. Weighing the equities and considering the FTC's likelihood of ultimate success on the merits, a preliminary injunction with an asset freeze and other equitable relief is in the public interest.
E. This Court has the authority to issue this Order pursuant to Section 13(b) of the FTC Act, 15 U.S.C. § 53(b); Federal Rule of Civil Procedure 65; and the All Writs Act, 28 U.S.C. § 1651.
F. The FTC is an independent agency of the United States and no security is required of any agency of the United States for the issuance of a preliminary injunction. Fed. R. Civ. P. 65(c).
For the purpose of this Order, the following definitions shall apply:
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A. Consumers who purchase OEA's purported money-making opportunities will earn or are likely to earn substantial income; and
B. Any other fact material to consumers concerning any good or service, such as: the total costs; any refund policy; any material restrictions, limitations, or conditions; or any material aspect of its performance, efficacy, nature, or central characteristics.
A. Selling, renting, leasing, transferring, or otherwise disclosing, the name, address, birth date, telephone number, email address, credit card number, bank account number, Social Security number, or other financial or identifying information of any person that any Defendant obtained in connection with any activity that pertains to the subject matter of this Order; and
B. Benefitting from or using the name, address, birth date, telephone number, email address, credit card number, bank account number, Social Security number, or other financial or identifying information of any person that any Defendant obtained in connection with any activity that pertains to the subject matter of this Order.
Provided, however, that OEA may disclose such identifying information to a law enforcement agency, to its attorneys as required for its defense, as required by any law, regulation, or court order, or in any filings, pleadings or discovery in this action in the manner required by the Federal Rules of Civil Procedure and by any protective order in the case.
A. Transferring, liquidating, converting, encumbering, pledging, loaning, selling, concealing, dissipating, disbursing, assigning, relinquishing, spending, withdrawing, granting a lien or security interest or other interest in, or otherwise disposing of any assets that are:
B. Opening or causing to be opened any safe deposit boxes, commercial mail boxes, or storage facilities titled in the name of any Defendant or subject to access by any Defendant;
C. Incurring charges or cash advances on any credit, debit, or ATM card issued in the name, individually or jointly, of any corporate defendant or any corporation, partnership, or other entity directly or indirectly owned, managed, or controlled by any Defendant or of which any Defendant is an officer, director, member, or manager. This includes any corporate bankcard or corporate credit card account for which any Defendant is, or was on the date that this Order was signed, an authorized signor; or
D. Cashing any checks or depositing any money orders or cash received from consumers, clients, or customers of any Defendant.
The assets affected by this Section shall include: (1) all assets of OEA as of the time this Order is entered; and (2) assets obtained by OEA after this Order is entered if those assets are derived from any activity that is the subject of the Complaint in this matter or that is prohibited by this Order. This Section does not prohibit any repatriation of foreign assets specifically required by this Order.
Nothing in this Order shall prohibit OEA from seeking relief from the provisions of Section III after entry of this Order.
(a) has held, controlled, or maintained custody, through an account or otherwise, of any Document on behalf of OEA or any asset that has been owned or controlled, directly or indirectly, by OEA; held, in part or in whole, for the benefit of OEA; in the actual or constructive possession of OEA; or owned or controlled by, in the actual or constructive possession of, or otherwise held for the benefit of, any corporation, partnership, asset protection trust, or other entity that is directly or indirectly owned, managed or controlled by OEA;
(b) has held, controlled, or maintained custody, through an account or otherwise, of any Document or asset associated with credits, debits, or charges made on behalf of OEA, including reserve funds held by payment processors, credit card processors, merchant banks, acquiring banks, independent sales organizations, third party processors, payment gateways, insurance companies, or other entities; or
(c) has extended credit to OEA, including through a credit card account, shall:
A. Hold, preserve, and retain within its control and prohibit the withdrawal, removal, alteration, assignment, transfer, pledge, encumbrance, disbursement, dissipation, relinquishment, conversion, sale, or other disposal of any such Document or asset, as well as all Documents or other property related to such assets, except by further order of this Court; provided, however, that this provision does not prohibit an individual defendant from incurring charges on a personal credit card established prior to entry of this Order, up to the pre-existing credit limit;
B. Deny any person access to any safe deposit box, commercial mail box, or storage facility that is titled in the name of OEA, either individually or jointly, or otherwise subject to access by OEA;
C. If they have not done so already in compliance with the TRO previously issued in this action (Docket No. 28), provide Plaintiff's counsel, within three (3) days of receiving a copy of this Order, a sworn statement setting forth, for each asset or account covered by this Section:
D. If they have not done so already in compliance with the TRO previously issued in this matter (Docket No. 28), upon the request of Plaintiff's counsel, promptly provide Plaintiff's counsel with copies of all records or other Documents pertaining to any account covered by this Section or asset, including originals or copies of account applications, account statements, signature cards, checks, drafts, deposit tickets, transfers to and from the accounts, including wire transfers and wire transfer instructions, all other debit and credit instruments or slips, currency transaction reports, 1099 forms, and all logs and records pertaining to safe deposit boxes, commercial mail boxes, and storage facilities.
Provided, however, that this Section does not prohibit any repatriation of foreign assets specifically required by this order.
A. Completed financial statements on the forms attached to this Order as
B. Completed
A. Provide Plaintiff's counsel with a full accounting, verified under oath and accurate as of the date of this Order, of all assets, Documents, and accounts outside of the United States which are: (1) titled in the name, individually or jointly, of OEA; (2) held by any person or entity for the benefit of OEA or for the benefit of, any corporation, partnership, asset protection trust, or other entity that is directly or indirectly owned, managed or controlled by OEA; or (3) under the direct or indirect control, whether jointly or singly, of OEA;
B. Take all steps necessary to provide Plaintiff's counsel access to all Documents and records that may be held by third parties located outside of the territorial United States of America, including signing the Consent to Release of Financial Records appended to this Order as
C. Transfer to the territory of the United States any and all Documents and assets located in foreign countries which are: (1) titled in the name, individually or jointly, of OEA; (2) held by any person or entity for the benefit of OEA or for the benefit of, any corporation, partnership, asset protection trust, or other entity that is directly or indirectly owned, managed or controlled by OEA; or (3) under the direct or indirect control, whether jointly or singly, of OEA; and
D. The same business day as any repatriation, (1) notify counsel for Plaintiff of the name and location of the financial institution or other entity that is the recipient of such Documents or assets; and (2) serve this Order on any such financial institution or other entity.
A. Sending any communication or engaging in any other act, directly or indirectly, that results in a determination by a foreign trustee or other entity that a "duress" event has occurred under the terms of a foreign trust agreement until such time that OEA's assets have been fully repatriated pursuant to this Order; or
B. Notifying any trustee, protector or other agent of any foreign trust or other related entities of either the existence of this Order, or of the fact that repatriation is required pursuant to a court order, until such time that all OEA's assets have been fully repatriated pursuant to this Order.
A. Destroying, erasing, falsifying, writing over, mutilating, concealing, altering, transferring, or otherwise disposing of, in any manner, directly or indirectly, Documents that relate to: (1) the business, business practices, assets, or business or personal finances of any Defendant; (2) the business practices or finances of entities directly or indirectly under the control of any Defendant; or (3) the business practices or finances of entities directly or indirectly under common control with any other Defendant; and
B. Failing to create and maintain Documents that, in reasonable detail, accurately, fairly, and completely reflect Defendants' incomes, disbursements, transactions, and use of Defendants' assets.
A. Identifying and reviewing all marketing materials, advertisements, sales scripts, training materials, videos, webinars, websites, posts to message boards or social media groups (e.g., Facebook groups) controlled by OEA, call logs, call detail records, or other Documents that reflect marketing, advertising, promotion, distribution, offer for sale or sale of goods or services by OEA during the pendency of this Order;
B. Identifying and reviewing all educational, informational, or training content provided by OEA to OEA's customers and clients during the pendency of this Order, including videos, webinars, websites, group chats (including on Skype or social media platforms), and posts to message boards or social media groups (e.g., Facebook groups) controlled by OEA. This provision includes OEA content for OEA's 14 Day Challenge (or 14 Day Champion Challenge), Champion Advocates, curriculum and Success Tier courses, and Mastermind courses;
C. Identifying and reviewing recorded information that is played for customers and prospective customers who place telephone calls to OEA;
D. Advising the Court and all parties to this action of concerns the Temporary Monitor has regarding any OEA materials or content reviewed by the Temporary Monitor;
E. Copying or imaging Documents that the Temporary Monitor deems necessary for purposes of preservation or otherwise carrying out the Temporary Monitor's duties pursuant to this Order;
F. Within 30 days of this Order, providing notice of the pendency of this action, FTC v. 8 Figure Dream Lifestyle LLC et al., No. SACV 19-1165-AG (KESx), to existing members, clients, customers, and contractors of OEA; and
G. Choosing, engaging, and employing support personnel as the Temporary Monitor deems advisable or necessary to assist the Temporary Monitor's performance of duties pursuant to this Order.
A. Refusing to cooperate with the Temporary Monitor or the Temporary
Monitor's duly authorized agents in the exercise of their duties or authority under any order of this Court;
B. Failing to provide any assistance or information requested by the Temporary Monitor in connection with the performance of the Temporary Monitor's duties under this Order; and
C. Interfering with the Temporary Monitor's efforts to identify and review the OEA materials or content subject to review by the Temporary Monitor pursuant to this Order.
A.
The Commission shall return produced materials pursuant to this Paragraph within five (5) business days of completing said inventory and copying. Production of Documents pursuant to this Paragraph shall not provide grounds for OEA to object to any subsequent request for Documents served by Plaintiff.
