VIRGINIA M. HERNANDEZ COVINGTON, District Judge.
Plaintiff, Federal Trade Commission ("FTC"), filed its Complaint for Permanent Injunction and Other Equitable Relief in this matter, pursuant to 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, and moved for a preliminary injunction and other relief pursuant to Rule 65 of the Federal Rules of Civil Procedure.
The Commission and all Defendants have consented to entry of this Stipulated Preliminary Injunction with Asset Freeze and Appointment of a Receiver ("Stipulated PI Order").
NOW, THEREFORE, the Commission and Defendants, having requested the Court to enter this Stipulated PI Order, and the Court having considered the Stipulated PI Order and for other cause appearing, it is
1. This Court has jurisdiction over the subject matter of this case and has jurisdiction over the parties.
2. Venue, process, and service of process are proper.
3. There is good cause to believe that Resort Solution Trust, Inc., Lincoln Renwick II, and Anthony Talavera (collectively "Defendants") have engaged in, and are likely to engage in the future in, acts and practices that violate Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the FTC's Trade Regulation Rule entitled "Telemarketing Sales Rule" ("TSR"), 16 C.F.R. Part 310, and that the Plaintiff is therefore likely to prevail on the merits of this action.
4. There is good cause to believe that consumers will suffer continuing harm unless Defendants are enjoined by an Order of this Court. The FTC's memorandum in support of its motion for preliminary relief and the accompanying declarations and exhibits demonstrate that it is likely that Defendants have engaged in illegal activity in connection with the sale of timeshare resale services.
5. There is good cause to believe that immediate and irreparable damage to the Court's ability to grant effective final relief for consumers in the form of monetary restitution will occur from the sale, transfer, or other disposition or concealment by Defendants of their assets or corporate records unless Defendants are enjoined by order of this Court. Thus, there is good cause for an asset freeze and the appointment of a receiver over the corporate Defendant, Resort Solution Trust, Inc.
6. Defendants neither admit not deny any of the allegations in the Complaint, except as specifically stated in this Order. Only for the purposes of this action, Defendants admit the facts necessary to establish jurisdiction.
7. Weighing the equities and considering Plaintiff's likelihood of ultimate success, a Preliminary Injunction is in the public interest.
8. No security is required of any agency of the United States for issuance of a Preliminary Injunction order. Fed. R. Civ. P. 65(c).
For purposes of this Stipulated PI Order, the following definitions shall apply:
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A. Misrepresenting, or assisting others in misrepresenting, directly or indirectly, expressly or by implication, that Defendants have a buyer or renter for a consumer's timeshare property who will pay a specified price or that Defendants will quickly sell or rent a consumer's timeshare; and
B. Violating, or assisting others in violating, any provision of the TSR, including, but not limited to:
A. Transferring, liquidating, converting, encumbering, pledging, loaning, selling, concealing, dissipating, disbursing, assigning, spending, withdrawing, granting a lien or security interest or other interest in, or otherwise disposing of any funds, real or personal property, automobiles, accounts, contracts, consumer lists, coins, precious metals, artwork, shares of stock, uncashed checks, or other Assets, or any interest therein, wherever located, including any Assets outside the territorial United States, that are:
B. Opening or causing to be opened any safe deposit boxes, commercial mail boxes, or storage facilities titled in the name of, or for the use or benefit of, any Defendant, or subject to access by any Defendant, or under the control of any Defendant;
C. Incurring charges or cash advances on any credit card, debit card, or lines of credit issued in the name, individually or jointly, of any Defendant;
D. Obtaining a personal or secured loan obligating any Defendant;
E. Cashing any checks or depositing any payments from customers or clients of Defendants received in payment for Corporate Defendant's services; or
F. Incurring liens or other encumbrances on real property, personal property, or other Asset titled in the name, individually or jointly, of any Defendant or of any corporation, partnership, or other entity directly or indirectly owned, managed, or controlled by any Defendant.
The Assets affected by this Section shall include both existing Assets and Assets acquired after the effective date of this Stipulated PI Order.
Provided, however, that:
A. Hold and retain within its control and prohibit the withdrawal, removal, assignment, transfer, pledge, hypothecation, encumbrance, disbursement, dissipation, conversion, sale, liquidation, or other disposal of any of the Assets, funds, Documents, or other property held by or under its control, on behalf of any Defendant, or for the benefit or use of any Defendant, in whole or in part, except:
B. Deny Defendants access to any safe deposit boxes, commercial mail boxes or storage facilities that are titled in the name, individually or jointly, of any Defendant, or otherwise subject to access by any Defendant;
C. Provide to counsel for the Plaintiff, within five (5) business days of notice of this Stipulated PI Order, a sworn statement setting forth:
D. Within five (5) days of a request by Plaintiff, provide Plaintiff with copies of any records or other Documents pertaining to each such account or Asset, including, but not limited to, originals or copies of account applications, corporate resolutions, account statements, signature cards, checks, drafts, deposit tickets, transfers to and from the accounts, all other debit and credit instruments or slips, currency transaction reports, 1099 forms, and safe deposit box logs;
E. Plaintiff may properly serve this Stipulated PI Order on any financial or brokerage institution, business entity or person that holds, controls or maintains custody of any account or Asset of any Defendant or has held, controlled or maintained custody of any account or Asset of any Defendant at any time since January 1, 2008, by facsimile transmission, hand delivery, or overnight carrier.
The Assets affected by this Section shall include both existing Assets and Assets acquired after the effective date of this Stipulated PI Order.
A. A completed financial statement, accurate as of the date of entry of this Stipulated PI Order, for each Individual Defendant in the form of the "Financial Statement of Individual Defendant," and for the Corporate Defendant, in the form of the "Financial Statement of Corporate Defendant." The financial statements shall be accurate as of the date of entry of this Stipulated PI Order and verified under oath. Defendants shall attach to these completed financial statements copies of all local, state, provincial, and federal income and property tax returns, along with other attachments and schedules as called for by the instructions to the financial statements; and
B. The name, address and telephone number of each accountant, financial planner, investment advisor, stock broker or other individual, corporation, or partnership whom they have used for financial, business or tax advice or services, since January 1, 2008.
A. Selling, renting, leasing, transferring, or otherwise disclosing the name, address, birth date, telephone number, email address, Social Security number, credit card number, bank account number, or other financial or identifying personal information of any person from whom or about whom any Defendant obtained such information in connection with the sale or offering for sale of timeshare resale or rental services;
B. Benefitting from or using the name, address, birth date, telephone number, email address, Social Security number, credit card number, bank account number, or other financial or identifying personal information of any person from whom or about whom any Defendant obtained such information in connection with activities alleged in the Complaint.
Provided however, that Defendants may disclose such financial or identifying personal information to a law enforcement agency or as required by any law, regulation, or court order.
A. Failing to create and maintain books, records, accounts, bank statements, accountants' reports, general ledgers, general journals, cash receipt ledgers, cash disbursement ledgers and source documents, documents indicating title to real or personal property, and any other data which, in reasonable detail, accurately, fairly, and completely reflect the incomes, disbursements, transactions, dispositions, and uses of the Defendants' Assets;
B. Destroying, erasing, mutilating, concealing, altering, transferring, or otherwise disposing of, in any manner, directly or indirectly, any Documents, including electronically stored information, that relate in any way to the business practices or business or personal finances of Defendants; to the business practices or finances of entities directly or indirectly under the control of Defendants; or to the business practices or finances of entities directly or indirectly under common control with any other Defendant; and
C. Creating, operating, or exercising any control over any business entity, whether newly formed or previously inactive, including any partnership, limited partnership, joint venture, sole proprietorship, or corporation, without first providing Plaintiffs with a written statement disclosing: (1) the name of the business entity; (2) the address and telephone number of the business entity; (3) the names of the business entity's officers, directors, principals, managers, and employees; and (4) a detailed description of the business entity's intended activities.
A. Assume full control of the Receivership Defendant by removing, as the Receiver deems necessary or advisable, any director, officer, independent contractor, employee, or agent of the Receivership Defendant, including the Individual Defendants, from control of, management of, or participation in, the affairs of the Receivership Defendant. The Receiver shall, however, not interfere with or be privy to the defense of this action;
B. Take custody, control, and possession of all Assets and Documents of, or in the possession, custody or under the control of, the Receivership Defendant wherever situated and including, but not limited to, the business premises of the Receivership Defendant. The Receiver shall have full power to divert mail and to sue for, collect, receive, take possession, hold and manage all Assets and Documents of the Receivership Defendant and other persons or entities whose interests are now held by or under the direction, possession, custody, or control of the Receivership Defendant. Provided, however, that the Receiver shall not attempt to collect any amount from a consumer if the Receiver believes the consumer was a victim of unfair or deceptive acts or practices in the sale or offering for sale of timeshare resale or rental services, without prior Court approval;
C. Use any means necessary to take possession of and to secure each and every business premises of the Receivership Defendant. Such steps may include, but are not limited to, any of the following, as the Receiver deems necessary or advisable: (1) serving this Stipulated PI Order; (2) completing a written inventory of all receivership Assets; (3) obtaining pertinent information from all employees and other agents of the Receivership Defendant, including, but not limited to, the name, home address, Social Security number, job description, passwords or access codes, method of compensation, and all accrued and unpaid commissions and compensation of each such employee or agent; (4) photographing and video taping any or all portions of the location; (5) securing the location by changing the locks and disconnecting any computer modems, servers, network access, or other means of access to the computer or other records maintained at that location; and (6) requiring any persons present on the premises at the time this Stipulated PI Order is served to leave the premises, to provide the Receiver with proof of identification, and to demonstrate to the satisfaction of the Receiver that such persons are not removing from the premises Documents or Assets of the Receivership Defendant;
D. Conserve, hold, and manage all Assets of the Receivership Defendant and perform all acts necessary or advisable to preserve the value of those Assets in order to prevent any irreparable loss, damage, or injury to consumers or creditors of the Receivership Defendant, including, but not limited to, obtaining an accounting of the assets and preventing unauthorized transfer, withdrawal, or misapplication of Assets, and including the authority to liquidate or close out any open securities or commodities futures positions of the Receivership Defendant;
E. Enter into contracts and purchase insurance as advisable or necessary;
F. Prevent the inequitable distribution of assets and determine, adjust, and protect the interests of consumers and creditors who have transacted business with the Receivership Defendant;
G. Manage and administer the business of the Receivership Defendant until further order of this Court by performing all incidental acts that the Receiver deems to be advisable or necessary;
H. Make payments and disbursements from the receivership estate that are necessary or advisable for carrying out the directions of, or exercising the authority granted by, this Stipulated PI Order. The Receiver shall apply to the Court for prior approval of any payment of any debt or obligation incurred by the Receivership Defendant prior to the date of entry of this Stipulated PI Order, except payments that the Receiver deems necessary or advisable to secure assets of the Receivership Defendant, such as rental payments;
I. Determine and implement the manner in which the Receivership Defendant will comply with, and prevent violations of, this Stipulated PI Order and all other applicable laws;
J. Institute, compromise, adjust, appear in, intervene in, or become party to such actions or proceedings in state, federal, or foreign courts that the Receiver deems necessary and advisable to preserve or recover the Assets of the Receivership Defendant or that the Receiver deems necessary and advisable to carry out the Receiver's mandate under this Stipulated PI Order;
K. Defend, compromise, adjust, or otherwise dispose of any or all actions or proceedings instituted against the Receiver in his role as Receiver, or against the Receivership Defendant, as the Receiver deems necessary and advisable to preserve the Assets of the Receivership Defendant, or as the Receiver deems necessary and advisable to carry out the Receiver's mandate under this Stipulated PI Order;
L. Continue to conduct the business of the Receivership Defendant in such manner, to such extent, and for such duration as the Receiver may in good faith deem to be necessary or appropriate to operate the businesses profitably and lawfully, if at all; provided that the continuation and conduct of the business shall be conditioned upon the Receiver's good faith determination that the business can be lawfully operated at a profit using the Assets of the receivership estate;
M. Issue subpoenas to obtain Documents and records pertaining to the receivership, and conduct discovery in this action on behalf of the receivership estate;
N. Open one or more bank accounts as designated depositories for funds of the Receivership Defendant. The Receiver shall deposit all funds of the Receivership Defendant in such a designated account and shall make all payments and disbursements from the receivership estate from such an account. The Receiver shall serve copies of monthly account statements on all parties;
O. Maintain accurate records of all receipts and expenditures made as Receiver;
P. Cooperate with reasonable requests for information or assistance from any state or federal law enforcement agency, including Plaintiff; and
Q. File reports with the Court on a timely basis.
A. Defendants, and their officers, agents, servants, employees, attorneys, and all other Persons who are in active concert or participation with them, who receive actual notice of this Stipulated PI Order by personal service or otherwise, whether acting directly or indirectly, shall fully cooperate with and assist the Receiver. This cooperation and assistance shall include, but not be limited to:
B. Defendants and their officers, agents, servants, employees, attorneys, and all other Persons who are in active concert or participation with them, who receive actual notice of this Stipulated PI Order by personal service or otherwise, whether acting directly or indirectly, are hereby restrained and enjoined from:
Defendants and all agents or employees of Defendants shall provide counsel for Plaintiff and the Receiver with any necessary means of access to Documents, including, without limitation, the locations of Receivership Defendant's business premises, keys and combinations to business premises locks, computer access codes of all computers, including mobile devices, used to conduct Receivership Defendant's business, and storage area access information.
The Receiver and counsel for Plaintiff shall have the right to remove any Documents related to Defendants' business practices from the premises in order that they may be inspected and copied. The materials so removed shall be returned within three (3) business days of completing said copying.
If any Asset or Document belonging to the Receivership Defendant is located at the residence of any Defendant or is otherwise in the custody or control of any Defendant, then such Defendant shall produce the Asset or Document to the Receiver within twenty-four (24) hours of service of this Stipulated PI Order.
A. All Assets of the Receivership Defendant (including, but not limited to, desktop and laptop computers and network servers), including Assets subject to repatriation pursuant to Section XV, infra;
B. All Documents of the Receivership Defendant, including, but not limited to, all financial and accounting records, balance sheets, income statements, bank records (including monthly statements, canceled checks, records of wire transfers, and check registers), customer lists, title documents, contracts, accounting data, written or electronic correspondence, advertisements, computer tapes, disks, or other computerized records, books, written or printed records, handwritten notes, telephone logs, telephone scripts, membership records and lists, refund records, receipts, ledgers, personal and business canceled checks and check registers, appointment books, copies of federal, state, or local business, personal income, or property tax returns, and other Documents or records of any kind that relate to the Receivership Defendant's business practices;
C. All funds and other Assets belonging to members of the public now held by the Receivership Defendant; and
D. All keys, codes, and passwords, entry codes, combinations to locks, and information or devices required to open or gain access to any Asset or Document, including, but not limited to, access to their business premises, means of communication, accounts, computer systems, or other property.
A. Repatriate to the United States all funds, Documents or Assets in foreign countries held either: (1) by any Defendant; (2) for the benefit of any Defendant; or (3) under the direct or indirect control, jointly or individually, of any Defendant;
B. The same business day as any repatriation, (1) notify counsel for the Plaintiff and the Receiver of the name and location of the financial institution or other entity that is the recipient of such funds, Documents or Assets; and (2) serve this Stipulated PI Order on any such financial institution or other entity;
C. Provide the Plaintiff and the Receiver with a full accounting of all funds, Documents, and Assets outside of the territory of the United States held either: (1) by the Defendants; (2) for the Defendants' benefit; or (3) under the Defendants' direct or indirect control, individually or jointly; and
D. Provide Plaintiff with access to all records of accounts or Assets of Defendants held by financial institutions whether located outside the territorial United States or otherwise by signing the Consent to Release of Financial Records.
A. Sending any statement, letter, fax, e-mail or wire transmission, or telephoning 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 as all Assets have been fully repatriated pursuant to the preceding Section of this Stipulated PI Order; and
B. Notifying any trustee, protector or other agent of any foreign trust or other related entities of either the existence of this Stipulated PI Order, or of the fact that repatriation is required pursuant to a Court Order, until such time as all Assets have been fully repatriated pursuant to the preceding Section of this Stipulated PI Order.
A. Commencing, prosecuting, continuing or enforcing any suit or proceeding, except that such actions may be filed to toll any applicable statute of limitations;
B. Accelerating the due date of any obligation or claimed obligation, filing, perfecting, or enforcing any lien; taking or attempting to take possession, custody or control of any Asset; attempting to foreclose, forfeit, alter, or terminate any interest in any Asset, whether such acts are part of a judicial proceeding, are acts of self-help, or otherwise, or setoff of any debt owing to the Receivership Defendant that arose before the date of this Stipulated PI Order against any claim against the Receivership Defendant;
C. Doing any act or thing whatsoever to interfere with the Receiver taking custody, control, possession or management of the Assets or Documents subject to this receivership, or to harass or interfere with the Receiver in any way, or to interfere in any manner with the exclusive jurisdiction of this Court over the Assets and Documents of the Receivership Defendant.
Provided, however, nothing in this Paragraph shall prohibit any law enforcement or regulatory authority from commencing or prosecuting an action against the Receivership Defendant to enforce such governmental unit's police or regulatory power;
Provided further, that, except as otherwise provided in this Stipulated PI Order, all persons and entities in need of documentation from the Receiver shall in all instances first attempt to secure such information by submitting a formal written request to the Receiver, and, if such request has not been responded to within thirty (30) days of receipt by the Receiver, any such person or entity may thereafter seek an order of this Court with regard to the relief requested.
Notice may be provided by email to
