LS Enterprises, LLC

Text (OCR of the scan at left; may contain errors)

Complaint 128 F.T.C.

IN THE MATTER OF

LS ENTERPRISES, LLC, ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-3884. Complaint, July 13, 1999--Decision, July 13, 1999

This consent order, among other things, prohibits the two Connecticut-based companies and a member from misrepresenting their ability to provide unsolicited commercial e-mail products or services, or work-at-home opportunities, and prohibits respondents from making any representation as to the amount of earnings, income, or sales that a prospective purchaser can expect to attain. In addition, the consent order requires the respondents to obtain a performance bond, and to make a disclosure statement regarding the bond, prior to distributing any unsolicited commercial e-mail product or service.

Participants

For the Commission: John Dugan and Andrew Caverly. For the respondents: Pro se.

COMPLAINT

The Federal Trade Commission, having reason to believe that 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 ("respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. 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.

2. 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.

3. 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, including the acts or practices

LS ENTERPRISES, LLC, ET AL. 33

32 Complaint

alleged in this complaint. His place of residence is 13 Branhaven Drive, East Haven, Connecticut.

4. Respondents have advertised, offered for sale, sold, and distributed products and services to the public, including: a service whereby respondents will assist in disseminating unsolicited commercial electronic mail ("E-Mail") on behalf of other companies or individuals who are trying to sell their own products or services; software and mailing lists that would enable other companies or individuals to send their own unsolicited commercial E-Mail; and various business opportunities and work-at-home opportunities offered for sale by respondents via unsolicited commercial E-Mail or postings on Internet newsgroups. Newsgroups are a collection of topic groups and discussion fora on the Usenet portion of the Internet where users can post messages to be read by the general public, and where others can post responses to particular messages. 5. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act.

UNSOLICITED COMMERCIAL E-MAIL PRODUCTS AND SERVICES

6. Respondents have disseminated or have caused to be disseminated advertisements for unsolicited commercial E-Mail products and services, including but not necessarily limited to the attached Exhibits A through D that were disseminated via unsolicited commercial E-Mail, postings on Internet newsgroups, or the World Wide Web. These advertisements contain the following statements:

A. "Bulk E-Mail I[nternet] S[ervice] P[rovider] http:www.freepromo.com/isp.htm High Speed E-Mail Relay Network . . . NOW AVAILABLE! . . . .

LS Enterprises is now presenting THREE new technologies that will only work properly if used all together. The first technology can CHANGE THE MESSAGE- ID **BEFORE** your emails leave your computer! The second technology allows you to send OVER 150,000 EMAILS AN HOUR - with a single computer and modem - and the third technology will relay your email messages through LS Enterprises [sic] *OWN* PROPRIETARY HIGH-SPEED RELAY NETWORK, WITHOUT IDENTIFYING THE DOMAIN NAME OR IP ADDRESS OF THE ORIGIN! . . . .

Complaint 128 F.T.C.

You can make the same fortunes that many other online marketers are making the hard way! . . .

Well, if this package sold for $8,000 . . . you would probably be smart enough to spend that money on 'Cyber-Bomber,' knowing that you will make it right back in the next couple of *days*. . . . The bottom line is that LS Enterprises is offering the full 'Cyber-Bomber' package for only $1,495. This will be the best investment you will make this year - guaranteed. It's hard to put a value on what you will receive, but it would be fair to say that this technology can help make you thousands or even millions - this year! This is what you will receive when you order 'Cyber-Bomber': . . . .

* Unlimited exclusive-direct-access to LS Enterprises [sic] own dedicated highspeed relay network that will relay your email to its final destination, and cloak the originating domain name and IP address of your local dialup provider, leaving absolutely no trace to your origin." (Exhibit A).

B. "27,000,000 Email Addresses Plus 12 Bonuses . . . All For Only $295! EARN INSANE PROFITS WITH THE RIGHT FORMULA . . . .

You can literally make a fortune by just sending out email and the best part is that you will pay nothing to do so. All you need is an internet connection that you can find for as little as $19 per month. . . .

LS Enterprises has been in the online marketing business for over 7 years. We have helped many individuals succeed in marketing their product effectively. It's very simple to do. In fact, soon you will have the problem of what to do with all the cash you will make from sending out bulk email.

Here is just one of many true success stories we have seen . . . We did a mailing of 1 ½ million emails for one of our customers. He was selling a home workers manual for $29.95. His results are very typical and scary. He took in over 700 orders! 700 x $29.95 = $20,000. This gentleman was so amazed, that after being skeptical, it had really happened to him, he made it, he found a niche. That niche was email! He went on to buy our full list and will be set for life in less than a years time. All this from selling a manual via email. That was just one of the many success stories we hear everyday. It may all sound to [sic] good to be true. Well, we can tell you this. It really does work. Why else are there so many individuals doing it? They are not just wasting their time. They are all making mega bucks." (Exhibit B).

C. "Bulk Email Services . . . .

The Demographic Breakdown for our [mailing] list of 300,000 [bulk e-mail] recipients, include only business people and opportunity seekers. All recipients are located in the United States and are interested in receiving emails from other businesses. Recent research reveals that approximately 90% of our recipients are small business owners or opportunity seekers. The remaining 10% of our list is comprised of medium to large corporations. . . . These types of individuals have proven to be most receptive to internet marketing." (Exhibit C).

LS ENTERPRISES, LLC, ET AL. 35

32 Complaint

D. "The Truths about Bulk Email

Our Recipient List Our recipient list is over 27,000,000 and continuously growing. It is made up of mainly small business owners and individuals that would be categorized as opportunity seekers. Experience has shown that these types of recipients are the most responsive to this form of marketing." (Exhibit D).

7. Through the means described in paragraph 6, respondents have represented, expressly or by implication, that:

A. Respondents act as an E-Mail Internet Service Provider, maintaining their own proprietary high speed E-Mail relay network through which unsolicited commercial E-mail can be transmitted. B. Respondents sent out 1.5 million unsolicited commercial E-Mails on behalf of one customer who was selling a home worker's manual for $29.95 each, and this customer took in over 700 orders as a result of this one mailing, earning $20,000.

8. In truth and in fact:

A. Respondents do not act as an E-Mail Internet Service Provider, and do not maintain their own proprietary high speed E-Mail relay network through which unsolicited commercial E-mail can be transmitted. Rather, respondents can arrange for purchasers to have their unsolicited commercial E-mail transmitted through actual Internet Service Providers. B. Respondents did not send out 1.5 million unsolicited commercial E-Mails on behalf of one customer who was selling a home worker's manual for $29.95 each, and who then took in over 700 orders as a result of this one mailing, earning $20,000. The representation set forth in paragraph 7(B) does not reflect the actual experience of any customer of respondents.

Therefore, the representations set forth in paragraph 7 were, and are, false or misleading. 9. Through the means described in paragraph 6, respondents have represented, expressly or by implication, that:

A. Purchasers of respondents' unsolicited commercial E-Mail products and services can reasonably expect to achieve a specific level of earnings, income, or sales, such as: sales of 700 products and

Complaint 128 F.T.C.

profits of $20,000 for each one-time sending of bulk unsolicited commercial E-Mail; earnings of millions of dollars per year; or recouping an investment of up to $8,000 within a matter of days. B. Most or all of the recipients on respondents' E-Mail recipient lists have been identified as small business owners and individuals categorized as opportunity seekers who are interested in receiving unsolicited commercial E-Mail.

10. In truth and in fact:

A. Few if any purchasers attain the specific level of earnings, income, or sales represented by respondents. B. Few if any of the recipients on respondents' E-Mail recipient lists have been identified as small business owners and individuals categorized as opportunity seekers who are interested in receiving unsolicited commercial E-Mail.

Therefore, the representations set forth in paragraph 9 were, and are, false or misleading.

11. Through the means described in paragraph 6, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in paragraph 9, at the time the representations were made. 12. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in paragraph 9, at the time the representations were made. Therefore, the representation set forth in paragraph 11 was, and is, false or misleading.

WORK-AT-HOME OPPORTUNITIES AND BUSINESS OPPORTUNITIES

Mystery Shopper Promotion

13. Respondents have disseminated or have caused to be disseminated advertisements for a work-at-home opportunity as a "mystery shopper," i.e., someone who is hired by companies to shop in their stores or places of business and then report back on the shopping experience, including but not necessarily limited to the attached Exhibit E that was disseminated via unsolicited commercial E-Mail and postings on Internet newsgroups. This advertisement contains the following statements:

LS ENTERPRISES, LLC, ET AL. 37

32 Complaint

"Subject: $ JOBS $

....

GET PAID TO SHOP AND RECEIVE FREE MERCHANDISE!

....

[Y]ou can easily make $300 - $600 part-time in your area.

....

You are guaranteed to find a position in your local area and we will make sure this dream comes true for you. In fact, we are the #1 company in connecting people just like you with the right contacts. You can earn up to $24 per hour and bring home Free Merchandise every time you go shopping. Items such as Food, Clothing, Appliances, Electronics and much more. In addition, you will even receive coupons worth hundreds of dollars in free stuff. Help solve your money problems! If you already have a job, you can still work part-time and earn a hefty pay check each week, or if you want a full-time job and want to earn $600 to $1000 or more per week, then this could be for you. You can take as many shopping assignments as you desire. You can also turn down assignments if you wish, without losing your job. Basically you work when you want and for whoever you want. We will make sure you have as many assignments as you need.

....

[M]ajor corporations ask contractors such as ourselves, to hire people like you to do this simple work. Where [sic] not the only contractor. There are hundreds of contractors and each one has thousands of assignments they need to give to somebody, why not let that somebody be you. In addition to our service, you will be given a 25 page manual that will include over one hundred contractors['] [n]ames, [p]hone [n]umbers, and addresses so you can get in touch with them for more assignments. You can work for as many contractors as you like and for as long as you like. You can even make a career out of Mystery Shopping!

....

In addition, you will be entered into our Nationwide Database, so when there is [sic] extra "shops" in your area, you will be contacted in advance to see if you can fit them in your schedule.

....

You never have to pay any money for the merchandise [that you purchase during a shopping assignment]. You will be given Vouchers or Free Coupons to make sure you don't spend one single penny of your own cash. In other words, you pick out the merchandise, totaling a certain amount, usually $25 to $75 worth of merchandise. The company pays for it . . . . and you get to keep it! This of course, is in addition to making upwards of $24 per hour. There is a one time refundable fee of $29.00 to get started. This is a small fee indeed! This one-time refundable fee is to ensure us that you are serious about Mystery Shopping. We are looking for serious people and this is a good way to weed out the people who just are not serious. 60 Day No Risk Trial! We have helped thousands of people get started Mystery Shopping. Let us help you. Try Mystery Shopping for 60 days and if it's not for you, we will promptly refund your $29[.] Guaranteed !

Complaint 128 F.T.C.

In order to get started, just [p]rint out the form below and fill in the necessary information. [S]end it to us along with your check or money order and then wait 3 to 7 days to hear from us. Also, upon receiving your form, [W]e will [r]ush the Professional Mystery Shopping Guide to you the same day. This is the guide that contains the Mystery Shopping contractors in your area and will be waiting to hear from you.

This is a one time offer and will never be repeated. You must act right now and let us hear from you today. When we receive your profile form below[,] [y]ou can begin Mystery Shopping. You will then be able to take on as many assignments as you desire and work for as long as you wish, with no obligation to us." (Exhibit E).

14. Through the means described in paragraph 13, respondents have represented, expressly or by implication, that:

A. Respondents act as contractors for major corporations to hire consumers to work as "mystery shoppers," and have hired thousands of consumers to work as "mystery shoppers."

B. Respondents have actual job openings for "mystery shoppers" all over the country, and consumers who respond to respondents' "mystery shopper" promotion will be given as many "mystery shopper" assignments from respondents as they want or need.

15. In truth and in fact:

A. Respondents do not act as contractors for major corporations to hire consumers to work as "mystery shoppers," and have not hired thousands of consumers to work as "mystery shoppers." Rather, respondents do nothing more than sell a manual known as the "Guide to Professional Mystery Shopping."

B. Respondents do not have actual job openings for "mystery shoppers" all over the country, and consumers who respond to respondents' "mystery shopper" promotion will not be given as many "mystery shopper" assignments from respondents as they want or need. Rather, respondents do nothing more than sell a manual known as the "Guide to Professional Mystery Shopping."

Therefore, the representations set forth in Paragraph 14 were, and are, false or misleading.

16. Through the means described in paragraph 13, respondents have represented, expressly or by implication, that:

A. Consumers who respond to respondents' "mystery shopper" promotion can reasonably expect to achieve a specific level of

LS ENTERPRISES, LLC, ET AL.

Complaint earnings, such as $300 to $600 per week part time, $600 to $1000 or more per week full time, or up to $24 per hour. B. Consumers who respond to respondents' "mystery shopper" promotion will always receive for free all merchandise purchased during "mystery shopper" assignments. 17. In truth and in fact:

A. Few if any consumers who respond to respondents' "mystery shopper" promotion attain the specific level of earnings represented by respondents. B. Consumers who respond to respondents' "mystery shopper" promotion may not always receive for free all merchandise purchased during "mystery shopper" assignments. Whether consumers receive any free merchandise, and the types of merchandise they may receive, depend on the policies of companies who actually hire and use "mystery shoppers." Therefore, the representations set forth in paragraph 16 were, and are, false or misleading. 18. Through the means described in paragraph 13, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in paragraph 16, at the time the representations were made. 19. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in paragraph 16, at the time the representations were made. Therefore, the representation set forth in paragraph 18 was, and is, false or misleading. General Work-At-Home Opportunities 20. Respondents have disseminated or have caused to be disseminated advertisements for general work-at-home opportunities, including but not necessarily limited to the attached Exhibit F that was disseminated via unsolicited commercial E-Mail and postings on Internet newsgroups. This advertisement contains the following statements: "Subject: MAKE EXTRA CASH AT HOME! ....

****WORK IN THE COMFORT OF YOUR OWN HOME****

Complaint 128 F.T.C.

***WIDE SELECTION OF JOBS . . . TOP PAY*** **REAL JOBS WITH REAL COMPANIES** Plus receive your very own ‘Computer Cash Disk’ . . FREE! Every day thousands of people just like you are getting started working at home in fields of computer work, sewing, assembling products, crafts, processing coupons, typing, telephone work and much more! WHO ARE HOME WORKERS? They are regular ordinary people who earn an excellent living working at their own pace and make their own hours. They are fortunate people who have found an easier way to make a living. They had absolutely no prior experience in this field. They earn several hundred dollars weekly in the comfort of their own home and you can be next! Companies all over the United States want to hire you as an independent home worker.

. . . .

$$$$ EASY EXTRA INCOME AT HOME $$$$ All business can be done by Mail or phone. You can START THE SAME DAY you receive the ‘Guide to Genuine Home Employment.’ Start Receiving Money in about two [w]eeks and every week from then on for as long as you desire.

**ONLY REAL COMPANIES OFFERING REAL JOBS! The companies in our guide are legitimate and really need home workers. There is [sic] over one hundred of the top companies included in our guide offering an opportunity for you to make extra income at home. Unlike other insulting booklets or lists you may see, our guide only includes up to date information of companies who pay top dollar for your services and will hire you. . [. . ] GUARANTEED! . . . .

You are guaranteed to find home based work in our guide. . [. .] No Problem! . . . . .

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ This is an opportunity for you to become an independent HOME WORKER. remember, this is not a get-rich-quick-scheme. It is an easy way for you to [e]arn [m]oney while filling the needs of a company who needs you. . . . .

We helped thousands of people like yourself get started working at home. You can be next! THINK WHAT AN EXTRA $300, $700 OR MORE A WEEK COULD DO FOR YOU AND LET US HEAR FROM YOU TODAY! THIS COULD EASILY CHANGE YOUR LIFE FOREVER! DON’T LET THIS EXTRAORDINARY OPPORTUNITY PASS!! THESE OPPORTUNITIES ARE PROFITABLE AND EASY . . . ACT NOW!!!!!! . . . .

Send Check or Money-Order for $29.95 [t]o:

LRS PUBLICATIONS." (Exhibit F).

LS ENTERPRISES, LLC, ET AL. 41

32 Complaint

21. Through the means described in paragraph 20, respondents have represented, expressly or by implication, that respondents have helped thousands of consumers to find home-based work.

22. In truth and in fact, respondents have not helped thousands of consumers to find home-based work. Respondents sell a home workers' manual that contains tips for finding home-based work and a list of companies that may be hiring home workers. Respondents have sold fewer than 200 of these manuals. Therefore, the representation set forth in paragraph 21 was, and is, false or misleading.

23. Through the means described in paragraph 20, respondents have represented, expressly or by implication, that:

A. Consumers who purchase respondents' "Guide to Genuine Home Employment" can reasonably expect to achieve a specific level of earnings, such as $300 to $700 or more per week.

B. Consumers who purchase respondents' "Guide to Genuine Home Employment" can start working at home the same day they receive the guide, will start receiving earnings within two weeks of receiving the guide, and will continue to receive earnings every week thereafter for as long as they want to continue working at home.

24. In truth and in fact:

A. Few if any purchasers attain the specific level of earnings represented by respondents.

B. Few if any purchasers can start working at home the same day they receive the guide, will start receiving earnings within two weeks of receiving the guide, or will continue to receive earnings every week thereafter for as long as they want to continue working at home.

Therefore, the representations set forth in paragraph 23 were, and are, false or misleading.

25. Through the means described in paragraph 20, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in paragraph 23, at the time the representations were made.

26. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in paragraph 23, at the time the representations were made. Therefore, the representation set forth in paragraph 25 was, and is, false or misleading.

Complaint 128 F.T.C.

Sale of Distribution Rights to Consumer Manuals

27. Respondents have disseminated or have caused to be disseminated advertisements for a business opportunity or work-athome opportunity involving making money through the reproduction and distribution of various consumer manuals, including but not necessarily limited to the attached Exhibit G that was disseminated via unsolicited commercial E-Mail and postings on Internet newsgroups. This advertisement contains the following statements:

"Subject: Open . . . . . NOW!!!

. . . .

FOR SALE! My Multi-Million Dollar Publishing Company - $199. If you ever wanted 'the easy way out' to make a lot of money with a business of your own. . . Here is the easiest way to start!

. . . .

For the past five years or so. . . I've been running small, inexpensive ads in the back of many large National magazines and the Internet. These ads were always small and very cheap. . . On [sic] these ads I've been selling little manuals. These manuals sold from $14.95 - $49.95 each. I always ran a different ad for each manual I was selling.

I have collected the reprint rights to 15 different HOT SELLING manuals on topics that consumers really need. . . . [I]t is very cheap to produce HOW-TO manuals. It usually costs me about 40 cents to produce each manual that I get to sell for as much as $49.95. That s [sic] one hell of a mark-up. Anyway, I've been selling these 15 manuals with little, cheap ads in the back of National Magazines and on the Internet for the past five years or so. . . Each manual brings me about $2000 - $4000 per week - PER AD . . . . This is big money stuff . . . A very lucrative business to be in.

Well this is where the unbelievable offer comes in . . . I hope your [sic] sitting down for this one . . . because it is a once in a lifetime offer to you. I do not know of any easier way for you to become financially independent . . . In fact THEIR [sic] IS NO EASIER WAY!!! . . . Since I m [sic] so busy selling my best-selling HOW-TO business books nowadays . . . I do not have the time to service these ads . . . It s [sic] just that I really can t [sic] find the time to have all the orders taken care of in a timely fashion.

. . . .

[L]ike I was saying $2000 to $4000 per week per advertisement. There are 15 different manuals. . . and there are several hundreds of magazines to run these little ads in.

. . . .

I m [sic] willing to sell you the entire set of reprint rights to all 15 of these manuals on a 3 1\2 [sic] floppy disk . . . I m [sic] also willing to give you the rough drafts of the actual ads that sold these manuals!!! (all you have to do is have them copied.

LS ENTERPRISES, LLC, ET AL. 43

32 Complaint

You can do it yourself - or you can take them all to a local copy shop. . . this is why I say Push One Button And Start Your Own Million Dollar Publishing Company). . . . .

Remember these are PROVEN winners.

. . . .

One of the manuals in this kit sold $4,000,000 worth by a Florida man named M. Zboch. Now, I got the reprint rights . . . and I ll [sic] sell them to you . . . If your [sic] wondering how much this will cost you . . . Think about it for a minute. There are 15 different manuals that can make you $3000 per week - each manual . . . That equals $45,000 per week if you placed an ad in one magazine . . . Now there are thousands of magazines and newspapers out there . . . You can place these ads in more magazines as you make more money . . . You can also sell them through direct mail . . .

. . . .

[Y]ou get to make a ton of money off these manuals, for as long as you wish. . . . All I ask for is this. . . $199.00 and I'll include RUSH shipping for free! . . . But there is only one drawback. . . I will only allow 200 sets of my Publishing Company In A Box to be sold. It won t [sic] make much sense if I sold the kit to 1000 or 2000 people. . . the market would be saturated with the same manuals. . . and I don't want that. To make sure the same people who invest in this offer get the same results I got in the past 5 years. . . Only 200 people can have it for $199.00. . . . .

And anyone who gets their check in to me late. . . I ll [sic] simply send it back uncashed. . . . For only $199.00 I m [sic] going to let you in on the easiest money you ll [sic] ever make. YOU DO NOT HAVE TO DO ANYTHING!! The ads are done. The manuals are all written. The printer will print the manuals for about 40 cents. . . All you have to do is place the ads and your [sic] set. . . Push one button today! Rush me your payment of $199.00 right now. . . and get your very own MILLION-DOLLAR publishing company going! . . . .

Sincerely,

Louis Salatto Owner Enterprise Publications." (Exhibit G).

28. Through the means described in paragraph 27, respondents have represented, expressly or by implication, that respondents have been selling the consumer manuals referred to in paragraph 27 for five years preceding the dissemination of the advertisement(s) referred to in paragraph 27, and that the experiences related in paragraph 27 are those of respondents over that five year period. 29. In truth and in fact, respondents have not been selling the consumer manuals referred to in paragraph 27 for five years preceding the dissemination of the advertisement(s) referred to in paragraph 27, and the experiences related in paragraph 27 are not the

Complaint 128 F.T.C.

actual experiences of respondents over that five year period. Rather, respondents began selling the consumer manuals referred to in paragraph 27 no earlier than March 1996, and began disseminating the advertisement(s) referred to in paragraph 27 shortly thereafter. Therefore, the representations set forth in paragraph 28 were, and are, false or misleading. 30. Through the means described in paragraph 27, respondents have represented, expressly or by implication, that consumers who purchase from respondents the right to reproduce and distribute various consumer manuals can reasonably expect to achieve a specific level of earnings, such as $2,000 to $4,000 per week for each individual advertisement promoting a single manual, $45,000 per week for 15 individual advertisements promoting each of 15 different manuals, $4,000,000 overall for one particular manual, or millions of dollars each year. 31. In truth and in fact, few if any purchasers attain the specific level of earnings represented by respondents. Therefore, the representations set forth in paragraph 30 were, and are, false or misleading. 32. Through the means described in paragraph 27, respondents have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in paragraph 30, at the time the representations were made. 33. In truth and in fact, respondents did not possess and rely upon a reasonable basis that substantiated the representations set forth in paragraph 30, at the time the representations were made. Therefore, the representation set forth in paragraph 32 was, and is, false or misleading. 34. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

LS ENTERPRISES, LLC, ET AL. 45

32 Complaint

EXHIBIT A

High Speed Bulk E-Mail Relay Network...

NOW AVAILABLE!

----> Send All The Bulk Email You Wish..

-----> At Lightning Fast Speed...

------> From Your Own Local Dialup Account... ------> Without The Risk Of Account Termination... ------> Without Stealing Other People's Resources...

The Ultimate Bulk Email Solution Has Finally Arrived!

> SEND OVER 150,000 EMAILS AN HOUR WITH A 28.8 MODEM!

>YOUR LOCAL DIALUP ACCOUNT WON'T BE SHUT OFF!

>YOUR EMAIL CAMPAIGN WILL BE COMPLETELY LEGAL!

*** LS Enterprises Has Done It Again ***

*** This Is The Big One! ***

As soon as you finish reading this document, you will WANT to SPEND thousands of dollars! You are about to enter a technical lesson that will - believe it or not - leave a lasting impression that will never be forgotten! It's time to turn on your thinking caps. This information is vital! Every single Internet email message has an origin, relay, and destination.

* Your dial-up account is the --origin--.

* Email messages must be --relayed-- to get to its final destination. Email programs have a setting for "relay host" or "smtp". That setting represents a computer that acts as a relay. Almost every computer connected to the Internet can act as a relay. You will soon see why that could lead to BIG trouble! * And, of course, the recipient of your message is the --destination--.

Every email message contains a "body" and a "header". * The --body-- is the actual message that you type. * The --header-- contains all of the technical information about the route that takes place when the email message travels from the origin to the relay to the destination. (Don't worry... We're going somewhere with all of this!)

Every computer connected to the Internet is represented by an "IP address" and a "domain name".

* An --IP address-- is a numeric code (ie. 205.199.212.30) that uniquely identifies a computer on the Internet. Any technically savvy Internet user can easily trace an IP address to the real owner of that particular machine.

EXHIBIT A 06/20/97 15:20:5

Complaint 128 F.T.C.

EXHIBIT A

to the real owner of that particular machine.

* A --domain name-- is a name that corresponds with an IP address (ie. freepromo.com). Generally, domain names were invented because they were easier to remember than IP addresses. But once again, any technically savvy Internet user can easily trace a domain name to the real owner of that particular machine. In every email header, one can see the IP address and domain of the computer from where the message originated, the IP address and domain of the computer that relayed the message, and the IP address and domain of the final destination.

PUNCH LINE... You see, the information in this wonderful email header is used by anti-commercial-email people to make your life miserable!! Without the header, the interference with your business would magically disappear!! Everyone knows that bulk emailers don't actually *try* to offend people. It would be stupid to do so purposely. How can bulk emailers make money if all of their potential clients are offended? The truth is that most people don't mind getting solicited through email, and many people end up BUYING! But -- The biggest problem that bulk emailers face is that if even 1 out of 1000 recipients complain, the bulk emailers' dialup-service-providers receive enough complaints to cancel their accounts!

SO HOW DID BULK EMAILERS OVERCOME THIS TERMINATION PROBLEM? They didn't! To lower the complaint rate, many bulk emailers began to "forge" their "return" addresses. In the beginning, people who were new to the Internet were fooled by this. But the problem was that the email *headers* still showed the true route of the messages. As Internet users became more educated in deciphering email headers, the forging tactics actually generated even more angry complaints to the originating dialup providers. So, then some bulk emailers discovered a new "trick". They realized that many computers on the Internet could be used to relay their mail. Even better, many of those relays did not identify the IP address of the origin's computer. But this tactic went sour, too. The origin's IP addresses may not have appeared, but the origin's domain name still *did* appear, thus still making it easy to identify the origin.

In addition, the owners of many of these unwilling relays quickly caught onto this tactic and reconfigured their computers to reject relay connections. This practice will lead to much more headache than it is worth!! SO WHY IS ALL OF THIS SO IMPORTANT? Because you will now appreciate the significance of LS Enterprises latest achievement... LS Enterprises is now presenting THREE new technologies that will only work properly if used all together. The first technology can CHANGE THE MESSAGE-ID **BEFORE** your emails leave your computer! The second technology allows you to send OVER 150,000 EMAILS AN HOUR - with a single computer and modem - and the third technology will relay your email messages through LS Enterprises *OWN* PROPRIETARY HIGH-SPEED RELAY NETWORK, WITHOUT IDENTIFYING THE DOMAIN NAME OR IP ADDRESS OF THE ORIGIN!

The end result is that you will be able to send all the bulk email you wish - AT LIGHTNING FAST SPEED - from your own local dialup account - without the risk of account termination! --- NOW WASN'T THAT WORTH READING?!?! --- If you thought *that* was good, then wait till you read this conclusion!!

INTRODUCING... LS Enterprises pride and joy... The ultimate solution... The package that will forever change the bulk email industry... The one and only... BRAND NEW...

---------- "Cyber-Bomber" ----------

"Cyber-Bomber" is a tremendously powerful package that will allow you to send email out on a Windows based machine connected with a 28.8 modem at speeds rivaling a T1 server.

06/20/97 15:20:55

LS ENTERPRISES, LLC, ET AL.

Complaint EXHIBIT A

on a Windows based machine connected with a 28.8 modem at speeds rivaling a T1 server. Standard email software only allows you to send mail at a rate of approximately 7,000 - 10,000 recipients an hour. "Cyber-Bomber" sends as much as 150,000 or more per hour! Not only does "Cyber-Bomber" consistently outperform the others, but it also includes many more powerful features! Here are some of the amazing cutting-edge features included with LS Enterprises new "Cyber-Bomber" package...

* Multitasking - opens several separate connections at the same time to LS Enterprises dedicated relay network so that your computer will essentially "clone" itself into 15 or more sending machines!!

* Can send personalized email which will greatly increase positive responses and dramatically lower flames... "Dear (recipient's address),"

* Can break large lists into subsets so you can test different ad copies against equal portions of your mailing list

* Automatically skips invalid email addresses (missing .com or .net, etc.)

* Can skip certain "foreign" email addresses that would greatly slow down the sending process

* When sending to AOL members, it can remove the complete header section from obvious view, by using special built-in email coding.

* Can automatically check *incoming* email every 30 seconds

* Automatically adds "remove" and "unsubscribe" requests to your do-no-send list

* Automatically processes undeliverable addresses and builds a "return" list

* Includes special "flame" handling capabilities

* Generates statistical analysis of responses. You can track percentages of REMOVES, RETURNS, FLAMES, and POSITIVE REPLIES! This feature is invaluable for testing different ad copies and email lists!

So, as you can see, the "Cyber-Bomber" package will give you the tools to successfully promote your product, service, or opportunity to hundreds, thousands, or millions of Internet users every day, without the regular headaches and obstacles that most bulk emailers have come to expect every day! You can make the same fortunes that many other online marketers are making the hard way! Remember earlier, we told you that you would actually *want* to *spend* thousands of dollars?

Well, if this package sold for $8,000 (the price of one high-speed email server and one month of T-1 service) you would probably be smart enough to spend that money on "Cyber-Bomber", knowing that you will make it right back in the next couple of *days*. But, LS Enterprises has never set high prices for cutting-edge services. That's why you can get two years of autoresponder service for 139 bucks (when others charge the same - for setup alone), or three years of unlimited bullet-proof web hosting for under $700 (when others charge $500 a MONTH for similar services).

The bottom line is that LS Enterprises is offering the full "Cyber-Bomber" package for only $1,495. This will be the best investment you will make this year - guaranteed. It's hard to put a value on what you will receive, but it would be fair to say that this technology can help you make thousands or even millions - this year! This is what you will receive when you order "Cyber-Bomber":

06/20/97 15:20:55

Complaint 128 F.T.C.

EXHIBIT A

* An easy-to-use fully-documented software package that will turn your PC & modem into a powerful email server - which will not only send over 150,000 qualified emails per hour, but will also cloak the "message-id" in the headers.

* Unlimited exclusive-direct-access to LS Enterprises own dedicated high-speed relay network that will relay your email to its final destination, and cloak the originating domain name and IP address of your local dialup provider, leaving absolutely no trace to your origin.

* A special "reply" / "return" email address on LS Enterprises network that can handle all of the responses and returns. This email account will integrate seamlessly with "Cyber-Bomber"s powerful incoming email processing features!

* Unlimited technical support by the people who programmed this great software package. And as always, your purchase is protected by a full "no questions asked" 10 day money back guarantee by LS Enterprises.

MINIMUM HARDWARE REQUIREMENTS TO QUALIFY FOR "CYBER-BOMBER": 486DX or better 33MHZ or better 8MB RAM or better Windows 3.x, 95, or NT 14.4kbs modem or faster PPP or SLIP account with an ISP.

ACT NOW! This is the total bulk email solution! Don't delay on this one! This is what you've been waiting for! If you have any questions, please feel free to call LS Enterprises at: 1-203-483-8634

ORDER NOW...CLICK HERE!

[ Email Us ] [ Home Page ] [ C.D.S. ] [ Bulk Email Services ] [ Webcollector ] [ Bulk EMail ISP ] [ Bullet Proof Autoresponder ] [ Become A Dealer ] [ Internet Marketers Resource Center ] [ Direct Response Marketing ] [ Bulk Email Addresses ] [ Merchant Account ] [ Sonic Mass Mailer ]

06/20/97 15:20:55

LS ENTERPRISES, LLC, ET AL. 49

32 Complaint

EXHIBIT B

27,000,000 Email Addresses Plus 12 Bonuses...

All For Only $295!

EARN INSANE PROFITS WITH THE RIGHT FORMULA

If you have a product, service, or message that you would like to get out to Thousands, Hundreds of Thousands, or even Millions of people, you have several options. Traditional methods include print advertising, direct mail, radio, and television advertising. They are all effective, but they all have two catches: They're EXPENSIVE and TIME CONSUMING. Not only that, you only get ONE SHOT at making your message heard, by the right people.

The INTERNET, the "Global Communications Frontier" has changed this dramatically, including making countless individuals wealthy. "Electronic Marketing," as it's commonly referred to, has effectively leveled the playing fields of all types businesses.

You can literally make a fortune by just sending out email and the best part is that you will pay nothing to do so. All you will need is an internet connection that you can find for as little as $19 per month. To find one, simply Click Here!

LS Enterprises has been in the online marketing business for over 7 years. We can help make your goals come true. We have helped many individuals succeed in marketing their product effectively. It's very simple to do. In fact soon you will have the problem of what to do with all the cash you will make from sending out bulk email.

Here is just one of many true success stories we have seen...

We did a mailing of 1 1/2 million emails for one of our customers. He was selling a home workers manual for $29.95. His results are very typical and scary. He took in over 700 orders! 700 x $29.95 = $20,000. This gentleman was so amazed, that after being skeptical, it had really happened to him, he made it, he found a niche. That niche was email! He went on to buy our full list and will be set for life in less than a years time. All this from selling a manual via email.

That was just one of the many success stories we hear everyday. It may all sound to good to be true. Well, we can tell you this. It really does work. Why else are so many individuals doing it? They are not just wasting their time. They are all making mega bucks.

Don't even hesitate on this one or you will miss out on the biggest and most effective way to market anywhere..PERIOD!

HERE'S THE BOTTOM LINE

AND

WHAT WE CAN DO FOR YOU

EXHIBIT B

06/20/97 15:13:01

Complaint 128 F.T.C.

EXHIBIT B

WHAT WE CAN DO FOR YOU

Here is what you get when you order today!

>> 27 Million Email Addresses... 1 per line in simple text format on a CD. Multiple files of 250,000 or greater (no codes needed to open files). You will receive email addresses of the following domains... AOL, PRODIGY, COMPUSERVE, DELPHI, GENIE, JUNO, PIPELINE, INTERAMP, MSN, MCI, and 5 MILLION OTHER MIXED EMAIL ADDRESSES (.com, .net). All names listed above are seperated in files by domain name for your convenience.

PLUS THESE BONUS SPECIALS...

>> 2 Free Bulk Email Programs...Pegasus and Eudora. You will be able to load our names into these 2 Distribution List Software's (which will create Distribution Lists Saving you hours of work) for immediate, around the clock launching! You can whip out as many distribution lists as you like, and depending on the speed of your modem and the length of your message, you will be able to send out around 10,000 to 30,000 messages per hour for free.

>> "Floodgate" Bulk Email Loader Demo. This is the most popular bulk emailer in the world. You can test drive it for free.

>> Super Note Pad... This software will help manage your large text files for you

>> Winzip Self Extractor... This program will be needed when de-compressing a compressed file. It will come in handy when dealing with files of zip format.

>> Over 5,000 Places To Advertise For Free!

Plus Yet Another Bonus...

>> "Profits 2500 Series"... 7 manuals that will teach you how to market on the internet and what offers work and which ones to stay clear of. Also we will show you where to find web designers for free and much, much more!

YOU GET EVERYTHING FOR ONLY $295...

We have previously sold the seven manuals alone for over $200. Now you can have the complete package for the low price of only $295!

This unbelievably low price will not last for ever. Reserve your email package today!

ORDER TODAY..CLICK HERE!

All lists are completely free of any Duplicates. We also, on a continual basis, add New names and Remove Undeliverables and Remove Requests.

The result is the Cleanest Email Addresses Available Anywhere to use over and over again, for a

3 06/20/97 15:13:02

LS ENTERPRISES, LLC, ET AL. 51

32 Complaint

EXHIBIT B

FRACTION of the cost that other companies charge. Typical rates for acquiring email lists are from 1 cent to as high as 3 cents per email address - that's "INFORMATION HIGHWAY" ROBBERY!.

Start earning mega money and get started now!

EASY ORDERING INSTRUCTIONS CLICK HERE!

If you have any further questions contact us by email: Click here, or call our Marketing Department at: 203-483-8634

[ Email Us ] [ Home Page ] [ C.D.S. ] [ Bulk Email Services ] [ Sonic Mass Mailer ] [ Bulk EMail ISP ] [ Bullet Proof Autoresponder ] [ Become A Dealer ] [ Internet Marketers Resource Center ] [ Direct Response Marketing ] [ Bulk Email Addresses ] [ Merchant Account ] Webcollector

f3 06/20/97 15:13:02

Complaint 128 F.T.C.

EXHIBIT C

Bulk Email Services [illegible]

Bulk Email Services

To learn more about Bulk Email and how to effectivly use it Click Here

Bulk Email Rates

Exclusive - Bulk E-Mailing

| | Up to 5 line AD | 6 to 10 line AD | Recipients | | PLAN 1 | $125 | $175 | 100,000 | | PLAN 2 | $195 | $250 | 200,000 | | PLAN 3 | $275 | $325 | 300,000 |

If Ad exceeds 10 lines, add $10 per additional line.

*** Best Value - Exclusive Bulk E-Mailing ***

Full Page up to 40 Lines | $399 | 300,000

The cost to send your message by postal mail would be over $75,000 with us it's ONLY $399. Your message will go out exclusivly (no other messages) to our full Circulation.

Full Page up to 40 Lines | $299 | 200,000

Full Page up to 40 Lines | $199 | 100,000

1 Line = 78 characters, including spaces, commas and periods.

The Demographic Breakdown for our list of 300,000 recipients, includes only business people and opportunity seekers. All recipients are located within the United States and are interested in receiving e-mails from other businesses. Recent research reveals that approximately 90% of our recipients are small business owners or opportunity seekers. The remaining 10% of our list is comprised of medium to large corporations. We do not currently break-down our lists in any other way, which is reflected in our low rates. These types of individuals have proven to be the most receptive to internet marketing.

2 EXHIBIT C 06/20/97 15:14:01

LS ENTERPRISES, LLC, ET AL. 53

32 Complaint

EXHIBIT C

Bulk Email Services http://www.ireepromo.com/buik.htm

General Recipients

If you have a product or service that would be of interest to a broader field of individuals, we also have a list of over 1,000,000 general recipients. There are no demographics available for this list, other than, all recipients are located within the United States. The rates for mailing to this list are the same as the above listed lists. For mailings over 300,000, please contact us for a current quote.

EASY ORDERING INSTRUCTIONS

If you have any questions send us email Click Here or call our Marketing Dept. at 203-483-8634

[ Email Us ] [ Home Page ] [ C.D.S. Check System ] [ Bulk Email Services ] [ Webcollector ] [ Bulk EMail ISP ] [ Bullet Proof Autoresponder ] [ Become A Dealer ] [ Internet Marketers Resource Center ] [ Direct Response Marketing ] [ Bulk Email Addresses ] [ Merchant Account ] [ Sonic Mass Mailer ]

2 of 2 06/20/97 15:14:01

Complaint 128 F.T.C.

EXHIBIT D

The Truths about Bulk Email http://www.freepromo.com/truths.htm

The Truths about Bulk Email

What is Bulk Email ?

Bulk Email is a powerful and fast promotional method in which your message is sent to 10's of thousands of people instantly via the internet.

Bulk Email vs. other Advertising

The cost associated with bulk email is lower than any other form of advertising.

The response rate can be much higher. This is because when you send someone email it sits in their email box until it's opened (100 % readership) With other forms of advertising your message may never be seen.

Email is faster, you can typically expect replies back within hours to a few days. Try that with the U.S. mail system (1 week or more). Also, with email there is no lost mail, thats something that never happens with the U.S. mail system? Postal mail costs over 300 times what it costs to use our bulk email service.

Our Recipient List

Our recipient list is over 27,000,000 and continuously growing. It is made up of mainly small business owners and individuals that would be categorized as opportunity seekers. Experience has shown that these types of recipients are the most responsive to this form of marketing.

What type of response rate should I expect?

Response rates will vary depending on your initial offer and sales letter. We recommend a two step approach:

1) Initially send a teaser letter, and do not make it too "pitchy" (don't try and sell them on the first letter). Give them the benefits of your product / service. People buy because of benefits, not features. ("What's in it for them?")

2) Offer a free information package (this should be 5-10 pages long, and where all the selling should be done ) We will be happy to work with you on your teaser letter. All you have to do is ask.

Tip 1: Always include your phone # in your follow up letter, because no one should EVER buy anything on line unless they can call and speak to someone.

Tip 2: Set up a web site, it doesn't have to be big and flashy, your internet provider probably has 5megs reserved for you right now / use it (this is common with most ISP's). If not, send us an email and we will send you some information on the Hosting Service we use. You can do this very cheaply. Being able to go some where and see something before buying can make a difference. (This is not mandatory, LS Enterprises has built its business on sending email out to millions of customers for the first year).

How do I get started ?

1 of 2 EXHIBIT D 06/30/97 14:56:56

LS ENTERPRISES, LLC, ET AL.

Complaint EXHIBIT D

The Truths about Bulk Email http://www.freepromo.com/truths.aa

For our rates and complete ordering instructions Click Here If you have any questions send us email Click Here or call our marketing department at 203-483-8634

[ Email Us ] [ Home Page ] [ C.D.S. ] [ Bulk Email Services ] Sonic Mass Mailer [ Bulk EMail ISP ] [ Bullet Proof Autoresponder ] [ Become A Dealer ] [ Internet Marketers Resource Center ] [ Direct Response Marketing ] [ Bulk Email Addresses ] [ Merchant Account ] Webcollector

2 of 2 06/30/97 14:56:56

Complaint 128 F.T.C.

EXHIBIT E

Deja News Retrieved Document [illegible]

[illegible]

Article 11 of 17

Subject: $ JOBS $ From: "Lou Salatto" <[email protected]> Date: 1996/08/03 Message-Id: <[email protected]> Newsgroups: alc.market.aol.commerce.c...puters.forsale.arnet.general.at.jobs.athena.forsale.atl.ge [More Headers]

LS Enterprises, Pleasing People Around The World

GET PAID TO SHOP AND RECEIVE FREE MERCHANDISE!

You've heard how companies hire people to "shop" in their stores or places of

business - then report their findings so they can improve their operations. Below.

see how this works and how you can easily make $300 - $600 part-time in your area.

Thank you for your interest in becoming a Mystery Shopper! Mystery Shopping is one of the most exciting jobs ever discovered and now for the first time has become available to you. It doesn't matter where you live or what race, religion, or background you come from. You are guaranteed to find a position in your local area and we will make sure that this dream comes true for you. In fact, we are the #1 company in connecting people just like you with the right contacts. You can earn up to $24 per hour and bring home Free Merchandise every time you go shopping. Items such as Food, Clothing, Appliances, Electronics and much more. In addition, you will even receive coupons worth hundreds of dollars in free stuff.

Help solve your money problems! If you already have a job, you can still work part-time and earn a hefty pay check each week, or if you want a full-time job and want to earn $600 to $1000 or more per week, then this could be for you. You can take on as many shopping assignments as you desire. You can also turn down assignments if you wish, without losing your job. Basically you work when you want and for whoever you want. We will make sure that you have as many assignments as you need.

What is Mystery Shopping and how does it work! Mystery Shopping is the worlds best kept secret and is not highly publicized because the companies don't want their employee's to know where and when the store is going to be "Secretly Shopped".

If the companies made it publicly known, then there would be no need to check-up on employee's. That's why these major corporations ask contractors such as ourselves, to hire people like you to do this simple work.

Where not the only contractor. There are hundreds of contractors and each one has thousands of assignments they need to give to somebody, why not let that somebody be you. In addition to our service, you will be given a 25 page manual that will include over one hundred contractors Names, Phone Numbers, and addresses so you can get in touch with them for more assignments. You can work for as many contractors as you like

1 of 3 EXHIBIT E 03/21/97 09:11:38

LS ENTERPRISES, LLC, ET AL. 57

32 Complaint

EXHIBIT E

Deja News Retrieved Document [illegible]

and for as long as you like. You can even make a career out of Mystery Shopping!

You can live in Anchorage, Alaska and work for a contractor in Miami, Florida because that same contractor is holding assignments to large chains of stores all over the country. In addition, you will be entered into our Nationwide Database, so when there is extra "shops" in your area, you will be contacted in advance to see if you can fit them in your schedule.

A Typical Assignment! You are contacted or you contact the contractor yourself, then you are given an assignment. You go to the place of business and complete the assignment, then report your findings to the contractor. Then you receive a check in the mail once a week. You will be checking business operations for cleanliness, courteousness, how employees answer questions, and many other small tasks that anyone can do.

You will be shopping, but at the same time you will be checking store operations. You always need to remain anonymous to all employee's. You never have to pay any money for the merchandise. You will be given Vouchers or Free Coupons to make sure you don't spend one single penny of your own cash. In other words, You pick out the merchandise, totaling a certain amount, usually $25 to $75 worth of merchandise. The company pays for it...and you get to keep it! This of course, is in addition to making upwards of $24 per hour.

There is a small one time refundable fee of $29.00 to get started. This is a small fee indeed! This one-time refundable fee is to ensure us that you are serious about Mystery Shopping; We are looking for serious people and this is a good way to weed out the people who just are not serious.

60 Day No Risk Trial! We have helped thousands of people get started Mystery Shopping. Let us help you. Try Mystery Shopping for 60 days and if it's not for you, we will promptly refund your $29 Guaranteed!

In order to get started, just Print out the form below and fill in the necessary information, send it to us along with your check or money order and then wait 3 to 7 days to hear from us. Also, upon receiving your form, We will Rush the Professional Mystery Shopping Guide to you the same day. This is the guide that contains the Mystery Shopping contractors in your area and will be waiting to hear from you.

This is a one time offer and will never be repeated. You must act right now and let us hear from you today. When we receive your profile form below, You can begin Mystery Shopping. You will be able to take on as many assignments as you desire and work for as long as you wish, with no obligation to us.

--------------------------cut here-------------------------- Mail Cash, Check, or Money Order For $29.00 To: LS Enterprise - P.O. Box 9535 - New Haven, CT. 06534

Yes, Rush me your Mystery Shopping Guide Containing Over 100 Contractors. In addition, put me in your Nationwide Data Base of Mystery Shoppers (confidential) so I can be notified of additional assignments.

Name________________________________ Phone# (___) ___________

Address____________________________________________________

City_________________________ State_______ Zip_______________ (Please Print All Information

Days I am available to "shop" (circle all that apply below)

Mon Tues Weds Thur Fri Sat Sun

2 of 3 03/21/97 09:11:38

Complaint 128 F.T.C.

EXHIBIT E

Deja News Retrieved Document http://xp5.dejanews.com/getdoc.xp?...&CONTEXT=858953232.25029&hitnum=10

[illegible] Home Power Search Post to Usenet Ask DN Wizard Help Why use DN? | Advertising Info | Press Releases | Jobs | Policy Stuff Copyright © 1995-97 Deja News, Inc. All rights reserved.

3 of 3 03/21/97 09:11:39

LS ENTERPRISES, LLC, ET AL. 59

32 Complaint

EXHIBIT F

Article 5 of 10

Subject: MAKE EXTRA CASH AT HOME! From: [email protected] Date: 1997/04/10 Message-Id: <[email protected]> Newsgroups: sci.engr.lighting [More Headers]

****WORK IN THE COMFORT OF YOUR OWN HOME**** ***WIDE SELECTION OF JOBS...TOP PAY*** **REAL JOBS WITH REAL COMPANIES**

Plus receive your very own "Computer Cash Disk"..FREE!

Every day thousands of people just like you are getting started working at home in fields of computer work, sewing, assembling products, crafts, processing coupons, typing, telephone work and much more!

WHO ARE HOME WORKERS?

They are regular ordinary people who earn an excellent living working at their own pace and make their own hours. They are fortunate people who have found an easier way to make a living. They had absolutely no prior experience in this field. They earn several hundred dollars weekly in the comfort of their own home and you can be the next!

Companies all over the United States want to hire you as an independent home-worker. You are a valuable person to these companies because you will actually be saving them a great amount of money.

These companies want to expand their business, but do not want to hire more office people. If they hired more office employees, they would have to supervise them, rent more office space, pay more taxes and insurance, all involving more paperwork. It is much easier for them to set it up so you can earn an excellent income working in the comfort of your own home.

——LIVE ANYWHERE——

You can live anywhere and work for these companies. The companies themselves can be located anywhere. For Computer work, the companies provide you with assignments, usually data entry or similar tasks. You then complete the project and get paid for each task you complete. You receive step by step instructions along with toll free telephone help numbers to make it easier for you and to insure you successfully complete the job.

After your finished you ship the completed assignments

1 of 4 EXHIBIT F 4/22/97

Complaint 128 F.T.C.

EXHIBIT F

After your finished you ship the completed assignments back to the company at no charge to yourself. Upon receiving your assignments, the company will then mail you a check along with some more assignments. It's that easy!

All the other home-based work (sewing, processing coupons, product assembly, typing, telephone work and mystery shopping) is done in a similar way. After contacting the companies you will be given step by step instructions and information on what you need to do. Upon completion of the task, they mail you a check.

You can work for every company in our guide. The only jobs that require equipment is computer work (computer needed) and typing (typewriter or computer). All other work requires no equipment of your own.

$$$$ EASY EXTRA INCOME AT HOME $$$$

All business can be done by Mail or phone. You can START THE SAME DAY you receive The "Guide to Genuine Home Employment".

Start Receiving Money in about two Weeks and every week from then on for as long as you desire.

**ONLY REAL COMPANIES OFFERING REAL JOBS!

The Companies in our guide are legitimate and really need home workers. There is over one hundred of the top companies included in our guide offering an opportunity for you to make extra income at home. Unlike other insulting booklets or lists you may see, our guide only includes up to date information of companies who pay top dollar for your services and will hire you.. GUARANTEED!

**UPDATE......Now our guide explains and goes into great detail about each company and what they have to offer you! You are guaranteed to find home based work in our guide.. No problem!

We urge you to consider this extraordinary opportunity. Don't delay or you could miss out! This is like no other offer you've ever seen.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

This is an opportunity to become an independent HOME WORKER. Remember, this is not a get-richquick-scheme. It is an easy way for you to Earn Money while filling the needs of a company who needs you. Therefore making it Easy to work at your OWN PACE and in the comfort of YOUR HOME.

**HERE'S HOW TO GET STARTED IMMEDIATELY....

Print and fill out the form below and mail or fax it in along with the small onetime fee for the guide. We will ship the "Guide To Genuine Home Employment" out the same day we receive your reply form!

Order within 15 days and the complete, updated, sure-fire genuine home employment guide is yours for the special low price of just $29.95! That's over 30% off our normal price of $39.95.

2 of 4

LS ENTERPRISES, LLC, ET AL.

Complaint EXHIBIT F

**FREE BONUS!.."COMPUTER CASH DISK" (IBM compatible) 167 business reports. Tips, Tricks, and Secrets on starting and operating a successful home based business and how to avoid dishonest marketing offers. Comes with full reproduction rights! READ THEM, SELL THEM AND BANK THE MONEY. Never pay us any royalties. Sells for $69 but it's worth a whole lot more than that. Get yours today..FREE! It will run on a MAC with softwindows installed.

>>>FULL 30 DAY RISK FREE MONEY-BACK GUARANTEE!

Test our material out for a free trial period and if it isn't everything we said it is, just send it back and we will gladly refund your money. We helped thousands of people like yourself get started working at home. You can be the next!

THINK WHAT AN EXTRA $300, $700 OR MORE A WEEK COULD DO FOR YOU AND LET US HEAR FROM YOU TODAY!

THIS COULD EASILY CHANGE YOUR LIFE FOREVER!

DON'T LET THIS EXTRAORDINARY OPPORTUNITY PASS !! THESE OPPORTUNITIES ARE PROFITABLE AND EASY...ACT NOW!!!!!!

EZ ORDER FORM

___Yes! I am interested in making money at home. I am ordering within 15 days. Here is my $29.95. Please Rush me my package today including "The Guide To Genuine Home Employment" and your "Free Computer Cash Disk"!

NAME________________________________________________

ADDRESS_____________________________________________

CITY. STATE. ZIP________________________________________

EMAIL ________________________ @ ________________________

PHONE (____) ________-________________________________ Please PRINT All Information Clearly

Send Check or Money-Order for $29.95 To:

LRS PUBLICATIONS PO BOX 9535 NEW HAVEN, CT 06534

**WANT TO GET STARTED EVEN FASTER?

USE OUR 24 HOUR CHECK BY FAX SERVICES...

Paste or Tape your check in the space below and fax it to our office along with the completed form. Fax # 1-203-483-8637

******************************************

3 of 4

Complaint 128 F.T.C.

EXHIBIT F

[illegible]

PLACE CHECK "HERE" AND FAX IT TO:

(203) 483-8637

**Note: If you fax a check, There is no need to mail it in. Keep it for your records. We will draft one up from your exact information on your original check.

****************************************

Home Power Search Post to Usenet Ask DN Wizard Help Why use DN? | Advertising Info | Press Releases | Jobs | Policy Stuff Copyright © 1995-97 Deja News, Inc. All rights reserved.

4 of 4

LS ENTERPRISES, LLC, ET AL.

Complaint EXHIBIT G Deja News Retrieved Document [illegible] Hard drive full? Electronic file storage over the Internet Free trial offer Click Here Article 100 of 108 Subject: Open......NOW!!!! From: [email protected] (LouSALA) Date: 1996/07/19 Message-Id: <[email protected]> Newsgroups: comp.multimedia [More Headers] FOR SALE! My Multi-Million Dollar Publishing Company - $199.

If you ever wanted "the easy way out" to make a lot of money with a business of your own... Here is the easiest way to start! I m writing this letter to let you in on something that will blow you away. What I m about to present to you is something that I ve never done before...and something that I ll never do again... So pay attention! For the past five years or so... I ve been running small, inexpensive ads in the back of many large National Magazines and the Internet. These ads were always small and very cheap... 1/6 of a page or 3 to 5 line classified ads. On these ads I ve been selling little manuals. These manuals sold from $14.95 - $49.95 each. I always ran a different ad for each manual I was selling.

I have collected the reprint rights to 15 different HOT SELLING manuals on topics that consumers really need. I like to sell information because NOBODY can set a price on it... Especially if the information I m selling is my own... The sky is the limit. Plus it is very cheap to produce HOW-TO manuals. It usually costs me about 40 cents to produce each manual that I get to sell for as much as $49.95. That s one hell of a mark-up. Anyway. I ve been selling these 15 manuals with little, cheap ads in the back of National magazines and on the Internet for the past five years or so... Each manual brings me about $2000 - $4000 per week - PER AD. These manuals tell people how to get a new car with little or no money down and no credit... another one tells how to get a government job... and stuff like that. I mean... you and I may not be interested in getting a job with the government... But believe me... their are MILLIONS OF PEOPLE THAT DO... and their willing to pay me to teach them! This kind of stuff sells the greatest! Remember. I have 15 different manuals that I sell with 15 different ads. This is big money stuff... A very lucrative business to be in.

Well this is where the unbelievable offer comes in... I hope your sitting down for this one... because it is a once in a lifetime offer for you. I do not know of any easier way for you to become financially independent... In fact THEIR IS NO EASIER WAY!!! The next few paragraphs will reveal everything to you. Since I m so busy selling my best-selling HOW-TO business books nowadays... I do not have the time to service these ads... It s just that I really can t find the time to have all the orders taken care of in a timely fashion.

1 of 4 EXHIBIT G 4/8/97

Complaint 128 F.T.C.

EXHIBIT G

Deja News Retrieved Document http://xp5.dejanews.com/getdoc.xp...[illegible]

I prefer to keep helping people just like you, by selling my business books and offering my assistance... and I m doing a lot of work with Large corporations right now. Now I don t have the time to run 15 little ads anymore... I could just put them to sleep... I could stop running them and stop the entire thing... But, like I was saying $2000 to $4000 per week per advertisement. There are 15 different manuals... and there are several hundreds of magazines to run these little ads in... This is to good just to throw away... It d kill me to do that... This is why I m going to make you the deal of your entire life...

I m willing to sell you the entire set of re-print rights to all 15 of these manuals on a 3 1/2 floppy disk (IBM compatible)... I m also willing to give you the rough drafts of the actual ads that sold these manuals!!! (all you have to do is have them copied. You can do it yourself - or you can take them to a local copy shop... this is why I can say Push One Button And Start Your Own Million Dollar Publishing Company)... and if I get your order in the next 30 days... I ll also include an extra set of 82 other money making reports and manuals...$850 value. ABSOLUTELY FREE. They will show you exactly how to do just about anything. "HOW TO own and operate 1 of over 25 other businesses" - "How to write killer advertisement so people buy your materials NOW!" - "How to write, publish, and market reports, manuals, and books". And much much more. You will also receive our professionally designed and most successful advertising circulars.

All you have to do is insert the disk in your floppy drive and start printing. If you don t have a computer don t worry, because any local print shop will print them out in a jiffy. Have some of the ads copied along with the manuals you want to sell and then just wait for the orders to pour in.

Remember, these are PROVEN winners. If your stumped on selecting a product to sell... or if you are having a problem crafting a sales letter or space ad... This is your lucky day... IT IS ALL DONE FOR YOU!!! Now, when I say manual... please do not think that they are small, insulting items to sell... They are pretty bulky... They range from 20 to 60 pages long... Your customers will get more than their money s worth... and they ll be extremely happy with the purchase... And you ll have pride selling this information.

The entire re-printing package, which I like to call, The Publishing Business In A Box... will come with over 400 pages of camera ready artwork (these are the actual pages you ll make copies from). You will also receive a signed letter allowing you to reprint them and sell them as much as you want for as long as you want. Heck, you can even package them all together and sell the kit to someone else to resell on their own. You ll also receive copies of the winning ad drafts that sold these manuals.

One of the manual s in this kit sold $4,000,000 worth by a Florida man named M. Zboch. Now, I got the reprint rights... and I ll sell them to you... If your wondering how much this will cost you... Think about it for a minute. There are 15 different manuals that can make you $3000 per week - each manual... That equals $45,000 per week if you placed every ad in one magazine... Now there are thousands of magazines and newspapers out there... You can place these ads in more magazines as you make more money... You can also sell them through direct mail...

I m not going to ask you for any cut of the money either... What you make is what you keep. I m not going to hit you up for anymore fees either... Once you pay me for the re-print rights... you re all paid up for good! In fact... you get to make a ton of money off these manuals, for as long as you wish... and you never have to pay one cent in royalty!

All I ask for all this is... $199.00 and I ll include RUSH shipping for free! Yes . I said only $199.00. And that is for all 15 manuals, and if you respond in the next 30 days... I ll even give you the rough drafts of the actual advertisements that sold them!!! Also, I ll include 82 more reports and manuals absolutely FREE. That s 97 in all. But

2 of 4

LS ENTERPRISES, LLC, ET AL.

Complaint

EXHIBIT G

Deja News Retrieved Document

there is only one drawback... I will only allow 200 sets of my Publishing Company In A Box to be sold. It won t make much sense if I sold the kit to 1000 or 2000 people... the market would be saturated with the same manuals... and I don t want that. To make sure the same people who invest in this offer get the same results I got for the past 5 years... ONLY 200 people can have it for $199.00.

Chances are, I ll get 200 within a weeks time. So, if this is some thing you d be interested in... Rush me a check or money order for $199.00 TODAY to insure you get your very own publishing company in a box.

But, even if you decide to pass up on this offer... Don t sweat it. It s not like I m going to be mad or anything like that. I know I will fill my 200 order limit real fast. And anyone who gets their check in to me late... I ll simply send it back un-cashed. For only $199.00 I m going to let you in on the easiest money you ll ever make. YOU DO NOT HAVE TO DO ANYTHING!! The ads are done. The manuals are all written. The printer will print the manuals for about 40 cents... All you have to do is place the ads and your set... Push one button today! Rush me your payment of $199.00 right now... and get your very own MILLION-DOLLAR publishing company going!

You can start out by selling one or two manuals... then grow to sell all 15. You can do this from your kitchen table if you wish. And you do not have to pay any royalties and you print the manuals as you sell them. If you order in the next 30 days... You ll get the winning ads and 82 How to reports and manuals included!

For only $199.00 you will have everything you need to make a killing with your very own business. You do not need to read any manuals or study any courses...If you want to make money the easy way - real fast... this offer may be right for you.

Last year, a friend of mine wrote a book and tried to sell it through a publishing company, after about nine months and a lot of searching he finally found one that would except the book. He spent over $6,000 and one and a half years to write and compile information in putting the book together. The publishing company gave him $2000 up front and only about 1,000 copies sold for $19.95. He also had to pay a 5% royalty to the publisher. His book was about building a coral reef fish tank. He lost his shirt and valuable time was wasted. He now says he wishes I was running this offer last year.

The point is this... the market is not in demand for knowing how to build fish tanks or any other non-money-making offer. People will always buy information on how they can make money, save money or improve their lives... and you can have all this information Today... with no hassles. It s easy to get started, just simply complete the form below and mail it to me along with your check. I ll personally send your Publishing Company In A Box out the same day I receive your order. But remember, you must HURRY or you could be to late.

Sincerely.

Louis Salatto Owner Enterprise Publications - - - - - - - - - - - - - - - - -cut here- - - - - - - - - - - - - - - For Immediate Delivery RUSH Check or Money Order for $199.00 To: Enterprise Publications - 15 Crestwood Road - Branford, CT 06405

__ I m ordering within 30 days and want all the bonuses mentioned above. I understand that you are only offering this to 200 people. If I m late, please return my check un-cashed.

Name__________________________________________________

Address________________________________________________

3 of 4

Complaint 128 F.T.C.

EXHIBIT G

Deja News [illegible]

City________________ State____________Zip________ (Please Print All Information Clearly)

Free trial offer Hard drive full? Electronic file storage over the internet Click Here!

[illegible] Previous Article Next Results Current Results View Thread Author Profile Post Article Email Reply

Home Power Search Post to Usenet Ask DN Wizard Help Why use DN? | Advertising Info | Press Releases | Jobs | Policy Stuff Copyright © 1995-97 Deja News, Inc. All rights reserved.

4 of 4 04

LS ENTERPRISES, LLC, ET AL. 67

32 Decision and Order

DECISION AND ORDER

The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint that the Boston Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge the respondents with violations of the Federal Trade Commission Act; and

The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by the respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission's Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1.a. 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.

1.b. 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.

1.c. 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.

Decision and Order 128 F.T.C.

2. The acts and practices of the respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act.

3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

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.

LS ENTERPRISES, LLC, ET AL. 69

32 Decision and Order

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:

A. Respondents' ability to provide any such product or service; B. Respondents' experience in providing any such product or service; C. That respondents act as contractors for other companies to hire consumers for any type of work; or D. The availability of actual job openings or any other type of employment opportunities, or the level of assistance provided by respondents in securing any job or other type of employment opportunity.

II.

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 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 make any representation, in any manner, expressly or by implication, about:

A. The amount of earnings, income, or sales that a prospective purchaser could reasonably expect to attain; B. The amount of time within which a prospective purchaser could reasonably expect to: (i) begin earning money; (ii) continue earning money; (iii) attain any amount of earnings, income, or sales; or (iv) recoup his or her investment; C. The availability of free merchandise; or D. The receptivity of potential recipients listed on any type of mailing list towards receiving commercial solicitations,

Decision and Order 128 F.T.C.

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:

A. The subject line of the unsolicited commercial E-Mail; or B. The text of the unsolicited commercial E-Mail.

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,

LS ENTERPRISES, LLC, ET AL. 71

32 Decision and Order

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:

THIS BOND IS REQUIRED BY ORDER OF THE FEDERAL TRADE COMMISSION IN SETTLEMENT OF CHARGES THAT RESPONDENTS ENGAGED IN FALSE AND MISLEADING REPRESENTATIONS IN THE PROMOTION AND SALE OF VARIOUS PRODUCTS AND SERVICES.

Decision and Order 128 F.T.C.

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:

A. All advertisements and promotional materials containing the representation;

B. All materials that were relied upon in disseminating the representation; and

C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

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

LS ENTERPRISES, LLC, ET AL. 73

32 Decision and Order

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.

Decision and Order 128 F.T.C.

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 on July 13, 2019, 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:

A. Any Part in this order that terminates in less than twenty (20) years; B. This order's application to any respondent that is not named as a defendant in such complaint; and C. This order if such complaint is filed after the order has terminated pursuant to this Part.

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.

NORTH LAKE TAHOE MEDICAL GROUP, INC. 75

75 Complaint

IN THE MATTER OF

NORTH LAKE TAHOE MEDICAL GROUP, INC.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-3885. Complaint, July 21, 1999--Decision, July 21, 1999

This consent order, among other things, prohibits North Lake Tahoe Medical Group, Inc., a California corporation, from entering into, maintaining, or enforcing any conspiracy or agreement to negotiate, to deal, or refuse to deal with any payer or provider for physician services. It also requires the respondent to terminate the membership of physician members who refused to deal with Blue Shield, unless the physicians make a good faith effort to reestablish participation in Blue Shield.

Participants

For the Commission: Paul Nolan, Kerry O'Brien, Matthew Gold, Richard Feinstein, William Baer, Jeremy Bulow, Roy Levy and Alan Fisher.

For the respondent: Joel Goldman, Hanson, Bridgett, Marcus, Valhos & Rudy, San Francisco, CA.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act, as amended, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that the North Lake Tahoe Medical Group, Inc., a corporation ("Tahoe IPA") has violated Section 5 of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues this complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Tahoe IPA is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of California, with its office and principal place of business located at P.O. Box 2466, Truckee, California. North Lake Tahoe Medical Group, Inc., also has traded and done business as North Lake Tahoe IPA, North Lake IPA, and Tahoe IPA.

PAR. 2. Tahoe IPA physician members compete in the Lake Tahoe Basin, a basin comprised of the North Lake Tahoe area and the