Orion Processing, LLC d/b/a World Law Processing, World Credit Repair and World Law Debt et al.
Documents in this case
- Complaint · · 19 p.
- Document · · 67 p.
- Judgment · · 20 p.
- Stipulation · · 25 p.
- Judgment · · 25 p.
- Stipulation · · 14 p.
Case summary
The Court entered a default
judgment against Bradley J. Haskins, the World Law corporate defendants, and
Family Capital Investment & Management LLC and a Stipulated Final Judgment
against two of the individuals involved and the corporate defendant Orion Processing,
LLC. All four orders permanently ban the defendants from participating in
telemarketing or assisting others in telemarketing any consumer financial
product or service, and from selling, advertising, offering, or providing any
debt relief products or services. The Court also entered monetary
judgments against the defendants for $106,83,049 and assessed civil money
penalties against them.
Complaint ()
PDF of this document (19 pages)
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Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 1 of 19
re gr tail
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
Consumer Financial Protection Bureau, Case wp. ~~ po? £} O rev Y ped Pini ¥S=230 60 CIV-COOKE . - la 7 [| cae v. FILED by_\S"_ pe, Orion Processing, LLC, a Texas limited liability company, AUG 1 % 2015 d/b/a World Law Processing, Wld Credit Repair, and World Law STEVEN M. LARIMORE ? CLERK U.S. Di Debt; S.D. of FLA MARA Family Capital Investment & Management LLC, a Delaware limited TORRE liability company, iio S a/k/a FCIAM Property Management;
World Law Debt Services, LLC, a Delaware limited liability company;
World Law Processing, LLC, a Delaware limited liability company;
Derin Scott, an individual; David Klein, an individual; and
Bradley James Haskins, individually and d/b/a World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South;
Defendants,
Shannon Scott, and individual, Relief Defendant.
COMPLAINT FOR PERMANENT INJUNCTION AND OTHER RELIEF (FILED UNDER TEMPORARY SEAL)
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The Consumer Financial Protection Bureau (Bureau) brings this complaint against Defendants Orion Processing, LLC d/b/a W orld Law Processing, W orld Credit Repair and W orld Law Debt; Family Capital Investment & Management LLC a/k/a FCIAM Property M anagem ent; W orld Law Debt Serdces, LLC; W orld Iaaw Processing, LLC; Derin Scott; David Klein; and Bradley James Haskins, individually and d/b/a as W orld Law Group, LLP, W orld laaw Group Am erica, LLP, W LD Price Global, lnc., W orld Ixaw Form s and M ediation, and W orld Law South. Together, these entities and individuals are referred to as RDefendants'' or GW orld Iaaw'' herein. The Bureau also brings this eom plaint against Shannon Scott as Relief Defendant. The Bureau alleges the following:
INTRODU CTION Defendants operate a debt relief business that takes exorbitant, illegal upfront fees from vulnerable consum ers suffering financial dio culties. Defendants solicit consum ers with large debts, prom ising that Defendants' lawyers will negotiate affordable repapnents with consum ers' creditors and provide legal representation, including by local counsel, if consum ers stop paying their creditors and instead pay Defendants.
2.
Defendants have collected at least $67 million in unlawful fees from consum ers before settling their debts-which Defendants often fail to settle at all. Defendants also fail to provide consum ers with the legal representation they promise. 3.
The Bureau brings this action under Sections 1o31(a), 1o36(a), 1054, and 1055 of the Consumer Financial Protection Act of 2o1o (CFPA), 12 U.S.C. jj 5531(a), 5536(a), 5564(a), and 5581, and under the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. jj 61o2(c)(2), 61o5(d), based on Defendants' dolations of the CFPA and the Telemarketing Sales Rule (TSR), 16 C.F.R. pt. 310, in connection with the m arketing and sale of debt relief serdces. JU RISD ICTIO N AN D W N U E Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 2 of 19
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4. This Court has subject-matter jurisdiction over this action because the action is “brought under Federal consumer financial law,” 12 U.S.C. § 5565(a)(@), presents a federal question, 28 U.S.C. § 1331, and is brought by an agency of the United States, 28 U.S.C. § 1345.
5. This Court has personal jurisdiction over Defendants because the causes of action arise from Defendants’ transacting business in this District or have caused injury in this District through acts or omissions occurring outside of this District.
6. Venue is proper in this District under 28 U.S.C. 88 1391(b) and (c), and 12 U.S.C. § 5564(f).
PLAINTIFF
7. The Bureau is an independent agency of the United States charged with regulating the offering and provision of consumer financial products or services under Federal consumer financial laws. 12 U.S.C. § 5491(a). The Bureau has independent litigating authority, 12 U.S.C. § 5564(a)-(b), including the authority to enforce the TSR as it applies to persons subject to the CFPA, 15 U.S.C. §§ 6102(c)(2), 6105(d); 12 U.S.C. §
5531(a).
DEFENDANTS
Business Entities 8. Defendant Orion Processing, LLC d/b/a World Law Processing, Wld
Credit Repair, and World Law Debt (referred to collectively as Orion), is a Texas limited liability company. Its principal place of business is at 9011 Mountain Ridge Drive, Austin, Texas 78759. Orion offers and provides debt relief services, as defined in the TSR, 16 C.F.R. § 310.2(m) (2010), and financial advisory services within the meaning of the CFPA, 12 U.S.C. § 5481(15)(A)(viii). Orion is a “covered person” under the CFPA because:
a. Orion engages in the offering or providing of consumer financial services through the provision of financial advisory services, including services to assist consumers settle debts; and/or
b. Orion is a service provider that (1) participates in designing, operating, or maintaining the provision of financial advisory services, including services to
assist consumers settle debts, or (2) processes transactions relating to the
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provision of financial advisory services, including services to assist consumers
settle debts, and is an affiliate providing services to a covered person.
g. At all times material to this Complaint, Orion transacts or has transacted business with consumers residing in the Southern District of Florida.
10. Defendant Family Capital Investment & Management LLC a/k/a FCIAM Property Management (FCIAM) is a Delaware limited liability company. Its principal place of business is also 9011 Mountain Ridge Drive, Austin, Texas 78759. FCLAM offers and provides debt relief services, as defined in the TSR, 16 C.F.R. § 310.2(m) (2010), and financial advisory services within the meaning of the CFPA, 12 U.S.C.
§ 5481(15)(A)(vili). FCLAM is a “covered person” under the CFPA because:
a. FCIAM engages in the offering or providing of consumer financial services through the provision of financial advisory services, including services to assist consumers settle debts; and/or
b. FCIAM is a service provider that (1) participates in designing, operating, or maintaining the provision of financial advisory services, including services to assist consumers settle debts, or (2) processes transactions relating to the provision of financial advisory services, including services to assist consumers settle debts, and is an affiliate providing services to a covered person.
11. At all times material to this Complaint, FCIAM transacts or has transacted business with consumers residing in the Southern District of Florida.
12. Defendant World Law Debt Services, LLC is a Delaware limited liability company that is owned by or under common ownership with “World Law Group,” a purported consortium of international law firms. World Law Debt Services, LLC offers and provides debt relief services, as defined in the TSR, 16 C.F.R. § 310.2(m) (2010), and financial advisory services within the meaning of the CFPA, 12 U.S.C.
§ 5481(15)(A)(viii). World Law Debt Services, LLC is a “covered person” under the CFPA because:
a. World Law Debt Services, LLC engages in the offering or providing of consumer financial services through the provision of financial advisory services, including services to assist consumers settle debts; and/or
b. World Law Debt Services, LLC is a service provider that (1) participates
in designing, operating, or maintaining the provision of financial advisory
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services, including services to assist consumers settle debts, or (2) processes transactions relating to the provision of financial advisory services, including serdces to assist consum ers settle debts, or (2) processes transactions relating to the provision of hnancial advisory selvices, including services to assist consum ers settle debts, and is an affiliate providing services to a covered person. 13.
At all tim es all tim es m aterial to this Com plaint, W orld Law Debt Senrices, LLC transacts or has transacted business with consum ers residing in the Southern District of Florida.
14.
Defendant W orld laaw Processing, LLC is a Delaware lim ited liability com pany that is owned by or under com mon ownership with tdW orld Law Group,'' a purported consortium of international 1aw firm s. W orld laaw Processing, LLC offers and provides debt relief serdces, as desned in the TSR, 16 C.F.R. j 31O.2(m) (2010), and financial advisory senrices within the meaning of the CFPA, 12 U.S.C.j 5481(15)(A)(viii). W orld Law Processing, LLC is a ffcovered person'' under the CFPA because: a. W orld Iaaw Processing, LLC engages in the offering or providing of consum er financial senrices through the provision of Gnancial advisoly services, including serdces to assist consumers settle debts; and/or b. W orld Law Processing, LLC is a service provider that (1) participates in designing, operating, or m aintaining the provision of financial advisory services, including services to assist consumers settle debts, or (2) processes transactions relating to the provision of financial advisory services, including services to assist consum ers settle debts, and is an ac liate providing services to a covered person. 15.
At al1 tim es m aterial to this Com plaint, W orld txaw Processing, LLC transacts or has transacted business with consum ers residing in the Southern District of Florida.
Individuals Bradley Jam es H askins:
16.
Defendant Bradley Haskins holds him self out as the ddchairm an'' of W orld taaw Group and is a licensed attorney in Texas. He is a principal and manager of W orld Law Debt Services, LLC and W orld Law Processing, LLC. At al1 times m aterial to this com plaint, acting alone or in concert with others, Defendant H askins has form ulated, directed, controlled, or participated in the acts and praetices of W orld Law Group, LLP; Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 5 of 19
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World Law Debt Services, LLC, World Law Processing, LLC, World Law Group America, LLP; WLD Price Global, Inc.; World Law Forms and Mediation; and World Law South (collectively referred to as “WLG”)
17. | WLG purports to be a consortium of international law firms with its principal places of business located at 110 Wall Street, New York, New York 10005, and 5214 SW 91° Street Terrace, Suite A, Gainesville, Florida 32608.
18. At all times material to this complaint, acting alone or in concert with others, Defendant Haskins has materially participated in, committed, and/or engaged in the acts and practices set forth in this Complaint.
19. Given his status as an officer or employee charged with managerial responsibility for World Law Debt Services, LLC and World Law Processing, LLC, Defendant Haskins is a “related person under the CFPA. 12 U.S.C. § 5481(25). Because of his status as a “related person” under the CFPA, Haskins is a “covered person” under the CFPA. Id. Defendant Haskins is also a “covered person” under the CFPA because:
a. He engages in the offering or providing of consumer financial services through his provision of financial advisory services, including services to assist consumers settle debts; and/or
b. He is a service provider that (1) participates in designing, operating, or maintaining the provision of financial advisory services, including services to assist consumers settle debts, or (2) processes transactions relating to the provision of financial advisory services, including services to assist consumers settle debts, and is an affiliate providing services to a covered person.
20. Atall times material to this Complaint, Defendant Haskins has transacted business in the Southern District of Florida. In addition, Defendant Haskins resides in the Southern District of Florida.
Derin Scott:
21. Defendant Derin Scott is the sole owner, President, and Chief Executive Officer of Orion and FCIAM. He was also the owner of the now-dissolved marketing arm for Orion—Swift Rock Financial, Inc.—which also did business under the assumed name “World Law Debt.”
22. Defendant Scott is the signatory on accounts for Orion, FCIAM, and other
non-debt settlement entities that have received proceeds from the operation.
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23.
At a1l tim es m aterial to this complaint, acting alone or in concert with others, Defendant Scott has materially participated in, committed, and/or engaged in the acts and practices set forth in this Com plaint. 2o. Given his status as an officer or employee charged with m anagerial responsibility, Defendant Scott is a tdrelated person'' under the CFPA. 12 U.S.C. j 5481(25). Because of his status as a d'related person'' under the CFPA, Defendant Scott is a îdcovered person'' under the CFPA. Id. Defendant Scott is also a dtcovered person'' under the CFpA because:
a. He engages in the offering or providing of consum er inancial services through his provision of financial advisory services, including services to assist consumers settle debts; and/or b. He is a service provider that (1) participates in designing, operating, or m aintaining the provision of financial advisory services, including setvices to assist consumers settle debts, or (2) processes transactions relating to the provision of financial advisory serdces, including serdces to assist consum ers settle debts, and is an affiliate providing services to a covered person. 24. At al1 times material to this Com plaint, Defendant Scott has transacted business in the Southern Distdct of Florida. In addition, Scott resides in the Southern District of Florida.
David Klein:
25.
Defendant David Klein is the Chief Operating Oo cer of Orion and FCIAM . 26.
Defendant Klein is the signatory on accounts for Orion, FCIAM , and m any of Defendant Scott's non-debt settlem ent entities that have received proceeds from the operation.
27.
At all tim es m aterial to this complaint, acting alone or in concert with others, Defendant Klein has materially participated in, committed, and/or engaged in the acts and practices set forth in this Com plaint. 28.
Given his status as an oK cer or employee charged with m anagerial responsibility, Defendant Klein is a Wrelated person'' under the CFPA. 12 U.S.C. j 5481(25). Because of his status as a Grelated person'' under the CFPA, Defendant Klein is a ddcovered person'' under the CFPA. Id. Defendant Klein is also a 'scovered person'' under the CFPA because:
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a. He engages in the offering or providing of consum er financial setvices through his provision of financial advisory serdces, including services to assist consumers settle debts; and/or b. He is a service provider that (1) participates in designing, operating, or m aintaining the provision of financial advisory services, including services to assist consumers settle debts, or (2) processes transactions relating to the provision of financial advisory services, including services to assist consum ers settle debts, and is an ao liate providing services to a covered person. 29. At all tim es m aterial to this Com plaint, Defendant Klein has transacted business in the Southern District of Florida.
ReliefDefendant 3o.
Relief Defendant Shannon Scott is the wife of Defendant Derin Scott and is a signatory on accounts for num erous Orion entities and on accounts in the nam es of Derin Scott's m inor children who also receive regular paym ents from Orion. 31.
Relief Defendant Shannon Scott has received funds or assets that can be traced directly to Defendants' unlawftll acts and practices alleged below. 32.
Relief Defendant Shannon Scott has no legitim ate claim to those funds. Com m on Fnêerprîse 33.
At all tim es m aterial to this com plaint, Defendants have operated as a com m on enterprise while engaging in the violation of Federal consumer financial law set forth below. Defendants have conducted the business practices described below through an interrelated network of com panies that have com m on business functions, em ployees, and office locations. M oreover, Defendants have also comm ingled funds and shared operations and proceeds of the unlawful activity. Because Defendants have operated as a common enterprise, each of them isjointly and severally liable for the acts and practices alleged below.
FACTS Oven ûew 34.
Defendants Derin Scott and David Klein have run a debt-relief operation purporting to settle consum ers' debts since at least 2008. They have operated through Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 8 of 19
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Scott's companies, Orion (previously Swifl Rock) and FCIAM, and charged consumers up-front fees.
35.
In Oetober zolo, the Federal Trade Com m ission responded to the proliferation of abusive and deceptive practices in the debt relief sector by am ending the TSR to, among other things, prohibit debt relief com panies engaged in telem arketing from requesting or receiving advance fees before renegotiating, settling, reducing, or otherwise altering the terms of at least one of a consumer's debts. 36.
In or around July zolo, right before the TSR'S advance-fee ban went into effect Defendants developed a plan to avoid the advance-fee ban by continuing operations under the guise of providing legal services. To that end, Defendants Scott, Klein, Orion, and FCIAM partnered with Defendant Haskins and W LG. Their agreem ent provided that W LG would provide tdlegal representation'' and Orion would perform ddprocessing senrices'' for clients seeking debt relief services. 37.
Defendants then began prom ising consum ers both debt relief serdces and legal representation, including by a local attorney, claim ing to employ lawyers in every state. They also touted that consum ers would receive the skill and expertise of a licensed lawyer to negotiate with creditors regarding their unsecured debts. 38.
ln reality, Defendants do not provide the promised legal representation. Consumers rarely, if ever, communicate with a lawyer and the vast majority of serdces provided-if selvices are provided at al1 - are debt relief serdces provided by nonlawyers.
39.
Defendants withdraw hundreds of dollars in advance fees from consum ers' accounts each m onth.
4o.
Defendants have charged advance fees to pp% of the consum ers enrolled in the W orld I-aw program before settling their debts. M arketlng fhe Program 41.
Defendants m arket the W orld Law program through third party m arketing com panies, using television com m ercials, radio advertisem ents, targeted m ailers, billboards, search engine optimization programs (SEO's), and websites. Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 9 of 19
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42.
Defendants' m arketing includes claim s that consum ers will be assigned a Gteam of attorneys' and be represented by a 'ddebt relief law firm '' and have a local attorney or f<personally assigned state attorney.'' 43.
Defendants' advertisem ents contain toll-free telephone num bers for consum ers to ca11 to speak with sales representatives trained to prom ote Defendants' debt relief senrices.
44.
The sales representatives, referred to as ddEnrollm ent Specialists,'' work for third-party m arketing com panies and use pitch m aterials vetted and approved by Defendants.
45.
During these pitch calls, the Enrollm ent Specialists tell consum ers that Defendants' network of attorneys will negotiate settlem ents of their unsecured debts with creditors so consum ers will be able to repay the debt for less than what is owed. Enrollm ent Specialists also prom ise consumers local attorney representation and consultation.
46.
The Enrollm ent Specialists instruct consumers to enter all of their outstanding unsecured debts into the W orld Law Program . They also instruct consum ers to im mediately stop m aking paym ents to creditors on any debt entered in the W orld Law Program , and instead to begin m aking a single m onthly paym ent into a special purpose account (SPA), ostensibly so that W orld lxaw can use it to settle consumers' debts.
The Conêruct 47.
The Enrollment Specialists obtain detailed inform ation from consum ers about the am ount and source of their incom e and the am ount and number of their debts. W orld Law consum ers generally enroll m ultiple debts in the program , totaling tens of thousands of dollars.
48.
The Enrollm ent Specialist then enters the consum er's inform ation into W orld Law's software program , which autom atically generates a contract u4th a proposed monthly payment and program length (typically 24-48 months). 49. As the snal step of the intake call, the Enrollm ent Specialist aslcs consum ers with internet access to access a web portal and electronically sign a dense, single-spaced contract called the Client Service Agreement (CSA). At least through lo Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 10 of 19
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August 2014, the Enrollment Specialist also asked consumers to sign a contract to open an SPA, into which consumers will make their payments.
50. The CSAstates that “World Law Group,” “World Law Debt” and/or “World Law Processing” will provide debt negotiation and settlement services on behalf of the consumer. The contract further states that consumers will be assigned a local attorney to represent them with respect to the attempted negotiation and settlement of their debts
and in any creditor suits on a debt enrolled in the World Law program.
World Law Charges Advance Fees 51. Defendants take multiple up-front fees from consumers, listed in the “Legal Program Fee Schedule” attached to the CSA. These fees include:
a. “Initial Fees” in the amount $199 that are usually collected from a consumer’s account over the first three months of the program;
b. “Bundled Legal Service Fees” that range from ten to fifteen percent of the consumer’s combined outstanding debts and are usually collected over the first 13 months of the program; and
c. “Attorney Monthly Service Fees” in the amount of $84.95 that are collected every month a consumer participates in the program.
52. If consumers attempt to terminate their relationship with World Law and ask for a refund of the money they have paid, World Law typically makes cancelling very
difficult or refuses to provide the requested refund.
World Law Does Not Provide Legal Representation
53. Attorneys rarely, if ever, are involved in World Law’s promised debt relief services, including negotiating consumers’ debts with creditors. And consumers are not assigned or represented by a local attorney, as promised.
54. In fact, Defendants’ marketing agents and employees, not attorneys, perform virtually all of the debt relief work that occurs on behalf of World Law enrollees, if any. Among other things, non-lawyers:
a. Field phone calls from consumers responding to its advertisements;
b. Perform consumer intake;
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c. Analyze consum ers' budgets to determ ine the potential savings that consum ers m ay realize as a result of enrolling in the debt relief program ;
d. Determ ine consum ers' monthly paym ents;
e. Obtain paperwork from consumers to process enrolled debts; f. Set up autom atic withdrawals from consum ers' bank accounts; g. Negotiate with creditors to facilitate debt relief; h. Determ ine when to m ake a settlement offer to creditors; i. Direct and negotiate the allocation and distribution of consumer funds in SPA accounts to Defendants, creditors, and/or other third parties; and j. Handle inquiries or complaints from consumers, the Better Business Bureau, and governm ent agencies.
55.
If debt settlem ent negotiations fail, and a creditor seeks to collect a debt through litigation, consum ers are still not assigned a local attorney. In fact, consum ers rarely, if ever, com m unicate with a local lawyer. 56.
Instead, non-attorneys at W orld law provide consum ers with boilerplate pleadings that are not custom ized for the consum er's particular case. Consumers are instructed to sign and Gle such pleadings and to represent them selves pro se at any hearings.
Consum ev N arm 57.
Consum ers who stop paying debts as a result of W orld Law's advice experience signifcant harm . Their failure to pay their creditors m ay result in, am ong other things, a lowered credit score, collection calls, collection suits, and late fees. Few, if any, consum ers becom e debt free as a result of W orld Law's program . 58.
At least 21,ooo consum ers have enrolled in W orld Law's program since October 27, 2o10 and have been charged at least $67 million in up-front fees. ROLE O F IND IW D U AT, D EFEN DAN T DER IN SCOW 59.
Defendant Scott has engaged in the offering or providing of debt relief services through W orld Law. He has controlling interests in Orion, FCIAM , and various Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 12 of 19
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non-debt settlement entities that received proceeds from the operation, and is a principal of each.
60. Among other acts relating to World Law, Defendant Scott oversaw the individuals he appointed to manage the day-to-day operations of Orion and FCIAM. He is a signatory on bank accounts associated with Orion, FCIAM, and various non-debt settlement entities that received proceeds from the operation. Scott was instrumental in the creation of Defendants’ debt relief operation and has final authority over the managers of the operation.
ROLE OF INDIVIDUAL DEFENDANT DAVID KLEIN
61. Defendant Klein has engaged in the offering or providing of debt relief services by Defendants. He is a principal of Orion, FCIAM, and various non-debt settlement entities that received proceeds from the operation.
62. Defendant Klein manages Orion and FCIAM’s day-to-day operations. He is the signatory on accounts for Orion, FCIAM, and numerous non-debt settlement entities that received proceeds from the operation.
ROLE OF INDIVIDUAL DEFENDANT BRADLEY JAMES HASKINS
63. Defendant Haskins has engaged in the offering or providing of debt relief services through World Law. He is the “Chairman” of WLG.
64. Defendant Haskins is a principal and manages the day-to-day operations of WLG. Defendant Haskins also negotiates with third-party companies that market the World Law program to consumers. He is the signatory on accounts for WLG.
THE TELEMARKETING SALES RULE
65. The TSR was promulgated for the explicit purpose of preventing consumer harm from debt relief operations like World Law’s. 75 Fed. Reg. 48, 458 (Aug. 10, 2010). The TSR amendments do not provide an exemption for attorneys practicing law in connection with debt relief.
66. The TSR, 16C.F.R. § 310.2(m), defines “debt relief service” as “any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payments or other terms of the debt between a person and one or more unsecured creditors or debt collectors, including, but not limited to, a reduction in the balance, interest rate, or fees owed by a person to an unsecured creditor
or debt collector.”
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67. The TSR, 16 C.F.R. § 310.2(dd), defines “telemarketing” as “a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call.”
68. The TSR, 16 C.F.R. § 310.2(aa), defines “seller” as “any person who, in connection with a telemarketing transaction, provides, offers to provide, or arranges for others to provide goods or services to the customer in exchange for consideration.”
69. The TSR, 16 C.F.R. § 310.2(cc), defines “telemarketer” as “any person who, in connection with telemarketing, initiates or receives telephone calls to or froma customer or donor.”
70. Defendants are “sellers” or “telemarketers” of “debt relief service,” who engage in “telemarketing,” as defined in the TSR. 16 C.F.R. § 310.2
71. The TSR, 16 C.F.R. § 310.4(a)(5)(i), provides that a seller or a telemarketer may not request or receive payment of any fee or consideration for any debt relief service until and unless, among other things, “the seller or telemarketer has renegotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a settlement agreement, debt management plan, or other such valid contractual agreement executed by the customer” and “the customer has made at least one payment” pursuant to such an agreement or plan.
72. The TSR, 16 C.F.R. § 310.3(a)(2)(iii), prohibits a seller or telemarketer from misrepresenting, directly or by implication, in the sale of goods or services, any material aspect of the performance, efficacy, nature, or central characteristics of goods or services that are the subject of a sales offer.
73. The TSR, 16 C.F.R. § 310.3(a)(2)(x), prohibits a seller or telemarketer from misrepresenting, directly or by implication, in the sale of goods or services, any material aspect of any debt relief service.
VIOLATIONS OF THE TSR COUNT I
74. Plaintiff re-alleges Paragraphs 1 —73 and incorporates them herein by
reference.
75. Inthe course of telemarketing debt relief services from October 27, 2010
to the present, Defendants requested or received payment of fees or consideration from
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consumers for debt relief services before: (1) they had renegotiated, settled, reduced, or otherwise altered the term s of at least one debt pursuant to a settlem ent agreem ent, debt m anagem ent plan, or other such valid contractual agreem ent executed by the consumer; and (2) the consumer had made at least one payment pursuant to that agreem ent.
76.
Therefore, Defendants' acts or practices violate the TSR, 16 C.F.R. j 31O.4(a)(5)(i), and are abusive acts or practices in telemarketing. Because Defendants are dicovered persons'' their conduct is unlawful under sections 1o31(a) and 1o36(a)(1) of the CFPA, 12 U.S.C. jj 5531(a), 5536(a)(1). 15 U.S.C. j 61024C)42). COU NT 11 77.
Plaintiff re-alleges Paragraphs 1 - 73 and incorporates them herein by reference.
78.
In numerous instances, in connection with the advertising, m arketing, prom oting, offering for sale, or sale of debt relief senrices, Defendants have represented, directly or indirectly, expressly or by ilnplication, that consum ers who enroll in Defendants' debt relief program :
a.
will receive legal representation;
b.
will be represented by a local attorney; and/or will have settlem ents of their debts negotiated with their creditors by an attorney.
79.
ln fad, in num erous instances, consum ers do not receive legal representation, are not represented by a local attorney, and do not have settlements of their debts negotiated with their creditors by an attorney. 8o.
Therefore, Defendants' representations as described herein violate the TSR, 16 C.F.R. j 31O.3(a)(2)(iii) and (x), and are deceptive acts or practices in telem arketing. Because Defendants are Gcovered persons'' their conduct is unlawf'ul under sections 1o31(a) and 1o36(a)(1) of the CFPA, 12 U.S.C. jj 5531(a), 5536(a)(1). 15 U.S.C. j 61o2(c)(2).
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TH E CON SUM ER FINA NCIM , PROTECTION ACT 81. Sections 1031 and 1o36(a)(1)(B) of the CFPA, 12 U.S.C. jj 5531, 5536(a)(1)(B), prohibit covered persons from engaging Tdin any unfair, deceptive, or abusive act or practice.'' 82. Section 1o36(a)(1)(A) of the CFPA provides that it is 'dunlawful for any covered person or service provider to offer or provide to a consum er any financial product or service not in conformity w'ith Federal consum er law, or otherwise comm it any act or omission in violation of a Federal consumer Gnancial lam '' Section 1o54(a) of the CFPA grants the Bureau authority to com m ence a civil action against any person who violates a Federal consum er financial law. The CFPA is a Federal consum er financial law. 12 U.S.C. j 5481414).
W OIA TION S OF TH E CFPA COUNT III 83.
Plaintiff re-alleges Paragraphs 1 - 64 and incorporates them herein by reference.
84.
In num erous instances, in connection urith the advertising, m arketing, prom oting, offering for sale, or sale of debt relief services, Defendants have represented, directly or indirectly, expressly or by im plication, that consum ers who enroll in Defendants' debt relief program :
a.
will receive legal representation;
b.
will be represented by a local attorney; and/or will have settlements of their debts negotiated with their creditors by an attorney.
85.
In fact, in numerous instances, consum ers do not receive legal representation, are not represented by a local attorney, and do not have settlements of their debts negotiated with their creditors by an attorney. 86. Therefore, Defendants' representations are false and m isleading, and constitute deceptive acts or practices in violation of Sections 1031 and 1036 of the CFPA, 12 U.S.C jj 5531, 5536.
87. Defendants are Gcovered persongsly'' fdrelated persons,'' and/or %sservice providers'' within the meaning of the CFPA, 12 U.S.C. jj 548146), (25), and (26). Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 16 of 19
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CO UNT IV - AMainst Relief D efendant Onlv 88. Relief Defendant Shannon Scott has received, directly or indirectly, funds or other assets from Defendants that are traceable to funds obtained from Defendants' customers through the deceptive and unlawful acts or practices described herein. 89.
Relief Defendant Shannon Scott is not a bona fide purchaser with legal and equitable title to Defendants' customers' ftznds or other assets, and Relief Defendant will be unjustly enriched if she is not required to disgorge ftmds or the value of the beneit she received as a result of Defendants' deceptive and unlawful acts or practices. 9o.
By reason of the foregoing, Relief Defendant holds funds and assets in constructive trust for the benelt of Defendants' customers. CON SUM ER INJURY 91.
Consumers have suffered and will continue to suffer substantial injury as a result of Defendants' violations of the TSR and the CFPA. ln addition, Defendants have been unjustly enriched as a result of their unlawful acts or praetices. Absent injunctive relief by this Court, Defendants are likely to continue to injure consumers, reap unjust enrichm ent, and harm the public.
TH IS CO URT'S POW ER TO GRANT RELIEF 92.
The CFPA em powers this Court to grant any appropriate legal or equitable relief with respect to violations of Federal consumer financial law, including, without limitation, permanent or temporary injunction, rescission or reformation of contracts, the refund of moneys paid, restitution, disgorgement or compensation for unjust enrichment, and civil money penalties. 12 U.S.C. jj 5538(a) and 5565(a). Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 17 of 19
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PM YER FOR RELIEF 93.
W herefore, the Bureau requests that the Court: a. Award Plaintiff such preliminary injunctive and ancillary relief as may be necessary to avert the likelihood of consumer injury during the pendency of this action, and to preserve the possibility of effedive final relief, including but not lim ited to a tem poraly and prelim inaly injunctions, an order freezing assets, immediate access to business premises, and appointm ent of a Receiver;
b. Permanently enjoin Defendants from harming consumers through the advertisem ent, marketing, promotion, offering for sale, or selling of any consum er t'inancial product or setvice, including but not lim ited to any debt relief product or service.
c. Permanently enjoin Defendants from committing future violations of the CFPA, 12 U.S.C. jj 5531, 5536, and the TSR, 16 C.F.R. pt. 3109 d. Award such relief as the Court snds necessary to redress injury to consumers resulting from Defendants' violations of the CFPA and the TSR, including, but not lim ited to, rescission or reform ation of contracts, the refund of moneys paid, restitution, and disgorgem ent or compensation for unjust enrichment;
e. Award Plaintiff civil money penalties; and f. Award Plaintiff the costs of bringing this action, as well as such other and additional relief as the Court may determine to bejust and proper. Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 18 of 19
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Case 1:15-cv-23070-MGC Document 1 Entered on FLSD Docket 08/17/2015 Page 19 of 19
Dated: August 17, 2015 Respectfully submitted,
CARA PETERSEN Deputy Enforcement Director For Litigation
JAMES SUGARMAN Assistant Litigation Deputy
For tient 7 A. /A_--—~
/s{ Laura Schneider
LAURA SCHNEIDER, NY Bar #2715449 S.D. Fla. Bar #77828
(E-mail: [email protected]) (Phone: 202-435-7311)
WHITNEY CASE, DC Bar #501296 S.D. Fla. Special Bar #A5502103 (E-mail: [email protected]) (Phone: 202-435-7371)
ERIN MARY KELLY, VA Bar #43070 S.D. Fla. Special Bar #45502102 (Email: [email protected])
(Phone: 202-435-7367)
1625 I Street, NW Washington, DC 20006
Fax: (202) 435-7722
Attorneys for Plaintiff Consumer Financial Protection Bureau
Document ()
PDF of this document (67 pages)
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
Case No. 15-23070-Civ-COOKE/TORRES
Consumer Financial Protection Bureau,
Plaintiff,
v.
ORION PROCESSING, LLC, a Texas limited liability company, d/b/a World Law Processing, Wld Credit Repair, and World Law Debt; FAMILY CAPITAL INVESTMENT & MANAGEMENT LLC, a Delaware limited liability company, a/k/a FCIAM Property Management; WORLD LAW DEBT SERVICES, LLC, a Delaware limited liability company; WORLD LAW PROCESSING, LLC, a Delaware limited liability company; DERIN SCOTT, an individual; DAVID KLEIN, an individual; and BRADLEY JAMES HASKINS, individually and d/b/a World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South;
Defendants, Shannon Scott, an individual,
Relief Defendant.
PRELIMINARY INJUNCTION WITH ASSET FREEZE, APPOINTMENT OF RECEIVER, EXPEDITED DISCOVERY, AND OTHER EQUITABLE RELIEF AS TO DEFENDANTS ORION PROCESSING, LLC, BRADLEY JAMES HASKINS, WORLD LAW DEBT SERVICES, LLC, AND WORLD LAW PROCESSING, LLC
THIS CAUSE is before the Court upon Magistrate Judge Edwin G. Torres’ Report and Recommendation on Preliminary Injunction. (ECF No. 26). Judge Torres’ Report and Recommendation recommended that the Plaintiff’s Motion for Preliminary Injunction and Receiver (ECF No. 4; see also ECF No. 23) be granted. Judge Torres found good cause for expediting any objections to his Report and Recommendation. The objections were due no later than September 1, 2015. No objections were filed. Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 1 of 67
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I have considered Judge Torres’ Report and Recommendation, Plaintiff’s Motion, relevant legal authorities, and have conducted a de novo review of the record. I find Judge Torres’ Report and Recommendation clear, cogent, and compelling. Accordingly, it is ORDERED and ADJUDGED that Judge Torres’ Report and Recommendation (ECF No. 26) is AFFIRMED and ADOPTED, and the following ORDER is ENTERED: Plaintiff, the Consumer Financial Protection Bureau, commenced this civil action on August 17, 2015, under the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531(a), 5536(a), 5564(a), and 5581, and under the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6102(c)(2), 6105(d), alleging Defendants violated the CFPA and the Telemarketing Sales Rule (TSR), 16 C.F.R. pt. 310 in connection with the marketing and sale of debt relief services. The Complaint seeks preliminary and permanent injunctive relief, rescission or reformation of contracts, the refund of monies paid, restitution, disgorgement of ill-gotten monies, the appointment of a Receiver, and other equitable relief, as well as civil money penalties. The Bureau also moved ex parte for a temporary restraining order under Rule 65(b) of the Federal Rules of Civil Procedure.
On August 18, 2015, this Court granted the Bureau’s motion and entered the Temporary Restraining Order (TRO), which included an asset freeze, injunctive relief, and other equitable relief.
FINDINGS Having considered the Complaint, Plaintiff’s Ex Parte Motion for a Temporary Restraining Order with Asset Freeze, Appointment of a Receiver, and Other Equitable Relief, and Order to Show Cause Why a Preliminary Injunction Should Not Issue and Memorandum of Points and Authorities in Support (Motion) (Docket No. 4), and the declarations, exhibits, and all other evidence, the Court finds that: 1.
This Court has jurisdiction over the subject matter of this case, there is good cause to believe that it will have jurisdiction over all the parties hereto, and venue in this district is proper;
2.
There is good cause to believe that (a) Orion Processing, LLC d/b/a World Law Processing, Wld Credit Repair and World Law Debt (collectively, Orion); (b) Bradley James Haskins, individually and d/b/a as World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 2 of 67
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Law South; (c) World Law Debt Services, LLC; and (d) World Law Processing, LLC (collectively, PI Defendants), have engaged and are likely to continue to engage in acts or practices that violate the CFPA and the TSR, 16 C.F.R. pt. 310. Plaintiff is therefore likely to prevail on the merits of this action;
3.
There is good cause to believe that immediate and irreparable harm will result from the PI Defendants’ ongoing violations of these laws unless the PI Defendants continue to be restrained and enjoined by Order of this Court; 4.
There is good cause to believe that immediate and irreparable damage to the Court’s ability to grant effective final relief for consumers in the form of monetary restitution and disgorgement or compensation for unjust enrichment will occur from the transfer, dissipation, or concealment by the PI Defendants of their assets or business records unless the PI Defendants continue to be restrained and enjoined by Order of this Court. Thus, good cause exists for continuing the asset freeze imposed under the TRO, permitting the Bureau to take expedited discovery, and ordering the other equitable relief set forth herein;
5.
Good cause exists for appointing a Receiver over World Law Debt Services, LLC, and World Law Processing, LLC (collectively Receivership Defendants), and permitting Plaintiff continued access to Defendants’ business premises at the discretion of the Receiver and the Bankruptcy Trustee;
6.
Weighing the equities and considering Plaintiff’s likelihood of ultimate success on the merits, a preliminary injunction with an asset freeze, expedited discovery as to the existence and location of assets and documents, and other equitable relief is in the public interest; and 7.
As the Bureau is an agency of the United States, no security is required for this Order. Fed. R. Civ. P. 65(c).
DEFINITIONS For the purposes of this Order, the following definitions shall apply: 1.
“Advance Fee” means any fee or consideration requested or received by a Debt Relief Service Provider from a consumer for any Debt Relief Service, whether directly or indirectly, that occurs before;
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a. the Debt Relief Service Provider has renegotiated, settled, reduced, or otherwise altered the terms of a debt pursuant to a settlement agreement, debt management plan, or other valid contractual agreement executed by the Consumer; and b. the Consumer has made at least one payment pursuant to that settlement agreement, debt management plan, or other valid contractual agreement between the Consumer and the creditor or debt collector. 2.
“Assets” means any legal or equitable interest in, right to, or claim to any real, personal, or intellectual property owned or controlled by, or held, in whole or in part for the benefit of, or subject to access by any Defendant or Relief Defendant, wherever located, whether in the United States or abroad. This includes, but is not limited to, chattel, goods, instruments, equipment, fixtures, general intangibles, effects, leaseholds, contracts, mail or other deliveries, shares of stock, commodities, futures, inventory, checks, notes, accounts, credits, receivables (as those terms are defined in the Uniform Commercial Code), funds, cash, and trusts, including, but not limited to any trust held for the benefit of any Defendant, Relief Defendant, any of the Individual Defendants’ minor children, or any of the Individual Defendants’ spouses. It shall include both existing assets and assets acquired after the date of entry of this Order;
3.
“Assisting Others” includes, but is not limited to a. Providing paralegal or administrative support services; b. performing customer service functions including, but not limited to, receiving or responding to consumer complaints;
c. formulating or providing, or arranging for the formulation or provision of, any advertising or marketing material, including, but not limited to, any telephone sales script, direct mail solicitation, or the text of any Internet website, email, or other electronic communication; d. formulating or providing, or arranging for the formulation or provision of, any marketing support material or service, including but not limited to, web or Internet Protocol addresses or domain name registration for any Internet websites, affiliate marketing services, or media placement services; e. providing names of, or assisting in the generation of, potential customers; Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 4 of 67
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f. performing marketing, billing, or payment services of any kind; and acting or serving as an owner, officer, director, manager, or principal of any entity. 4.
“Bankruptcy Proceeding” means In re Orion Processing LLC, Case No. 15- 10279 currently pending in the United States Bankruptcy Court, Western District of Texas, Austin Division.
5.
“Bankruptcy Trustee” means the Chapter 7 Trustee appointed over Defendant Orion Processing, LLC by the United States Bankruptcy Court, Western District of Texas, Austin Division in the Bankruptcy Proceeding. 6.
“Consumer” means an individual or an agent, trustee, or representative acting on behalf of an individual.
7.
“Debt” means any obligation or alleged obligation to pay money, whether or not such obligation has been reduced to judgment. 8.
“Debt Relief Product or Service” means any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a consumer and one or more creditors or debt collectors, including but not limited to, a reduction in the balance, interest rate, or fees owed by a person to a creditor or debt collector.
9.
“Debt Relief Service Provider” means any Person that offers or provides any Debt Relief Product or Service.
10.
“Defendants” means (a) Orion Processing, LLC d/b/a World Law Processing, Wld Credit Repair and World Law Debt (collectively, Orion); (b) Family Capital Investment & Management LLC a/k/a FCIAM Property Management (FCAIM); (c) World Law Debt Services, LLC; (d) World Law Processing, LLC; (e) Derin Scott; (f) David Klein; and (g) Bradley James Haskins, individually and d/b/a as World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South, individually, collectively, or in any combination, and each of them by whatever names each might be known; a.
“Corporate Defendants” means: Orion; World Law Debt Services, LLC; and World Law Processing, LLC.
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b.
“PI Defendants” means Orion; Bradley James Haskins, individually and d/b/a as World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South; World Law Debt Services, LLC; and World Law Processing, LLC. c.
“Receivership Defendants” means World Law Debt Services, LLC; and World Law Processing, LLC, and their successors, assigns, affiliates, or subsidiaries, and each of them, by whatever names each might be known, provided that the Receiver has reason to believe they are owned or controlled in whole or in part by any of the Defendants; d.
“Relief Defendant” means Shannon Scott individually and by any other name by which she might be known;
11.
“Document” and “Electronically Stored Information” are synonymous in meaning and equal in scope to the usage of the terms in Rule 34(a) of the Federal Rules of Civil Procedure and include but are not limited to: a.
The original or a true copy of any written, typed, printed, electronically stored, transcribed, taped, recorded, filmed, punched, or graphic matter or other data compilations of any kind, including, but not limited to, letters, email or other correspondence, messages, memoranda, paper, interoffice communications, notes, reports, summaries, manuals, magnetic tapes or discs, tabulations, books, records, checks, invoices, work papers, journals, ledgers, statements, returns, reports, schedules, files, charts, logs, electronic files, stored in any medium; and b.
Any electronically created or stored information, including but not limited to electronic mail, instant messaging, videoconferencing, SMS, MMS, or other text messaging, and other electronic correspondence (whether active, archived, unsent, or in an deleted items folder), word processing files, spreadsheets, databases, document metadata, presentation files, and sound recordings, whether stored on any cell phones, smartphones, flash drives, personal digital assistants (“PDAs”), cards, desktop personal computer and workstations, laptops, notebooks and other portable computers, or other electronic storage media, backup disks and tapes, Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 6 of 67
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archive disks and tapes, and other forms of offline storage, whether assigned to individuals or in pools of computers available for shared use, or personally owned but used for work-related purposes, whether stored on-site with the computer used to generate them, stored offsite in another company facility, or stored, hosted, or otherwise maintained off-site by a third party; and computers and related offsite storage used by Defendants or Defendants’ participating associates, which may include persons who are not employees of the company or who do not work on company premises; 12.
“Electronic Data Host” means any person or entity that stores, hosts, or otherwise maintains electronically stored information; 13.
“Financial Institution” means any bank, savings and loan institution, credit union, or any financial depository of any kind, including, but not limited to, any brokerage house, trustee, broker-dealer, escrow agent, title company, commodity trading company, or precious metal dealer;
14.
“Person” means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity;
15.
“Plaintiff” or “Bureau” means the Consumer Financial Protection Bureau; 16.
The words “and” and “or” shall be understood to have both conjunctive and disjunctive meanings as necessary to make the applicable phrase or sentence inclusive rather than exclusive.
ORDER I. PROHIBITIONS ON THE PROVISION OF DEBT RELIEF PRODUCTS OR SERVICES IT IS THEREFORE ORDERED that the PI Defendants and their successors, assigns, officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, are hereby preliminarily restrained and enjoined from, or assisting others from, any of the following:
A. Participating in telemarketing any debt relief product or service; Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 7 of 67
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B. Advertising, marketing, promoting, offering for sale, selling, or providing any debt relief product or service;
C. Receiving any remuneration or other consideration from, holding any ownership interest in, providing services to, or working in any capacity for any person engaged in advertising, marketing, promoting, offering for sale, selling, or providing any debt relief product or service; and D. Attempting to collect, collecting, or selling or assigning any right to collect payments from Consumers who purchased or agreed to purchase any Debt Relief Product or Service from Defendants.
IT IS FURTHER ORDERED that within three (3) days of the date of this Order, the PI Defendants shall provide to Plaintiff, Receiver, and the Bankruptcy Trustee a list of all consumers who had a settlement with a creditor where, as of August 20, 2015, the Defendants were continuing to pay the creditor, and the details of any such settlement, including the amount and dates of any payments to creditors and contact information for the consumers. Nothing in this order prohibits the PI Defendants, the Receiver, or the Bankruptcy Trustee from assisting these consumers in the orderly transition of responsibility for making payments under any debt settlement payment plans Defendants previously negotiated with consumers’ creditors, including pursuant to any order in the Bankruptcy Proceeding. However, in no event may PI Defendants collect any fees from these consumers.
II. PROHIBITED MISREPRESENTATIONS IT IS THEREFORE ORDERED that the PI Defendants and their successors, assigns, officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this Order by personal service, facsimile transmission, email, or otherwise, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, sale, performance of any Debt Relief Product or Service are hereby preliminarily restrained and enjoined from falsely representing, or from assisting others who are falsely representing, expressly or by implication, any of the following:
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A. That any Defendant or any other person will or likely will provide to Consumers legal representation;
B. That any Defendant or any other person will or likely will provide to Consumers a local attorney or an attorney located in the Consumers’ state; C. That any Defendant or any other person will or likely will provide to Consumers an attorney to negotiate with creditors a modification or settlement of the Consumers’ debts; or D. Any other material fact.
III. PRESERVATION OF RECORDS AND TANGIBLE THINGS IT IS FURTHER ORDERED that the PI Defendants and their successors, assigns, officers, agents, servants, employees, independent contractors, and attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this Order by personal service, facsimile transmission, email, or otherwise, whether acting directly or indirectly are hereby preliminarily enjoined from destroying, erasing, mutilating, concealing, altering, transferring, or otherwise disposing of, in any manner, directly or indirectly, any Documents or records that relate to the business practices, or business or personal finances of any Defendant, or other entity directly or indirectly under the control of any Defendant.
IV. DISABLEMENT OF WEBSITES IT IS FURTHER ORDERED that, immediately upon service of the Order upon them:
A. any person hosting any Internet website for, or on behalf of, any Defendant, and B. the PI Defendants and their successors, assigns, officers, agents, servants, employees, independent contractors, and attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this order by personal service, facsimile transmission, email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, shall: Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 9 of 67
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1. Immediately do whatever is necessary, including cooperating with the Receiver, to ensure that any Internet website used by Defendants for the advertising, marketing, promotion, offering for sale, sale, or performance of any Debt Relief Product or Service, including but not limited to worldlawdebtsettlement.com;
orionprocessing.com;
and worldlawprocessing.com, containing statements, representations, or omissions prohibited by Sections I and II of this Order cannot be accessed by the public;
2. Prevent the destruction or erasure of any Internet website used by Defendants for the advertising, marketing, promotion, offering for sale, sale, or performance of any Debt Relief Service, by preserving such website in the format in which it is maintained currently; and 3. Immediately notify Plaintiff’s counsel, in writing, of any other Internet website operated or controlled by any Defendant.
V. SUSPENSION OF INTERNET DOMAIN NAME REGISTRATIONS IT IS FURTHER ORDERED that any domain name registrar must suspend the registration of any Internet website used by the PI Defendants for the advertising, marketing, promotion, offering for sale, sale, or performance of any Debt Relief Product or Service, and containing statements, representations, or omissions prohibited by Sections I and II of this Order, and provide immediate notice to Plaintiff’s counsel of any other Internet domain names registered or controlled by any Defendants.
VI. ASSET FREEZE IT IS FURTHER ORDERED that except as specified below, the PI Defendants, and their successors, assigns, officers, agents, servants, employees, independent contractors, and attorneys, and all persons directly or indirectly under the control of any of them, including any financial institution, and all other persons in active concert or participation with any of them, who receive actual notice of this Order by personal service, facsimile, Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 10 of 67
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email, or otherwise, are hereby preliminarily restrained and enjoined from directly or indirectly:
A. Selling, liquidating, assigning, transferring, converting, loaning, hypothecating, disbursing, gifting, conveying, encumbering, pledging, concealing, dissipating, spending, withdrawing, or otherwise disposing of any Asset that is: 1. in the actual or constructive possession of any PI Defendant; or 2. in the actual or constructive possession of, or owned or controlled by, or subject to access by, or belonging to, any corporation, partnership, trust or other entity directly or indirectly owned, managed or controlled by any PI Defendant;
B. Opening, or causing to be opened, any safe deposit box, commercial mail box, or storage facility belonging to, for the use or benefit of, controlled by, or titled in the name of any PI Defendant, or subject to access by any PI Defendant; C. Incurring charges or cash advances on any credit card, stored value card, debit card or charge card issued in the name, singly or jointly, of any PI Defendant, or any other entity directly or indirectly owned, managed, or controlled by any PI Defendant;
D. Incurring liens or encumbrances on real property, personal property, or other Assets in the name, singly or jointly, of any PI Defendant; or E. Cashing any checks or depositing or processing any payment from any consumer, client, or customer of any PI Defendant.
IT IS FURTHER ORDERED that the Assets affected by this Section shall include: A. all Assets of each PI Defendant as of the time this Order is entered; and B. those Assets obtained or received after entry of this Order that are derived, directly or indirectly, from the actions alleged in Plaintiff’s Complaint. This Section does not prohibit transfers to the Receiver, as specifically required in Section XVI (Delivery of Receivership Property), nor does it prohibit the Repatriation of Foreign Assets, as specifically required in Section X of this Order.
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VII.
RETENTION OF ASSETS AND RECORDS BY FINANCIAL INSTITUTIONS AND OTHER THIRD PARTIES
IT IS FURTHER ORDERED that, except as otherwise ordered by this Court, any financial or brokerage institution, business entity, electronic data host, Internet or “ecurrency” payment processor, or person served with a copy of this Order, or who otherwise has actual or constructive knowledge of this Order, that holds, controls, or maintains custody of any account, Document, or Asset of, on behalf of, in the name of, for the benefit of, subject to withdrawal by, subject to access or use by, or under the signatory power of any PI Defendant, or other party subject to Section VII above, or has held, controlled, or maintained any such account, Document, or Asset shall: A. Hold, preserve, and retain within such person’s control, and prohibit the withdrawal, removal, alteration, assignment, transfer, pledge, hypothecation, encumbrance, disbursement, dissipation, conversion, sale, liquidation, or other disposal of such account, Document, or Asset held by or under such person’s control, except as directed by further order of the Court or as directed in writing by the Receiver regarding accounts, Documents, or Assets held in the name of or benefit of any Receivership Defendant;
B. Provide Plaintiff, and Plaintiff’s agents, the Receiver, and the Receiver’s agents, immediate access to Documents, including those electronically stored, hosted, or otherwise maintained on behalf of the PI Defendants for forensic imaging or copying;
C. Deny access to any safe deposit box, commercial mail box, or storage facility belonging to, for the use or benefit of, controlled by, or titled in the name of any PI Defendant, or subject to access by any PI Defendant, or other party subject to Section VII (Asset Freeze) above, except that this subsection shall not limit the Receiver’s access to such places;
D. Provide to Plaintiff’s counsel and the Receiver, within one business day, a sworn statement setting forth:
1. the identification of each account or Asset titled in the name, individually or jointly, or held on behalf of or for the benefit of, subject to withdrawal by, subject to access or use by, or under the signatory power of any PI Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 12 of 67
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Defendant, or other party subject to Section VII above, whether in whole or in part;
2. the balance of each such account, or a description of the nature and value of such Asset, as of the close of business on the day on which this Order is served;
3. the identification of any safe deposit box, commercial mail box, or storage facility belonging to, for the use or benefit of, controlled by, or titled in the name of any PI Defendant, or subject to access by any PI Defendant, or other party subject to Section VII above, whether in whole or in part; and 4. if the account, safe deposit box, or other Asset has been closed or removed, the date closed or removed, the balance on said date, and the name or the person or entity to whom such account or other Asset was remitted;
E. Provide to Plaintiff’s counsel and the Receiver, within three business days after being served with a request, copies of all Documents pertaining to such account or Asset, including but not limited to originals or copies of account applications, account statements, signature cards, checks, drafts, deposit tickets, transfers to and from the accounts, all other debit and credit instruments or slips, currency transaction reports, 1099 forms, and safe deposit box logs; provided that such institution or custodian may charge a reasonable fee; and F. Cooperate with all reasonable requests of the Receiver relating to this Order’s implementation.
G. The accounts subject to this provision include: (a) all Assets of each PI Defendant deposited as of the time this Order is entered, and (b) those Assets deposited after entry of this Order that are derived from the actions alleged in Plaintiff’s Complaint. This Section does not prohibit transfers to the Receiver, as specifically required in Section XVI (Delivery of Receivership Property), nor does it prohibit the Repatriation of Foreign Assets, as specifically required in Section X of this Order.
H. Plaintiff is granted leave, pursuant to Rule 45 of the Federal Rules of Civil Procedure, to subpoena Documents immediately from any financial or brokerage Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 13 of 67
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institution, business entity, electronic data host, or person served with a copy of this Order that holds, controls, or maintains custody of any account, Document, or Asset of, on behalf of, in the name of, for the benefit of, subject to access or use by, or under the signatory power of any PI Defendant or other party subject to Section VI above, or has held, controlled, or maintained any such account, Document, or Asset and such financial or brokerage institution, business entity, electronic data host or person shall respond to such subpoena within three business days after service.
VIII.
FINANCIAL STATEMENTS AND ACCOUNTING IT IS FURTHER ORDERED that each PI Defendant within three (3) business days of service of this Order, shall prepare and deliver to Plaintiff’s counsel and to the Receiver: A. For Defendant Bradley James Haskins, a completed financial statement accurate as of the date of service of this Order upon such Defendant on the form of Attachment A to this Order captioned “Financial Statement of Individual Defendant.”
B. For the Corporate Defendants, a completed financial statement accurate as of the date of service of this Order upon each of the Corporate Defendants (unless otherwise agreed upon with Plaintiff’s counsel) in the form of Attachment B to this Order captioned “Financial Statement of Corporate Defendant.” C. A list of all officers and directors of the Corporate Defendants and all other individuals or entities with authority to direct the operations of each Corporate Defendant or withdraw money from the account of the Corporate Defendant. D. For each PI Defendant, a statement, verified under oath, of all payments, transfers, or assignments of any Assets worth $5,000 or more since October 27, 2010. Such statements shall include: (a) the amount transferred or assigned; (b) the name of each transferee or assignee; (c) the date of the assignment or transfer; and (d) the type and amount of consideration paid by or to the PI Defendant. Each statement shall specify the name and address of each Financial Institution at which PI Defendant has accounts or safe deposit boxes; and Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 14 of 67
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E. For each PI Defendant, a detailed accounting, verified under oath, of all gross and net profits obtained from, derived from, or related in any way to the offer for sale or sale of any Debt Relief Product or Service since October 27, 2010. IX. CONSUMER CREDIT REPORTS IT IS FURTHER ORDERED that pursuant to Section 604(a)(1) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(a)(1), Plaintiff may obtain credit reports concerning any PI Defendant and that, upon written request, any credit reporting agency from which such reports are request shall provide them to Plaintiff. X.
REPATRIATION OF FOREIGN ASSETS IT IS FURTHER ORDERED that, within three business days following the service of this Order, each PI Defendant shall:
A. Provide Plaintiff’s counsel and the Receiver with a full accounting of all Assets, accounts, and Documents outside of the territory of the United States that are held (1) by Defendants or Relief Defendant; (2) for their benefit; (3) in trust by or for them, individually or jointly; or (4) under their direct or indirect control, individually or jointly;
B. Transfer to the territory of the United States all Assets, accounts, and Documents in foreign countries held (1) by PI Defendants; (2) for their benefit; (3) in trust by or for them, individually or jointly; or (4) under their direct or indirect control, individually or jointly;
C. Hold and retain all repatriated Assets, accounts, funds, and Documents, and prevent any transfer, disposition, or dissipation whatsoever of any such Assets, accounts, or Documents; and D. Provide Plaintiff access to all records of accounts or Assets of the PI Defendants held by financial institutions located outside the territorial United States by signing the Consent to Release of Financial Records attached to this Order as Attachment C. All repatriated Assets, accounts, and Documents are subject to Section VI of this Order.
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XI. NONINTERFERENCE WITH REPATRIATION IT IS FURTHER ORDERED that the PI Defendants, and their successors, assigns, officers, agents, servants, employees, independent contractors, and attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this Order by personal service or otherwise, whether acting directly or indirectly, are hereby preliminarily restrained and enjoined from taking any action, directly or indirectly, which may result in the encumbrance or dissipation of foreign Assets, or in the hindrance of the repatriation required by the preceding Section X of this Order, including, but not limited to: A. Sending any statement, letter, fax, email or wire transmission, or telephoning or engaging in any other act, directly or indirectly, that results in a determination by a foreign trustee or other entity that a “duress” event has occurred under the terms of a foreign trust agreement until such time that all Assets have been fully repatriated pursuant to Section X of this Order; or B. Notifying any trustee, protector, or other agent of any foreign trust or other related entities of either the existence of this Order, or of the fact that repatriation is required pursuant to a court order, until such time that all Assets have been fully repatriated pursuant to Section X of this Order. XII.
APPOINTMENT OF A RECEIVER IT IS FURTHER ORDERED that Robb Evans and Associates, LLC is appointed Receiver for the business activities of Receivership Defendants with the full power of an equity receiver. The Receiver shall be the agent of this Court and solely the agent of this Court in acting as Receiver under this Order. The Receiver shall be accountable directly to this Court. The Receiver shall comply with all laws and Local Rules of this Court governing federal equity receivers.
XIII.
DUTIES AND AUTHORITIES OF RECEIVER IT IS FURTHER ORDERED that the Receiver is directed and authorized to accomplish the following:
A. Assume full control of the Receivership Defendants by removing, as the Receiver deems necessary or advisable, any director, officer, independent contractor, employee, or agent of any of the Receivership Defendants including any named Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 16 of 67
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Defendant, from control of, management of, or participation in, the affairs of the Receivership Defendants;
B. Take exclusive custody, control, and possession of all Assets and Documents of, or in the possession, custody, or under the control of, the Receivership Defendants, wherever situated. The Receiver shall have full power to divert mail and to sue for, collect, receive, take into possession, hold, and manage all Assets and Documents of the Receivership Defendants and other persons whose interests are now held by or under the direction, possession, custody, or control of the Receivership Defendants. The Receiver shall not, however, attempt to collect or receive any amount from a consumer if the Receiver believes the consumer was a victim of the unlawful conduct alleged in the complaint in this matter.
C. Take all steps necessary to secure the business premises of the Receivership Defendants. Such steps may include, but are not limited to, the following as the Receiver deems necessary or advisable:
1. serving and filing this Order;
2. completing a written inventory of all Receivership Assets; 3. obtaining pertinent information from all employees and other agents of the Receivership Defendants, including but not limited to, the name, home address, social security number, job description, method of compensation, and all accrued and unpaid commissions and compensation of each such employee or agent, and all computer hardware and software passwords;
4. videotaping or photographing all portions of such business premises; 5. securing the location by changing the locks and disconnecting any computer modems or other means of access to the computer or other records maintained at that location;
6. requiring any persons present on the premises at the time this Order is served to leave the premises, to provide the Receiver with proof of identification, or to demonstrate to the satisfaction of the Receiver that Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 17 of 67
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such persons are not removing from the premises Documents or Assets of the Receivership Defendants; and 7. requiring all employees, independent contractors, and consultants of the Receivership Defendants to complete a questionnaire submitted by the Receiver;
D. Conserve, hold, and manage all Receivership Assets, and perform all acts necessary or advisable to preserve the value of those Assets, in order to prevent any irreparable loss, damage, or injury to consumers or to creditors of the Receivership Defendants, including, but not limited to, obtaining an accounting of the Assets and preventing transfer, withdrawal, or misapplication of Assets; E. Liquidate any and all securities or commodities owned by or for the benefit of the Receivership Defendants as the Receiver deems to be advisable or necessary; F. Enter into contracts and purchase insurance as the Receiver deems to be advisable or necessary;
G. Prevent the inequitable distribution of Assets and determine, adjust, and protect the interests of consumers and creditors who have transacted business with the Receivership Defendants;
H. Manage and administer the business of the Receivership Defendants until further order of this Court by performing all incidental acts that the Receiver deems to be advisable or necessary, which includes retaining, hiring, or dismissing any employees, independent contractors, or agents;
I. Choose, engage, and employ attorneys, accountants, appraisers, and other independent contractors and technical specialists, as the Receiver deems advisable or necessary in the performance of duties and responsibilities under the authority granted by this Order;
J. Make payments and disbursements from the Receivership estate that are necessary or advisable for carrying out the directions of, or exercising the authority granted by, this Order. The Receiver shall apply to the Court for prior approval of any payment of any debt or obligation incurred by the Receivership Defendants prior to the date of entry of this Order, except payments that the Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 18 of 67
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Receiver deems necessary or advisable to secure assets of the Receivership Defendants, such as rental payments;
K. Determine and implement measures to ensure that the Receivership Defendants comply with and prevent violations of this Order and all other applicable laws, including, but not limited to, if appropriate, revising sales materials and implementing monitoring procedures;
L. Institute, compromise, adjust, appear in, intervene in, or become party to such actions or proceedings in state, federal, or foreign courts that the Receiver deems necessary and advisable to preserve or recover the Assets of the Receivership Defendants, or that the Receiver deems necessary and advisable to carry out the Receiver’s mandate under this Order;
M. Defend, compromise, adjust, or otherwise dispose of any or all actions or proceedings instituted in the past or in the future against the Receiver in his or her role as Receiver, or against the Receivership Defendants, that the Receiver deems necessary and advisable to preserve the Assets of the Receivership Defendants or that the Receiver deems necessary and advisable to carry out the Receiver’s mandate under this Order;
N. Continue and conduct the business of the Receivership Defendants in such manner, to such extent, and for such duration as the Receiver may in good faith deem to be necessary or appropriate to operate the business profitably and lawfully, if at all; provided, however, that the continuation and conduct of the business shall be conditioned upon the Receiver’s good faith determination that the businesses can be lawfully operated at a profit using the Assets of the receivership estate;
O. Take depositions and issue subpoenas to obtain Documents and records pertaining to the receivership estate and compliance with this Order. Subpoenas may be served by agents or attorneys of the Receiver and by agents of any process server retained by the Receiver;
P. Open one or more bank accounts as designated depositories for funds of the Receivership Defendants. The Receiver shall deposit all funds of the Receivership Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 19 of 67
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Defendants in such a designated account and shall make all payments and disbursements from the receivership estate from such account(s); Q. Maintain accurate records of all receipts and expenditures that it makes as Receiver;
R. Cooperate with reasonable requests for information or assistance from any state or federal law enforcement agency;
S. Maintain the chain of custody of all of Defendants’ records in their possession; and T. Notify all courts in which Receivership Defendants have litigation pending, that this case is pending, and request temporary stays, where appropriate, of those cases or any other necessary relief to preserve the rights of consumers. XIV.
CONTINUING ACCESS TO BUSINESS PREMISES AND RECORDS IT IS FURTHER ORDERED that Plaintiff, the Receiver, and their respective representatives, agents, contractors, or assistants, are permitted continued access to the PI Defendants’ business premises; and IT IS FURTHER ORDERED that the PI Defendants and their successors, assigns, officers, directors, agents, servants, employees, attorneys, and all other persons directly or indirectly, in whole or in part, under their control, and all other persons in active concert or participation with them, who receive actual notice of this Order by personal service, facsimile, email, or otherwise, whether acting directly or, shall: A. Allow Plaintiff and the Receiver, and their respective representatives, agents, attorneys, investigators, paralegals, contractors, or assistants, continuing access to:
1. all of the PI Defendants’ business premises, including but not limited to: a. 9011 Mountain Ridge Dr., Suites. 130-E, 130-F, 130- G, 200, and 220, Austin, TX 78759 b. any storage facilities; and c. such other business locations that are wholly or partially owned, rented, leased, or under the temporary or permanent control of any PI Defendant;
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2. any other premises where the PI Defendants conduct business, sales operations, or customer service operations;
3. any premises where Documents related to the PI Defendants’ businesses are stored or maintained, including but not limited to a storage unit; 4. any premises where Assets belonging to any PI Defendant are stored or maintained; and 5. any Documents located at any of the locations described in this Section; B. To the extent not already done, immediately identify to Plaintiff’s counsel and the Receiver:
1. all of the PI Defendants’ business premises and storage facilities; 2. any non-residence premises where any PI Defendant conducts business, sales operations, or customer service operations; 3. any non-residence premises where Documents related to the business, sales operations, or customer service operations of any PI Defendant are hosted, stored, or otherwise maintained, including but not limited to the name and location of any Electronic Data Hosts; and 4. any non-residence premises where Assets belonging to any PI Defendant are stored or maintained; and C. Provide Plaintiff and the Receiver, and their respective representatives, agents, attorneys, investigators, paralegals, contractors, or assistants with any necessary means of access to, copying of, and forensic imaging of Documents, including, without limitation, identifying the locations of Receivership Defendants’ business premises, keys and combinations to business premises locks, passwords to devices that hold Electronically Stored Information, computer access codes of all computers used to conduct Receivership Defendants’ business, access to (including but not limited to execution of any Documents necessary for access to and forensic imaging of) any data stored, hosted or otherwise maintained by an electronic data host, and storage area access information;
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IT IS FURTHER ORDERED that:
A. Plaintiff and the Receiver are authorized to employ the assistance of federal, state, and local law enforcement officers, including, but not limited to, the United States Marshals service, the United States Marshal or Deputy United States Marshal, the Federal Bureau of Investigation, the Internal Revenue Service, and the Sheriff or deputy of any county, and the Police Department and police officer of any community, to effect service, to implement peacefully the provisions of this Order, and to keep the peace.
B. The Bankruptcy Trustee and the Receiver will continue to allow Plaintiff and its representatives, agents, contractors, or assistants into the premises and facilities described in this Section to inspect, inventory, image, and copy Documents relevant to any matter contained in this Order, wherever they may be situated. The Receiver may exclude the PI Defendants and their agents and employees from the business premises and facilities during the immediate access. No one shall interfere with Plaintiff’s or the Receiver’s inspection of the PI Defendants’ premises or documents.
C. The Receiver and Plaintiff shall have the right to remove any Documents, including any devices containing Electronically Stored Information related to the PI Defendants’ business practices from the premises in order that they may be inspected, inventoried, and copied. The materials so removed shall be returned within five business days of completing said inventory and copying. If any property, records, Documents, or computer files relating to the Receivership Defendants’ finances or business practices are located in the residence of any PI Defendant or are otherwise in the custody or control of any PI Defendant, then such PI Defendant shall produce them to the Receiver within twenty-four hours of service of this Order. In order to prevent the destruction of computer data, upon service of this Order upon Defendants, any such computers may be powered down (turned off) in the normal course for the operating systems used on such computers and shall not be powered up or used again until produced for copying and inspection, along with any codes needed for access. Plaintiff’s and the Receiver’s representatives may also photograph and videotape the inside and Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 22 of 67
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outside of all premises to which they are permitted access by this Order, and all Documents and other items found on such premises; D. Plaintiff’s access to the PI Defendants’ Documents pursuant to this Order shall not provide grounds for any PI Defendant to object to any subsequent request for Documents served by Plaintiff; and E. The Receiver shall allow the PI Defendants and their representatives reasonable access to the premises of the Receivership Defendants. The purpose of this access shall be to inspect, inventory, and copy any and all Documents and other property owned by or in the possession of the Receivership Defendants, provided that those Documents and property are not removed from the premises. The Receiver shall have the discretion to determine the time, manner, and reasonable conditions of such access.
F. To the extent not already done, PI Defendants and their employees, agents, and bookkeepers shall also immediately provide usernames and passwords to all computers that store information concerning Defendants’ business operations; G. To the extent not already done, PI Defendants and their employees shall surrender Blackberry, iPhone, Android, or other mobile access devices that contain information concerning Defendants’ business operations to the Receiver or Plaintiff’s representatives.
XV.
COOPERATION WITH RECEIVER IT IS FURTHER ORDERED that:
A. To the extent not already done under the TRO issued in this case, the PI Defendants, and their successors, assigns, officers, agents, directors, servants, employees, salespersons, independent contractors, attorneys, and corporations, and all other persons or entities in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, whether acting directly or indirectly, or any of them, shall fully cooperate with and assist the Receiver. Defendants’ cooperation and assistance shall include, but not be limited to:
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1. Providing any information to the Receiver that the Receiver deems necessary to exercising the authority and discharging the responsibilities of the Receiver under this Order, including but not limited to allowing the Receiver to inspect Documents and Assets and to partition office space; 2. Providing any username or password and executing any documents required to access any computer or electronic files in any medium, including but not limited to Electronically Stored Information stored, hosted, or otherwise maintained by an electronic data host; and 3. Advising all persons who owe money to the Receivership Defendants that all debts should be paid directly to the Receiver; and B. The PI Defendants and their successors, assigns, officers, directors, agents, servants, employees, attorneys, and all other persons or entities directly or indirectly, in whole or in part, under their control, and all other persons in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, shall not interfere in any manner, directly or indirectly with the custody possession, management, or control by the Receiver of Assets and Documents, and are hereby preliminarily restrained and enjoined from directly or indirectly:
1. Transacting any of the business of the Receivership Defendants; 2. Destroying, secreting, erasing, mutilating, defacing, concealing, altering, transferring or otherwise disposing of, in any manner, directly or indirectly, any Documents or equipment of the Receivership Defendants, including but not limited to contracts, agreements, consumer files, consumer addresses and telephone numbers, correspondence, advertisements, brochures, sales material, sales presentations, Documents evidencing or referring to Defendants’ services, training materials, scripts, data, computer tapes, disks, or other computerized records, books, written or printed records, handwritten notes, telephone logs, “verification” or “compliance” tapes or other audio or video tape recordings, receipt books, invoices, postal receipts, ledgers, personal and business canceled checks and check registers, bank statements, appointment books, copies of Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 24 of 67
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federal, state or local business or personal income or property tax returns, photographs, mobile devices, electronic storage media, accessories, and any other Documents, records or equipment of any kind that relate to the business practices or business or personal finances of the Receivership Defendants or any other entity directly or indirectly under the control of the Receivership Defendants;
3. Transferring, receiving, altering, selling, encumbering, pledging, assigning, liquidating, or otherwise disposing of any Assets owned, controlled, or in the possession or custody of, or in which an interest is held or claimed by, the Receivership Defendants, or the Receiver; 4. Excusing debts owed to the Receivership Defendants; 5. Failing to notify the Receiver of any Asset, including accounts, of a Receivership Defendant held in any name other than the name of the Receivership Defendant, or by any person or entity other than the Receivership Defendant, or failing to provide any assistance or information requested by the Receiver in connection with obtaining possession, custody, or control of such Assets; 6. Failing to create and maintain books, records, and accounts which, in reasonable detail, accurately, fairly, and completely reflect the incomes, assets, disbursements, transactions and use of monies by the PI Defendants or any other entity directly or indirectly under the control of the PI Defendants;
7. Doing any act or refraining from any act whatsoever to interfere with the Receiver’s taking custody, control, possession, or managing of the Assets or Documents subject to this Receivership; or to harass or to interfere with the Receiver in any way; or to interfere in any manner with the exclusive jurisdiction of this Court over the Assets or Documents of the Receivership Defendants; or to refuse to cooperate with the Receiver or the Receiver’s duly authorized agents in the exercise of their duties or authority under any Order of this Court; and Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 25 of 67
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8. Filing, or causing to be filed, any petition on behalf of the Receivership Defendants for relief under the United States Bankruptcy Code, 11 U.S.C. § 101 et seq., without prior permission from this Court. XVI.
DELIVERY OF RECEIVERSHIP PROPERTY IT IS FURTHER ORDERED that immediately upon service of this Order upon them or upon their otherwise obtaining actual knowledge of this Order, or within a period permitted by the Receiver, the PI Defendants and any other person or entity, including but not limited to financial institutions and electronic data hosts, shall transfer or deliver access to possession, custody, and control of the following to the Receiver: A. All Assets of the Receivership Defendants;
B. All Documents of the Receivership Defendants, including but not limited to books and records of accounts, all financial and accounting records, balance sheets, income statements, bank records (including monthly statements, canceled checks, records of wire transfers, records of ACH transactions, and check registers), client or customer lists, title documents and other papers; C. All Assets belonging to members of the public now held by the Receivership Defendants;
D. All keys, computer and other passwords, user names, entry codes, combinations to locks required to open or gain or secure access to any Assets or Documents of the Receivership Defendants, wherever located, including, but not limited to, access to their business premises, means of communication, accounts, computer systems, or other property; and E. Information identifying the accounts, employees, properties, or other assets or obligations of the Receivership Defendants.
In the event any person or entity fails to deliver or transfer immediately any asset or otherwise fails to comply with any provision of this Section, the Receiver may file ex parte with the court an Affidavit of Non-Compliance regarding the failure. Upon filing of the affidavit, the Court may authorize, without additional process or demand, Writs of Possession or Sequestration or other equitable writs requested by the Receiver. The writs shall authorize and direct the United States Marshal, any Deputy United States Marshal, Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 26 of 67
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the Federal Bureau of Investigation, the Internal Revenue Service, or any sheriff or deputy sheriff of any county to seize the Asset, Document, or other thing and to deliver it to the Receiver.
XVII.
COMPENSATION FOR RECEIVER IT IS FURTHER ORDERED that the Receiver and all personnel hired by the Receiver as herein authorized, including counsel to the Receiver and accountants, are entitled to reasonable compensation for the performance of duties pursuant to this Order, and for the cost of actual out-of-pocket expenses incurred by them, from the assets now held by or in the possession or control of, or which may be received by, the Receivership Defendants. The Receiver shall file with the Court and serve on the parties periodic requests for the payment of such reasonable compensation, with the first such request filed no more than sixty (60) days after the date of this Order. The Receiver shall not increase the hourly rates used as the bases for such fee applications without prior approval of the Court. XVIII.
RECEIVER’S REPORTS IT IS FURTHER ORDERED that the Receiver shall report to this Court on or before the date set for the hearing to Show Cause regarding the Preliminary Injunction, regarding: (1) the steps taken by the Receiver to implement the terms of this Order; (2) the value of all liquidated and unliquidated assets of the Receivership Defendants; (3) the sum of all liabilities of the Receivership Defendants; (4) the steps the Receiver intends to take in the future to (a) prevent any diminution in the value of assets of the Receivership Defendants, (b) pursue receivership assets from third parties, and (c) adjust the liabilities of the Receivership Defendants, if appropriate; (5) the Receiver’s assessment of whether the business can be operated in compliance with this Order; and (6) any other matters that the Receiver believes should be brought to the Court’s attention. Provided, however, that if any of the required information would hinder the Receiver’s ability to pursue receivership assets, the portions of the Receiver’s report containing such information may be filed under seal and not served on the parties.
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XIX.
WITHDRAWAL OF RECEIVER IT IS FURTHER ORDERED that the Receiver and any professional retained by the Receiver, including but not limited to his or her attorneys and accountants, be and are hereby authorized to reasonably withdraw from his or her respective appointments or representations and apply for payment of their professional fees and costs at any time after the date of this Order by sending written notice seven days prior to the date of the intended withdrawal to the Court and to the parties along with a written report reflecting the Receiver’s work, findings, and recommendations, as well as an accounting for all funds and assets in possession or control of the Receiver. The Receiver shall be exonerated and the receivership deemed closed seven days from the date of the mailing of such notice of withdrawal. The Court will retain jurisdiction to consider the fee applications, report, and accounting submitted by the Receiver and the professionals. The written notice shall include an interim report indicating the Receiver’s actions and reflect the knowledge gained along with the fee applications of the Receiver and his or her professionals. The report shall also contain the Receiver’s recommendations, if any.
XX.
RECEIVER’S BOND/LIABILITY IT IS FURTHER ORDERED that no bond shall be required in connection with the appointment of the Receiver. Except for an act of gross negligence, the Receiver and the professionals shall not be liable for any loss or damage suffered by any of the PI Defendants, their officers, agents, servants, employees, and attorneys or any other person, by reason of any act performed or omitted to be performed by the Receiver and the professionals in connection with the discharge of his or her duties and responsibilities, including but not limited to their withdrawal from the case under Section XIX.
XXI.
PROHIBITION ON RELEASE OF CONSUMER INFORMATION IT IS FURTHER ORDERED that, except as required by a law enforcement agency, law, regulation, or court order, the PI Defendants, and their successors, assigns, officers, agents, servants, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order by personal service or otherwise, are preliminarily restrained and enjoined from disclosing, using, or benefitting Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 28 of 67
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from consumer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a consumer’s account (including a credit card, bank account, or other financial account), of any person, which any Defendant obtained prior to entry of this Order in connection with any Debt Relief Product or Service.
XXII.
STAY OF ACTIONS IT IS FURTHER ORDERED that:
A. Except by leave of this Court, during pendency of the Receivership ordered herein, the PI Defendants are hereby stayed from taking any action for, against, on behalf of, or in the name of any of the following: the Receivership Defendants, any of their subsidiaries, affiliates, partnerships, Assets, Documents or the Receiver or the Receiver’s duly authorized agents acting in their capacities as such. Such hereby-stayed actions include, but are not limited to, the following: 1. Commencing, prosecuting, continuing, entering, or enforcing any suit or proceeding, except that such actions may be filed to toll any applicable statute of limitations;
2. Accelerating the due date of any obligation or claimed obligation; filing or enforcing any lien; taking or attempting to take possession, custody, or control of any asset; attempting to foreclose, forfeit, alter, or terminate any interest in any asset, whether such acts are part of a judicial proceeding, are acts of self-help, or otherwise; or 3. Executing, issuing, serving, or causing the execution, issuance, or service of, any legal process, including, but not limited to, attachments, garnishments, subpoenas, writs of replevin, writs of execution, or any other form of process whether specified in this Order or not; or 4. Doing any act or thing whatsoever to interfere with the Receiver taking custody, control, possession, or management of the Assets or Documents subject to the Receivership, or to harass or interfere with the Receiver in Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 29 of 67
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any way, or to interfere in any manner with the exclusive jurisdiction of this Court over the Assets or Documents of the Receivership Defendants; B. This Section XXII does not stay:
1. The commencement or continuation of a criminal action or proceeding; 2. The continuation of the Bankruptcy Proceeding; 3. The commencement or continuation of an action or proceeding by a state bar association to enforce its police or regulatory power; 4. The commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit’s police or regulatory power;
5. The enforcement of a judgment, other than a money judgment, obtained in an action or proceeding by a governmental unit to enforce such governmental unit’s police or regulatory power; or 6. The issuance to a Receivership Defendant of a notice of tax deficiency; and C. Except as otherwise provided in this Order, all persons and entities in need of documentation from the Receiver shall in all instances first attempt to secure such information by submitting a formal written request to the Receiver, and, if such request has not been responded to within thirty days of receipt by the Receiver, any such person or entity may thereafter seek an Order of this Court with regard to the relief requested.
XXIII.
LIMITED EXPEDITED DISCOVERY IT IS FURTHER ORDERED that Plaintiff and the Receiver are granted leave to conduct certain expedited discovery, and that, commencing with the time and date of this Order, in lieu of the time periods, notice provisions, and other requirements of Rules 19, 26, 30, 34, and 45 of the Federal Rules of Civil Procedure, and applicable Local Rules, the Bureau and the Receiver are granted leave to:
A. Take the deposition, on three days’ notice, of any person or entity, whether or not a party, for the purpose of: (1) discovering the nature, location, status, and extent of Assets of the PI Defendants or their affiliates or subsidiaries; (2) Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 30 of 67
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discovering the nature and location of Documents and business records of the PI Defendants or their affiliates or subsidiaries; and (3) enforcing compliance with this Order. The limitations and conditions set forth in Rules 30(a)(2) and 31(a)(2) of the Federal Rules of Civil Procedure regarding subsequent depositions shall not apply to depositions taken pursuant to this Section. In addition, any such depositions taken pursuant to this Section shall not be counted toward the ten deposition limit set forth in Rules 30(a)(2)(A)(i) and 31(a)(2)(A)(i) of the Federal Rules of Civil Procedure and shall not preclude Plaintiff from subsequently deposing the same person or entity in accordance with the Federal Rules of Civil Procedure. Service of discovery upon a party, taken pursuant to this Section, shall be sufficient if made by facsimile, email or by overnight delivery. Any deposition taken pursuant to this subsection that has not been reviewed and signed by the deponent may be used by any party for purposes of the preliminary injunction hearing;
B. Serve upon parties requests for production of documents or inspection that require production or inspection within three calendar days of service, and may serve subpoenas upon non-parties that direct production or inspection within five calendar days of service, for the purpose of discovering: (1) the nature, location, status, and extent of assets of the PI Defendants or their affiliates or subsidiaries; (2) the nature and location of Documents and business records of PI Defendants or their affiliates or subsidiaries; and (3) compliance with this Order, provided that twenty-four hours’ notice shall be deemed sufficient for the production of any such Documents that are maintained or stored only as electronic data; C. Serve deposition notices and other discovery requests upon the parties to this action by facsimile or overnight courier, and take depositions by telephone or other remote electronic means; and D. If a PI Defendant fails to appear for a properly noticed deposition or fails to comply with a request for production or inspection, seek to prohibit that Defendant from introducing evidence at any subsequent hearing.
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XXIV.
MONITORING IT IS FURTHER ORDERED that Plaintiff’s agents or representatives may contact the PI Defendants directly or anonymously for the purpose of monitoring compliance with Sections I and II of this Order, and may tape record any oral communications that occur in the course of such contacts.
XXV.
NOTIFICATION OF BUSINESS ACTIVITIES
IT IS FURTHER ORDERED that:
A. The PI Defendants are hereby preliminarily enjoined from directly or indirectly creating, operating, or exercising any control over any business entity, including any partnership, limited partnership, joint venture, sole proprietorship or corporation, without first serving on counsel for the Bureau a written statement disclosing the following: (1) the name of the business entity; (2) the address and telephone number of the business entity; (3) the names of the business entity’s officers, directors, principals, managers and employees; and (4) a detailed description of the business entity’s intended or actual activities. B. Defendant Bradley James Haskins must notify the Bureau at least seven (7) days prior to affiliating with, becoming employed by, or performing any work for any business that is not a named Defendant in this action. Each notice must include his new business address and a statement of the nature of the business or employment and the nature of his duties and responsibilities in connection with that business or employment.
XXVI.
DEFENDANTS’ DUTY TO DISTRIBUTE ORDER IT IS FURTHER ORDERED that the PI Defendants shall immediately provide a copy of this Order to each affiliate, subsidiary, division, sales entity, successor, assign, officer, director, employee, independent contractor, client company, electronic data host, agent, authorized signatory to bank accounts, attorney, spouse, and representative of the PI Defendants and shall, within three calendar days from the date of entry of this Order, provide Plaintiff’s counsel with a sworn statement that: (a) confirms that the PI Defendants Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 32 of 67
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have provided copies of the Order as required by this Section and (b) lists the names and addresses of each entity or person to whom the PI Defendants provided a copy of the Order. Furthermore, the PI Defendants shall not take any action that would encourage officers, agents, directors, employees, salespersons, independent contractors, attorneys, subsidiaries, affiliates, successors, assigns, or other persons or entities in active concert or participation with the PI Defendants to disregard this Order or believe that they are not bound by its provisions.
XXVII.
CORRESPONDENCE WITH PLAINTIFF CONSUMER FINANCIAL PROTECTION BUREAU
IT IS FURTHER ORDERED that, for the purposes of this Order, because mail addressed to the Bureau is subject to delay due to heightened security screening, all correspondence and service of pleadings on Plaintiff Consumer Financial Protection Bureau shall be sent either via electronic submission or via overnight express delivery to:
Consumer Financial Protection Bureau Office of Enforcement 1625 Eye Street, NW Washington, DC 20006 ATTN: Laura Schneider Email: [email protected]
XXVIII.
SERVICE OF THIS ORDER IT IS FURTHER ORDERED that copies of this Order may be served by facsimile transmission, email, personal or overnight delivery, or US Mail, by Plaintiff’s agents and employees or any local, state, or federal law enforcement agency or by private process server, upon any financial institution or other entity or person that may have possession, custody, or control of any Documents or Assets of any Defendant, or that may otherwise be subject to any provision of this Order. Service upon any branch or office of any financial institution shall effect service upon the entire financial institution.
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XXIX.
EXPIRATION OF ORDER
IT IS FURTHER ORDERED that this Order will expire upon entry of a final judgment in this case.
XXX.
RETENTION OF JURISDICTION IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for all purposes of construction, modification, and enforcement of this Order.
DONE and ORDERED in Chambers at Miami, Florida, this 2nd day of September 2015.
Copies furnished to:
Edwin G. Torres, U.S. Magistrate Judge Counsel of Record
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Attachment A Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 35 of 67
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Consumer Financial Protection Bureau
FINANCIAL STATEMENT OF INDIVIDUAL DEFENDANT
Instructions:
Complete all items. Enter “None” or “N/A” (“Not Applicable”) where appropriate. If you cannot fully answer a question, explain why.
“Dependents” include your live-in companion, dependent children, or any other person, whom you or your spouse (or your children’s other parent) claimed or could have claimed as a dependent for tax purposes at any time during the past five years.
“Assets” and “Liabilities” include ALL assets and liabilities, located within the United States or elsewhere, whether held individually or jointly.
Attach continuation pages as needed. On the financial statement, state next to the Item number that the Item is being continued. On the continuation page(s), identify the Item number(s) being continued. Type or print legibly.
Initial each page in the space provided in the lower right corner.
Sign and date the completed financial statement on the last page.
Penalty for False Information:
Federal law provides that any person may be imprisoned for not more than five years, fined, or both, if such person in any: (a) “matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully (1) falsifies, conceals or covers up by any trick, scheme, or device a material fact; (2) makes any false, fictitious or fraudulent statement or representation; or (3) makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry” (18 U.S.C. § 1001); (2) “statement under penalty of perjury as permitted under section 1746 of title 28, United States Code, willfully subscribes as true any material matter which he does not believe to be true” (18 U.S.C. § 1621); or (3) “(...statement under penalty of perjury as permitted under section 1746 of title 28, United States Code) in any proceeding before or ancillary to any court or grand jury of the United States knowingly makes any false material declaration or makes or uses any other information...knowing the same to contain any false material declaration.” (18 U.S.C. § 1623)
For a felony conviction under the provisions cited above, federal law provides that the fine may be not more than the greater of (i) $250,000 for an individual or $500,000 for a corporation, or (ii) if the felony results in pecuniary gain to any person or pecuniary loss to any person other than the defendant, the greater of twice the gross gain or loss. 18 U.S.C. § 3571.
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Initials _____
BACKGROUND INFORMATION Item 1. Information About You
Your Full Name ______________________________________________ Social Security No. ___________________
Place of Birth _________________________ Date of Birth _______________ Drivers License No. _______________
Current Address ______________________________________________________ From (Date) _________________
Rent or Own? _________ Telephone No. _________________________ Facsimile No. _________________________
E-Mail Address _____________________________________ Internet Home Page ____________________________
Previous Addresses for past five years:
Address___________________________________________ Rent or Own?________ From/Until_________________
Address___________________________________________ Rent or Own?________ From/Until_________________
Identify any other name(s) and/or social security number(s) you have used, and the time period(s) during which they were
used________________________________________________________________________________________
Marital Status: ______________________ (i.e., Married, Single, Divorced, Widowed, Separated)
Item 2. Information About Your Spouse or Live-In Companion
Spouse/Companion's Name _____________________________________ Social Security No. ___________________
Place of Birth _________________________________________ Date of Birth _______________________________
Identify any other name(s) and/or social security number(s) your spouse/companion has used, and the time period(s) during
which they were used ________________________________________________________________________
Address (if different from yours) _____________________________________________________________________
From (Date) _________________________ Rent or Own?___________ Telephone No._________________________
Employer’s Name and Address ______________________________________________________________________
Job Title _______________________ Years in Present Job _________ Annual Gross Salary/Wages $______________
Item 3. Information About Your Previous Spouse
Previous Spouse’s Name & Address __________________________________________________________________
___________________________________ Social Security No. _________________ Date of Birth _______________ Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 37 of 67
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Initials _____
Item 4. Contact Information
Name & Address of Nearest Living Relative or Friend ___________________________________________________
____________________________________________________________ Telephone No. ______________________
Item 5. Information About Dependents Who Live With You
Name ______________________________________________ Date of Birth ________________________________
Relationship _________________________________________ Social Security No. ____________________________
Name ______________________________________________ Date of Birth ________________________________
Relationship _________________________________________ Social Security No. ____________________________
Name ______________________________________________ Date of Birth ________________________________
Relationship _________________________________________ Social Security No. ____________________________
Item 6. Information About Dependents Who Do Not Live With You
Name & Address ________________________________________________________________________________
Date of Birth __________________ Relationship ____________________ Social Security No.___________________
Name Address __________________________________________________________________________________
Date of Birth __________________ Relationship ____________________ Social Security No.__________________
Name & Address ________________________________________________________________________________
Date of Birth __________________ Relationship ____________________ Social Security No.__________________
Item 7. Employment Information
Provide the following information for this year-to-date and for each of the previous five full years, for each company of which you were a director, officer, employee, agent, contractor, participant or consultant at any time during that period. “Income” includes, but is not limited to, any salary, commissions, draws, consulting fees, loans, loan payments, dividends, royalties or other benefits for which you did not pay (e.g., health insurance premiums, automobile lease or loan payments) received by you or anyone else on your behalf.
Company Name & Address ________________________________________________________________________
Dates Employed: From (Month/Year) ________________________ To (Month/Year) _________________________
Positions Held with Beginning and Ending Dates ________________________________________________________
Income Received: This year-to-date: $______________________ _______: $______________________
20_____:
$______________________ _______: $______________________
_______:
$______________________ _______: $______________________
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Initials _____
Company Name & Address ________________________________________________________________________
Dates Employed: From (Month/Year) ________________________ To (Month/Year) _________________________
Positions Held with Beginning and Ending Dates ________________________________________________________
Income Received: This year-to-date: $______________________ _______: $______________________
20_____:
$______________________ _______: $______________________
_______:
$______________________ _______: $______________________
Company Name & Address ________________________________________________________________________
Dates Employed: From (Month/Year) ________________________ To (Month/Year) _________________________
Positions Held with Beginning and Ending Dates ________________________________________________________
Income Received: This year-to-date: $______________________ _______: $______________________
20_____:
$______________________ _______: $______________________
_______:
$______________________ _______: $______________________
Item 8. Pending Lawsuits Filed by You or Your Spouse
List all pending lawsuits that have been filed by you or your spouse in court or before an administrative agency. (List lawsuits that resulted in final judgments or settlements in Items 16 and 25).
Opposing Party’s Name & Address ___________________________________________________________________
Court’s Name & Address ___________________________________________________________________________
Docket No. _________________ Relief Requested ____________________ Nature of Lawsuit ___________________
____________________________________ Status ______________________________________________________
Item 9. Pending Lawsuits Filed Against You or Your Spouse
List all pending lawsuits that have been filed against you or your spouse in court or before an administrative agency. (List lawsuits that resulted in final judgments or settlements in Items 16 and 25).
Opposing Party’s Name & Address ___________________________________________________________________
Court’s Name & Address ___________________________________________________________________________
Docket No. _________________ Relief Requested ____________________ Nature of Lawsuit ___________________
____________________________________ Status ______________________________________________________
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Initials _____
Item 10. Safe Deposit Boxes
List all safe deposit boxes, located within the United States or elsewhere, held by you, your spouse, or any of your dependents, or held by others for the benefit of you, your spouse, or any of your dependents. On a separate page, describe the contents of each box.
Owner’s Name Name & Address of Depository Institution
Box No.
________________ _______________________________________________ ________________________
_______________ ____________________________________________ ______________________
Item 11. Business Interests
List all businesses for which you, your spouse, or your dependents are an officer or director.
Business’ Name & Address ________________________________________________________________________
Business Format (e.g., corporation) __________________________ Description of Business _____________________
______________________________ Position(s) Held, and By Whom _______________________________________
Business’ Name & Address ________________________________________________________________________
Business Format (e.g., corporation) __________________________ Description of Business _____________________
______________________________ Position(s) Held, and By Whom _______________________________________
Business’ Name & Address ________________________________________________________________________
Business Format (e.g., corporation) __________________________ Description of Business _____________________
______________________________ Position(s) Held, and By Whom _______________________________________
FINANCIAL INFORMATION: ASSETS AND LIABILITIES
REMINDER: “Assets” and “Liabilities” include ALL assets and liabilities, located within the United States or elsewhere, whether held individually or jointly.
Item 12. Cash, Bank, and Money Market Accounts
List cash and all bank and money market accounts, including but not limited to, checking accounts, savings accounts, and certificates of deposit, held by you, your spouse, or your dependents, or held by others for the benefit of you, your spouse, or your dependents. The term “cash” includes currency and uncashed checks.
Cash on Hand $____________________________ Cash Held For Your Benefit $____________________________
Name on Account Name & Address of Financial Institution
Account No.
Current Balance
_________________ __________________________________________________ _______________ $__________
_________________ __________________________________________________ _______________ $__________
_________________ __________________________________________________ _______________ $__________ Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 40 of 67
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Initials _____
_________________ __________________________________________________ _______________ $__________
_________________ __________________________________________________ _______________ $__________
_________________ __________________________________________________ _______________ $__________
Item 13. U.S. Government Securities
List all U.S. Government securities, including but not limited to, savings bonds, treasury bills, and treasury notes, held by you, your spouse, or your dependents, or held by others for the benefit of you, your spouse, or your dependents.
Name on Account Type of Obligation
Security Amount
Maturity Date ____________________ ________________________ $________________ _____________
___________________ ________________________ $________________
_____________
___________________ _________________________ $________________
_____________
Item 14. Publicly Traded Securities and Loans Secured by Them
List all publicly traded securities, including but not limited to, stocks, stock options, registered and bearer bonds, state and municipal bonds, and mutual funds, held by you, your spouse, or your dependents, or held by others for the benefit of you, your spouse, or your dependents.
Issuer _______________________________ Type of Security __________________ No. of Units Owned ________
Name on Security _________________ Current Fair Market Value $______ Loan(s) Against Security $__________
Broker House, Address _____________________________________________ Broker Account No. ____________
Item 15. Other Business Interests
List all other business interests, including but not limited to, non-public corporations, subchapter-S corporations, limited liability corporations (“LLCs”), general or limited partnership interests, joint ventures, sole proprietorships, and oil and mineral leases, held by you, your spouse, or your dependents, or held by others for the benefit of you, your spouse, or your dependents.
Business Format _____________________________ Business’ Name & Address____________________________
_________________________________________________________________________ Ownership % ________
Owner (e.g., self, spouse) ________________________________ Current Fair Market Value $_________________
Item 16. Monetary Judgments or Settlements Owed to You, Your Spouse, or Your Dependents
List all monetary judgments or settlements owed to you, your spouse, or your dependents.
Opposing Party’s Name & Address__________________________________________________________________
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Initials _____
Court’s Name & Address __________________________________________________
Docket No. _______________ Nature of Lawsuit ______________________________
Date of Judgment _______________ Amount $____________
Item 17. Other Amounts Owed to You, Your Spouse, or Your Dependents
List all other amounts owed to you, your spouse, or your dependents.
Debtor’s Name, Address, & Telephone No. _________________________________________________________
Original Amount Owed $_____________ Current Amount Owed $____________ Monthly Payment $____________
Item 18. Life Insurance Policies
List all life insurance policies held by you, your spouse, or your dependents.
Insurance Company’s Name, Address, & Telephone No._________________________________________________
Insured ________________________ Beneficiary _______________________ Face Value $___________________
Policy No. _________________ Loans Against Policy $________________ Surrender Value $_________________
Insurance Company’s Name, Address, & Telephone No.________________________________________________
Insured ________________________ Beneficiary _______________________ Face Value $___________________
Policy No. _________________ Loans Against Policy $________________ Surrender Value $__________________
Item 19. Deferred Income Arrangements
List all deferred income arrangements, including but not limited to, deferred annuities, pensions plans, profit-sharing plans, 401(k) plans, IRAs, Keoghs, and other retirement accounts, held by you, your spouse, or your dependents, or held by others for the benefit of you, your spouse, or your dependents.
Name on Account _________________________ Type of Plan ___________________ Date Established _________
Trustee or Administrator’s Name, Address & Telephone No.______________________________________________
Account No. ______________________ Surrender Value $___________________
Name on Account _________________________ Type of Plan ___________________ Date Established__________
Trustee or Administrator’s Name, Address & Telephone No.______________________________________________
Account No. ______________________ Surrender Value $___________________
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Initials _____
Item 20. Personal Property
List all personal property, by category, whether held for personal use or for investment, including but not limited to, furniture and household goods of value, computer equipment, electronics, coins, stamps, artwork, gemstones, jewelry, bullion, other collectibles, copyrights, patents, and other intellectual property, held by you, your spouse, or your dependents, or held by others for the benefit of you, your spouse, or your dependents.
Property Category
Name of Owner
Property Location Acquisition Current (e.g., artwork, jewelry)
Cost Value ___________________ __________________ _______________ $_________ $________
___________________ __________________ _______________ $_________ $________
___________________ __________________ _______________ $_________ $________
___________________ __________________ _______________ $_________ $________
___________________ __________________ _______________ $_________ $________
Item 21. Cars, Trucks, Motorcycles, Boats, Airplanes, and Other Vehicles
List all cars, trucks, motorcycles, boats, airplanes, and other vehicles owned or operated by you, your spouse, or your dependents, or held by others for the benefit of you, your spouse, or your dependents.
Vehicle Type __________________ Make ____________________ Model ______________________ Year_______
Registered Owner’s Name __________________________ Registration State & No.__________________________
Address of Vehicle’s Location _____________________________________________________________________
Purchase Price $_______________Current Value $_______________ Account/Loan No._______________________
Lender’s Name and Address_______________________________________________________________________
Original Loan Amount $______________ Current Loan Balance $______________ Monthly Payment $_________
Mileage ________________ Current condition of car ________________________ Purchase date ______________
Vehicle Type __________________ Make ____________________ Model ______________________ Year ______
Registered Owner’s Name __________________________ Registration State & No. _________________________
Address of Vehicle’s Location _____________________________________________________________________
Purchase Price $_______________Current Value $_______________ Account/Loan No._______________________
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Initials _____
Lender’s Name and Address_______________________________________________________________________
Original Loan Amount $______________ Current Loan Balance $______________ Monthly Payment $_________
Mileage ________________ Current condition of car ________________________ Purchase date ______________
Item 22. Real Property
List all real estate held by you, your spouse, or your dependents, or held by others for the benefit of you, your spouse, or your dependents.
Type of Property________________________________ Property’s Location_______________________________
Name(s) on Title and Ownership Percentages__________________________________________________________
Acquisition Date________________ Purchase Price $____________________ Current Value $_________________
Basis of Valuation_______________________________________ Loan or Account No._______________________
Lender’s Name and Address_______________________________________________________________________
Current Balance On First Mortgage $__________________ Monthly Payment $__________
Other Loan(s) (describe)_________________________________________ Current Balance $_________________
Monthly Payment $__________________ Rental Unit?_________________ Monthly Rent Received $___________
Type of Property________________________________ Property’s Location_______________________________
Name(s) on Title and Ownership Percentages__________________________________________________________
Acquisition Date________________ Purchase Price $____________________ Current Value $_________________
Basis of Valuation_______________________________________ Loan or Account No._______________________
Lender’s Name and Address_______________________________________________________________________
Current Balance On First Mortgage $__________________ Monthly Payment $__________
Other Loan(s) (describe)_________________________________________ Current Balance $_________________
Monthly Payment $__________________ Rental Unit?_________________ Monthly Rent Received $___________
Item 23. Credit Cards
List each credit card held by you, your spouse, or your dependents. Also list any other credit cards that you, your spouse, or your dependents use.
Name of Credit Card (e.g., Visa, Account No.
Name(s) on Current Minimum Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 44 of 67
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Initials _____
MasterCard, Department Store)
Account Balance Monthly Payment
_______________________ __________________ _________________ $____________ $________________
_______________________ __________________ _________________ $____________ $________________
_______________________ __________________ _________________ $____________ $________________
_______________________ __________________ _________________ $____________ $________________
_______________________ __________________ _________________ $____________ $________________
_______________________ __________________ _________________ $____________ $________________
Item 24. Taxes Payable
List all taxes, such as income taxes or real estate taxes, owed by you, your spouse, or your dependants.
Type of Tax
Amount Owed
Year Incurred _______________________________ $__________________________ ___________________
_______________________________ $__________________________ ___________________
_______________________________ $__________________________ ___________________
_______________________________ $__________________________ ___________________
Item 25. Judgments or Settlements Owed
List all judgments or settlements owed by you, your spouse, or your dependents.
Opposing Party’s Name & Address__________________________________________________________________
Court’s Name & Address____________________________________________________
Docket No._____________ Nature of Lawsuit_______________________________________
Date______________ Amount $______________
Item 26. Other Loans and Liabilities
List all other loans or liabilities in your, your spouse’s, or your dependents’ names.
Name & Address of Lender/Creditor ________________________________________________________________
Nature of Liability___________________________________ Name(s) on Liability__________________________
Date of Liability___________________ Amount Borrowed $________________ Current Balance $______________
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Initials _____
Payment Amount $_____________________ Frequency of Payment_____________________
Name & Address of Lender/Creditor ________________________________________________________________
Nature of Liability_____________________________________ Name(s) on Liability_________________________
Date of Liability___________________ Amount Borrowed $________________ Current Balance $______________
Payment Amount $_____________________ Frequency of Payment_____________________
OTHER FINANCIAL INFORMATION
Item 27. Tax Returns
List all federal tax returns that were filed during the last three years by or on behalf of you, your spouse, or your dependents. Provide a copy of each signed tax return that was filed during the last three years.
Tax Year
Name(s) on Return
Refund Expected ___________ ____________________________________________________________ $_______________
___________ ____________________________________________________________ $_______________
___________ ____________________________________________________________ $_______________
Item 28. Applications for Credit
List all applications for bank loans or other extensions of credit that you, your spouse, or your dependents have submitted within the last two years. Provide a copy of each application, including all attachments.
Name(s) on Application
Name & Address of Lender ________________________ ____________________________________________________________
________________________ ____________________________________________________________
Item 29. Trusts and Escrows
List all funds or other assets that are being held in trust or escrow by any person or entity for you, your spouse, or your dependents. Also list all funds or other assets that are being held in trust or escrow by you, your spouse, or your dependents, for any person or entity. Provide copies of all executed trust documents.
Trustee or Escrow Agent’s Date Grantor
Beneficiaries Present Market Name & Address
Established
Value of Assets
______________________________ ______________ _________________ ______________ $______________
______________________________ ______________ _________________ ______________ $______________
______________________________ ______________ _________________ ______________ $______________ Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 46 of 67
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Initials _____
______________________________ ______________ _________________ ______________ $______________
______________________________ ______________ _________________ ______________ $______________
Item 30. Transfers of Assets
List each person to whom you have transferred, in the aggregate, more than $2,500 in funds or other assets during the previous three years by loan, gift, sale, or other transfer. For each such person, state the total amount transferred during that period.
Transferee’s Name, Address, & Relationship Property Aggregate Transfer Type of Transfer Transferred Value Date
(e.g., Loan, Gift)
______________________________________ ________________ $____________ __________ _______________
______________________________________ ________________ $____________ __________ _______________
______________________________________ ________________ $____________ __________ _______________
______________________________________ ________________ $____________ __________ _______________
______________________________________ ________________ $____________ __________ _______________
______________________________________ ________________ $____________ __________ _______________
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SUMMARY FINANCIAL SCHEDULES
Item 31. Combined Balance Sheet for You, Your Spouse, and Your Dependents
ASSETS
LIABILITIES
Cash on Hand (Item 12)
Credit Cards (Item 23)
Cash in Financial Institutions (Item 12)
Motor Vehicles - Liens (Item 21)
U.S. Government Securities (Item 13)
Real Property - Encumbrances (Item 22)
Publicly Traded Securities (Item 14)
Loans Against Publicly Traded Securities (Item 14)
Other Business Interests (Item 15)
Taxes Payable (Item 24)
Judgments or Settlements Owed to You (Item 16)
Judgments or Settlements Owed (Item 25)
Other Amounts Owed to You (Item 17)
Surrender Value of Life Insurance (Item 18)
Other Loans and Liabilities (Item 26)
Deferred Income Arrangements (Item 19)
Personal Property (Item 20)
Other Liabilities (Itemize):
Motor Vehicles (Item 21)
Real Property (Item 22)
Other Assets (Itemize):
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Initials _____
Item 32. Combined Average Monthly Income and Expenses for You, Your Spouse, and Your Dependents for the Last 6 Months
Provide the average monthly income and expenses for you, your spouse, and your dependents for the last 6 months. Do not include credit card payments separately; rather, include credit card expenditures in the appropriate categories.
INCOME
EXPENSES
Salary - After Taxes $___________ Mortgage Payments for Residence(s) $___________ Fees, Commissions, and Royalties $___________ Property Taxes for Residence(s) $___________
Rental Property Expenses, Including
Interest $___________ Mortgage Payments, Taxes, and Insurance $___________
Car or Other Vehicle Lease or Loan
Dividends and Capital Gains $___________ Payments $___________ Gross Rental Income $___________ Food Expenses $___________ Profits from Sole Proprietorships $___________ Clothing Expenses $___________ Distributions from Partnerships,
S-Corporations, and LLCs $___________ Utilities $___________ Distributions from Trusts and
Estates $___________ Medical Expenses, Including Insurance $___________ Distributions from Deferred
Income Arrangements $___________ Other Insurance Premiums $___________ Social Security Payments $___________ Other Transportation Expenses $___________ Alimony/Child Support Received $___________ Other Household Expenses $___________ Gambling Income $___________ Other Expenses (Itemize)
Other Income (Itemize)
_________________________________ $___________ __________________________ $___________ _________________________________ $___________ __________________________ $___________ _________________________________ $___________ __________________________ $___________ _________________________________ $___________ Total Income $ ___________ Total Expenses $___________ Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 49 of 67
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ATTACHMENTS
Item 33. Documents Attached to this Financial Statement
List all documents that are being submitted with this financial statement.
Item No. Document
Description of Document Relates To
______________
_______________________________________________________________________
______________
_______________________________________________________________________
______________
_______________________________________________________________________
______________
_______________________________________________________________________
______________
_______________________________________________________________________
______________
_______________________________________________________________________
I am submitting this financial statement with the understanding that it may affect action by the Federal Trade Commission or a federal court. I have used my best efforts to obtain the information requested in this statement. The responses I have provided to the items above are true and contain all the requested facts and information of which I have notice or knowledge. I have provided all requested documents in my custody, possession, or control. I know of the penalties for false statements under 18 U.S.C. § 1001, 18 U.S.C. § 1621, and 18 U.S.C. § 1623 (five years imprisonment and/or fines). I certify under penalty of perjury under the laws of the United States that the foregoing is true and correct.
Executed on:
______________
_______________________________________________________________________ (Date)
Signature Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 50 of 67
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Attachment B Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 51 of 67
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CONSUMER FINANCIAL PROTECTION BUREAU FINANCIAL STATEMENT OF CORPORATE DEFENDANT
Instructions:
Complete all items. Enter “None” or "N/A" (“Not Applicable”) where appropriate. If you cannot fully answer a question, explain why.
In completing this financial statement, “the corporation” refers not only to this corporation but also to each of its predecessors that are not named defendants in this action.
When an Item asks for information about assets or liabilities “held by the corporation,” include ALL such assets and liabilities, located within the United States or elsewhere, held by the corporation or held by others for the benefit of the corporation.
Attach continuation pages as needed. On the financial statement, state next to the Item number that the Item is being continued. On the continuation page(s), identify the Item number being continued. Type or print legibly.
An officer of the corporation must sign and date the completed financial statement on the last page and initial each page in the space provided in the lower right corner.
Penalty for False Information:
Federal law provides that any person may be imprisoned for not more than five years, fined, or both, if such person in any: (a) “matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully – (1) falsifies, conceals or covers up by any trick, scheme, or device a material fact; (2) makes any false, fictitious or fraudulent statement or representation; or (3) makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry” (18 U.S.C. § 1001); (2) “statement under penalty of perjury as permitted under section 1746 of title 28, United States Code, willfully subscribes as true any material matter which he does not believe to be true” (18 U.S.C. § 1621); or (3) “(...statement under penalty of perjury as permitted under section 1746 of title 28, United States Code) in any proceeding before or ancillary to any court or grand jury of the United States knowingly makes any false material declaration or makes or uses any other information...knowing the same to contain any false material declaration.” (18 U.S.C. § 1623)
For a felony conviction under the provisions cited above, federal law provides that the fine may be not more than the greater of (i) $250,000 for an individual or $500,000 for a corporation, or (ii) if the felony results in pecuniary gain to any person or pecuniary loss to any person other than the defendant, the greater of twice the gross gain or loss. 18 U.S.C. § 3571.
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Initials ______
BACKGROUND INFORMATION Item 1. General Information Corporation’s Full Name ___________________________________________________________________________ Primary Business Address ______________________________________________________ From (Date) _________ Telephone No. _____________________________ Fax No. _____________________________
E-Mail Address________________________ Internet Home Page________________________
All other current addresses & previous addresses for past five years, including post office boxes and mail drops:
Address____________________________________________________________ From/Until____________________
Address____________________________________________________________ From/Until____________________
Address____________________________________________________________ From/Until____________________
All predecessor companies for past five years:
Name & Address _________________________________________________________ From/Until ______________
Name & Address _________________________________________________________ From/Until ______________
Name & Address _________________________________________________________ From/Until ______________ Item 2. Legal Information
Federal Taxpayer ID No. _________________________ State & Date of Incorporation _________________________
State Tax ID No. ____________________ State ________________ Profit or Not For Profit _____________________
Corporation’s Present Status: Active ________________ Inactive _______________ Dissolved __________________
If dissolved: Date dissolved _________________________ By Whom ______________________________________
Reasons _________________________________________________________________________________________
Fiscal Year-End (Mo./Day) ________________ Corporation’s Business Activities _____________________________ Item 3. Registered Agent Name of Registered Agent __________________________________________________________________________
Address __________________________________________________________ Telephone No. __________________
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Initials ______
Item 4. Principal Stockholders
List all persons and entities that own at least 5% of the corporation’s stock.
Name
Address
% Owned
______________________ ___________________________________ __________
______________________ ___________________________________ __________
______________________ ___________________________________ __________
Item 5. Board Members
List all members of the corporation’s Board of Directors.
Name
Address
% Owned Term (From/Until)
______________________ ___________________________________ __________ __________
______________________ ___________________________________ __________ __________
______________________ ___________________________________ __________ __________
Item 6. Officers
List all of the corporation’s officers, including de facto officers (individuals with significant management responsibility whose titles do not reflect the nature of their positions).
Name
Address
% Owned
______________________ ___________________________________ __________
______________________ ___________________________________ __________
______________________ ___________________________________ __________
Item 7. Businesses Related to Corporation
List all corporations, partnerships, and other business entities in which this corporation has an ownership interest.
Name
Address
Business Activities
% Owned ______________________ ___________________________ _____________ _________ __________
______________________ ___________________________ ______________________ __________
______________________ ___________________________ ______________________ __________
State which of these businesses, if any, has ever transacted business with the corporation _______________________ Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 54 of 67
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Initials ______
Item 8. Businesses Related to Individuals
List all corporations, partnerships, and other business entities in which the corporation’s principal stockholders, board members, or officers (i.e., the individuals listed in Items 4 - 6 above) have an ownership interest.
Individual’s Name
Business Name
Address
Business Activities % Owned ___________________ ___________________ _________________ ________________ ________
___________________ ____________________ _________________ ________________ ________
___________________ ____________________ _________________ ________________ ________
State which of these businesses, if any, have ever transacted business with the corporation _______________________
Item 9. Related Individuals
List all related individuals with whom the corporation has had any business transactions during the three previous fiscal years and current fiscal year-to-date. A “related individual” is a spouse, sibling, parent, or child of the principal stockholders, board members, and officers (i.e., the individuals listed in Items 4 - 6 above).
Name
Address
Relationship
Business Activities ______________________ ___________________________ _____________ ____ _________________
______________________ ___________________________ _________________ _________________
______________________ ___________________________ __________________ _________________
Item 10. Outside Accountants
List all outside accountants retained by the corporation during the last three years.
Name
Firm Name
Address
CPA/PA? ______________________ ___________________________ _____________ _________ __________
______________________ ___________________________ ______________________ __________
______________________ ___________________________ ______________________ __________
Item 11. Corporation’s Recordkeeping
List all individuals within the corporation with responsibility for keeping the corporation’s financial books and records for the last three years.
Name
Address
Telephone Number Position(s) Held ______________________ ___________________________ _____________ ____ ________________
______________________ ___________________________ _____________ ____ ________________
______________________ ___________________________ _____________ ____ ________________
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Initials ______
Item 12. Attorneys
List all attorneys retained by the corporation during the last three years. Name
Firm Name
Address ______________________ ___________________________________ _________________________
______________________ ___________________________________ _________________________
______________________ ___________________________________ _________________________
Item 13. Pending Lawsuits Filed By Corporation
List all pending lawsuits that have been filed by the corporation in court or before an administrative agency. (List lawsuits that resulted in final judgments or settlements in favor of the corporation in Item 25).
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________ Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 56 of 67
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Initials ______
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Item 14. Current Lawsuits Filed Against Corporation
List all pending lawsuits that have been filed against the corporation in court or before an administrative agency. (List lawsuits that resulted in final judgments, settlements, or orders in Items 26 - 27).
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Opposing Party’s Name & Address___________________________________________________________________ Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 57 of 67
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Initials ______
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address___________________________________________________________________________
Docket No._________________ Relief Requested____________________ Nature of Lawsuit____________________
____________________________________ Status______________________________________________________
Item 15. Bankruptcy Information
List all state insolvency and federal bankruptcy proceedings involving the corporation.
Commencement Date _________________ Termination Date _________________ Docket No. __________________
If State Court: Court & County _______________________ If Federal Court: District __________________________
Disposition ______________________________________________________________________________________
Item 16. Safe Deposit Boxes
List all safe deposit boxes, located within the United States or elsewhere, held by the corporation, or held by others for the
benefit of the corporation. On a separate page, describe the contents of each box.
Owner’s Name
Name and Address of Depository Institution Box No.
______________________ ___________________________________ __________
______________________ ___________________________________ __________
______________________ ___________________________________ __________
FINANCIAL INFORMATION
REMINDER: When an Item asks for information about assets or liabilities “held by the corporation,” include ALL such assets and liabilities, located within the United States or elsewhere, held by the corporation or held by others for the benefit of the corporation.
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Initials ______
Item 17. Tax Returns
List all federal and state corporate tax returns filed for the last three complete fiscal years. Attach copies of all returns.
Federal/State/Both Tax Year Tax Due Federal Tax Paid Federal Tax Due State Tax Paid State Preparer’s Name
Item 18. Financial Statements
List all financial statements that were prepared for the corporation’s last three complete fiscal years and for the current fiscal year-to-date. Attach copies of all statements, providing audited statements if available.
Year Balance Sheet Profit and Loss Statement Cash Flow Statement Changes in Owner’s Equity Audited?
Item 19. Financial Summary
For each of the last three complete fiscal years and for the current fiscal year-to-date for which the corporation has not provided a profit and loss statement in accordance with Item 18 above, provide the following summary financial information.
Current Year-to-Date 1 Year Ago 2 Years Ago 3 Years Ago Gross Revenue
$ $ $ $ Expenses
$ $ $ $ Net Profit After Taxes $ $ $ $ Payables
$
Receivables
$
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Initials ______
Item 20. Cash, Bank, and Money Market Accounts
List cash and all bank and money market accounts, including but not limited to, checking accounts, savings accounts, and certificates of deposit, held by the corporation. The term “cash” includes currency and uncashed checks.
Cash on Hand $_________________________ Cash Held for the Corporation’s Benefit $_______________________
Name & Address of Financial Institution Signator(s) on Account Account No.
Current Balance
$
$
$
Item 21. Government Obligations and Publicly Traded Securities
List all U.S. Government obligations, including but not limited to, savings bonds, treasury bills, or treasury notes, held by the corporation. Also list all publicly traded securities, including but not limited to, stocks, stock options, registered and bearer bonds, state and municipal bonds, and mutual funds, held by the corporation.
Issuer _________________________________ Type of Security/Obligation __________________________________
No. of Units Owned __________ Current Fair Market Value $__________________ Maturity Date _______________
Issuer _________________________________ Type of Security/Obligation __________________________________
No. of Units Owned __________ Current Fair Market Value $__________________ Maturity Date _______________
Item 22. Real Estate
List all real estate, including leaseholds in excess of five years, held by the corporation.
Type of Property________________________________ Property’s Location__________________________________
Name(s) on Title and Ownership Percentages___________________________________________________________
Current Value $____________________ Loan or Account No. __________________________
Lender’s Name and Address_________________________________________________________________________
Current Balance On First Mortgage $_______________ Monthly Payment $______________
Other Loan(s) (describe)____________________________________________ Current Balance $_________________
Monthly Payment $__________________ Rental Unit?_________________ Monthly Rent Received $_____________
Type of Property________________________________ Property’s Location__________________________________
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Initials ______
Name(s) on Title and Ownership Percentages___________________________________________________________
Current Value $____________________ Loan or Account No. __________________________
Lender’s Name and Address_________________________________________________________________________
Current Balance On First Mortgage $_______________ Monthly Payment $______________
Other Loan(s) (describe)____________________________________________ Current Balance $_________________
Monthly Payment $__________________ Rental Unit?_________________ Monthly Rent Received $_____________
Item 23. Other Assets
List all other property, by category, with an estimated value of $2,500 or more, held by the corporation, including but not limited to, inventory, machinery, equipment, furniture, vehicles, customer lists, computer software, patents, and other intellectual property.
Property Category
Property Location
Acquisition Current Cost Value ____________________________ _____________________________________________ $__________ $_________
____________________________ _____________________________________________ $__________ $_________
____________________________ _____________________________________________ $__________ $_________
____________________________ _____________________________________________ $__________ $_________
____________________________ _____________________________________________ $__________ $_________
____________________________ _____________________________________________ $__________ $_________
____________________________ _____________________________________________ $__________ $_________
____________________________ _____________________________________________ $__________ $_________
____________________________ _____________________________________________ $__________ $_________
Item 24. Trusts and Escrows
List all persons and other entities holding funds or other assets that are in escrow or in trust for the corporation.
Trustee or Escrow Agent’s
Description and Location of Assets
Present Market Name & Address
Value of Assets
______________________________________ _______________________________________ $_________________
______________________________________ _______________________________________ $_________________
______________________________________ _______________________________________ $_________________
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Initials ______
______________________________________ _______________________________________ $_________________
______________________________________ _______________________________________ $_________________
______________________________________ _______________________________________ $_________________
______________________________________ _______________________________________ $_________________
Item 25. Monetary Judgments and Settlements Owed To the Corporation
List all monetary judgments and settlements, recorded and unrecorded, owed to the corporation.
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address____________________________________________________ Docket No._____________
Nature of Lawsuit______________________________ Date of Judgment________________ Amount $____________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address____________________________________________________ Docket No._____________
Nature of Lawsuit______________________________ Date of Judgment________________ Amount $____________
Item 26. Monetary Judgments and Settlements Owed By the Corporation
List all monetary judgments and settlements, recorded and unrecorded, owed by the corporation.
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address____________________________________________________ Docket No._____________
Nature of Lawsuit_______________________________________ Date______________ Amount $______________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address____________________________________________________ Docket No._____________
Nature of Lawsuit______________________________ Date of Judgment________________ Amount $____________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address____________________________________________________ Docket No._____________
Nature of Lawsuit______________________________ Date of Judgment________________ Amount $____________
Opposing Party’s Name & Address___________________________________________________________________
Court’s Name & Address____________________________________________________ Docket No._____________
Nature of Lawsuit______________________________ Date of Judgment________________ Amount $____________ Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 62 of 67
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Initials ______
Opposing Party’s Name & Address___________________________________________________________________ Court’s Name & Address____________________________________________________ Docket No._____________
Nature of Lawsuit______________________________ Date of Judgment________________ Amount $____________
Item 27. Government Orders and Settlements
List all existing orders and settlements between the corporation and any federal or state government entities.
Name of Agency ___________________________________________ Contact Person __________________________
Address _____________________________________________________________ Telephone No. _______________
Agreement Date ______________ Nature of Agreement __________________________________________________
Item 28. Credit Cards
List all of the corporation’s credit cards and store charge accounts and the individuals authorized to use them.
Name of Credit Card or Store
Names of Authorized Users and Positions Held
______________________________________ __________________________________________
______________________________________ __________________________________________
_____________________________________
__________________________________________
Item 29. Compensation of Employees
List all compensation and other benefits received from the corporation by the five most highly compensated employees, independent contractors, and consultants (other than those individuals listed in Items 5 and 6 above), for the two previous fiscal years and current fiscal year-to-date. “Compensation” includes, but is not limited to, salaries, commissions, consulting fees, bonuses, dividends, distributions, royalties, pensions, and profit sharing plans. “Other benefits” include, but are not limited to, loans, loan payments, rent, car payments, and insurance premiums, whether paid directly to the individuals, or paid to others on their behalf.
Name/Position
Current Fiscal 1 Year Ago 2 Years Ago Compensation or Year-to-Date
Type of Benefits
_____________________________ $____________ $___________ $____________ ___________________________
_____________________________ $____________ $___________ $____________ ___________________________
_____________________________ $____________ $___________ $____________ ___________________________
_____________________________ $____________ $___________ $____________ ___________________________
_____________________________ $____________ $___________ $____________ ___________________________
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Initials ______
Item 30. Compensation of Board Members and Officers
List all compensation and other benefits received from the corporation by each person listed in Items 5 and 6, for the current fiscal year-to-date and the two previous fiscal years. “Compensation” includes, but is not limited to, salaries, commissions, consulting fees, dividends, distributions, royalties, pensions, and profit sharing plans. “Other benefits” include, but are not limited to, loans, loan payments, rent, car payments, and insurance premiums, whether paid directly to the individuals, or paid to others on their behalf.
Name/Position
Current Fiscal 1 Year Ago 2 Years Ago Compensation or Year-to-Date
Type of Benefits
_____________________________ $____________ $___________ $____________ ___________________________
_____________________________ $____________ $___________ $____________ ___________________________
_____________________________ $____________ $___________ $____________ ___________________________
_____________________________ $____________ $___________ $____________ ___________________________
_____________________________ $____________ $___________ $____________ ___________________________
_____________________________ $____________ $___________ $____________ ___________________________
_____________________________ $____________ $___________ $____________ ___________________________
Item 31. Transfers of Assets Including Cash and Property
List all transfers of assets over $2,500 made by the corporation, other than in the ordinary course of business, during the previous three years, by loan, gift, sale, or other transfer.
Transferee’s Name, Address, & Relationship Property Aggregate
Transfer Type of Transfer Transferred Value
Date (e.g., Loan, Gift)
______________________________________ ________________ $____________ __________ _________________
______________________________________ ________________ $____________ __________ _________________
______________________________________ ________________ $____________ __________ _________________
______________________________________ ________________ $____________ __________ _________________
______________________________________ ________________ $____________ __________ _________________
Item 32. Documents Attached to Financial Statement
List all documents that are being submitted with the financial statement.
Item No. Document Description of Document Relates To _____________ ________________________________________________________
_____________ ________________________________________________________ Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 64 of 67
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Initials ______
I am submitting this financial statement with the understanding that it may affect action by the Consumer Financial Protection Bureau or a federal court. I have used my best efforts to obtain the information requested in this statement. The responses I have provided to the items above are true and contain all the requested facts and information of which I have notice or knowledge. I have provided all requested documents in my custody, possession, or control. I know of the penalties for false statements under 18 U.S.C. § 1001, 18 U.S.C. § 1621, and 18 U.S.C. § 1623 (five years imprisonment and/or fines). I certify under penalty of perjury under the laws of the United States that the foregoing is true and correct.
Executed on:
______________________
_________________________________
(Date)
Signature
_________________________________ Corporate Position Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 65 of 67
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Attachment C Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 66 of 67
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CONSENT TO RELEASE FINANCIAL RECORDS
I, ____________________________________, of ________________________ ___________________________________________ (City, State), do hereby direct any bank, saving and loan association, credit union, depository institution, finance company, commercial lending company, credit card processor, credit card processing entity, automated clearing house, network transaction processor, bank debit processing entity, brokerage house, escrow agent, money market or mutual fund, title company, commodity trading company, trustee, or person that holds, controls, or maintains custody of assets, wherever located, that are owned or controlled by me or at which there is an account of any kind upon which I am authorized to draw, and its officers, employees, and agents, to disclose all information and deliver copies of all documents of very nature in its possession or control which relate to the said accounts to any attorney of the Consumer Financial Protection Bureau, and to give evidence relevant thereto, in the matter of the Consumer Financial Protection Bureau v. Moseley, et al., now pending in the United States District Court for the Western District of Missouri, and this shall be irrevocable authority for so doing.
This direction is intended to apply to the laws of countries other than the Unites States of America which restrict or prohibit disclosure of bank or other financial information without the consent of the holder of the account, and shall be construed as consent with respect hereto, and the same shall apply to any of the accounts for which I may be a relevant principal.
Dated:____________________________ Signature:_________________________________ Printed Name:______________________________ Case 1:15-cv-23070-MGC Document 28 Entered on FLSD Docket 09/02/2015 Page 67 of 67
Judgment ()
PDF of this document (20 pages)
Page 88
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
Case No. 15-23070-Civ-COOKE/TORRES
Consumer Financial Protection Bureau, Plaintiff,
v.
ORION PROCESSING, LLC, a Texas limited liability company, d/b/a World Law Processing, Wld Credit Repair, and World Law Debt; FAMILY CAPITAL INVESTMENT & MANAGEMENT LLC, a Delaware limited liability company, a/k/a FCIAM Property Management; WORLD LAW DEBT SERVICES, LLC, a Delaware limited liability company; WORLD LAW PROCESSING, LLC, a Delaware limited liability company; DERIN SCOTT, an individual; DAVID KLEIN, an individual; and BRADLEY JAMES HASKINS, individually and d/b/a World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South;
Defendants,
Shannon Scott, an individual,
Relief Defendant.
DEFAULT JUDGMENT AND ORDER AGAINST WORLD LAW DEBT SERVICES, LLC, WORLD LAW PROCESSING, LLC, AND FAMILY CAPITAL INVESTMENT & MANAGEMENT LLC
Plaintiff, the Consumer Financial Protection Bureau (“Bureau”) commenced this civil action on August 17, 2015 to obtain permanent injunctive relief, rescission or reformation of contracts, the refund of moneys paid, restitution, disgorgement or compensation for unjust enrichment, civil money penalties, and other equitable relief from Defendants (a) Orion Processing, LLC, a Texas limited liability company, d/b/a World Law Processing, Wld Credit Repair, and World Law Debt; (b) Family Capital Investment & Management LLC, a Delaware limited liability company, a/k/a FCIAM Property Case 1:15-cv-23070-MGC Document 104 Entered on FLSD Docket 08/01/2016 Page 1 of 20
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Management; (c) World Law Debt Services, LLC, a Delaware limited liability company; (d) World Law Processing, LLC, a Delaware limited liability company; (e) Derin Scott, an individual; (f) David Klein, an individual; and (g) Bradley James Haskins, individually and d/b/a as World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South. The Bureau brought this Complaint under sections 1031(a), 1036(a), 1054, and 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5531(a), 5536(a), 5564(a), and 5565, and the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6102(c)(2), 6105(d), alleging Defendants violated the CFPA and the Telemarketing Sales Rule (“TSR”), 16 C.F.R. pt. 310 in connection with the marketing and sale of debt relief services.
On August 18, 2015, this Court entered an ex parte temporary restraining order (“TRO”), finding good cause to believe the Bureau would prevail on the merits of its claims and that immediate and irreparable harm would result from allowing Defendants’ operations to continue. Among other things, the TRO froze the Defendants’ assets. On September 2, 2015, this Court entered a preliminary injunction (“September 2, 2015 PI”) against Defendants Orion Processing, LLC; Bradley James Haskins; World Law Debt Services, LLC; and World Law Processing, LLC (ECF No. 28). On September 14, 2015, the Court entered a similar preliminary injunction (“September 14, 2015 PI”) against the remaining Defendants—Derin Scott; David Klein; Family Capital Investment & Management LLC; and Relief Defendant Shannon Scott (ECF No. 42). Among other things, these PIs continued the asset freeze and appointed a Receiver over Defendants World Law Debt Services, LLC, World Law Processing, LLC, and Family Capital Investment & Management LLC (“Default Defendants”).
Default Defendants failed to file an answer or otherwise defend in this action, and the Clerk entered default against them on December 21, 2015 (ECF No. 75). The court may enter default judgment when a defendant fails to respond to a complaint and court orders and fails to participate in the litigation or cooperate in good faith with the plaintiff. See Tara Prods., Inc. v. Hollywood Gadgets, Inc., 449 F. App’x 908, 910 – 12 (11th Cir. 2011); Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1307 (11th Cir. 2009); Buchanan v. Bowman, 820 F.2d 359, 361 (11th Cir. 1987). Granting a Case 1:15-cv-23070-MGC Document 104 Entered on FLSD Docket 08/01/2016 Page 2 of 20
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default judgment is within the court’s discretion. See Tara Prods. 449 F. App’x at 910-912. Under Federal Rule of Civil Procedure 55(b)(2), default judgment is appropriate here against Default Defendants because they have failed to file answers or otherwise appear and defend the claims brought against them. Default Defendants’ liability is well-pled in the Complaint, and Default Defendants have failed to participate in the litigation in good faith. Pursuant to Fed. R. Civ. P. 55(b)(2), upon application by Plaintiffs, the Court now enters a default judgment against Default Defendants for violations of the CFPA and the TSR.
Therefore, it is ORDERED and ADJUDED as follows:
FINDINGS 1.
This Court has jurisdiction over the parties and the subject matter of this action pursuant to 12 U.S.C. § 5565(a)(1) and 28 U.S.C. §§ 1331, 1345, and 1367. 2.
Venue in the Southern District of Florida is proper under 28 U.S.C. § 1391(b) and (c) and 12 U.S.C. § 5564(f).
3.
Default Defendants have been properly served with the Summons and Complaint. 4.
Default Defendants have failed to answer or otherwise defend this action. 5.
The Clerk properly entered defaults against Default Defendants on December 21, 2015 (ECF No. 75).
6.
The Complaint states claims upon which relief may be granted under the CFPA and TSR. The relief provided in this Order is appropriate and available pursuant to Sections 1054 and 1055 of the CFPA, 12 U.S.C. §§ 5564, 5565, and pursuant to the Telemarketing and Consumer Fraud and Abuse and Prevention Act, 15 U.S.C. § 6102(c).
7.
Because of Default Defendants’ default, Default Defendants are deemed to have admitted the well-pled facts of the complaint and the allegations are taken as true. Eagle Hosp., 515 F.2d at 1307; Buchanan, 820 F.2d at 361. 8.
During the Relevant Period, Defendants operated as a common enterprise while engaging in the acts and practices described in the complaint. Defendants conducted the business practices described in the complaint through an interrelated network of companies that had common business functions, employees, and office locations. Moreover, Defendants also commingled funds and shared operations and proceeds Case 1:15-cv-23070-MGC Document 104 Entered on FLSD Docket 08/01/2016 Page 3 of 20
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of the unlawful activity. Because Defendants have operated as a common enterprise, each of them is jointly and severally liable for the acts and practices alleged in the complaint.
9.
Default Defendants are owned or controlled in whole or in part by Defendants Bradley Haskins, David Klein, and/or Derin Scott.
10.
Default Defendants are each a “covered person,” “related person,” and/or a “service provider” as those terms are defined by the CFPA, 12 U.S.C. § 5481(6)(A), (19), (25), and (26).
11.
During the Relevant Period, Default Defendants offered or provided financial advisory services, including services to assist consumers settle debts. 12.
Default Defendants’ business included inducing the purchase of financial advisory services by use of one or more telephones and involved more than one interstate telephone call. Default Defendants are “sellers” or “telemarketers” of a “debt relief service,” who engage in “telemarketing,” as defined in the TSR. 16 C.F.R. § 310.2. Default Defendants Violated the TSR Count I of the Complaint 13.
In the course of telemarketing debt relief services from October 27, 2010 to the Effective Date, Defendants requested or received payment of fees or consideration from consumers for debt relief services before: (1) they had renegotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a settlement agreement, debt management plan, or other such valid contractual agreement executed by the consumer; and (2) the consumer had made at least one payment pursuant to that agreement.
14.
The Complaint contains well-pled factual allegations supporting a finding of liability for violations of the TSR, 16 C.F.R. § 310.4(a)(5)(i), including as follows: a. Defendants offered debt relief services to consumers, promising to negotiate their unsecured debts with their creditors in exchange for a fees paid up-front. Compl. ¶¶ 1-2, 37.
b. Defendants withdrew hundreds of dollars in advance fees from consumer’s accounts each month, including “Initial Fees” in the amount of $199 (usually collected from the consumers’ account over the first three months of the Case 1:15-cv-23070-MGC Document 104 Entered on FLSD Docket 08/01/2016 Page 4 of 20
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program); “Bundled Legal Service Fees” that ranged from 10 to 15 percent of the consumer’s combined outstanding debts (usually collected over the first 13 months of the program); and “Attorney Monthly Service Fees” in the amount of $84.95 (collected every month the consumer participates in the program). Compl. ¶¶ 2, 39-40, 51, 75.
c. These fees were all charged before any consumer’s debts were negotiated and settled. Compl. ¶ 39-40, 75.
d. Defendants have charged advance fees to 99% of the consumers, at least 21,000 consumers, before settling any of their debts. Compl. ¶ 2, 40, 58. 15.
Therefore, Defendants’ acts or practices violate the TSR, 16 C.F.R. § 310.4(a)(5)(i), and are abusive acts or practices in telemarketing. Because Defendants are “covered persons” their conduct is unlawful under sections 1031(a) and 1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1). 15 U.S.C. § 6102(c)(2). 16.
Given these well-pled allegations and Default Defendants’ failure to answer or defend, the Court enters a default judgment against Default Defendants for violations of the TSR, 16 C.F.R. § 310.4(a)(5)(i). See, e.g., CFPB v. Harper, No. 14cv80931 (S.D. Fla. May 28, 2015) (awarding default judgment against corporate defendants for violations of the CFPA and other consumer protection laws); CFPB v. Jalan, No. 12cv02088 (C.D. Cal. July 23, 2013) (awarding default judgment against a corporation and two individual defendants for violations of Regulation O and other consumer protection laws).
Default Defendants Violated the TSR and the CFPA Counts II and III of the Complaint 17.
In numerous instances, in connection with the advertising, marketing, promoting, offering for sale, or sale of debt relief services, Defendants have falsely represented that consumers who enroll in Defendants’ debt relief program: a. will receive legal representation;
b. will be represented by a local attorney; and/or c. will have settlements of their debts negotiated with their creditors by an attorney. Case 1:15-cv-23070-MGC Document 104 Entered on FLSD Docket 08/01/2016 Page 5 of 20
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18.
The Complaint contains well-pled factual allegations supporting a finding of liability for violations of the TSR, 16 C.F.R. § 310.3(a)(2)(iii) and (x), and Sections 1031 and 1036 of the CFPA, 12 U.S.C §§ 5531, 5536, including as follows: a. Defendants promised consumers both debt relief services and legal representation, including by a local attorney, claiming to employ lawyers in every state. They also touted that consumers would receive the skill and expertise of a licensed lawyer to negotiate with creditors regarding their unsecured debts. Compl. ¶¶ 1, 37, 41-42, 45, 50, 78, 84.
b. In fact, in numerous instances, consumers do not receive legal representation, are not represented by a local attorney, and do not have settlements of their debts negotiated with their creditors by an attorney. Compl. ¶¶ 38, 53-56, 79, 85. 19.
Therefore, Defendants’ representations as described herein violate the TSR, 16 C.F.R. § 310.3(a)(2)(iii) and (x), and are deceptive acts or practices in telemarketing. Because Defendants are “covered persons” their conduct is unlawful under sections 1031(a) and 1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1). 15 U.S.C. § 6102(c)(2).
20.
Defendants’ representations described in the complaint and above are false and misleading, and constitute deceptive acts or practices in violation of sections 1031 and 1036 of the CFPA, 12 U.S.C § 5531, 5536.
21.
Given these well-pled allegations and Default Defendants’ failure to answer or defend, the Court enters a default judgment against Default Defendants for violations of the TSR, 16 C.F.R. § 310.3(a)(2)(iii) and (x) and for violations of sections 1031(a) and 1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531, 5536. See, e.g., CFPB v. Harper, No. 14cv80931 (S.D. Fla. May 28, 2015) (awarding default judgment against corporate defendants for violations of the CFPA and other consumer protection laws); CFPB v. Jalan, No. 12cv02088 (C.D. Cal. July 23, 2013) (awarding default judgment against a corporation and two individual defendants for violations of Regulation O and other consumer protection laws).
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Damages 22.
Section 1055 of the CFPA, 12 U.S.C. § 5565, empowers this Court to order injunctive and other relief, restitution, and civil money penalties. 23.
Defendants are liable for the entire amount spent by consumers, regardless of whether consumers received anything of value; the relevant factor is the “fraud in the selling, not the value of the thing sold.” McGregor v. Chierico, 206 F.3d 1378, 1389 (11th Cir. 2000) (quoting FTC v. Figgie Int’l, Inc., 994 F.2d 595, 606 (9th Cir. 1993)). Because Defendants, including Default Defendants, have operated as a common enterprise, each of them is jointly and severally liable for the acts and practices alleged in the complaint.
24.
Plaintiff bears the burden of proving damages and may do so through affidavits and other documentary evidence showing the amount and calculation of damages. Tara Prods., 449 F. App’x at 911 – 12.
25.
Plaintiff has established, through competent evidence, that at least 21,900 consumers were victimized by and paid money to Defendants and that these consumers paid at least $106,813,049 during the Relevant Period.
26.
As explained in the declaration of Timothy Hanson attached to Plaintiff’s Motion, these figures were derived from the Corporate Defendants’ records, records of Defendants’ third-party payment processor and bank statements, as well as information compiled by the Receiver.
27.
The amount of $106,813,048 represents a reasonable approximation of consumer loss.
28.
The Bureau is entitled to an Order imposing permanent injunctive relief; requiring Default Defendants to make restitution of $106,813,048; and requiring Default Defendants to pay a civil money penalty in the amount of $40 million. 29.
The Court, in its discretion, enters injunctive and monetary relief, without holding an evidentiary hearing. Id.
30.
This action and the relief awarded herein are in addition to, and not in lieu of, other remedies as may be provided by law, including both civil and criminal remedies. 31.
Entry of this Order is in the public interest.
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DEFINITIONS The following definitions apply to this Order:
32.
“Advance Fee” means any fee or consideration requested or received by a Debt Relief Service Provider from a consumer for any Debt Relief Service, whether directly or indirectly, that occurs before;
a. the Debt Relief Service Provider has renegotiated, settled, reduced, or otherwise altered the terms of a debt pursuant to a settlement agreement, debt management plan, or other valid contractual agreement executed by the Consumer; and b. the Consumer has made at least one payment pursuant to that settlement agreement, debt management plan, or other valid contractual agreement between the Consumer and the creditor or debt collector. 33.
“Affected Consumers” means any consumer who paid an Advance Fee or any other fees to Defendants or their officers, agents, servants, employees, or attorneys for Debt Relief Products or Services between July 1, 2010 and the Effective Date. 34.
“Assets” means any legal or equitable interest in, right to, or claim to any real, personal, or intellectual property owned or controlled by, or held, in whole or in part for the benefit of, or subject to access by any Defendant or Relief Defendant, wherever located, whether in the United States or abroad. This includes, but is not limited to, chattel, goods, instruments, equipment, fixtures, general intangibles, effects, leaseholds, contracts, mail or other deliveries, shares of stock, commodities, futures, inventory, checks, notes, accounts, credits, receivables (as those terms are defined in the Uniform Commercial Code), funds, cash, and trusts, including, but not limited to any trust held for the benefit of any Defendant, Relief Defendant, any of the Individual Defendants’ minor children, or any of the Individual Defendants’ spouses.
35.
“Assisting Others” includes, but is not limited to: c. Consulting in any form whatsoever;
d. Providing paralegal or administrative support services; e. performing customer service functions including, but not limited to, receiving or responding to consumer complaints;
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f. formulating or providing, or arranging for the formulation or provision of, any advertising or marketing material, including, but not limited to, any telephone sales script, direct mail solicitation, or the text of any Internet website, email, or other electronic communication; g. formulating or providing, or arranging for the formulation or provision of, any marketing support material or service, including but not limited to, web or Internet Protocol addresses or domain name registration for any Internet websites, affiliate marketing services, or media placement services;
h. providing names of, or assisting in the generation of, potential customers; i. performing marketing, billing, or payment services of any kind; and j. acting or serving as an owner, officer, director, manager, or principal of any entity.
36.
“Bankruptcy Proceeding” means In re Orion Processing LLC, Case No. 15-10279 currently pending in the United States Bankruptcy Court, Western District of Texas, Austin Division.
37.
“Chapter 7 Trustee” means the Trustee appointed over Defendant Orion Processing, LLC by the United States Bankruptcy Court, Western District of Texas, Austin Division in the Bankruptcy Proceeding.
38.
“Consumer Financial Product or Service” is synonymous in meaning and equal in scope to the definition of the term in Section 1002(5) of the CFPA, 12 U.S.C. § 5481(5), and, subject to applicable restrictions contained in the CFPA, includes, but is not limited to:
a. Extending credit and servicing loans, including acquiring, purchasing, selling, brokering, or other extensions of credit (other than solely extending commercial credit to a person who originates consumer credit transactions);
b. Providing financial advisory services to consumers on individual financial matters or relating to proprietary financial products or services, including providing credit counseling to any consumer or providing services to assist Case 1:15-cv-23070-MGC Document 104 Entered on FLSD Docket 08/01/2016 Page 9 of 20
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a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure; c. Collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a Consumer Financial Product or Service; or d. Collecting debt related to any Consumer Financial Product or Service. 39.
“Debt Relief Product or Service” means any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a consumer and one or more creditors or debt collectors, including but not limited to, a reduction in the balance, interest rate, or fees owed by a person to a creditor or debt collector. 40.
“Debt Relief Service Provider” means any Person that offers or provides any Debt Relief Product or Service.
41.
“Defendants” means the Individual Defendants and the Corporate Defendants, individually, collectively, or in any combination, and each of them by whatever names each might be known;
a. “Corporate Defendants” means: Orion Processing, LLC d/b/a World Law Processing, Wld Credit Repair and World Law Debt (collectively, “Orion”) and its successors and assigns; Family Capital Investment & Management LLC a/k/a FCIAM Property Management (“FCIAM”) and its successors and assigns; World Law Debt Services, LLC and its successors and assigns; and World Law Processing, LLC and its successors and assigns.
b. “Individual Defendants” means Derin Scott, David Klein, and Bradley Haskins, collectively, or in any combination, and each of them by any other names by which they might be known;
c. “Default Defendants” means World Law Debt Services, LLC, World Law Processing, LLC, and Family Capital Investment & Management LLC a/k/a FCIAM Property Management;
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d. “Receivership Defendants” means World Law Debt Services, LLC, World Law Processing, LLC, and Family Capital Investment & Management LLC a/k/a FCIAM Property Management and their successors, assigns, affiliates, or subsidiaries, and each of them, by whatever names each might be known, provided that the Receiver has reason to believe they are owned or controlled in whole or in part by any of the Defendants, including but not limited to World Law Forms and Mediation, Inc., World Law South Inc., and WLD Price Global, Inc.; e. “Relief Defendant” means Shannon Scott individually and by any other name by which she might be known;
42.
“Effective Date” means the date on which the Order is issued. 43.
“Enforcement Director” means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his/her delegee. 44.
“Receiver” means Robb Evans & Associates LLC. 45.
“Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against Defendant based on substantially the same facts as described in the Complaint.
46.
“Relevant Period” includes the period from July 1, 2010 to the Effective Date. 47.
“Telemarketing” means any plan, program, or campaign that is conducted to induce the purchase of goods or services or a charitable contribution by use of one or more telephones, whether or not covered by the Telemarketing Sales Rule, 16 C.F.R. Part 310.
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ORDER
I.
PERMANENT BAN ON TELEMARKETING AND DEBT RELIEF PRODUCTS OR SERVICES It is ORDERED that:
48. Default Defendants and their officers, agents, servants, employees, and attorneys, and all other persons in active concert or participation with them who have actual notice of this Order, whether acting directly or indirectly, are permanently restrained from any of the following:
a. Participating in telemarketing or assisting others engaged in telemarketing any Consumer Financial Product or Service;
b. Advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service;
c. Assisting others in advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service; and d. Receiving any remuneration or other consideration from, holding any ownership interest in, providing services to, or working in any capacity for any person engaged in or assisting others in advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service.
II.
PROHIBITION ON DECEPTIVE PRACTICES It is FURTHER ORDERED that:
49. Default Defendants and their successors, assigns, officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this Order whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of any Consumer Financial Product or Service may not misrepresent, or assist others in misrepresenting, expressly or impliedly: Case 1:15-cv-23070-MGC Document 104 Entered on FLSD Docket 08/01/2016 Page 12 of 20
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a. Any aspect of any Consumer Financial Product or Service, including but not limited to, the amount of savings a consumer will receive from purchasing, using, or enrolling in such Consumer Financial Product or Service; b. The total costs to purchase, receive, or use, or the quantity of any Consumer Financial Product or Service, including that there will be no charge for all or a portion of such service;
c. Any material restriction, limitation, or condition to purchase, receive, or use any Consumer Financial Product or Service;
d. Any aspect of the nature or terms of a refund, cancellation, exchange, or repurchase policy for any Consumer Financial Product or Service, including but not limited to, the likelihood of a consumer obtaining a full or partial refund, or the circumstances in which a full or partial refund will be granted to the consumer; e. The income, profits, sales, or savings likely to be achieved from any Consumer Financial Product or Service;
f. The terms or rates that are available for any loan or other extension of credit; g. Any person’s ability to improve or otherwise affect a consumer’s credit record, credit history, or credit rating or ability to obtain credit; h. That a consumer will receive legal representation or services from an attorney duly licensed to practice law;
i. Any material aspect of the performance, efficacy, nature, or central characteristic of any Consumer Financial Product or Service; and j. Any other fact material to consumers concerning any Consumer Financial Product or Service.
50. In addition, Default Defendants, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, or sale of any Consumer Financial Product or Service, are hereby permanently restrained and enjoined from making any representation or assisting others in making any representation, expressly or by implication, about the benefits, performance, or efficacy of any Consumer Financial Product or Service, unless, at the time such representation is made, such Default Defendant possesses and relies upon competent and reliable evidence that substantiates that the representation is true.
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51. In addition, Default Defendants, whether acting directly or indirectly, are permanently restrained from offering or providing any Consumer Financial Product or Service for which a state license, registration, permit, bonding or other regulatory authority is required, unless such Default Defendant first obtains such authority. III.
PROHIBITED USE OF CUSTOMER INFORMATION It is FURTHER ORDERED that:
48.
Default Defendants, and their officers, agents, servants, employees, and attorneys who receive actual notice of this Order, whether acting directly or indirectly, may not disclose, use, or benefit from customer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a customer’s account (including a credit card, bank account, or other financial account), that Defendants obtained before the Effective Date in connection with Consumer Financial Products or Services or Debt Relief Products or Services offered by Defendants. IT IS FURTHER ORDERED that:
49.
The Default Defendants, and their officers, agents, servants, employees, attorneys, and all other persons in active concert or participation with them who receive actual notice of this Order by personal service, facsimile transmission, email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, are hereby permanently restrained and enjoined from attempting to collect, collecting, selling, or assigning, or otherwise transferring any right to collect payment from any consumer who purchased or agreed to purchase debt relief products or services from Defendants.
However, customer information may be disclosed if requested by a government agency or required by law, regulation, or court order.
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IV.
ORDER TO PAY REDRESS It is FURTHER ORDERED that:
50.
A judgment for monetary relief is entered in favor of the Bureau and against Default Defendants, jointly and severally, in the amount of $106,813,049 for the purpose of providing redress to Affected Consumers. The monetary judgment set forth in this Section is immediately due and payable upon entry of this Order and is enforceable against any asset owned by, on behalf of, for the benefit of, or in trust by or for Default Defendants.
51.
This Order grants to the Bureau all rights and claims that Default Defendants have to Default Defendants’ frozen assets currently in the possession, custody, or control of the Receiver or in the receivership estate, and Default Defendants shall forfeit any rights to the funds in the receivership estate, including but not limited to: a. Funds previously held in Account Numbers XXXXXX2473, XXXXXX9483, and XXXXXXX9491 at TD Bank in the name of World Law Forms and Mediation Inc.;
b. Funds previously held in Account Number XXXXXX3559 at Bank of America in the name of WLD Price Global, Inc.;
c. Funds previously held in Account Numbers XXXXXX2571 and XXXXXXX2584 at Bank of America in the name of World Law Forms and Mediation Inc.;
d. Funds previously held in Account Numbers XXXXXX2067 and XXXXXXX2075 at IBC Bank in the name of Family Capital Investment and Management;
e. Funds previously held in Account Number XXXXXX2083 at IBC Bank in the name of All Things Energy LLC; and f. Funds previously held in Account Number XXXXXX2641 at Bank of America in the name of Appz, LLC, d/b/a App Ventures.
52.
Any financial or brokerage institution, escrow agent, title company, commodity trading company, business entity, or person, whether located within the United States or outside the United States, that holds, controls or maintains accounts or Case 1:15-cv-23070-MGC Document 104 Entered on FLSD Docket 08/01/2016 Page 15 of 20
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assets of, on behalf of, or for the benefit of, the Default Defendants shall turn over such account or asset to the Receiver or its designated agent within ten (10) business days of receiving notice of this Order by any means, including but not limited to via facsimile or email. Any such funds must be paid to the Receiver, by wire transfer to the Receiver or to the Receiver’s agent, and according to the Receiver’s wiring instructions.
53.
Any funds received by the Bureau pursuant to this Order will be deposited into a fund or funds administered by the Bureau or to the Bureau’s agent according to applicable statutes and regulations to be used to provide redress to Affected Consumers, for the fees they paid Defendants, and for any attendant expenses for the administration of any such redress.
54.
If the Bureau determines, in its sole discretion, that redress to consumers is wholly or partially impracticable or otherwise inappropriate, or if funds remain after redress is completed, the Bureau will deposit any remaining funds in the U.S. Treasury as disgorgement. Default Defendants will have no right to challenge any actions that the Bureau or its representatives may take under this paragraph. 55.
Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right. V.
ORDER TO PAY CIVIL MONEY PENALTIES It is FURTHER ORDERED that:
56.
Under Section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the alleged violations of law, and taking into account the factors in 12 U.S.C. § 5565(c)(3), Default Defendants must pay a civil money penalty of $40 million to the Bureau. 57.
Within 10 days of the Effective Date, Default Defendants must pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions.
58.
The civil money penalty paid under this Order will be deposited in the Civil Penalty Fund of the Bureau as required by Section 1017(d) of the CFPA, 12 U.S.C. § 5497(d).
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59.
Default Defendants must treat the civil money penalty paid under this Order as a penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Default Defendants may not: a. Claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Order; or b. Seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Order. 60.
To preserve the deterrent effect of the civil money penalty in any Related Consumer Action, Default Defendants may not argue that they are entitled to, nor may Default Defendants benefit by, any offset or reduction of any monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action or because of any payment that the Bureau makes from the Civil Penalty Fund (Penalty Offset). If the court in any Related Consumer Action grants such a Penalty Offset, Default Defendants must, within 30 days after entry of a final order granting the Penalty Offset, notify the Bureau, and pay the amount of the Penalty Offset to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in this action.
61.
The civil penalty imposed by this Order represents a civil penalty owed to the United States Government, is not compensation for actual pecuniary loss, and, thus, as to each Default Defendant, it is not subject to discharge under the Bankruptcy Code under 11 U.S.C. § 523(a)(7).
VI.
ADDITIONAL MONETARY PROVISIONS It is FURTHER ORDERED that:
62.
In the event of any default on Default Defendants’ obligations to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable. Case 1:15-cv-23070-MGC Document 104 Entered on FLSD Docket 08/01/2016 Page 17 of 20
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63.
Default Defendants must relinquish all dominion, control, and title to the funds paid to the fullest extent permitted by law and no part of the funds may be returned to Default Defendants.
64.
The facts alleged in the Bureau’s Complaint will be taken as true and be given collateral estoppel effect, without further proof, in any proceeding based on the entry of the Order, or in any subsequent civil litigation by the Bureau to enforce this Order or its rights to any payment or monetary judgment under the Order, such as a nondischargeability complaint in any bankruptcy case.
65.
The facts alleged in the Complaint establish all elements necessary to sustain an action by the Bureau pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect for such purposes.
66.
Under 31 U.S.C. § 7701, Default Defendants, unless they have already done so, must furnish to the Bureau any taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order.
VII.
RECEIVERSHIP It is FURTHER ORDERED that:
67.
The appointment of Robb Evans & Associates LLC as Receiver for the Receivership Defendants pursuant to the September 2, 2015 and September 14, 2015 PIs is hereby continued as modified by this Section.
68.
The Receiver shall take any and all steps that the Receiver concludes are appropriate to wind down the Receivership Defendants.
69.
The Receiver shall continue to take all steps to locate and collect all viable Assets of the Receivership Defendants and proceed to liquidate all Assets of the Receivership Defendants, without further order of the Court. The Receiver shall use the proceeds of the sales of these Assets to pay any legitimate liens and necessary expenses relating to the sales.
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70.
The Receiver shall continue to perform all acts necessary or advisable to complete an accounting of the receivership Assets, and prevent unauthorized transfer, withdrawal, or misapplication of Assets.
71.
The Receiver may continue to apply to the Court for payment of compensation and expenses associated with the performance of its duties as Receiver. 72.
No later than one hundred and eighty (180) days from the Effective Date, the Receiver shall file and serve on the parties a report (the “Final Report”) to the Court that details the steps taken to dissolve the receivership estate. The Final Report must include an accounting of the receivership estate’s finances and total Assets and a description of what other actions, if any, must be taken to wind down the Receivership Defendants. At the time of filing the Final Report, the Receiver shall also file an application for final payment of compensation and expenses associated with its performance of its duties as Receiver. The Court will review the Final Report, payment application and any objections thereto and, absent a valid objection, will issue an order directing that the Receiver: a. Pay the reasonable costs and expenses of administering the receivership estate, including compensation of the Receiver and the Receiver’s personnel and the actual out-of-pocket costs incurred by the Receiver in carrying out its duties; and b. Pay all remaining funds to the Bureau within ten (10) days by wire transfer to the Bureau or to the Bureau’s agent, and according to the Bureau’s wiring instructions toward the monetary judgment and penalties set forth in this Order. 73.
If the Receiver believes that viable outstanding claims of the receivership estate will not be resolved within one hundred and eighty (180) days of the entry of this Order, or if the Receiver believes that additional actions need to be taken more than one hundred and eighty (180) days after the entry of this Order, the Receiver will move the Court for an appropriate extension of the receivership and the deadline to file the Final Report.
74.
Until the date the Court issues an order based on the Receiver’s Final Report, if there is any final judgment, consent order, or settlement in a Related Consumer Action, the Receiver must notify the Enforcement Director of the final judgment, consent order, or settlement in writing. That notification must indicate the amount of redress, Case 1:15-cv-23070-MGC Document 104 Entered on FLSD Docket 08/01/2016 Page 19 of 20
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if any, that any Receivership Defendant paid or is required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid.
75.
Upon the transfer of funds to the Bureau pursuant to this Section, the Receivership, pursuant to the September 2, 2015 and September 14, 2015 PIs, will be dissolved. VIII.
COOPERATION WITH BUREAU IT IS FURTHER ORDERED that:
76.
The Receiver is directed to cooperate fully to help the Bureau determine the identity and location of, and the amount of injury sustained by, each Affected Consumer. IX.
RETENTION OF JURISDICTION IT IS FURTHER ORDERED that:
77.
The Court will retain jurisdiction of this matter for the purpose of enforcing this Order.
DONE and ORDERED in Chambers, in Miami, Florida, this 1st day of August 2016.
Copies furnished to:
Edwin G. Torres, U.S. Magistrate Judge Counsel of record
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Stipulation ()
PDF of this document (25 pages)
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
Case No. 15-23070-Civ-COOKE/TORRES
CONSUMER FINANCIAL PROTECTION BUREAU, Plaintiff,
v.
ORION PROCESSING, LLC, a Texas limited liability company, d/b/a World Law Processing, Wld Credit Repair, and World Law Debt; FAMILY CAPITAL INVESTMENT & MANAGEMENT LLC, a Delaware limited liability company, a/k/a FCIAM Property Management; WORLD LAW DEBT SERVICES, LLC, a Delaware limited liability company; WORLD LAW PROCESSING, LLC, a Delaware limited liability company; DERIN SCOTT, an individual; DAVID KLEIN, an individual; and BRADLEY JAMES HASKINS, individually and d/b/a World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South;
Defendants,
Shannon Scott, an individual,
Relief Defendant.
STIPULATED FINAL JUDGMENT AND ORDER AGAINST DEFENDANTS DERIN SCOTT, DAVID KLEIN, AND RELIEF DEFENDANT SHANNON SCOTT
Plaintiff, the Consumer Financial Protection Bureau (“Bureau”) commenced this civil action on August 17, 2015 to obtain permanent injunctive relief, rescission or reformation of contracts, the refund of moneys paid, restitution, disgorgement or compensation for unjust enrichment, civil money penalties, and other equitable relief from Defendants (a) Orion Processing, LLC, a Texas limited liability company, d/b/a World Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 1 of 25
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Law Processing, Wld Credit Repair, and World Law Debt; (b) Family Capital Investment & Management LLC, a Delaware limited liability company, a/k/a FCIAM Property Management; (c) World Law Debt Services, LLC, a Delaware limited liability company; (d) World Law Processing, LLC, a Delaware limited liability company; (e) Derin Scott, an individual; (f) David Klein, an individual; and (g) Bradley James Haskins, individually and d/b/a as World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South. The Bureau brought this Complaint under sections 1031(a), 1036(a), 1054, and 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5531(a), 5536(a), 5564(a), and 5581, and the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6102(c)(2), 6105(d), alleging Defendants violated the CFPA and the Telemarketing Sales Rule (“TSR”), 16 C.F.R. pt. 310 in connection with the marketing and sale of debt relief services.
The Bureau and Defendants Derin Scott and David Klein (“Settling Defendants”) and Relief Defendant Shannon Scott (“Relief Defendant”) have agreed to entry of this Stipulated Final Judgment and Order (“Order”) by this Court. Therefore, it is ORDERED and ADJUDGED as follows:
FINDINGS 1.
This Court has jurisdiction over the parties and the subject matter of this action pursuant to 12 U.S.C. § 5565(a)(1) and 28 U.S.C. §§ 1331, 1345, and 1367. 2.
Venue in the Southern District of Florida is proper under 28 U.S.C. § 1391(b) and (c) and 12 U.S.C. § 5564(f).
3.
The Bureau, Settling Defendants, and Relief Defendant agree to entry of this Order to settle and resolve all matters in dispute arising from the conduct alleged in the Complaint.
4.
The Complaint states claims upon which relief may be granted under the CFPA, 12 U.S.C. §§ 5531(a), 5536(a), 5564(a), and 5581, and the Telemarketing and Consumer Fraud and Abuse and Prevention Act, 15 U.S.C. §§ 6102(c)(2), 6105(d), and its implementing regulation, 16 C.F.R. part 310. The relief provided in this Order is appropriate and available pursuant to Sections 1054 and 1055 of the CFPA, 12 Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 2 of 25
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U.S.C. §§ 5564, 5565, and pursuant to the Telemarketing and Consumer Fraud and Abuse and Prevention Act, 15 U.S.C. § 6102(c).
5.
Settling Defendants and Relief Defendant waive all rights to seek judicial review or otherwise challenge or contest the validity of this Order and any claim they may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action to the date of this Order. Each Party agrees to bear its own costs and expenses, including, without limitation, attorneys’ fees. 6.
Entry of this Order is in the public interest.
7.
Settling Defendants neither admit nor deny the allegations in the Complaint, except as specifically stated herein, but do not waive any privilege. 8.
Settling Defendants are each a “covered person,” “related person,” and a “service provider” as those terms are defined by the CFPA, 12 U.S.C. § 5481(6)(A), (19), (25), and (26).
9.
During the Relevant Period, Defendants offered or provided financial advisory services, including services to assist consumers settle debts. 12 U.S.C. § 5481(15)(A)(viii).
10.
Defendants’ business included inducing the purchase of financial advisory services by use of one or more telephones and involved more than one interstate telephone call. Defendants are “sellers” or “telemarketers” of a “debt relief service,” who engage in “telemarketing,” as defined in the TSR. 16 C.F.R. § 310.2. 11.
In the course of telemarketing debt relief services from October 27, 2010 to the Effective Date, Defendants requested or received payment of fees or consideration from consumers for debt relief services before: (1) they had renegotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a settlement agreement, debt management plan, or other such valid contractual agreement executed by the consumer; and (2) the consumer had made at least one payment pursuant to that agreement.
12.
During the Relevant Period, the Defendants’ operation received approximately $106,813,049 in payments and fees, a substantial portion of which were Advance Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 3 of 25
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Fees, from Affected Consumers. These payments and fees were divided among the multiple participants.
13.
Defendants conducted the business practices described in paragraphs 8-12 above through cooperation among the Corporate and Individual Defendants, which operated together to offer and provide debt relief services to consumers through the World Law debt relief program. In this joint operation, Defendants often used overlapping employees and offices, commingled funds, and shared operations and proceeds.
14.
The Court finds that Defendants’ acts and practices described above violate the TSR, 16 C.F.R. § 310.4(a)(5)(i).
15.
Relief Defendant Shannon Scott has received, directly or indirectly, funds or other assets from Defendants that are traceable to funds obtained from Defendants’ customers through the acts or practices described in paragraphs 8-13 above. Relief Defendant Shannon Scott is not a bona fide purchaser with legal and equitable title to Defendants’ customers’ funds or other assets. 16.
All pending motions by Settling Defendants and Relief Defendant are hereby denied as moot.
DEFINITIONS The following definitions apply to this Order:
17.
“Advance Fee” means any fee or consideration requested or received by a Debt Relief Service Provider from a consumer for any Debt Relief Service, whether directly or indirectly, that occurs before:
a. the Debt Relief Service Provider has renegotiated, settled, reduced, or otherwise altered the terms of a debt pursuant to a settlement agreement, debt management plan, or other valid contractual agreement executed by the Consumer; and b. the Consumer has made at least one payment pursuant to that settlement agreement, debt management plan, or other valid contractual agreement between the Consumer and the creditor or debt collector. Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 4 of 25
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18.
“Affected Consumers” means any consumer who paid an Advance Fee or any other fees to Defendants or their officers, agents, servants, employees, or attorneys for Debt Relief Products or Services between July 1, 2010 and the Effective Date. 19.
“Assets” means any legal or equitable interest in, right to, or claim to any real, personal, or intellectual property owned or controlled by, or held, in whole or in part for the benefit of, or subject to access by any Defendant or Relief Defendant, wherever located, whether in the United States or abroad. This includes, but is not limited to, chattel, goods, instruments, equipment, fixtures, general intangibles, effects, leaseholds, contracts, mail or other deliveries, shares of stock, commodities, futures, inventory, checks, notes, accounts, credits, receivables (as those terms are defined in the Uniform Commercial Code), funds, cash, and trusts, including, but not limited to any trust held for the benefit of any Defendant, Relief Defendant, any of the Individual Defendants’ minor children, or any of the Individual Defendants’ spouses.
20.
“Assisting Others” includes, but is not limited to: a. Consulting in any form whatsoever;
b. Providing paralegal or administrative support services; c. Performing customer service functions including, but not limited to, receiving or responding to consumer complaints;
d. Formulating or providing, or arranging for the formulation or provision of, any advertising or marketing material, including, but not limited to, any telephone sales script, direct mail solicitation, or the text of any Internet website, email, or other electronic communication;
e. Formulating or providing, or arranging for the formulation or provision of, any marketing support material or service, including but not limited to, web or Internet Protocol addresses or domain name registration for any Internet websites, affiliate marketing services, or media placement services; f. Providing names of, or assisting in the generation of, potential customers; g. Performing marketing, billing, or payment services of any kind; and Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 5 of 25
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h. Acting or serving as an owner, officer, director, manager, or principal of any entity.
21.
“Bankruptcy Proceeding” means In re Orion Processing LLC, Case No. 15-10279 currently pending in the United States Bankruptcy Court, Western District of Texas, Austin Division.
22.
“Chapter 7 Trustee” means the Trustee appointed over Defendant Orion Processing, LLC by the United States Bankruptcy Court, Western District of Texas, Austin Division in the Bankruptcy Proceeding, and any successor. 23.
“Consumer Financial Product or Service” is synonymous in meaning and equal in scope to the definition of the term in Section 1002(5) of the CFPA, 12 U.S.C. § 5481(5), and, subject to applicable restrictions contained in the CFPA, includes, but is not limited to:
a. Extending credit and servicing loans, including acquiring, purchasing, selling, brokering, or other extensions of credit (other than solely extending commercial credit to a person who originates consumer credit transactions); b. Providing financial advisory services to consumers on individual financial matters or relating to proprietary financial products or services, including providing credit counseling to any consumer or providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure;
c. Collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a Consumer Financial Product or Service; or d. Collecting debt related to any Consumer Financial Product or Service. 24.
“Debt Relief Product or Service” means any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a consumer and one or more creditors or Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 6 of 25
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debt collectors, including but not limited to, a reduction in the balance, interest rate, or fees owed by a person to a creditor or debt collector. 25.
“Debt Relief Service Provider” means any Person that offers or provides any Debt Relief Product or Service.
26.
“Defendants” means the Individual Defendants and the Corporate Defendants, individually, collectively, or in any combination, and each of them by whatever names each might be known;
a. “Corporate Defendants” means: Orion Processing, LLC d/b/a World Law Processing, Wld Credit Repair and World Law Debt (collectively, “Orion”) and its successors and assigns; Family Capital Investment & Management LLC a/k/a FCIAM Property Management (“FCIAM”) and its successors and assigns; World Law Debt Services, LLC and its successors and assigns; and World Law Processing, LLC and its successors and assigns. b. “Individual Defendants” means Derin Scott, David Klein, and Bradley Haskins, collectively, or in any combination, and each of them by any other names by which they might be known;
c. “Relief Defendant” means Shannon Scott individually and by any other name by which she might be known;
d. “Settling Defendants” means Derin Scott and David Klein collectively, or in any combination, and each of them by any other names by which they might be known.
27.
“Effective Date” means the date on which the Order is issued. 28.
“Enforcement Director” means the Assistant Director for the Office of Enforcement for the Consumer Financial Protection Bureau, or his/her delegee. 29.
“Receiver” means Robb Evans & Associates LLC.
30.
“Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against Defendant based on substantially the same facts as described in the Complaint.
31.
“Relevant Period” includes the period from July 1, 2010 to the Effective Date. Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 7 of 25
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32.
“Telemarketing” means any plan, program, or campaign that is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones, whether or not covered by the Telemarketing Sales Rule, 16 C.F.R. Part 310.
ORDER
Conduct Provisions I.
PERMANENT BAN ON TELEMARKETING AND DEBT RELIEF PRODUCTS OR SERVICES It is ORDERED that:
33.
Settling Defendants and their officers, agents, servants, employees, and attorneys, and all other persons in active concert or participation with them who have actual notice of this Order, whether acting directly or indirectly, are permanently restrained from any of the following:
a. Participating in telemarketing or assisting others engaged in telemarketing any Consumer Financial Product or Service;
b. Advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service;
c. Assisting others in advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service; and d. Receiving any remuneration or other consideration from, holding any ownership interest in, providing services to, or working in any capacity for any person engaged in or assisting others in advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service. II.
PROHIBITION ON DECEPTIVE PRACTICES It is FURTHER ORDERED that:
34.
Settling Defendants and their successors, assigns, officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this Order whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 8 of 25
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sale, sale, or performance of any Consumer Financial Product or Service may not misrepresent, or assist others in misrepresenting, expressly or impliedly: a. Any aspect of any Consumer Financial Product or Service, including but not limited to, the amount of savings a consumer will receive from purchasing, using, or enrolling in such Consumer Financial Product or Service; b. The total costs to purchase, receive, or use, or the quantity of any Consumer Financial Product or Service, including that there will be no charge for all or a portion of such service;
c. Any material restriction, limitation, or condition to purchase, receive, or use any Consumer Financial Product or Service;
d. Any aspect of the nature or terms of a refund, cancellation, exchange, or repurchase policy for any Consumer Financial Product or Service, including but not limited to, the likelihood of a consumer obtaining a full or partial refund, or the circumstances in which a full or partial refund will be granted to the consumer;
e. The income, profits, sales, or savings likely to be achieved from any Consumer Financial Product or Service;
f. The terms or rates that are available for any loan or other extension of credit; g. Any person’s ability to improve or otherwise affect a consumer’s credit record, credit history, or credit rating or ability to obtain credit; h. That a consumer will receive legal representation or services from an attorney duly licensed to practice law;
i. Any material aspect of the performance, efficacy, nature, or central characteristic of any Consumer Financial Product or Service; and j. Any other fact material to consumers concerning any Consumer Financial Product or Service.
35.
In addition, Settling Defendants, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, or sale of any Consumer Financial Product or Service, are hereby permanently restrained and enjoined from making any representation or assisting others in making any Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 9 of 25
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representation, expressly or by implication, about the benefits, performance, or efficacy of any Consumer Financial Product or Service, unless, at the time such representation is made, such Settling Defendant possesses and relies upon competent and reliable evidence that substantiates that the representation is true. 36.
In addition, Settling Defendants, whether acting directly or indirectly, are permanently restrained from offering or providing any Consumer Financial Product or Service for which a state license, registration, permit, bonding or other regulatory authority is required, unless such Settling Defendant first obtains such authority. III.
PROHIBITED USE OF CUSTOMER INFORMATION It is FURTHER ORDERED that:
37.
Settling Defendants, and their officers, agents, servants, employees, and attorneys who receive actual notice of this Order, whether acting directly or indirectly, may not disclose, use, or benefit from customer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a customer’s account (including a credit card, bank account, or other financial account), that Defendants obtained before the Effective Date in connection with Consumer Financial Products or Services or Debt Relief Products or Services offered by Defendants. It is FURTHER ORDERED that:
38.
The Settling Defendants, and their officers, agents, servants, employees, attorneys, and all other persons in active concert or participation with them who receive actual notice of this Order, whether acting directly or indirectly, are hereby permanently restrained and enjoined from attempting to collect, collecting, selling, or assigning, or otherwise transferring any right to collect payment from any consumer who purchased or agreed to purchase Debt Relief Products or Services from Defendants. However, customer information may be disclosed if requested by a government agency or required by law, regulation, court rules or order.
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IV.
COOPERATION WITH THE BUREAU It is FURTHER ORDERED that:
39.
Settling Defendants must cooperate fully and in good faith with the Bureau in connection with this action or any subsequent investigation or litigation related to or associated with the conduct described in the Bureau’s Complaint, including related to the Bankruptcy Proceeding. Settling Defendants must provide truthful and complete information, evidence, and testimony. Settling Defendants must appear for interviews, conferences, pretrial discovery, review of documents, deposition, trial, or any other proceedings that the Bureau may reasonably request upon 5 days written notice, or other reasonable notice, at such places and times as the Bureau may designate, without the service of compulsory process. 40.
Settling Defendants must cooperate fully to help the Bureau determine the identity, location and contact information of any Defendant and any person who might have contact information for any Defendant. Settling Defendants must provide such information in their or their agents’ possession or control within 14 days of receiving a written request from the Bureau.
41.
Settling Defendants must cooperate fully to help the Bureau determine the identity, location, contact information and amount of injury sustained by each Affected Consumer. Settling Defendants must provide such information in their or their agents’ possession or control within 14 days of receiving a written request from the Bureau.
V.
ORDER TO PAY REDRESS It is FURTHER ORDERED that:
42.
A judgment for monetary relief is entered in favor of the Bureau and against Settling Defendants, jointly and severally, in the amount of $106,813,049 for the purpose of providing redress to Affected Consumers. However, full payment of this judgment will be suspended upon satisfaction of the obligations in paragraphs 43 - 47, 52 - 53, and subject to Section VII of this Order.
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a. Of this judgment for monetary relief, Relief Defendant shall be jointly and severally liable for the amount of $580,133, such amount also being for the purpose of providing redress to Affected Consumers. However, full payment of Relief Defendant’s portion of this judgment will be suspended upon satisfaction of the obligations in paragraphs 43 - 47, and subject to Section VII of this Order. 43.
Settling Defendants and Relief Defendant hereby grant to the Bureau all rights and claims they have to any frozen assets and shall forfeit any rights to those funds, including but not limited to assets in accounts at: a. Space Coast Credit Union in the following accounts: i. Account Number XXXXX0589 in the name of Shannon Scott; ii. Account Number XXXXX0594 in the name of Shannon Scott; iii. Account Number XXXXX0668 in the name of Shannon Scott and Zain Scott; iv. Account Number XXXXX0670 in the name of Shannon Scott and Laken Scott;
v. Account Number XXXXX0602 in the name of Shannon Scott and Kalea A. Scott; and vi. Account Number XXXXX0584 in the name of Micah Scott. Within ten (10) business days from receipt of a copy of this Order by any means, including but not limited to via facsimile or email, Space Coast Credit Union shall transfer to the Bureau or its designated agent all funds held in the frozen accounts listed in subparagraphs (i) through (vi) above by wire transfer to the Bureau or to the Bureau’s agent and according to the Bureau’s wiring instructions.
b. Connect Credit Union in Account Number XXXXX02688 in the name of Shannon Scott. Within ten (10) business days from receipt of a copy of this Order by any means, including but not limited to via facsimile or email, Connect Credit Union shall transfer to the Bureau or its designated agent all funds held in Account Number XXXXX02688 in the name of Shannon Scott by wire transfer to the Bureau or to the Bureau’s agent and according to the Bureau’s wiring instructions.
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c. Wells Fargo Bank in Account Number XXXXX6897 in the name CSCS, LLC, which is an account owned and controlled by Settling Defendant Klein. Within ten (10) business days from receipt of a copy of this Order by any means, including but not limited to via facsimile or email, Wells Fargo Bank shall transfer to the Bureau or its designated agent all funds held in Account Number XXXXX6897 in the name CSCS, LLC, by wire transfer to the Bureau or to the Bureau’s agent and according to the Bureau’s wiring instructions. 44.
Settling Defendant David Klein also hereby grants to the Bureau all rights and claims he has to the assets currently held in the following accounts at Wells Fargo Bank and shall forfeit any rights to the funds: Account Numbers XXXXX4293, XXXXXX2941, and XXXXXX0908, all in the name National Integrated Solutions; 45.
To the extent Settling Defendant Scott has not already done so, Settling Defendant Scott is ordered to relinquish any interest in and transfer and relinquish to Receiver, or to its designated agent, possession, custody, and control of the following assets within seven (7) days of entry of this Order, unless otherwise stated: a. Dominion and all legal and equitable right, title, and interest in, as well as any accounts receivable from, the following entities, their successors, assigns, affiliates, or subsidiaries, and each of them by whatever names each might be known, whether those rights, titles, interest, and amounts receivable are held by one or more Defendants: Orion Limo Services, LLC; Psamathe Sands, LLC; Global Energy Partners, LLC; GNS Frac, LLC; Prop Transport & Trading LLC; 10K International LLC; All Things Energy, LLC; Athlete Entertainment Group, LLC; Seamless Human; Appz, LLC DBA App Ventures; and 9011 Mountain Ridge Dr., LLC;
b. All funds in the following accounts:
i. Funds held in Account Number XXXXXX2083 at IBC Bank in the name of All Things Energy LLC;
ii. Funds held in Account Number XXXXXX2641 at Bank of America in the name of Appz, LLC DBA App Ventures;
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iii. Funds held in Account Number XXXXX9966 at Bank of America in the name Orion Limo Services, LLC. Within ten (10) business days from receipt of a copy of this Order by any means, including but not limited to via facsimile or email, Bank of America shall transfer to the Receiver or its designated agent all funds held in Account Number XXXXX9966 in the name Orion Limo Services, LLC.
c. The following vehicles including certificates of title: i. 2007 Cadillac Escalade SUV;
ii. 2007 Mercedes Benz S600;
iii. 1995 Range Rover County LWB SUV iv. 2007 MB Sport B52 boat;
v. 1999 Malibu LX boat;
vi. Pair of 2007 Polaris Vintage Jet Skis;
vii. Polaris 4-Wheeler;
viii. 2004 Kawasaki KDX Motorcross Bike;
ix. 2004 Kawasaki KX60 Motorcross Bike;
x. 2006 Honda CFR Motorcross Bike;
xi. 2012 Husqvarna Zero turn Lawn Mower;
xii. 4 2012 mini ATVs;
xiii. Triathalon racing bicycles; and d. The building located at 9011 Mountain Ridge Drive, Austin, Texas and any personal property inside the building.
Provided, however, that the Receiver may abandon, without further court order, any such Asset set forth in this paragraph or otherwise it deems in its discretion to be of inconsequential or no value.
46.
Settling Defendant Scott shall cooperate fully with the Receiver and shall execute any instrument or document presented by the Receiver, and take any other actions the Receiver deems necessary or appropriate to effect the transfers required by Paragraph 45. All of the property set forth in paragraph 45 shall constitute Assets of the receivership estate.
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47.
Settling Defendants and Relief Defendant hereby grant to the Bureau all rights and claims they have to any other frozen Assets currently in the possession, custody or control of the Receiver, and shall forfeit any rights to the funds in the receivership estate, including but not limited to:
a. All funds held, obtained, or to be obtained by the Receiver since the inception of the receivership whether through this Stipulated Order or otherwise. 48.
With regard to any redress that Settling Defendants and Relief Defendant pay under this Section V (Order to Pay Redress), if Settling Defendants or Relief Defendant receive, directly or indirectly, any reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, or if Settling Defendants or Relief Defendant secure a tax deduction or tax credit with regard to any federal, state, or local tax, Settling Defendants or Relief Defendant must: (a) immediately notify the Enforcement Director in writing, and (b) within ten (10) days of receiving the funds or monetary benefit, Settling Defendants or Relief Defendant must transfer to the Bureau the full amount of such funds or monetary benefit (Additional Payment) to the Bureau or to the Bureau’s agent according to the Bureau’s wiring instructions. After the Bureau receives the Additional Payment, the amount of the suspended judgment referenced in Paragraph 42 will be reduced by the amount of the Additional Payment and the Additional Payment will be applied toward satisfaction of the monetary judgment entered in Paragraph 42. 49.
Any funds received by the Bureau pursuant to this Order will be deposited into a fund or funds administered by the Bureau or to the Bureau’s agent according to applicable statutes and regulations to be used to provide redress to Affected Consumers for the fees they paid to Defendants, and for any attendant expenses for the administration of any such redress.
50.
If the Bureau determines, in its sole discretion, that redress to consumers is wholly or partially impracticable or otherwise inappropriate, or if funds remain after redress is completed, the Bureau will deposit any remaining funds in the U.S. Treasury as disgorgement. Settling Defendants will have no right to challenge any actions that the Bureau or its representatives may take under this paragraph. Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 15 of 25
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51.
Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right. VI.
ORDER TO PAY CIVIL MONEY PENALTIES It is FURTHER ORDERED that:
52.
Under Section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law alleged in the Complaint and continuing until the Effective Date, and taking into account the factors in 12 U.S.C. § 5565(c)(3), Settling Defendant Derin Scott must pay a civil money penalty of $1 to the Bureau; and Settling Defendant David Klein must pay a civil money penalty of $1 to the Bureau. These nominal civil penalties are based on Settling Defendants’ limited ability to pay as attested to in all financial statements and supporting documents that Settling Defendants submitted to the Bureau, and Settling Defendant Scott’s and Settling Defendant Klein’s oral testimony provided on December 15, 2015 and December 22, 2015, respectively. 53.
Within 10 days of the Effective Date, Settling Defendants must each pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions.
54.
The civil money penalty paid under this Order will be deposited in the Civil Penalty Fund of the Bureau as required by Section 1017(d) of the CFPA, 12 U.S.C. § 5497(d).
55.
Settling Defendants and Relief Defendant must treat the civil money penalty paid under this Order as a penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Settling Defendants and Relief Defendant may not:
a. Claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Order; or b. Seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Order. Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 16 of 25
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56.
To preserve the deterrent effect of the civil money penalty in any Related Consumer Action, Settling Defendants may not argue that they are entitled to, nor may Settling Defendants benefit by, any offset or reduction of any monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action or because of any payment that the Bureau makes from the Civil Penalty Fund (Penalty Offset). If the court in any Related Consumer Action grants such a Penalty Offset, Settling Defendants must, within 30 days after entry of a final order granting the Penalty Offset, notify the Bureau, and pay the amount of the Penalty Offset to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in this action.
57.
The civil penalty imposed by this Order represents a civil penalty owed to the United States Government, is not compensation for actual pecuniary loss, and, thus, as to each Settling Defendant, it is not subject to discharge under the Bankruptcy Code under 11 U.S.C. § 523(a)(7).
VII.
EFFECT OF MISREPRESENTATION OR OMISSION REGARDING FINANCIAL CONDITION It is FURTHER ORDERED that:
58.
The suspension of the monetary judgment entered in Section V of this Order is expressly premised on the truthfulness, accuracy, and completeness of Settling Defendants’ and Relief Defendant’s financial statements and supporting documents, all of which Settling Defendants and Relief Defendant assert are truthful, accurate, and complete, and which include:
a. Financial Statement of Derin and Shannon Scott, including the attachments, signed on September 11, 2015 and submitted to the Bureau on or about October 1, 2015;
b. Financial Statement of David Klein, including the attachments, signed on September 1, 2015 and submitted to the Bureau on or about September 20, 2015; c. Updated Financial Statement of David Klein, including the attachments, signed on May 23, 2016, and submitted to the Bureau on or about May 24, 2016; Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 17 of 25
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d. Updated Financial Statement of Derin and Shannon Scott, including the attachments, submitted to the Bureau on or about May 24, 2016, and signed on July 15, 2016; and e. Derin Scott’s and David Klein’s oral testimony provided on December 15, 2015 and December 22, 2015, respectively.
59.
If upon motion by the Bureau, the Court determines that any Settling Defendant or Relief Defendant has failed to disclose any material asset or that any of his/her financial statements or oral testimony contain any material misrepresentation or omission, including materially misstating the value of any asset, the Court shall terminate the suspension of the monetary judgment entered in Section V and without further adjudication, shall reinstate the judgment entered in Section V of this Order and the full judgment of $106,813,049 shall be immediately due and payable, less any amounts paid to the Bureau under Section V of this Order. 60.
If the Court terminates the suspension of the monetary judgment under this Section, the Bureau will be entitled to interest on the judgment, computed from the date of entry of this Order, at the rate prescribed by 28 U.S.C. § 1961, as amended, on any outstanding amounts not paid.
61.
Provided, however, that in all other respects this Order shall remain in full force and effect unless otherwise ordered by the Court; and, provided further, that proceedings instituted under this provision would be in addition to, and not in lieu of any other civil or criminal remedies as may be provided by law, including any other proceedings that the Bureau may initiate to enforce this Order. VIII.
ADDITIONAL MONETARY PROVISIONS It is FURTHER ORDERED that:
62.
In the event of any default on Settling Defendants’ and Relief Defendant’s obligations to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable. Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 18 of 25
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63.
Settling Defendants and Relief Defendant must relinquish all dominion, control, and title to the funds paid to the fullest extent permitted by law and no part of the funds may be returned to Settling Defendants or Relief Defendant. 64.
The facts alleged in the Bureau’s Complaint will be taken as true and be given collateral estoppel effect, without further proof, in any proceeding based on the entry of the Order, or in any subsequent civil litigation by the Bureau to enforce this Order or its rights to any payment or monetary judgment under the Order, such as a nondischargeability complaint in any bankruptcy case.
65.
The facts alleged in the Complaint establish all elements necessary to sustain an action by the Bureau pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect for such purposes.
66.
Under 31 U.S.C. § 7701, Settling Defendants and Relief Defendant, unless they have already done so, must furnish to the Bureau any taxpayer identifying numbers associated with them and their assets, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. 67.
Within 30 days of the entry of a final judgment, Order, or settlement in a Related Consumer Action, Settling Defendants and/or Relief Defendant must notify the Enforcement Director of the final judgment, Order, or settlement in writing. That notification must fully identify the matter, indicate the amount of redress, if any, that Settling Defendants and Relief Defendant paid or are required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid.
68.
Under Section 604(a)(I) of the Fair Credit Reporting Act, 15 U.S.C.§ 168l b(a)( 1), any consumer reporting agency may furnish a consumer report concerning any Settling Defendant and Relief Defendant to the Bureau, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order.
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IX.
LIFTING OF ASSET FREEZE IT IS FURTHER ORDERED that:
69.
The freeze on the Assets of Settling Defendants and Relief Defendant Shannon Scott is modified to permit the payments and other transfers of Assets identified in Sections V and VI of this Order. Upon completion of all payment and other obligations identified Sections V and VI of this Order, the freeze of the Assets pursuant to the Preliminary Injunction entered on September 14, 2015 (“September 14, 2015 PI”) (ECF No. 42), shall be dissolved.
Compliance Provisions X.
REPORTING REQUIREMENTS It is FURTHER ORDERED that:
70.
Settling Defendants must notify the Bureau of any development 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; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against any Settling Defendants; or a change in any Settling Defendants’ name or address. Settling Defendants must provide this notice, if practicable, at least 30 days before the development, but in any case no later than 14 days after the development. 71.
Within 7 days of the Effective Date, each Settling Defendant must: a. Designate at least one telephone number and email, physical, and postal address as points of contact, which the Bureau may use to communicate with such Settling Defendant;
b. Identify all businesses for which Settling Defendant is the majority owner, or that such Settling Defendant directly or indirectly controls, by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 20 of 25
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c. Describe the activities of each such business, including the products and services offered, and the means of advertising, marketing, and sales. d. Identify each of their telephone numbers and all email, Internet, physical, and postal addresses, including all residences;
e. Describe in detail each Settling Defendant’s involvement in any business for which he performs services in any capacity or which he wholly or partially owns, including Settling Defendant’s title, role, responsibilities, participation, authority, control, and ownership.
72.
Each Settling Defendant must report any change in the information required to be submitted under Paragraph 71 above at least 30 days before the change or as soon as practicable after the learning about the change, whichever is sooner. 73.
Within 90 days of the Effective Date, and again one year after the Effective Date, each Settling Defendant must submit to the Enforcement Director an accurate written compliance progress report sworn under penalty of perjury (“Compliance Report”), which, at a minimum:
a. Describes in detail the manner and form in which such Settling Defendant has complied with this Order; and b. Attaches a copy of each Order Acknowledgment obtained under Section XI, unless previously submitted to the Bureau.
74.
After the one-year period, each Settling Defendant must submit to the Enforcement Director additional Compliance Reports within 14 days of receiving a written request from the Bureau.
XI.
ORDER DISTRIBUTION AND ACKNOWLEDGMENT It is FURTHER ORDERED that:
75.
Within 7 days of the Effective Date, each Settling Defendant must submit to the Enforcement Director an acknowledgment of receipt of this Order, sworn under penalty of perjury.
76.
Within 30 days of the Effective Date, each Settling Defendant, for any business for which he is the majority owner or which he directly or indirectly controls, must Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 21 of 25
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deliver a copy of this Order to each of its board members and executive officers, as well as to any managers, employees, service providers, or other agents and representatives who have responsibilities related to the subject matter of the Order. 77.
For 5 years from the Effective Date, each Settling Defendant, for any business for which he is the majority owner or which he directly or indirectly controls, must deliver a copy of this Order to any business entity resulting from any change in structure referred to in Section X (Reporting Requirements), any future board members and executive officers, as well as to any managers, employees, service providers, or other agents and representatives who will have responsibilities related to the subject matter of the Order before they assume their responsibilities, and any entity or regulatory body from whom he seeks a business license. 78.
Each Settling Defendant must secure a signed and dated statement acknowledging receipt of a copy of this Order, ensuring that any electronic signatures comply with the requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of delivery, from all persons receiving a copy of this Order under this Section. XII.
RECORDKEEPING It is FURTHER ORDERED that:
79.
Each Settling Defendant must create, for at least ten (10) years from the Effective Date, the following business records for any business involving consumer financial products or services for which each Settling Defendant, individually or collectively with any other Defendant, is a majority owner or which he directly or indirectly controls:
a. All documents and records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Bureau. b. Copies of all sales scripts; training materials; advertisements; websites; and other marketing materials; and including any such materials used by a third party on behalf of Defendant.
c. All documents regarding each individual consumer showing his or her enrollment in that consumer financial product or service, including: the Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 22 of 25
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consumer’s name, address, phone number, email address; amount paid, quantity of the product or service purchased, description of the product or service purchased, the date on which the product or service was purchased, a copy of any promotional or welcome materials provided, and, if applicable, the date and reason consumer left the program.
d. Accounting records showing the gross and net revenues generated by the all consumer financial products or services, and all costs incurred in generating those revenues;
e. All consumer complaints and refund requests (whether received directly or indirectly, such as through a third party), and any responses to those complaints or requests.
f. Records showing, for each employee providing services, that person’s: name; telephone number; email, physical, and postal address; job title or position; dates of service; and, if applicable, the reason for termination. g. Records showing, for each service provider providing services related to relevant consumer financial product or service, the name of a point of contact, and that person’s telephone number; email, physical, and postal address; job title or position; dates of service; and, if applicable, the reason for termination. 80.
Each Settling Defendant must retain the documents identified in Paragraph 79 for at least five (5) years after its creation.
81.
Each Settling Defendant must make the documents identified in Paragraph 79 available to the Bureau upon the Bureau’s request. XIII.
NOTICES It is FURTHER ORDERED that:
82.
Unless otherwise directed in writing by the Bureau, Settling Defendants must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, “CFPB v. Orion Processing, et al., Case No. 15-23070- Civ-COOKE/TORRES,” and send them either:
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By overnight courier (not the U.S. Postal Service) to: Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1625 Eye Street, N.W.
Washington D.C. 20006; or
By first-class mail to the below address and contemporaneously by email To: [email protected]:
Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1700 G Street, N.W.
Washington D.C. 20552 XIV.
COMPLIANCE MONITORING It is FURTHER ORDERED that:
83.
To monitor Settling Defendants’ compliance with this Order, within fourteen [14] days of receipt of a written request from the Bureau, each Settling Defendant must submit to the Bureau additional compliance reports or other requested information, which must be sworn to under penalty of perjury; provide sworn testimony; or produce documents. The Bureau is also authorized to obtain discovery, without further leave of court, using any of the procedures prescribed by Federal Rules of Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69. 84.
For purposes of this Section, the Bureau may communicate directly with each Settling Defendant, unless such Settling Defendant retains counsel related to these communications.
85.
Each Settling Defendant must permit Bureau representatives to interview any employee or other person affiliated with such Defendant who has agreed to such an interview. The person interviewed may have counsel present. 86.
The Bureau is authorized by this Order to use all other lawful means, including posing, through its representatives, as consumers, suppliers, or other individuals or entities, to the Settling Defendants or any individual or entity affiliated with the Settling Defendants, without the necessity of identification or prior notice. Nothing Case 1:15-cv-23070-MGC Document 105 Entered on FLSD Docket 08/01/2016 Page 24 of 25
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in this Order will limit the Bureau’s lawful use of compulsory process, under 12 C.F.R. § 1080.6.
XV.
RETENTION OF JURISDICTION It is FURTHER ORDERED that:
87.
The Court will retain jurisdiction of this matter for the purpose of enforcing this Order.
XVI.
DEFENDANTS’ COUNTERCLAIM FOR DECLARATORY JUDGMENT It is FURTHER ORDERED that:
88.
Defendants’ Counterclaim for Declaratory Judgment is dismissed with prejudice. XVII.
FINAL JUDGMENT AND ORDER 89.
The Bureau and Settling Defendants have consented to the terms and conditions of this Order as set forth above and have consented to the entry thereof.
DONE and ORDERED in Chambers, in Miami, Florida, this 1st day of August 2016.
Copies furnished to:
Edwin G. Torres, U.S. Magistrate Judge Counsel of record
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Judgment ()
PDF of this document (25 pages)
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
Case No. 15-23070-Civ-COOKE/TORRES
Consumer Financial Protection Bureau, Plaintiff,
v.
ORION PROCESSING, LLC, a Texas limited liability company, d/b/a World Law Processing, Wld Credit Repair, and World Law Debt; FAMILY CAPITAL INVESTMENT & MANAGEMENT LLC, a Delaware limited liability company, a/k/a FCIAM Property Management; WORLD LAW DEBT SERVICES, LLC, a Delaware limited liability company; WORLD LAW PROCESSING, LLC, a Delaware limited liability company; DERIN SCOTT, an individual; DAVID KLEIN, an individual; and BRADLEY JAMES HASKINS, individually and d/b/a World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South;
Defendants,
Shannon Scott, an individual,
Relief Defendant.
DEFAULT JUDGMENT AND ORDER AGAINST BRADLEY J. HASKINS
Plaintiff, the Consumer Financial Protection Bureau (“Bureau”) commenced this civil action on August 17, 2015 to obtain permanent injunctive relief, rescission or reformation of contracts, the refund of moneys paid, restitution, disgorgement or compensation for unjust enrichment, civil money penalties, and other equitable relief from Defendants (a) Orion Processing, LLC, a Texas limited liability company, d/b/a World Law Processing, Wld Credit Repair, and World Law Debt; (b) Family Capital Investment & Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 1 of 25
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Management LLC, a Delaware limited liability company, a/k/a FCIAM Property Management; (c) World Law Debt Services, LLC, a Delaware limited liability company; (d) World Law Processing, LLC, a Delaware limited liability company; (e) Derin Scott, an individual; (f) David Klein, an individual; and (g) Bradley James Haskins, individually and d/b/a as World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South. The Bureau brought this Complaint under sections 1031(a), 1036(a), 1054, and 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5531(a), 5536(a), 5564(a), and 5565, and the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6102(c)(2), 6105(d), alleging Defendants violated the CFPA and the Telemarketing Sales Rule (“TSR”), 16 C.F.R. pt. 310 in connection with the marketing and sale of debt relief services.
On August 18, 2015, this Court entered an ex parte temporary restraining order (“TRO”), finding good cause to believe the Bureau would prevail on the merits of its claims and that immediate and irreparable harm would result from allowing Defendants’ operations to continue. Among other things, the TRO froze the Defendants’ assets. On September 2, 2015, this Court entered a preliminary injunction (“September 2, 2015 PI”) against Defendants Orion Processing, LLC; Bradley James Haskins; World Law Debt Services, LLC; and World Law Processing, LLC (ECF No. 28). On September 14, 2015 the Court entered a similar preliminary injunction (“September 14, 2015 PI”) against the remaining Defendants—Derin Scott; David Klein; Family Capital Investment & Management LLC; and Relief Defendant Shannon Scott (ECF No. 42). Among other things, these PIs continued the asset freeze and appointed a Receiver over Defendants World Law Debt Services, LLC, World Law Processing, LLC, and Family Capital Investment & Management LLC.
On August 1, 2016, the Court entered a Stipulated Final Judgment and Order against Defendants Derin Scott, David Klein, and Relief Defendant Shannon Scott (ECF No. 105). Defendants World Law Debt Services, LLC, World Law Processing, LLC, and Family Capital Investment & Management LLC failed to file an answer or otherwise defend in this Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 2 of 25
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action, and the Court entered a default judgment against them on August 1, 2016 (ECF No. 104).
On August 8, 2016, the Bureau moved for an order authorizing alternative service of process on Defendant Haskins setting forth its diligent efforts to locate and effectuate service on Haskins in Fort Lauderdale, Florida; London, England; and Prague, Czech Republic. (ECF No. 108). The Bureau’s motion demonstrated Haskins’ actual notice of this lawsuit. On September 7, 2016, the Court granted the Bureau’s motion and ordered the Bureau to serve Haskins at three email addresses, as well as effectuating substituted service on the Florida Secretary of State’s Office in accordance with Fla. Stat. §§ 48.161 and 48.181. (ECF No. 115). The Court further provided that in lieu of the requirement of filing a postal receipt for the substituted service, the Bureau may provide Haskins notice of the service and a copy of the process by electronic mail at the same three email addresses. On September 7, 2016, the Bureau effectuated service of the summons and Complaint on Haskins through electronic mail at all three email addresses and filed proof of service. (ECF No 116). On September 20, 2016, the Bureau effectuated substituted service on the Florida Secretary of State’s Office in accordance with the Court’s September 7, 2016 Order. The Bureau received the return receipt from the Florida Secretary of State’s Office on October 6, 2016, emailed a copy to Defendant Haskins, and filed the proof of service on October 6, 2016. (ECF No. 123). To date, Haskins has not responded or filed an answer, and his time to do so has expired.
The court may enter default judgment when a defendant fails to respond to a complaint and court orders and fails to participate in the litigation or cooperate in good faith with the plaintiff. Tara Prods., Inc. v. Hollywood Gadgets, Inc., 449 F. App’x 908, 910 – 12 (11th Cir. 2011); Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1307 (11th Cir. 2009); Buchanan v. Bowman, 820 F.2d 359, 361 (11th Cir. 1987). Granting a default judgment is within the court’s discretion. Tara Prods. 449 F. App’x at 910 – 12. Under Federal Rule of Civil Procedure 55(b)(2), default judgment is appropriate here against Defendant Haskins because he has failed to file an answer or otherwise appear and Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 3 of 25
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defend the claims brought against him. Defendant Haskins’ liability is well-pled in the Complaint, and he has failed to participate in the litigation in good faith. Pursuant to Federal Rule of Civil Procedure 55(b)(2), upon application by Plaintiff, the Court now enters a default judgment against Defendant Haskins for violations of the CFPA and the TSR.
THEREFORE, IT IS ORDERED:
FINDINGS 1.
This Court has jurisdiction over the parties and the subject matter of this action pursuant to 12 U.S.C. § 5565(a)(1) and 28 U.S.C. §§ 1331, 1345, and 1367. 2.
Venue in the Southern District of Florida is proper under 28 U.S.C. § 1391(b) and (c) and 12 U.S.C. § 5564(f).
3.
Defendant Haskins has been properly served with the Summons and Complaint. 4.
Defendant Haskins has failed to answer or otherwise defend this action. 5.
The Clerk properly entered default against Defendant Haskins on October 13, 2016 (ECF No. 125).
6.
The Complaint states claims upon which relief may be granted under the CFPA and TSR. The relief provided in this Order is appropriate and available pursuant to Sections 1054 and 1055 of the CFPA, 12 U.S.C. §§ 5564, 5565, and pursuant to the Telemarketing and Consumer Fraud and Abuse and Prevention Act, 15 U.S.C. § 6102(c).
7.
Because of Defendant Haskins’ default, Defendant Haskins is deemed to have admitted the well-pled facts of the complaint and the allegations are taken as true. Eagle Hosp., 515 F.2d at 1307; Buchanan, 820 F.2d at 361. 8.
During the Relevant Period, Defendants operated as a common enterprise while engaging in the acts and practices described in the complaint. Defendants conducted the business practices described in the complaint through an interrelated network of companies that had common business functions, employees, and office locations. Moreover, Defendants also commingled funds and shared operations and proceeds Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 4 of 25
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of the unlawful activity. Because Defendants have operated as a common enterprise, each of them is jointly and severally liable for the acts and practices alleged in the complaint.
9.
Default Defendants World Law Debt Services, LLC and World Law Processing, LLC are owned or controlled in whole or in part by Defendant Haskins. 10.
Defendant Haskins is a “covered person,” “related person,” and/or a “service provider” as those terms are defined by the CFPA, 12 U.S.C. § 5481(6)(A), (19), (25), and (26).
11.
During the Relevant Period, Defendant Haskins offered or provided financial advisory services, including services to assist consumers settle debts. 12.
Defendant Haskins’ business included inducing the purchase of financial advisory services by use of one or more telephones and involved more than one interstate telephone call. Defendant Haskins is a “seller” or “telemarketer” of a “debt relief service,” who engages in “telemarketing,” as defined in the TSR. 16 C.F.R. § 310.2. Defendant Haskins Violated the TSR Count I of the Complaint 13.
In the course of telemarketing debt relief services from October 27, 2010 to the Effective Date, Defendants requested or received payment of fees or consideration from consumers for debt relief services before: (1) they had renegotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a settlement agreement, debt management plan, or other such valid contractual agreement executed by the consumer; and (2) the consumer had made at least one payment pursuant to that agreement.
14.
The Complaint contains well-pled factual allegations supporting a finding of liability for violations of the TSR, 16 C.F.R. § 310.4(a)(5)(i), including as follows: a. Defendants offered debt relief services to consumers, promising to negotiate their unsecured debts with their creditors in exchange for a fees paid up-front. Compl. ¶¶ 1-2, 37.
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b. Defendants withdrew hundreds of dollars in advance fees from consumer’s accounts each month, including “Initial Fees” in the amount of $199 (usually collected from the consumers’ account over the first three months of the program); “Bundled Legal Service Fees” that ranged from 10 to 15 percent of the consumer’s combined outstanding debts (usually collected over the first 13 months of the program); and “Attorney Monthly Service Fees” in the amount of $84.95 (collected every month the consumer participates in the program). Compl. ¶¶ 2, 39-40, 51, 75.
c. These fees were all charged before any consumer’s debts were negotiated and settled. Compl. ¶ 39-40, 75.
d. Defendants have charged advance fees to 99% of the consumers, at least 21,000 consumers, before settling any of their debts. Compl. ¶ 2, 40, 58. 15.
Therefore, Defendants’ acts or practices violate the TSR, 16 C.F.R. § 310.4(a)(5)(i), and are abusive acts or practices in telemarketing. Because Defendants are “covered persons” their conduct is unlawful under sections 1031(a) and 1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1). 15 U.S.C. § 6102(c)(2). 16.
Given these well-pled allegations and Defendant Haskins’ failure to answer or defend, the Court enters a default judgment against Defendant Haskins for violations of the TSR, 16 C.F.R. § 310.4(a)(5)(i). See, e.g., CFPB v. Orion et al., No. 15cv23070 (S.D. Fla. Aug. 1, 2016) (ECF Nos. 104, 105); CFPB v. Harper, No. 14cv80931 (S.D. Fla. May 28, 2015) (awarding default judgment against corporate defendants for violations of the CFPA and other consumer protection laws); CFPB v. Jalan, No. 12cv02088 (C.D. Cal. July 23, 2013) (awarding default judgment against a corporation and two individual defendants for violations of Regulation O and other consumer protection laws).
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Defendant Haskins Violated the TSR and the CFPA Counts II and III of the Complaint 17.
In numerous instances, in connection with the advertising, marketing, promoting, offering for sale, or sale of debt relief services, Defendants have falsely represented that consumers who enroll in Defendants’ debt relief program: a. will receive legal representation;
b. will be represented by a local attorney; and/or c. will have settlements of their debts negotiated with their creditors by an attorney. 18.
The Complaint contains well-pled factual allegations supporting a finding of liability for violations of the TSR, 16 C.F.R. § 310.3(a)(2)(iii) and (x), and Sections 1031 and 1036 of the CFPA, 12 U.S.C §§ 5531, 5536, including as follows: a. Defendants promised consumers both debt relief services and legal representation, including by a local attorney, claiming to employ lawyers in every state. They also touted that consumers would receive the skill and expertise of a licensed lawyer to negotiate with creditors regarding their unsecured debts. Compl. ¶¶ 1, 37, 41-42, 45, 50, 78, 84.
b. In fact, in numerous instances, consumers do not receive legal representation, are not represented by a local attorney, and do not have settlements of their debts negotiated with their creditors by an attorney. Compl. ¶¶ 38, 53-56, 79, 85. 19.
Therefore, Defendants’ representations as described herein violate the TSR, 16 C.F.R. § 310.3(a)(2)(iii) and (x), and are deceptive acts or practices in telemarketing. Because Defendants are “covered persons” their conduct is unlawful under sections 1031(a) and 1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1). 15 U.S.C. § 6102(c)(2).
20.
Defendants’ representations described in the complaint and above are false and misleading, and constitute deceptive acts or practices in violation of sections 1031 and 1036 of the CFPA, 12 U.S.C § 5531, 5536.
21.
Given these well-pled allegations and Defendant Haskins’ failure to answer or defend, the Court enters a default judgment against Defendant Haskins for violations Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 7 of 25
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of the TSR, 16 C.F.R. § 310.3(a)(2)(iii) and (x) and for violations of sections 1031(a) and 1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531, 5536. See, e.g., CFPB v. Orion et al., No. 15cv23070 (S.D. Fla. Aug. 1, 2016) (ECF Nos. 104, 105); CFPB v. Harper, No. 14cv80931 (S.D. Fla. May 28, 2015) (awarding default judgment against corporate defendants for violations of the CFPA and other consumer protection laws); CFPB v. Jalan, No. 12cv02088 (C.D. Cal. July 23, 2013) (awarding default judgment against a corporation and two individual defendants for violations of Regulation O and other consumer protection laws).
Damages 22.
Section 1055 of the CFPA, 12 U.S.C. § 5565, empowers this Court to order injunctive and other relief, restitution, and civil money penalties. 23.
Defendants are liable for the entire amount spent by consumers, regardless of whether consumers received anything of value; the relevant factor is the “fraud in the selling, not the value of the thing sold.” McGregor v. Chierico, 206 F.3d 1378, 1389 (11th Cir. 2000) (quoting FTC v. Figgie Int’l, Inc., 994 F.2d 595, 606 (9th Cir. 1993)). Because Defendants, including Defendant Haskins, have operated as a common enterprise, each of them is jointly and severally liable for the acts and practices alleged in the complaint.
24.
Plaintiff bears the burden of proving damages and may do so through affidavits and other documentary evidence showing the amount and calculation of damages. Tara Prods., 449 F. App’x at 911-12.
25.
Plaintiff has established, through competent evidence, that at least 21,900 consumers were victimized by and paid money to Defendants and that these consumers paid at least $106,813,049 during the Relevant Period.
26.
As explained in the declaration of Timothy Hanson attached to Plaintiff’s Motion, these figures were derived from the Corporate Defendants’ records, records of Defendants’ third-party payment processor and bank statements, as well as information compiled by the Receiver.
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27.
The amount of $106,813,048 represents a reasonable approximation of consumer loss.
28.
The Bureau is entitled to an Order imposing permanent injunctive relief; requiring Defendant Haskins to make restitution of $106,813,048; and requiring Defendant Haskins to pay a civil money penalty in the amount of $40 million. 29.
The Court, in its discretion, enters injunctive and monetary relief, without holding an evidentiary hearing. Tara Prods., 449 F. App’x at 911-12 (11th Cir. 2011). 30.
This action and the relief awarded herein are in addition to, and not in lieu of, other remedies as may be provided by law, including both civil and criminal remedies. 31.
Entry of this Order is in the public interest.
DEFINITIONS The following definitions apply to this Order:
32.
“Advance Fee” means any fee or consideration requested or received by a Debt Relief Service Provider from a consumer for any Debt Relief Service, whether directly or indirectly, that occurs before;
a. the Debt Relief Service Provider has renegotiated, settled, reduced, or otherwise altered the terms of a debt pursuant to a settlement agreement, debt management plan, or other valid contractual agreement executed by the Consumer; and b. the Consumer has made at least one payment pursuant to that settlement agreement, debt management plan, or other valid contractual agreement between the Consumer and the creditor or debt collector. 33.
“Affected Consumers” means any consumer who paid an Advance Fee or any other fees to Defendants or their officers, agents, servants, employees, or attorneys for Debt Relief Products or Services between July 1, 2010 and the Effective Date. 34.
“Assets” means any legal or equitable interest in, right to, or claim to any real, personal, or intellectual property owned or controlled by, or held, in whole or in part for the benefit of, or subject to access by any Defendant or Relief Defendant, wherever located, whether in the United States or abroad. This includes, but is not Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 9 of 25
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limited to, chattel, goods, instruments, equipment, fixtures, general intangibles, effects, leaseholds, contracts, mail or other deliveries, shares of stock, commodities, futures, inventory, checks, notes, accounts, credits, receivables (as those terms are defined in the Uniform Commercial Code), funds, cash, and trusts, including, but not limited to any trust held for the benefit of any Defendant, Relief Defendant, any of the Individual Defendants’ minor children, or any of the Individual Defendants’ spouses.
35.
“Assisting Others” includes, but is not limited to: c. Consulting in any form whatsoever;
d. Providing paralegal or administrative support services; e. performing customer service functions including, but not limited to, receiving or responding to consumer complaints;
f. formulating or providing, or arranging for the formulation or provision of, any advertising or marketing material, including, but not limited to, any telephone sales script, direct mail solicitation, or the text of any Internet website, email, or other electronic communication; g. formulating or providing, or arranging for the formulation or provision of, any marketing support material or service, including but not limited to, web or Internet Protocol addresses or domain name registration for any Internet websites, affiliate marketing services, or media placement services;
h. providing names of, or assisting in the generation of, potential customers; i. performing marketing, billing, or payment services of any kind; and j. acting or serving as an owner, officer, director, manager, or principal of any entity.
36.
“Bankruptcy Proceeding” means In re Orion Processing LLC, Case No. 15-10279 currently pending in the United States Bankruptcy Court, Western District of Texas, Austin Division.
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37.
“Chapter 7 Trustee” means the Trustee appointed over Defendant Orion Processing, LLC by the United States Bankruptcy Court, Western District of Texas, Austin Division in the Bankruptcy Proceeding.
38.
“Consumer Financial Product or Service” is synonymous in meaning and equal in scope to the definition of the term in Section 1002(5) of the CFPA, 12 U.S.C. § 5481(5), and, subject to applicable restrictions contained in the CFPA, includes, but is not limited to:
a. Extending credit and servicing loans, including acquiring, purchasing, selling, brokering, or other extensions of credit (other than solely extending commercial credit to a person who originates consumer credit transactions);
b. Providing financial advisory services to consumers on individual financial matters or relating to proprietary financial products or services, including providing credit counseling to any consumer or providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure; c. Collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a Consumer Financial Product or Service; or d. Collecting debt related to any Consumer Financial Product or Service. 39.
“Debt Relief Product or Service” means any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a consumer and one or more creditors or debt collectors, including but not limited to, a reduction in the balance, interest rate, or fees owed by a person to a creditor or debt collector. 40.
“Debt Relief Service Provider” means any Person that offers or provides any Debt Relief Product or Service.
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41.
“Defendants” means the Individual Defendants and the Corporate Defendants, individually, collectively, or in any combination, and each of them by whatever names each might be known;
a. “Corporate Defendants” means: Orion Processing, LLC d/b/a World Law Processing, Wld Credit Repair and World Law Debt (collectively, “Orion”) and its successors and assigns; Family Capital Investment & Management LLC a/k/a FCIAM Property Management (“FCIAM”) and its successors and assigns; World Law Debt Services, LLC and its successors and assigns; and World Law Processing, LLC and its successors and assigns.
b. “Individual Defendants” means Derin Scott, David Klein, and Bradley Haskins, collectively, or in any combination, and each of them by any other names by which they might be known;
c. “Receivership Defendants” means World Law Debt Services, LLC, World Law Processing, LLC, and Family Capital Investment & Management LLC a/k/a FCIAM Property Management and their successors, assigns, affiliates, or subsidiaries, and each of them, by whatever names each might be known, provided that the Receiver has reason to believe they are owned or controlled in whole or in part by any of the Defendants, including but not limited to World Law Forms and Mediation, Inc., World Law South Inc., and WLD Price Global, Inc.; d. “Relief Defendant” means Shannon Scott individually and by any other name by which she might be known;
42.
“Effective Date” means the date on which the Order is issued. 43.
“Enforcement Director” means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his/her delegee. 44.
“Receiver” means Robb Evans & Associates LLC. 45.
“Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 12 of 25
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against Defendant based on substantially the same facts as described in the Complaint.
46.
“Relevant Period” includes the period from July 1, 2010 to the Effective Date. 47.
“Telemarketing” means any plan, program, or campaign that is conducted to induce the purchase of goods or services or a charitable contribution by use of one or more telephones, whether or not covered by the Telemarketing Sales Rule, 16 C.F.R. Part 310.
ORDER
I.
PERMANENT BAN ON TELEMARKETING AND DEBT RELIEF PRODUCTS OR SERVICES
IT IS ORDERED that:
48. Defendant Haskins and his officers, agents, servants, employees, and attorneys, and all other persons in active concert or participation with any of them who have actual notice of this Order, whether acting directly or indirectly, are permanently restrained from any of the following:
a. Participating in telemarketing or assisting others engaged in telemarketing any Consumer Financial Product or Service;
b. Advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service;
c. Assisting others in advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service; and d. Receiving any remuneration or other consideration from, holding any ownership interest in, providing services to, or working in any capacity for any person engaged in or assisting others in advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service.
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II.
PROHIBITION ON DECEPTIVE PRACTICES IT IS FURTHER ORDERED that:
49. Defendant Haskins and his successors, assigns, officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this Order whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of any Consumer Financial Product or Service may not misrepresent, or assist others in misrepresenting, expressly or impliedly:
a. Any aspect of any Consumer Financial Product or Service, including but not limited to, the amount of savings a consumer will receive from purchasing, using, or enrolling in such Consumer Financial Product or Service; b. The total costs to purchase, receive, or use, or the quantity of any Consumer Financial Product or Service, including that there will be no charge for all or a portion of such service;
c. Any material restriction, limitation, or condition to purchase, receive, or use any Consumer Financial Product or Service;
d. Any aspect of the nature or terms of a refund, cancellation, exchange, or repurchase policy for any Consumer Financial Product or Service, including but not limited to, the likelihood of a consumer obtaining a full or partial refund, or the circumstances in which a full or partial refund will be granted to the consumer; e. The income, profits, sales, or savings likely to be achieved from any Consumer Financial Product or Service;
f. The terms or rates that are available for any loan or other extension of credit; g. Any person’s ability to improve or otherwise affect a consumer’s credit record, credit history, or credit rating or ability to obtain credit; h. That a consumer will receive legal representation or services from an attorney duly licensed to practice law;
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i. Any material aspect of the performance, efficacy, nature, or central characteristic of any Consumer Financial Product or Service; and j. Any other fact material to consumers concerning any Consumer Financial Product or Service.
50. In addition, Defendant Haskins, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, or sale of any Consumer Financial Product or Service, is hereby permanently restrained and enjoined from making any representation or assisting others in making any representation, expressly or by implication, about the benefits, performance, or efficacy of any Consumer Financial Product or Service, unless, at the time such representation is made, he possesses and relies upon competent and reliable evidence that substantiates that the representation is true.
51. In addition, Defendant Haskins, whether acting directly or indirectly, is permanently restrained from offering or providing any Consumer Financial Product or Service for which a state license, registration, permit, bonding or other regulatory authority is required, unless he first obtains such authority.
III.
PROHIBITED USE OF CUSTOMER INFORMATION IT IS FURTHER ORDERED that:
48.
Defendant Haskins, and his officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, may not disclose, use, or benefit from customer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a customer’s account (including a credit card, bank account, or other financial account), that Defendants obtained before the Effective Date in connection with Consumer Financial Products or Services or Debt Relief Products or Services offered by Defendants.
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IT IS FURTHER ORDERED that:
49.
Defendant Haskins, and his officers, agents, servants, employees, attorneys, and all other persons in active concert or participation with him who receive actual notice of this Order by personal service, facsimile transmission, email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, are hereby permanently restrained and enjoined from attempting to collect, collecting, selling, or assigning, or otherwise transferring any right to collect payment from any consumer who purchased or agreed to purchase debt relief products or services from Defendants.
However, customer information may be disclosed if requested by a government agency or required by law, regulation, or court order. IV.
ORDER TO PAY REDRESS IT IS FURTHER ORDERED that:
50.
A judgment for monetary relief is entered in favor of the Bureau and against Defendant Haskins, jointly and severally, in the amount of $106,813,049 for the purpose of providing redress to Affected Consumers. The monetary judgment set forth in this Section is immediately due and payable upon entry of this Order and is enforceable against any asset owned by, on behalf of, for the benefit of, or in trust by or for Defendant Haskins.
51.
This Order grants to the Bureau all rights and claims that Defendant Haskins has to any assets currently in the possession, custody, or control of the Receiver or in the receivership estate, and Defendant Haskins shall forfeit any rights to the funds in the receivership estate, including but not limited to:
a. Funds previously held in Account Numbers XXXXXX2473, XXXXXX9483, and XXXXXXX9491 at TD Bank in the name of World Law Forms and Mediation Inc.;
b. Funds previously held in Account Number XXXXXX3559 at Bank of America in the name of WLD Price Global, Inc.;
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c. Funds previously held in Account Numbers XXXXXX2571 and XXXXXXX2584 at Bank of America in the name of World Law Forms and Mediation Inc.;
52.
Any financial or brokerage institution, escrow agent, title company, commodity trading company, business entity, or person, whether located within the United States or outside the United States, that holds, controls or maintains accounts or assets of, on behalf of, or for the benefit of, Defendant Haskins shall turn over such account or asset to the Bureau or its designated agent within ten (10) business days of receiving notice of this Order by any means, including but not limited to via facsimile or email. Any such funds must be paid to the Bureau, by wire transfer to the Bureau or to the Bureau’s agent, and according to the Bureau’s wiring instructions. 53.
Any funds received by the Bureau pursuant to this Order will be deposited into a fund or funds administered by the Bureau or to the Bureau’s agent according to applicable statutes and regulations to be used to provide redress to Affected Consumers, for the fees they paid Defendants, and for any attendant expenses for the administration of any such redress.
54.
If the Bureau determines, in its sole discretion, that redress to consumers is wholly or partially impracticable or otherwise inappropriate, or if funds remain after redress is completed, the Bureau will deposit any remaining funds in the U.S. Treasury as disgorgement. Defendant Haskins will have no right to challenge any actions that the Bureau or its representatives may take under this paragraph. 55.
Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right.
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V.
ORDER TO PAY CIVIL MONEY PENALTIES IT IS FURTHER ORDERED that:
56.
Under Section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the alleged violations of law, and taking into account the factors in 12 U.S.C. § 5565(c)(3), Defendant Haskins must pay a civil money penalty of $40 million to the Bureau. 57.
Within 10 days of the Effective Date, Defendant Haskins must pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions.
58.
The civil money penalty paid under this Order will be deposited in the Civil Penalty Fund of the Bureau as required by Section 1017(d) of the CFPA, 12 U.S.C. § 5497(d).
59.
Defendant Haskins must treat the civil money penalty paid under this Order as a penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Defendant Haskins may not: a. Claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Order; or b. Seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Order. 60.
To preserve the deterrent effect of the civil money penalty in any Related Consumer Action, Defendant Haskins may not argue that he is entitled to, nor may Defendant Haskins benefit by, any offset or reduction of any monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action or because of any payment that the Bureau makes from the Civil Penalty Fund (Penalty Offset). If the court in any Related Consumer Action grants such a Penalty Offset, Defendant Haskins must, within 30 days after entry of a final order granting the Penalty Offset, notify the Bureau, and pay the amount of the Penalty Offset to the U.S. Treasury. Such a payment will not be considered an additional civil money Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 18 of 25
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penalty and will not change the amount of the civil money penalty imposed in this action.
61.
The civil penalty imposed by this Order represents a civil penalty owed to the United States Government, is not compensation for actual pecuniary loss, and, thus, as to each Default Defendant, it is not subject to discharge under the Bankruptcy Code under 11 U.S.C. § 523(a)(7).
VI.
ADDITIONAL MONETARY PROVISIONS IT IS FURTHER ORDERED that:
62.
In the event of any default on Defendant Haskins’ obligations to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable. 63.
Defendant Haskins must relinquish all dominion, control, and title to the funds paid to the fullest extent permitted by law and no part of the funds may be returned to Defendant Haskins.
64.
The facts alleged in the Bureau’s Complaint will be taken as true and be given collateral estoppel effect, without further proof, in any proceeding based on the entry of the Order, or in any subsequent civil litigation by the Bureau to enforce this Order or its rights to any payment or monetary judgment under the Order, such as a nondischargeability complaint in any bankruptcy case.
65.
The facts alleged in the Complaint establish all elements necessary to sustain an action by the Bureau pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect for such purposes.
66.
Under 31 U.S.C. § 7701, Defendant Haskins, unless he has already done so, must furnish to the Bureau any taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order.
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Compliance Provisions VII.
REPORTING REQUIREMENTS IT IS FURTHER ORDERED that:
67.
Defendant Haskins must notify the Bureau of any development that may affect compliance obligations arising under this Order, including but not limited to for any company which Defendant Haskins is the majority owner, or that Defendant Haskins directly or indirectly controls, a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Defendant Haskins; or a change in Defendant Haskins’ name or address. Defendant Haskins must provide this notice, if practicable, at least 30 days before the development, but in any case no later than 14 days after the development. 68.
Within 7 days of the Effective Date, Defendant Haskins must: a. Designate at least one telephone number and email, physical, and postal address as points of contact, which the Bureau may use to communicate with Defendant Haskins;
b. Identify all businesses for which Defendant Haskins is the majority owner, or that Defendant Haskins directly or indirectly controls, by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; c. Describe the activities of each such business, including the products and services offered, and the means of advertising, marketing, and sales. d. Identify each of their telephone numbers and all email, Internet, physical, and postal addresses, including all residences;
e. Describe in detail Defendant Haskins’ involvement in any business for which he performs services in any capacity or which he wholly or partially owns, including Defendant Haskins’ title, role, responsibilities, participation, authority, control, and ownership.
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69.
Within 90 days of the Effective Date, and again one year after the Effective Date, Defendant Haskins must submit to the Enforcement Director an accurate written compliance progress report sworn under penalty of perjury (“Compliance Report”), which, at a minimum:
a. Describes in detail the manner and form in which such Defendant Haskins has complied with this Order; and b. Attaches a copy of each Order Acknowledgment obtained under Section VIII, unless previously submitted to the Bureau.
70.
After the one-year period, Defendant Haskins must submit to the Enforcement Director additional Compliance Reports within 14 days of receiving a written request from the Bureau.
VIII.
ORDER DISTRIBUTION AND ACKNOWLEDGMENT IT IS FURTHER ORDERED that:
71.
Within 7 days of the Effective Date, Defendant Haskins must submit to the Enforcement Director an acknowledgment of receipt of this Order, sworn under penalty of perjury.
72.
Within 30 days of the Effective Date, Defendant Haskins, for any business for which he is the majority owner or which he directly or indirectly controls, must deliver a copy of this Order to each of its board members and executive officers, as well as to any managers, employees, service providers, or other agents and representatives who have responsibilities related to the subject matter of the Order. 73.
For 10 years from the Effective Date, Defendant Haskins, for any business for which he is the majority owner or which he directly or indirectly controls, must deliver a copy of this Order to any business entity resulting from any change in structure referred to in Section VII (Reporting Requirements), any future board members and executive officers, as well as to any managers, employees, service providers, or other agents and representatives who will have responsibilities related to the subject matter Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 21 of 25
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of the Order before they assume their responsibilities, and any entity or regulatory body from whom he seeks a business license.
74.
Defendant Haskins must secure a signed and dated statement acknowledging receipt of a copy of this Order, ensuring that any electronic signatures comply with the requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of delivery, from all persons receiving a copy of this Order under this Section. IX.
RECORDKEEPING IT IS FURTHER ORDERED that:
75.
Defendant Haskins must create, for at least ten (10) years from the Effective Date, the following business records for any business involving consumer financial products or services for which Defendant Haskins, individually or collectively with any other Defendant, is a majority owner or which he directly or indirectly controls: a. All documents and records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Bureau. b. Copies of all sales scripts; training materials; advertisements; websites; and other marketing materials; and including any such materials used by a third party on behalf of Defendant.
c. All documents regarding each individual consumer showing his or her enrollment in that consumer financial product or service, including: the consumer’s name, address, phone number, email address; amount paid, quantity of the product or service purchased, description of the product or service purchased, the date on which the product or service was purchased, a copy of any promotional or welcome materials provided, and, if applicable, the date and reason consumer left the program. d. Accounting records showing the gross and net revenues generated by the all consumer financial products or services, and all costs incurred in generating those revenues;
e. All consumer complaints and refund requests (whether received directly or indirectly, such as through a third party), and any responses to those complaints or requests. Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 22 of 25
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f. Records showing, for each employee providing services, that person’s: name; telephone number; email, physical, and postal address; job title or position; dates of service; and, if applicable, the reason for termination. g. Records showing, for each service provider providing services related to relevant consumer financial product or service, the name of a point of contact, and that person’s telephone number; email, physical, and postal address; job title or position; dates of service; and, if applicable, the reason for termination. 76.
Defendant Haskins must retain the documents identified in Paragraph 75 for at least five (5) years after its creation.
77.
Defendant Haskins must make the documents identified in Paragraph 75 available to the Bureau upon the Bureau’s request.
X.
NOTICES IT IS FURTHER ORDERED that:
78.
Unless otherwise directed in writing by the Bureau, Defendant Haskins must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, “CFPB v. Orion Processing, et al., Case No. 15-23070- Civ-COOKE/TORRES,” and send them either:
By overnight courier (not the U.S. Postal Service) to: Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1625 Eye Street, N.W.
Washington D.C. 20006; or
By first-class mail to the below address and contemporaneously by email To: [email protected]:
Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1700 G Street, N.W.
Washington D.C. 20552 Case 1:15-cv-23070-MGC Document 132 Entered on FLSD Docket 11/29/2016 Page 23 of 25
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XI.
COMPLIANCE MONITORING IT IS FURTHER ORDERED that:
79.
To monitor Defendant Haskins’ compliance with this Order, within fourteen [14] days of receipt of a written request from the Bureau, Defendant Haskins must submit to the Bureau additional compliance reports or other requested information, which must be sworn to under penalty of perjury; provide sworn testimony; or produce documents. The Bureau is also authorized to obtain discovery, without further leave of court, using any of the procedures prescribed by Federal Rules of Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69. 80.
For purposes of this Section, the Bureau may communicate directly with Defendant Haskins, unless Defendant Haskins retains counsel related to these communications. 81.
Defendant Haskins must permit Bureau representatives to interview any employee or other person affiliated with him who has agreed to such an interview. The person interviewed may have counsel present.
82.
The Bureau is authorized by this Order to use all other lawful means, including posing, through its representatives, as consumers, suppliers, or other individuals or entities, to Defendant Haskins or any individual or entity affiliated with Defendant Haskins, without the necessity of identification or prior notice. Nothing in this Order will limit the Bureau’s lawful use of compulsory process, under 12 C.F.R. § 1080.6. XII.
RETENTION OF JURISDICTION IT IS FURTHER ORDERED that:
83.
The Court will retain jurisdiction of this matter for the purpose of enforcing this Order.
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DONE and ORDERED in Chambers, in Miami, Florida, this 29th day of November 2016.
Copies furnished to:
Edwin G. Torres, U.S. Magistrate Judge Counsel of record
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Stipulation ()
PDF of this document (14 pages)
Page 158
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
Case No. 15-23070-Civ-COOKE/TORRES
Consumer Financial Protection Bureau, Plaintiff,
v.
ORION PROCESSING, LLC, a Texas limited liability company, d/b/a World Law Processing, Wld Credit Repair, and World Law Debt; FAMILY CAPITAL INVESTMENT & MANAGEMENT LLC, a Delaware limited liability company, a/k/a FCIAM Property Management; WORLD LAW DEBT SERVICES, LLC, a Delaware limited liability company; WORLD LAW PROCESSING, LLC, a Delaware limited liability company; DERIN SCOTT, an individual; DAVID KLEIN, an individual; and BRADLEY JAMES HASKINS, individually and d/b/a World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South;
Defendants,
Shannon Scott, an individual,
Relief Defendant.
STIPULATED FINAL JUDGMENT AND ORDER AGAINST ORION PROCESSING, LLC
Plaintiff, the Consumer Financial Protection Bureau (“Bureau”) commenced this civil action on August 17, 2015 to obtain permanent injunctive relief, rescission or reformation of contracts, the refund of moneys paid, restitution, disgorgement or compensation for unjust enrichment, civil money penalties, and other equitable relief from Defendants (a) Orion Processing, LLC, a Texas limited liability company, d/b/a World Case 1:15-cv-23070-MGC Document 152 Entered on FLSD Docket 03/22/2017 Page 1 of 14
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Law Processing, Wld Credit Repair, and World Law Debt (collectively “Orion”); (b) Family Capital Investment & Management LLC, a Delaware limited liability company, a/k/a FCIAM Property Management; (c) World Law Debt Services, LLC, a Delaware limited liability company; (d) World Law Processing, LLC, a Delaware limited liability company; (e) Derin Scott, an individual; (f) David Klein, an individual; and (g) Bradley James Haskins, individually and d/b/a as World Law Group, LLP, World Law Group America, LLP, WLD Price Global, Inc., World Law Forms and Mediation, and World Law South. The Bureau brought this Complaint under sections 1031(a), 1036(a), 1054, and 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5531(a), 5536(a), 5564(a), and 5581, and the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6102(c)(2), 6105(d), alleging Defendants violated the CFPA and the Telemarketing Sales Rule (“TSR”), 16 C.F.R. pt. 310 in connection with the marketing and sale of debt relief services.
The Bureau and the Trustee (as defined below) for Orion, by and through counsel, request that the Court enter this Stipulated Final Judgment and Order (“Order”).
THEREFORE, IT IS ORDERED:
FINDINGS 1.
On February 27, 2015, before the commencement of the instant civil action, Orion filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq. (2012) (“Bankruptcy Code”), initiating a bankruptcy case pending in the United States Bankruptcy Court for the Western District of Texas, Austin Division (“Bankruptcy Court”), captioned In re Orion Processing LLC, Case No. 15-10279 (“Bankruptcy Proceeding”).
2.
On August 20, 2015, three days after the commencement of the instant civil action, the Bankruptcy Court converted the Bankruptcy Proceeding to a Chapter 7 proceeding over Orion’s objection, and appointed a trustee. Case 1:15-cv-23070-MGC Document 152 Entered on FLSD Docket 03/22/2017 Page 2 of 14
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3.
Randolph N. Osherow has been appointed Chapter 7 trustee (“Trustee”). Pursuant to 11 U.S.C. § 323, the Trustee is the representative of Orion’s bankruptcy estate and has the capacity to sue and be sued.
4.
The Trustee is not operating the business of Orion and is proceeding with an orderly liquidation under Chapter 7. Given that Orion is a Chapter 7 debtor and is no longer doing business, the Bureau has agreed not to seek its customary injunction, compliance and reporting requirements.
5.
The automatic stay of the Bankruptcy Code does not stay this civil action against Orion because the action falls within the police and regulatory power exception to the automatic stay set forth in 11 U.S.C. § 362(a), (b)(4). 6.
On November 23, 2015, the Bureau timely filed a proof of claim in the Bankruptcy Proceeding seeking at least $67 million in monetary relief and also seeking civil money penalties for Orion’s violations of the TSR and the CFPA as alleged in the Complaint.
7.
The Bankruptcy Court has authorized the Trustee to enter into this Order by order dated February 21, 2017, a copy of which is attached as Exhibit B to the Unopposed Motion to Enter Stipulated Final Judgment and Order. The Bankruptcy Court’s order is now final and non-appealable.
8.
The Bureau and the Trustee (the “Parties”) agree to entry of this Order, without adjudication of any issue of fact or law, to settle and resolve all matters in this dispute arising from the conduct of Orion alleged in the Complaint to the date this Order is entered.
9.
For purposes of this Order, the Trustee admits the facts necessary to establish the Court’s jurisdiction over the Trustee and the subject matter of this action, but is without sufficient information to otherwise admit or deny the factual allegations. The Trustee waives service under Rule 4(d) of the Federal Rules of Civil Procedure and waives all rights to seek judicial review or otherwise challenge or contest the validity of this Order. The Trustee also waives any claim that Orion may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this Case 1:15-cv-23070-MGC Document 152 Entered on FLSD Docket 03/22/2017 Page 3 of 14
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action to the date of this Order. Each Party will bear its own costs and expenses, including, without limitation, attorneys’ fees.
10.
This Court has jurisdiction over the parties and the subject matter of this action pursuant to 12 U.S.C. § 5565(a)(1) and 28 U.S.C. §§ 1331, 1345, and 1367. 11.
Venue in the Southern District of Florida is proper under 28 U.S.C. § 1391(b) and (c) and 12 U.S.C. § 5564(f).
12.
The Complaint states claims upon which relief may be granted under the CFPA and TSR. The relief provided in this Order is appropriate and available pursuant to Sections 1054 and 1055 of the CFPA, 12 U.S.C. §§ 5564, 5565, and pursuant to the Telemarketing and Consumer Fraud and Abuse and Prevention Act, 15 U.S.C. § 6102(c).
13.
During the Relevant Period, Defendants operated as a common enterprise while engaging in the acts and practices described in the complaint. Defendants conducted the business practices described in the complaint through an interrelated network of companies that had common business functions, employees, and office locations. Moreover, Defendants also commingled funds and shared operations and proceeds of the unlawful activity. Because Defendants have operated as a common enterprise, each of them is jointly and severally liable for the acts and practices alleged in the complaint.
14.
Orion is a “covered person,” “related person,” and a “service provider” as those terms are defined by the CFPA, 12 U.S.C. § 5481(6)(A), (19), (25), and (26). 15.
During the Relevant Period, Defendants offered or provided financial advisory services, including services to assist consumers settle debts. 16.
Defendants’ business included inducing the purchase of financial advisory services by use of one or more telephones and involved more than one interstate telephone call. Defendants are “sellers” or “telemarketers” of a “debt relief service,” who engage in “telemarketing,” as defined in the TSR. 16 C.F.R. § 310.2. 17.
In the course of telemarketing debt relief services during the Relevant Period, Defendants requested or received payment of fees or consideration from consumers Case 1:15-cv-23070-MGC Document 152 Entered on FLSD Docket 03/22/2017 Page 4 of 14
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for debt relief services before: (1) they had renegotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a settlement agreement, debt management plan, or other such valid contractual agreement executed by the consumer; and (2) the consumer had made at least one payment pursuant to that agreement.
18.
Defendants have falsely represented that consumers who enroll in Defendants’ debt relief program:
a. will receive legal representation;
b. will be represented by a local attorney; and/or c. will have settlements of their debts negotiated with their creditors by an attorney. 19.
During the Relevant Period, Defendants charged at least $106,813,049 in unlawful fees, including unlawful advance fees, to Affected Consumers. 20.
Defendants’ acts and practices described above violate the TSR, 16 C.F.R. § 310.4(a)(5)(i), and are abusive acts or practices in telemarketing. 21.
Defendants’ representations described in the complaint and above are false and misleading, and constitute deceptive acts or practices in violation of Sections 1031 and 1036 of the CFPA, 12 U.S.C § 5531, 5536.
22.
Section 1055 of the CFPA, 12 U.S.C. § 5565 empowers this Court to order injunctive and other relief, restitution, and civil money penalties. 23.
The Bureau is entitled to an Order imposing permanent injunctive relief; requiring Orion to make restitution of $106,813,049, which the bankruptcy court has deemed an allowed general unsecured claim in the Bankruptcy Proceeding. 24.
Entry of this Order is in the public interest.
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DEFINITIONS
The following definitions apply to this Order:
25.
“Advance Fee” means any fee or consideration requested or received by a Debt Relief Service Provider from a consumer for any Debt Relief Service, whether directly or indirectly, that occurs before;
a. the Debt Relief Service Provider has renegotiated, settled, reduced, or otherwise altered the terms of a debt pursuant to a settlement agreement, debt management plan, or other valid contractual agreement executed by the Consumer; and b. the Consumer has made at least one payment pursuant to that settlement agreement, debt management plan, or other valid contractual agreement between the Consumer and the creditor or debt collector. 26.
“Affected Consumers” means any consumer who paid an Advance Fee or any other fees to Defendants or their officers, agents, servants, employees, or attorneys for Debt Relief Products or Services between July 1, 2010 and the Effective Date. 27.
“Assets” means any legal or equitable interest in, right to, or claim to any real, personal, or intellectual property owned or controlled by, or held, in whole or in part for the benefit of, or subject to access by any Defendant or Relief Defendant, wherever located, whether in the United States or abroad. This includes, but is not limited to, chattel, goods, instruments, equipment, fixtures, general intangibles, effects, leaseholds, contracts, mail or other deliveries, shares of stock, commodities, futures, inventory, checks, notes, accounts, credits, receivables (as those terms are defined in the Uniform Commercial Code), funds, cash, and trusts, including, but not limited to any trust held for the benefit of any Defendant, Relief Defendant, any of the Individual Defendants’ minor children, or any of the Individual Defendants’ spouses.
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28.
“Bankruptcy Proceeding” means In re Orion Processing LLC, Case No. 15-10279 currently pending in the United States Bankruptcy Court, Western District of Texas, Austin Division.
29.
“Chapter 7 Trustee” means Randolph N. Osherow, the Trustee appointed over Defendant Orion Processing, LLC by the United States Bankruptcy Court, Western District of Texas, Austin Division in the Bankruptcy Proceeding and any successor trustee.
30.
“Consumer Financial Product or Service” is synonymous in meaning and equal in scope to the definition of the term in Section 1002(5) of the CFPA, 12 U.S.C. § 5481(5), and, subject to applicable restrictions contained in the CFPA, includes, but is not limited to:
c. Extending credit and servicing loans, including acquiring, purchasing, selling, brokering, or other extensions of credit (other than solely extending commercial credit to a person who originates consumer credit transactions);
d. Providing financial advisory services to consumers on individual financial matters or relating to proprietary financial products or services, including providing credit counseling to any consumer or providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure; e. Collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a Consumer Financial Product or Service; or f. Collecting debt related to any Consumer Financial Product or Service. 31.
“Debt Relief Product or Service” means any program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a consumer and one or more creditors or Case 1:15-cv-23070-MGC Document 152 Entered on FLSD Docket 03/22/2017 Page 7 of 14
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debt collectors, including but not limited to, a reduction in the balance, interest rate, or fees owed by a person to a creditor or debt collector. 32.
“Debt Relief Service Provider” means any Person that offers or provides any Debt Relief Product or Service.
33.
“Defendants” means the Individual Defendants and the Corporate Defendants, individually, collectively, or in any combination, and each of them by whatever names each might be known;
g. “Corporate Defendants” means: Orion Processing, LLC d/b/a World Law Processing, Wld Credit Repair and World Law Debt (collectively, “Orion”) and its successors and assigns; Family Capital Investment & Management LLC a/k/a FCIAM Property Management (“FCIAM”) and its successors and assigns; World Law Debt Services, LLC and its successors and assigns; and World Law Processing, LLC and its successors and assigns.
h. “Individual Defendants” means Derin Scott, David Klein, and Bradley Haskins, collectively, or in any combination, and each of them by any other names by which they might be known;
34.
“Effective Date” means the date on which the Order is issued. 35.
“Enforcement Director” means the Assistant Director for the Office of Enforcement for the Consumer Financial Protection Bureau, or his/her delegee. 36.
“Estate” or “Orion Estate” means the bankruptcy estate created within the Bankruptcy Proceeding by operation of law pursuant to 11 U.S.C. § 541. 37.
“Receiver” means Robb Evans & Associates LLC. 38.
“Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against Defendant based on substantially the same facts as described in the Complaint.
39.
“Relevant Period” includes the period from July 1, 2010 to the Effective Date. Case 1:15-cv-23070-MGC Document 152 Entered on FLSD Docket 03/22/2017 Page 8 of 14
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40.
“Telemarketing” means any plan, program, or campaign that is conducted to induce the purchase of goods or services or a charitable contribution by use of one or more telephones, whether or not covered by the Telemarketing Sales Rule, 16 C.F.R. Part 310.
ORDER
I.
ORION NOT TO RESUME OPERATIONS IT IS ORDERED that:
41.
Orion will not engage in the following, and the Trustee shall not move the Bankruptcy Court pursuant to 11 U.S.C. § 721 or otherwise seek authorization to operate Orion’s business, including seeking authorization for Orion, whether acting directly or through any other Person, to engage in the following: a. Telemarketing or assisting others engaged in telemarketing any Consumer Financial Product or Service;
b. Advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service;
c. Assisting others in advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service; and d. Receiving any remuneration or other consideration from, holding any ownership interest in, providing services to, or working in any capacity for any person engaged in or assisting others in advertising, marketing, promoting, offering for sale, selling, or providing any Debt Relief Product or Service. II.
PROHIBITED USE OF CUSTOMER INFORMATION IT IS FURTHER ORDERED that:
42.
The Trustee and the Orion Estate may not disclose, use, or benefit from customer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a customer’s account (including a credit card, bank account, or other financial Case 1:15-cv-23070-MGC Document 152 Entered on FLSD Docket 03/22/2017 Page 9 of 14
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account), that Defendants obtained before the Effective Date in connection with Consumer Financial Products or Services or Debt Relief Products or Services offered by Defendants.
However, customer information may be disclosed if requested by a government agency or required by law, regulation, or court order. IT IS FURTHER ORDERED that:
43.
The Trustee and the Orion Estate are hereby permanently restrained and enjoined from attempting to collect, collecting, selling, or assigning, or otherwise transferring any right to collect payment from any consumer who purchased or agreed to purchase Debt Relief Products or Services from Defendants. III.
ORDER TO PAY REDRESS IT IS FURTHER ORDERED that:
44.
A judgment for monetary relief is entered in favor of the Bureau and against Orion, jointly and severally, in the amount of $106,813,049 for the purpose of providing redress to Affected Consumers for the violations described in the Complaint. This redress is to compensate consumers for their actual pecuniary losses. 45.
This monetary judgment will be deemed by the Trustee to be an allowed general unsecured claim against Orion’s Estate, subject to 11 U.S.C. §§ 507(a) and 726 governing priorities of expenses and claims in the Bankruptcy Proceeding. 46.
Any funds received by the Bureau in satisfaction of this judgment shall be deposited into a fund or funds administered by the Bureau or its agent in accordance with applicable statutes and regulations to be used for redress for Affected Consumers, including, but not limited to, refund of moneys, restitution, damages, or other monetary relief, and for any attendant expenses for the administration of any such redress.
47.
If the Bureau determines, in its sole discretion, that providing redress to consumers is wholly or partially impracticable or if funds remain after the administration of redress is completed, any funds not used for equitable relief will be deposited in the Case 1:15-cv-23070-MGC Document 152 Entered on FLSD Docket 03/22/2017 Page 10 of 14
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U.S. Treasury as disgorgement. The Trustee will have no right to challenge the choice of remedies under this Section or to contest the manner of distribution. 48.
Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right. IV.
ORDER TO PAY CIVIL MONEY PENALTIES IT IS FURTHER ORDERED that:
49.
Under Section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law alleged in the Complaint, and taking into account the factors in 12 U.S.C. § 5565(c)(3), a civil money penalty in favor of the Bureau and against Orion’s Estate is ordered in the amount of $20 million, which the Bankruptcy Court has deemed a general unsecured claim.
50.
The Bureau will deposit any payment made to satisfy the judgment for a civil penalty into the Civil Penalty Fund administered by the Bureau under Section 1017(d) of the CFPA, 12 U.S.C. § 5497(d).
V.
ADDITIONAL MONETARY PROVISIONS IT IS FURTHER ORDERED that:
51.
Subject to 11 U.S.C. §§ 507(a) and 726 governing priorities of expenses and claims in the Bankruptcy Proceeding, the Trustee must relinquish all dominion, control, and title to the funds paid to the Bureau on account of its claims to the fullest extent permitted by law and no part of the funds may be returned to Orion’s Estate. 52.
Under 31 U.S.C. § 7701, the Trustee must, unless he has already done so, furnish to the Bureau Orion’s taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. 53.
Within 30 days of the entry of a final judgment, order or settlement in a Related Consumer Action, the Trustee must notify the Assistant Director for Enforcement in writing of the final judgment, order or settlement. That notification must include the amount of redress, if any, that the Orion Estate paid or is required to pay to Case 1:15-cv-23070-MGC Document 152 Entered on FLSD Docket 03/22/2017 Page 11 of 14
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consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid.
VI.
PENDENCY OF BANKRUPTCY PROCEEDING IT IS FURTHER ORDERED that:
54.
The Bureau must, if it has not already done so, seek leave of the Bankruptcy Court to amend its proof of claim to conform with the judgment amounts set forth in this Order.
55.
The Trustee shall not object to the Bureau’s proof of claim as amended so long as it complies with the provisions of this Order.
56.
The Trustee’s obligations under this Order will terminate upon the closure of the Bankruptcy Proceeding.
VII.
REPORTING REQUIREMENTS IT IS FURTHER ORDERED that:
57.
Given that Orion’s Estate is being liquidated and the Trustee is not operating and will not seek to operate the business of Orion, extensive compliance obligations by the Trustee are not warranted. The Trustee shall notify the Bureau of the occurrence of any of the following:
a. The Trustee’s discovery of any Assets in the Estate or any Assets that could be the subject of a turnover motion by the Trustee;
b. The Trustee’s filing of a motion under 11 U.S.C. § 363 in the Bankruptcy Proceeding to use, sell or lease property of the Estate; c. The Trustee’s filing of any interim report to the Bankruptcy Court; and d. The closure of the Bankruptcy Proceeding.
The Trustee must provide this notice at least 21 days before the development or as soon as practicable after learning about the development, whichever is sooner.
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VIII.
NOTICES IT IS FURTHER ORDERED that:
58.
Unless otherwise directed in writing by the Bureau, the Trustee must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, “CFPB v. Orion Processing, et al., Case No. 15-23070- Civ-COOKE/TORRES,” and send them either:
a. By overnight courier (not the U.S. Postal Service), as follows: Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1625 Eye Street, N.W.
Washington D.C. 20006; or
b. By first-class mail to the below address and contemporaneously by email to [email protected]:
Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1700 G Street, N.W.
Washington D.C. 20552
VIII.
COOPERATION WITH THE BUREAU IT IS FURTHER ORDERED that:
59.
In connection with this action, the Order, or any subsequent investigations related to or associated with the transactions or occurrences that are the subject of the Complaint, the Trustee shall cooperate in good faith with the Bureau to the extent there are funds available to the Estate to pay the costs of such cooperation. 60.
Within 21 calendar days of receipt of a written request from the Bureau, the Trustee must provide any documents or information that are the subject of the request that are available to him.
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61.
Nothing in this Order will limit the Bureau’s lawful use of civil investigative demands under 12 C.F.R. § 1080.6 or other compulsory process, subject to the Trustee’s ability to seek a protective order.
IX.
RETENTION OF JURISDICTION 62.
The Court shall retain jurisdiction over matters pertaining to the Order for purposes of its construction, modification, and enforcement; provided, however, that nothing herein shall divest the Bankruptcy Court of its jurisdiction over the Bankruptcy Proceeding. The Parties may jointly seek to modify the terms of the Order, which may be modified only by Court order.
DONE and ORDERED in chambers, at Miami, Florida, this 22nd day of March 2017..
Copies furnished to:
Edwin G. Torres, U.S. Magistrate Judge Counsel of record
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