Michael Harper, Ben Wilcox, Marc Hoffman et al.

Documents in this case

• Complaint · July 2014 · 59 p.
• Judgment · May 2015 · 22 p.
• Stipulation · May 2015 · 25 p.
• Stipulation · May 2015 · 25 p.
• Stipulation · May 2015 · 27 p.

Case summary

The Bureau filed a lawsuit against the Hoffman Law Group and its affiliated companies and principals that collected more than $12 million in illegal advance fees for services that falsely promised to prevent foreclosures or renegotiate troubled mortgages. The CFPB obtained a $27.7 million judgment against the corporations.

Complaint (July 2014)

PDF of this document (59 pages)

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA WEST PALM BEACH DIVISION

case no. _/' Sl /ZOT3/ ‘COHN [Se LT ZEX-

CONSUMER FINANCIAL PROTECTION ~

BUREAU and THE STATE OF FLORIDA, FILED by tox) nN

Office of the Attorney General, Department of in a

Legal Affairs, JUL + 2014 Plaintiffs,

V.

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| MICHAEL HARPER, an individual; BENN | WILLCOX, an individual; MARC HOFFMAN, | an individual; THE HOFFMAN LAW GROUP, | P.A. f/k/a THE RESIDENTIAL LITIGATION | GROUP, P.A., a Florida corporation; | NATIONWIDE MANAGEMENT SOLUTIONS, | LLC, a Florida limited liability company; | LEGAL INTAKE SOLUTIONS, LLC, a Florida | limited liability company; FILE INTAKE | SOLUTIONS, LLC, a Florida limited liability. | company; and BM MARKETING GROUP, | LLC, a Florida limited liability company, | |

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Defendants.

COMPLAINT FOR PERMANENT INJUNCTION AND OTHER RELIEF

(FILED UNDER TEMPORARY SEAL)!

Plaintiffs, the Consumer Financial Protection Bureau and the State of Florida,

allege:

1 Motion to Seal filed concurrently.

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SUMMARY OF COMPLAINT

1. In the midst of America’s foreclosure crisis, an illicit industry of mortgage modification scams began making money by charging distressed homeowners upfront fees on the promise that they could obtain mortgage modifications for those homeowners, often doing little to nothing to actually assist the homeowners. To combat this practice, many states, including Florida, enacted laws to prohibit these schemes, and federal regulators further enhanced these laws by making it illegal in every state for mortgage assistance relief providers to charge homeowners a fee for mortgage modification services before actually obtaining mortgage modifications for those homeowners. 12 C.F.R. Part 1015 (2012).

2. Since at least early 2012, an enterprise operating in the name of the Hoffman Law Group (the “HLG Enterprise”) has generated millions of dollars in illegal upfront fees by convincing sae to pay for the opportunity to be included as a plaintiff in so-called “mass-joinder” lawsuits against their mortgage lenders. This enterprise induces consumers to enroll by falsely promising that the lawsuits will induce banks to give the consumers mortgage modifications or foreclosure relief.

3, Run by veterans of mortgage modification schemes, the HLG Enterprise uses these promises to convince consumers to pay fees before the HLG Enterprise obtains, or even tries to obtain, mortgage modifications for the consumers it signs up.

4. The HLG Enterprise charges consumers varying amounts, typically a $6,000 initial payment, followed by a $495 monthly fee.

5. In reality, defendants do little or nothing to actually assist consumers. Rather, in numerous instances, they have directed consumers to avoid interactions with

their lenders or servicers and, in some instances, instructed consumers to stop making

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their mortgage payments. When consumers discover that the HLG Enterprise has never even contacted their lenders on their behalf, many find themselves in default and some have lost their properties through foreclosure.

6. The Consumer Financial Protection Bureau, an agency created by Congress in 2010 and charged with protecting consumers from financial industry misconduct, and the Attorney General of the State of Florida, bring this action to halt the HLG Enterprise’s scam, to hold the individuals who run the Enterprise accountable, and to provide redress for the injuries to consumers that the Enterprise has caused.

7. More specifically, the plaintiffs bring this action under (1) Sections 1054 and 1055 of the Consumer Financial Protection Act of 2010, 12 U.S.C. §§ 5564, and 5565; and (2) Section 626 of the Omnibus Appropriations Act, 2009 (as amended by Section 1097 of the CFPA), 12 U.S.C. § 5538, and its implementing regulation, the Mortgage Assistance Relief Services Rule, 12 C.F.R. Part 1015 (2012) (“Regulation 0”). Florida asserts further claims under the Florida Unfair and Deceptive Trade Practices Act (“FDUTPA”), Chapter 501, Part II, Florida Statutes and other state laws.

8. Regulation O requires providers of mortgage assistance relief services to make certain disclosures, such as that the business is not affiliated with the government and thatthe consumer may reject any proposed modification. It also prohibits these providers from making certain representations, such as that a consumer is not obligated to continue making his mortgage payments. And Regulation O generally prohibits mortgage assistance relief service providers from collecting an advance fee for such services. See 12 C.F.R. Part 1015.

9. The plaintiffs support consumers’ right to challenge alleged fraud by

mortgage lenders or servicers. But regardless of the underlying merits of the consumers’

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claims in the mass-joinder lawsuits that the HLG Enterprise files, it should not be allowed to violate the law in the process of recruiting consumers to join those lawsuits.

10. The HLG Enterprise has misled thousands of homeowners nationwide and as a result, has pocketed well over $5 million. In this action,.the plaintiffs seek an order permanently enjoining Defendants from engaging in their illicit business practices, granting restitution for affected consumers, imposing civil penalties, and granting all other relief available under the CFPA, Regulation O, and FDUTPA. This will make Defendants’ victims whole again and will prevent the HLG enterprise from causing the same harm to other homeowners.

JURISDICTION AND VENUE

11. This Court has subject matter jurisdiction — this action because it is “brought under Federal consumer financial law,” 12 U.S.C. § 5565(a)(1), presents a federal question, 28 U.S.C. § 1331, and is brought by an agency of the United States, 28 U.S.C. § 1345.

12. Inaddition, pursuant to 28 U.S.C. § £5607, this Court has supplemental jurisdiction over the separate state law claims asserted by Florida in this action because those claims are so related to the claims asserted by the Bureau and Florida under -. Regulation O that they form part of the same case or controversy. Those claims also arise out of the same femeaiBons or occurrences as the claims brought by the Bureau under 12 U.S.C. §§ 5564, 5565, and by Florida under 12 U.S.C. § 5538(b) and 12 C.F.R. § 1015.10 (2012).

13. Venue is proper in this district under 28 U.S.C. § 1391(b) and 12 U.S.C.

§ 5564(f) because a substantial part of the events or omissions and course of conduct

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giving rise to the claims set forth in this Complaint occurred in this district (specifically Palm Beach County).

PARTIES

14. 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, including Regulation O. 12 U.S.C. 8§ 5481(12)(Q), (14), 5491(a), 5538.

15. The Bureau is authorized to initiate federal district court proceedings, by its own attorneys, to enjoin violations of Regulation O, and to secure such relief as may be appropriate in each case. 12 U.S.C. §§ 5564(a)-(b), 5565. This includes the rescission or reformation of contracts, the refund of moneys paid, restitution, disgorgement or compensation for unjust enrichment, and civil money penalties. Id. § 5565(a)(2).

16. The State of Florida’s Office of the Attorney General is an enforcing authority of FDUTPA, and Section 812,14, Florida Statutes. The State of Florida has conducted an investigation of the matters alleged herein, and the head of the enforcing authority, Attorney General Pamela Jo Bondi, has determined that this enforcement action serves the public interest.

17. The State of Florida is authorized to bring this action and to seek injunctive and other statutory relief to enforce Regulation O under 12 U.S.C. § 5538(b) and 12 C.F.R. § 1015.10 (2012).

18. Asan enforcing authority under FDUTPA, the Office of the Attorney General is authorized to pursue this action to enjoin FDUTPA violations and to obtain

legal, equitable, or other appropriate relief, including restitution, the refund of monies

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paid, disgorgement of ill-gotten monies, civil penalties, and other relief as may be appropriate pursuant to Sections 501.207, 501.2075, and 501.2077, Florida Statutes.

19. Defendant Michael Harper is an individual who, directly and through the HLG Enterprise, offers, provides, or arranges for others to provide mortgage assistance relief services, as defined in Regulation O, 12 C.F.R. § 1015.2.

20. Harper, a non-attorney resident of North Palm Beach, Florida, within this District, is the HLG Enterprise’s most senior manager. He materially participates in the conduct of the enterprise’s affairs.

21. At all times material to this complaint, Harper transacts or has transacted business in the Southern District of Florida.

22, Defendant Benn Willeox is an individual who, directly and through the HLG Enterprise, offers, provides, or arranges for others to provide mortgage assistance relief services, as defined in Regulation O, 12 C.F.R. § 1015.2.

23. Willcox, a non-attorney resident of Jupiter, Florida, within this District, manages and controls the HLG Enterprise’s bank accounts. He has managerial responsibility for the enterprise and materially participates in the conduct of its affairs.

24. Atal] times material to this complaint, Willcox transacts or has transacted business in the Southern District of Florida.

25. Defendant Marc Hoffman is an individual who, directly and through the HLG Enterprise, offers, provides, or arranges for others to provide mortgage assistance relief services, as defined in Regulation O, 12 C.F.R. § 1015.2.

26. Hoffman, a resident of Boca Raton, Florida, within this District, is an

attorney licensed to practice in Florida and the District of Columbia and is the President

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of the Hoffman Law Group. He is the enterprise’s front man, has managerial responsibility for HLG, and materially participates in the conduct of its affairs.

27. Atall times material to this complaint, Hoffman transacts or has transacted business in the Southern District of Florida.

28. Defendant The Hoffman Law Group, P.A. (“HLG”), is a Florida corporation formed by Hoffman as “The Residential Litigation Group, P.A.” on or about April 16, 2012 and renamed “The Hoffman Law Group, P.A.” on or about November 26, 2012. Its current address is 860 US Highway 1, Suite 206, North Palm Beach, Florida, but it has also purported to do business at 2200 Pennsylvania Ave NW, 4th Floor, Washington, DC. The centerpiece of the enterprise, HLG is part of a common enterprise that offers, provides, or arranges for others to provide mortgage assistance relief services, as defined in Regulation O, 12 C.F.R. § 1015.2.

29. Atall times material to this complaint, HLG transacts or has transacted business in the Southern District of Florida.

30. Defendant Nationwide Management Solutions, LLC is a Florida limited liability company formed by Harper and Willcox on April 26, 2012. Its current address is 860 US Highway 1, Suite 209, North Palm Beach, Florida. Operating the human resources side of the enterprise, it is part of a common enterprise that offers, provides, or arranges for others to provide mortgage assistance relief services, as defined in Regulation O, 12 C.F.R. § 1015.2.

31. At all times material to this complaint, it transacts or has transacted business in the Southern District of Florida.

32. Defendant Legal Intake Solutions, LLC is a Florida limited liability

company formed by Harper and Willcox on November 3, 2011. Its current address is

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860 US Highway 1, Silks 205, North Palm Beach, Florida. As one of the companies that solicits consumers for the enterprise, it is part of a common enterprise that offers, provides, or arranges for others to provide mortgage assistance relief services, as defined in Regulation O, 12 C.F.R. § 1015.2.

33. At all times material to this complaint, Defendant Legal Intake Solutions transacts or has transacted business in the Southern District of Florida.

34. Defendant File Intake Solutions, LLC is a Florida limited liability company formed by Harper and Willcox on July 16, 2013. Its current address is 860 US Highway 1, Suite 205, North Palm Beach, Florida. It also solicits consumers for the enterprise, and is part of a common enterprise that offers, piawides, or arranges for others to provide mortgage assistance relief services, as defined in Regulation O, 12 C.F.R. § 1015.2.

35. Atall times material to this complaint, Defendant File Intake Solutions transacts or has transacted business in the Southern District of Florida.

36. Defendant BM Marketing Group is a Florida limited liability company formed by Harper on October 18, 2012. Its current address is 860 US Highway 1, Suite 205, North Palm Beach, Florida. BM Marketing Group funnels the enterprise’s profits to non-attorneys Harper and Willcox. In so doing, it is part of a common enterprise that offers, provides, or arranges for others to provide mortgage assistance relief services, as defined in Regulation O, 12 C.F.R. § 1015.2.

37. Atall times material to this complaint, it transacts or has transacted business in the Southern District of Florida.

38. Together, Defendants have engaged in an ongoing, illicit mortgage relief

scheme that preys on homeowners nationwide. As pleaded more specifically below,

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Harper, Willcox, and Hoffman operate the corporate Defendants as a common enterprise in order to carry out this scheme. At all times material to this Complaint, Harper, Willcox, and Hoffman have materially participated in the conduct of the enterprise’s affairs, including the development and approval of the purported mortgage assistance relief services complained of herein, Harper, Willcox and Hoffman are intimately familiar with and direct the enterprise’s operations, including its purported mortgage assistance relief services, and knew of and approved all of the practices described in this Complaint.

DEFENDANTS’ BUSINESS PRACTICES

DEFENDANTS RELY ON A DECEPTIVE SALES SCHEME

39. To induce consumers to purchase its services, the HLG Enterprise uses various marketing methods, including but not limited to websites, mailers, television advertisements, and outbound telemarketing calls.

40. Through these advertisements, Defendants claim that they will include consumers in mass-joinder lawsuits and represent to consumers that this will help them get mortgage modifications and relief from foreclosure. The HLG Enterprise targets consumers throughout the United States who are in financial distress, behind on their mortgage loans, or in danger of losing their homes to foreclosure.

41. . Defendants’ advertisements suggest that they can help consumers get a reduction or forgiveness of their mortgage loan, reduce interest rates, and stop foreclosure.

42. Defendants have falsely claimed or implied that they have multiple

attorneys on staff with significant experience litigating complex civil cases and that the

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mass-joinder cases have a high likelihood of resulting in the consumer receiving a loan modification with favorable terms.

43. | Consumers who respond to the HLG Enterprise’s marketing efforts have home mortgage loans, and typically are having difficulty making their monthly payments.

44. Consumers who call the toll-free numbers listed on the advertisements speak with Defendants’ telephone sales representatives. Defendants also employ an outbound telemarketing operation in order to get consumers on the phone with one of their sales representatives.

45. Defendants tell consumers that the HLG Enterprise can help consumers obtain loan modifications that substantially lower consumers’ monthly mortgage payments or interest rates by including the consumers in mass-joinder lawsuits in exchange for an advance fee.

46. The HLG Enterprise charges consumers a varying upfront fee, but their typical fee is a $6,000 initial fee, which may be broken into 4-6 monthly payments. The enterprise typically charges consumers $495 per month after they pay the $6,000 initial fee.

47. The HLG Enterprise also tells consumers that HLG works ona contingency basis. They claim that they will charge 30% of any recovery from a lawsuit and that any upfront fees that a consumer has paid will becredited to that 30%.

48. In numerous instances, Defendants have discouraged consumers from _communicating directly with their lenders or servicers and claimed that they will handle

all communications with consumers’ lenders and servicers.

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49. Innumerous instances, the HLG Enterprise has encouraged consumers to stop making mortgage payments, and in some instances told consumers that delinquency will demonstrate the consumers’ hardship to the consumers’ lenders. In those instances, Defendants do not disclose that if consumers stop making mortgage payments, they could lose their homes and damage their credit ratings.

50. Many of Defendants’ solicitations fail to make disclosures required by law, including that:

, e The consumer may stop doing business with Defendants or reject an offer of mortgage assistance, if one is made, without having to pay for the services;

e Defendants’ companies are not associated with the government or approved by the government or the consumer’s lender; and

e Even if the consumer uses the HLG Enterprise’s service, the consumer’s lender may not agree to modify the loan,

51. Where Defendants’ solicitations make any of these disclosures, Defendants fail to make the disclosures in a clear and prominent manner: They are not preceded by the heading “IMPORTANT NOTICE’ and they are made in a font size that is smaller

than 12 point type.

THE HLG ENTERPRISE DOES NOT OBTAIN THE PROMISED MODIFICATION AND CAUSES CONSUMER INJURY

52. After consumers pay Defendant’s upfront fees, Defendants in most, if not all, instances fail to obtain a loan modification, substantially reduce consumers’

mortgage payments, or stop foreclosure.

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53. One of Defendants’ major selling points to consumers has been to tout that lenders will be more willing to negotiate with HLG because they are filing litigation with a voluminous number of plaintiffs. In some instances, Defendants do file the promised mass-joinder litigation on behalf of some clients. But, beginning in March 2013, courts began dismissing claims and severing all but the first-named plaintiffs from these actions. Nevertheless, even after March 2013, Defendants continued to rely on the massjoinder theory to solicit new clients, knowing that this tactic has been continually rejected by the courts.

54. After consumers pay their upfront fees and become clients, the HLG Enterprise often fails to answer or return their telephone calls and emails and fails to provide updates to the clients.

55. | When the clients are able to reach the HLG Enterprise, they are told that Defendants are making progress and that the clients should continue paying upfront fees.

56. Inmany instances, the litigation is dismissed or the client is dropped from the action. In those instances, Defendants have failed to provide accurate information to their clients and spin the dismissals as a positive development, in order to induce the consumer to continue pay the monthly maintenance fees for participation in the litigation.

57. Because they believe that the HLG Enterprise is working on their cases, many consumers postpone or forego seeking other relief.that may be available to them, such as working directly with their lender, using a HUD-certified non-profit housing

counselor, or entering foreclosure mediation.

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58. Consumers who pay the HLG Enterprise’s upfront fees suffer significant economic injury.

THE HLG ENTERPRISE CONTINUES TO VIOLATE THE LAW EVEN AFTER ACTION BY LAW ENFORCEMENT

59. Defendant Harper set up the HLG Enterprise despite having entered an Assurance of Voluntary Compliance (“AVC”) with the State of Florida (attached as Exhibit 1), individually and as manager of Nation’s Choice Financial Solutions, LLC, in 2009 for violation of FDUTPA and Section 501.1377, Florida Statutes, which relates to foreclosure-related rescue services. In the AVC, Harper assures that, among other things, he will not “engage, involve, or compensate Florida attorneys or out of state attorneys, to provide legal services to Florida homeowners for mortgage foreclosure defense and/or foreclosure related services in violation of The Florida Bar rules” or , Section 877.02, Florida Statutes.

60. The HLG Enterprise has continued to operate even after receiving Cease and Desist Orders from state regulators in Idaho and New Mexico (attached as Exhibits 2 and 3).

61. The Idaho Order directs the Hoffman Law Group (then going by the name “the Residential Litigation Group”) to immediately cease and desist from “engaging in advertising that is misleading, confusing, and deceptive.”

62. The New Mexico Order directs Hoffman and the Residential Litigation Group to immediately cease and desist from, among other things, violating Regulation O

or offering mortgage relief services as defined therein.

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ROLE OF CORPORATE DEFENDANTS AS A COMMON ENTERPRISE

63. Individual defendants Harper, Willcox, and Hoffman, operate their

scheme by using the corporate defendants as a common enterprise.

64. Indeed, each of the corporations exists to participate in the same mortgage

assistance relief operation:

e The Hoffman Law Group files the mass joinder lawsuits and gives consumers the impression of a legitimate law firm;

¢ Nationwide Management Solutions runs the human resources side of the enterprise and helps to funnel revenue to non-attorneys, including Harper and Willcox;

e Legal Intake Solutions and File Intake Solutions are the telemarketing boiler rooms that convince consumers to pay HLG’s fees, with substantial amounts of the money raised by those fees used to fund the telemarketing operation; and

_¢ BM Marketing Group funnels the final profits to Harper and Willcox by first passing consumer fees through HLG’s various accounts, then through Nationwide Management Solutions’ various accounts, and then to BM Marketing Group.

, 65. The companies in the enterprise comingle finances. For instance,

Nationwide Management Solutions has paid the rent for other companies in the

enterprise.

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66. The companies in the enterprise share a common address, operating out of a setis of suites within the same building, and employees come and go between the suites multiple times per day.

67. The companies also have shared employees. For instance, at least nine employees have received paychecks from multiple businesses in the enterprise.

68. The corporate Defendants operate under the common control of Harper, Willcox, and Hoffman. These three individual defendants control the activities of each of the companies in the enterprise.

69. The companies in the enterprise all exist for the single purpose of selling consumers mortgage assistance relief services and splitting the profits among the individual defendants; none of the companies has any other apparent business purpose.

REGULATION O

70. In 2010, the Federal Trade Commission promulgated the MARS Rule to prohibit unfair and deceptive acts and practices with respect to mortgage loan or foreclosure relief services. 16 C.F.R. Part 322. In the CFPA, Congress transferred rulemaking authority over the MARS Rule to the Bureau, which recodified the Rule as 12 C.F.R. Part 1015, and designated it “Regulation O.” The Bureau has authority to enforce Regulation O, as well as the prior MARS Rule, pursuant to 12 U.S.C. §§ 5538(a), 5564. (References below to “Regulation 0” encompass both Regulation O and the MARS Rule.) The State of Florida has authority to enforce Regulation O under 12 U.S.C.

§ 5538(b) and 12 C.F.R. § 1015.10 (2012).

71. Regulation O defines “mortgage assistance relief service” as “any service,

plan, or program, offered or provided to the consumer in exchange for consideration,

that is represented, expressly or by implication, to assist or attempt to assist the

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consumer with .. . [nJegotiating, obtaining, or arranging a modification of any term of a dwelling loan, including a reduction in the amount of interest, uta balance, monthly payments, or fees.” 12 C.F.R. § 1015.2 (2012).

72. Regulation O defines “mortgage assistance relief service provider” as “any person that provides, offers to provide, or arranges for others to provide, any mortgage assistance relief service,” other than the dwelling loan holder, the servicer of a dwelling loan, or any agent or contractor of the lender or servicer. 12 C.F.R. § 1015.2 (2012).

73. Defendants are “mortgage assistance relief service provider[s]” engaged in the provision of “mortgage assistance relief services” as those terms are defined in Regulation O. 12 C.F.R. § 1015.2 (2012).

74. Regulation O prohibits any mortgage assistance relief service provider from requesting or receiving payment of any fee or other consideration until the consumer has executed a written agreement between the consumer and the consumer’s loan holder or servicer that incorporates the offer that the provider obtained from the loan holder or servicer. 12 C.F.R. § 1015.5(a) (2012).

75. Regulation O further prohibits any mortgage assistance relief service provider from representing, expressly or by implication, in connection with the offering or performance of such a service, that a consumer cannot or should not contact or communicate with his or her lender or servicer. 12 C.F.R. § 1015.3(a) (2012).

76. Regulation O further prohibits any mortgage assistance relief service provider from misrepresenting, expressly or by implication, the consumer’s obligation to make scheduled periodic payments or any other payments pursuant to the terms of

the consumer’s dwelling loan. 12 C.F.R. § 1015.3(b)(4) (2012).

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77. Regulation O requires any mortgage assistance relief service provider, in every general commercial communication, as defined by 12 C.F.R. § 1015.2, to disclose that: (1) the provider is not associated with the government and its service is not approved by the government or the consumer’s lender; and (2) in cases where the provider has represented, expressly or by implication, that consumers will receive certain services or results, a statement disclosing that the consumer’s lender may not agree to modify a loan, even if the consumer uses the provider's service. 12 C.F.R.

§ 1015.4(a)(1)-(2) (2012). Regulation O requires these disclosures to be placed in a “clear and prominent manner,” and when made in textual communications, they must “be preceded by the heading ‘IMPORTANT NOTICE,’ which must be in bold face font that is two point-type larger than the font size of the required disclosures.” When made orally or through other audible means, “the required disclosures must be preceded by the statement “Before using this service, consider the following information.” 12 C.F.R. §

1015.4(a)(3) (2012).

78. Regulation O further requires any mortgage assistance relief service provider, in every consumer-specific commercial communication, as defined by 12 C.F.R. § 1015.2, to disclose: (1) that the consumer may stop doing business with the provider or reject an offer of mortgage assistance without having to pay for the services; (2) that the provider is not associated with the government and its service is not approved by the government or the consumer’s lender; and (3) in cases where the provider has represented, expressly or by implication, that consumers will receive certain services or results, that the consumer’s lender may not agree to modify a loan,

even if the consumer uses the provider’s service. 12 C.F.R. § 1015.4(b)(1)-(3) (2012).

Regulation O requires these disclosures to be placed in a “clear and prominent manner,” gs >

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and when made in textual communications, must “be preceded by the heading “IMPORTANT NOTICE,” which must be in bold face font that is two point-type larger than the font size of the required disclosures.” When made orally or through other audible means, “the required disclosures must be preceded by the statement “Before using this service, consider the following information” and, in telephone communications, must be made at the beginning of the call.” 12 C.F.R. § 1015.4(b)(4) (2012).

79. Regulation O defines “clear and prominent manner,” as used in the disclosure requirements listed above, as requiring the textual disclosures to be made in, “at a minimum, the larger of 12-point type or one-half the size of the largest letter or numeral used in the name of the advertised Web site or telephone number to which consumers are referred.” 12 CF -R. § 1015.2 (2012).

80. Regulation O requires any mortgage assistance relief service provider, in cases where the provider has represented, in connection with the offering or performance of such a service, that the consumer should temporarily or permanently discontinue payments on a dwelling loan, to clearly and prominently state in close proximity to any such representation that the consumer could lose his or her home and damage his or her credit rating if the consumer stops paying the mortgage. 12 C.F.R. § 1015.4(c) (2012).

81. Regulation O further provides that it is a violation “for a person to provide substantial assistance or support to any mortgage assistance relief service provider when that person knows or consciously avoids knowing that the provider is engaged in

any act or practice that violates” the rule. 12 C.F.R. § 1015.6 (2012).

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82. Under section 1097 of the CFPA, 12 U.S.C. § 5538, a violation of Regulation O constitutes an unfair, deceptive, or abusive act or practice under the CFPA, in violation of sections 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531, 5536.

, VIOLATIONS OF REGULATION O

COUNTI (Advance Fees in Violation of Regulation O) (Asserted by all plaintiffs against all defendants)

83. The allegations in paragraphs 1 - 82 are incorporated here by reference.

84. Inthe course of providing, offering to provide, or arranging for others to provide mortgage assistance relief services, the defendants have asked for or received payment from consumers before those consumers have executed a written agreement with the loan holder or servicer that incorporates the offer obtained by the defendants, in violation of Regulation O, 12 C.F.R. § 1015.5(a) (2012).

COUNT II (Representations in Violation of Regulation O) (Asserted by all plaintiffs against all defendants)

85. Theallegations in paragraphs 1 - 82 of this complaint are incorporated here by reference.

86. Inthe course of providing, offering to provide, or arranging for others to provide mortgage assistance relief services, the defendants have engaged in representing, expressly or by implication, that a consumer should not contact or communicate with his or her lender or servicer, in violation of Regulation O, 12 C.F.R.

— § 1015.3(a) (2012).

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COUNT HI (Misrepresentations in Violation of Regulation O) (Asserted by all plaintiffs against all defendants)

87, , The allegations in paragraphs 1 - 82 are incorporated here by reference.

88. Inthe course of providing, offering to provide, or arranging for others to provide mortgage assistance relief services, the defendants have engaged in misrepresenting, expressly or by implication, material aspects of their services, including, but not limited to, misrepresenting consumers’ obligation to make scheduled periodic payments or any other payments pursuant to the terms of their dwelling loans, in violation of Regulation O, 12 C.F.R. § 1015.3(b)(4) (2012).

COUNT IV (Failure to Make Certain Disclosures in Violation of Regulation O) (Asserted by all plaintiffs against all defendants)

89. The allegations in paragraphs 1 - 82 are incorporated here by reference. 90. Inthe course of providing, offering to provide, or arranging for others to provide mortgage assistance relief services, the defendants: a) violated Regulation O, 12 C.F.R. § 1015.4(a)(1),(2), by failing to make the following disclosures in all general commercial communications in a clear and prominent manner —

o “[The Hoffman Law Group] is not associated with the government, and our service is not approved by the government or your lender;” and

o. “Even if you accept this offer and use our service, your lender

may not agree to change your loan;”

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b) violated Regulation O, 12 C.F.R. § 1015.4(b)(1),(2),(3), by failing to make the following disclosures in all consumer-specific commercial communications in a clear and prominent manner —

o “You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us (insert amount or method for calculating the amount) for our services;”

o “[The Hoffman Law Group] is not associated with the government, and our service is not approved by the government or your lender;” and

o “Even if you accept this offer and use our service, your lender may not agree to change your loan;” and

c) violated Regulation O, 12 C.F.R. § 1015.4(c), by failing to make the following disclosure in all communications in cases where Defendants have represented, expressly or by implication, in connection with the advertising, marketing, promotion, offering for sale, sale, or

| performance of any mortgage assistance relief service, that the consumer should temporarily or permanently discontinue payments, in whole or in part, on a dwelling loan, clearly and prominently, and in close proximity to any such representation: “If you stop paying your

mortgage, you could lose your home and damage your credit rating,”

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VIOLATIONS OF FLORIDA STATE LAW

COUNT V (Deceptive and Unfair Trade Practices) (Asserted by Florida against all Defendants)

91. The allegations in paragraphs 1 - 82 are incorporated here by reference.

92. Section 501.204(1) of the Florida Unfair and Deceptive Trade Practices Act, Chapter 501, Part II, Florida Statutes, states that “unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade of commerce are hereby declared unlawful.” ,

93. Aperson that willfully engages in a deceptive or unfair act or practice is liable for a civil penalty of $10,000 for each such violation; willful violations occur when the person knew or should have known that the conduct in question was deceptive or unfair or prohibited by rule, Section 501.2075, Florida Statutes.

94. Section 501.203(8), Florida Statutes, defines “trade or commerce” as:

.. the advertising, soliciting, providing, offering, or distributing, whether by sale, rental, or otherwise, of any good or service, or any property, whether tangible or intangible, or any other article, commodity, or thing of value, wherever situated. “Trade or commerce” shall include the conduct of any trade or commerce, however denominated, including any nonprofit or not-for-profit person or activity.

95. At all times material hereto, Defendants have engaged in “trade or commerce” as defined by Section 50 1.203(8), Florida Statutes.

96. At all times material hereto, Defendants have engaged in deceptive, unfair, and unconscionable acts that included but are not limited to designing, creating, and sending out to consumers direct mail pieces, and maintaining websites that contained

misleading information that have given consumers the impression that Defendants’

Page 24

proposed mass-joinder litigation would be able to help homeowners who are having difficulty making their monthly payment to negotiate their mortgage terms and/or to stop and resolve residential foreclosure proceedings.

97. Defendants Harper, Willcox, and Hoffman have directed or controlled, or have had the authority to direct and control, the practices engaged in by the HLG Enterprise. The false and misleading peddling of inclusion in mass-joinder lawsuits by Defendants concerns the “providing... of any . . . service,” which is specifically defined as trade or commerce by Section 501.203, Florida Statutes.

98. Defendants have willfully engaged in the acts and practices when they have known or should have known that such acts and practices are unfair or deceptive or otherwise prohibited by law.

99. These above-described acts and practices of Defendants have substantially injured and will likely continue to injure and prejudice the public. Further, these substantial injuries are not outweighed by any countervailing benefits to consumers or competition, and are not injuries that the consumers themselves could have reasonably avoided. |

100. Unless Defendants are permanently enjoined from engaging further in the acts and practices complained of herein, Defendants’ actions will result in irreparable injury to the public for which there is no adequate remedy at law.

COUNT VI (Civil Theft) (Asserted by Florida against all defendants)

101. The allegations in paragraphs 1 - 82 are incorporated here by reference.

Page 25

102. Section 812.014(1), Florida Statutes, states that a person commits theft if he or she knowingly obtains or uses the property of another with the intent to deprive another person of a right to property and appropriate the property to his or her own use or to the use of any person not entitled 6 the use of the property.

103. Defendants have collected millions of dollars from consumers around the country to obtain legal and mortgage assistance relief services under the guise that the litigation has a high likelihood of resulting in a modification of mortgage terms favorable to the consumer, which Defendants knew or should have known to be untrue.

104. Defendants have failed to inform and/or misinformed clients who have been listed as plaintiffs in mass-joinder actions about the status of their cases, the consequences of the respective court rulings (such as dismissal or being severed), and the likelihood of obtaining the desired relief (a loan modification) through the litigation in order to induce the clients to keep paying monthly fees to continue to participate in the litigation.

105. Upon information and belief, Defendants have not removed clients as plaintiffs in filed mass-joinder litigation for failure to pay monthly fees. Yet they indicate to currently paying clients that they will be removed from the litigation if they stop paying the monthly fee, and numerous clients have continued to pay the monthly fees based upon those representations.

106. Defendants Harper, Willcox, and Hoffman, have directed and controlled, or had the authority to direct and control, the practices engaged in by the HLG Enterprise.

107. Defendants have known or should have known that they cannot legally

provide these services to clients of the Hoffman Law Group.

Page 26

108. The litigation services purportedly offered by Defendants through the HLG Enterprise will not provide the promised results to Hoffman Law Group clients. In fact, the litigation is being filed with the knowledge that the vast majority of the claims will be severed or dismissed. When claims are dismissed and plaintiffs are severed, the HLG Enterprise then continually re-files the same or similar litigation (or at least leads the consumer to believe they are re-filing the litigation) to induce the clients to continue paying their monthly fees so that they can remain in the mass-joinder litigation.

109. The monies collected by Defendants are obtained with the intent to deprive the victims of the money and are appropriated for the use of Defendants and others not entitled to the funds.

110. Section 812.035(5), Florida Statutes, authorizes Plaintiff to seek relief for violations of Section 812.041, Florida Statutes, including ordering a defendant to divest himself of any interest in any enterprise and imposing reasonable restrictions on the future activities or investments of any defendant.

111. Defendants’ actions have deprived numerous consumers of the monies paid for services that were never rendered, and all such consumers are entitled to full

restitution from Defendants.

COUNT VII

(Violation of Assurance of Voluntary Compliance) (Asserted by Florida against Defendant Harper)

112. The allegations in paragraphs 1 - 82 are incorporated here by reference.

113. In Paragraph 28 of the AVC (attached as Exhibit 1) with the Florida Attorney General, relating to the investigation of Nations Choice Financial Solutions, LLC, Defendant Harper agreed that he would not “engage, involve, or compensate Florida attorneys or out of state attorneys, to provide legal services to Florida

Page 27

homeowners for mortgage foreclosure defense and/or foreclosure related services in violation of The Florida Bar rules or Florida Statute 877.02.”

114. The HLG Enterprise has sold legal services to consumers around the country, including Florida, and promised mortgage assistance relief services. The HLG Enterprise has engaged in numerous violations of the Florida Bar Rules, and has compensated Hoffman, as well as other out of state attorneys to provide legal services for mortgage foreclosure defense and/or foreclosure related services.

115. Defendant Harper failed to comply with the terms of the AVC, which is prima facie evidence of a FDUTPA violation, pursuant to Section 501.207(6) Florida Statutes and Section IV of the AVC.

116. By violating the terms of the AVC, Defendant Harper engaged in unfair and deceptive acts and practices in the conduct of trade or commerce in violation of Section 501.204(1), Florida Statutes.

117. Defendant’s actions have resulted in damage to consumers.

118. Plaintiff Florida is entitled to permanent injunctive relief without the necessity of showing that there is an irreparable injury to the public for which there is no adequate remedy at law.

COUNT VIII (Deceptive and Unfair Trade Practices Through Violation of the Florida Telemarketing Act) (Asserted by Florida against Defendants Harper, Willcox, and File Intake Solutions, LLC)

119. The allegations in paragraphs 1 - 82 are incorporated here by reference. 120. Onor about March 14, 2013, Defendants Harper and Willcox filed an

application with the Florida Department of Agriculture and Consumer Services for

Page 28

licensure as a commercial telephone seller on behalf of Defendant File Intake Solutions, LLC.

121. Defendants Harper and Willcox failed to truthfully answer all questions on the commercial telephone seller license filed on behalf of Defendant File Intake Solutions, LLC, including:

e Under the section titled Occupation History, Defendants Harper and Willcox omitted their previous history working on behalf of the HLG Enterprise prior to the incorporation of File Intake Solutions, LLC.

e Under the section of the application titled Previous Experience, Defendants Harper and Willcox claim to have “o months experience,” when, in fact, both had significant experience in the foreclosure rescue industry.

e Under the section Parents and Affiliates, Defendants Harper and Willcox omitted the other entities affiliated with the HLG Enterprise.

e¢ Under the section titled Officer 2, and in apparent reference to Harper, Defendants Harper and Willcox answered “no” to question 3, which asks, “Have you ever been subject to any litigation ...an assurance of voluntary compliance...as the result of any action brought by a government agency?” In fact, Harper was party to an Assurance of Voluntary Compliance agreed to with the Attorney General as alleged in paragraphs 59 and 113 of this Complaint.

e Under the section titled Salespersons, Defendants Harper and Willcox

answered, “No salespersons listed.” In fact, the HLG Enterprise has

Page 29

employed numerous telemarketers who have sold consumer goods or services,

e Under the section titled Question 12, Defendants Harper and Willcox answered, “We do not send any written material to any prospective or actual purchaser.” In fact, the HLG Enterprise sends out numerous advertisements and documents pertaining to the prospective client’s participation in the mass-joinder lawsuits peddled by the HLG Enterprise.

122. Furthermore, Defendants conducted telemarketing activities on behalf of the HLG Enterprise for approximately two years prior to applying for the commercial telephone seller license.

123. Section 501.203(3)(c), Florida Statutes, states that a violation of Chapter 501, Part II, may be based on a violation of “[a]ny law, statute, rule, regulation, or ordinance which proscribes unfair methods of competition, or unfair, deceptive, or unconscionable acts or practices.”

124. Falsifying information on a commercial telephone seller application, in violation of Sections 501.616(4) and 501.623(4), Florida Statutes, offends established public policy and is substantially injurious to consumers, as well as competitors, and is therefore an unfair practice in violation of Section 501.204, Florida Statutes.

125. . Engaging in unlicensed commercial telephone sales, in violation of Sections 501.616(4) and 501.623(3), Florida Statutes, offends established public policy and is substantially injurious to consumers, as well as competitors, and is therefore an

unfair practice in violation of Section 501.204, Florida Statutes.

Page 30

126. These above-described acts and practices of Defendants Harper, Willcox, and File Intake Solutions, LLC, have substantially injured and will likely continue to substantially injure and prejudice the public. Further, these substantial injuries are not outweighed by any countervailing benefits to consumers or competition, and are not injuries that the consumers themselves could have reasonably avoided.

‘ 127. Unless the Defendants are permanently enjoined from engaging further in the acts and practices complained of herein, the Defendants’ actions will result in irreparable injury to the public for which there is no adequate remedy at law.

PRAYER FOR RELIEF

128. Wherefore, Plaintiffs request that the Court:

a. permanently enjoin Defendants from committing future violations of Regulation O, the FDUTPA, the Florida Telemarketing Act, and acts of Civil Theft, and enter such other injunctive relief as appropriate;

b. award restitution, jointly and severally, against Defendants in the amount of all unlawfully collected fees;

c. order disgorgement of ill-gotten revenues against Defendants;

d. award civil money penalties against Defendants;

e. order the rescission or reformation of contracts where necessary to redress injury to consumers;

f. award costs against Defendants; and

g. award additional relief as the Court may determine to be just and

proper.

Page 31

Dated: July 14, 2014

Respectfully Submitted,

Attorneys for Plaintiff Consumer Financial Protection Bureau:

Anthony Alexis, DC Bar #384545 Acting Enforcement Director

Ori Lev, DC Bar #452565 Deputy Enforcement Director

‘Laurel Loomis Rimon, CA Bar #166148

Assistant Deputy Enforcement Director -

LA

’ Zach Mason, WA Bar #47202

S.D. Fla. Special Bar #A5501978

_ (Email: [email protected])

(Phone: 202-435-7508)

Nelle Rohlich, WI Bar #1047522 S.D. Fla. Special Bar #A5501979 (Email: nelle.rohlich @cfpb.gov) (Phone: 202-435-7280)

1700 G Street NW

Washington, DC 20552

Fax: 202-435-7722

And

Attorneys for Plaintiff

The State of Florida,

Office of the Attorney General Department of Legal Affairs:

~ Pamela Jo Bondi

Attorney General

Victoria A. Butler Attorney Supervisor/Bureau Chief Richard Schi

iffer, WL Ba #74418

[email protected]

Page 32

Amanda Arnold Sansone, FL Bar # 587311 [email protected] 3507 East Frontage Road #325

Tampa, Florida 33607

Phone: 813-287-7950

Fax: 813-281-5515

Page 33

Exhibit 1

Page 34

STATE OF FLORIDA DEPARTMENT OF LEGAL AFFAIRS OFFICE OF THE ATTORNEY GENERAL

IN THE MATTER OF:

AG Case # L09-3-1081

NATION’S CHOICE FINANCIAL SOLUTIONS, LLC, a Florida Corporation and JAMES P. ADORNA and MICHAEL HARPER, individuals

Respondents.

/

ASSURANCE OF VOLUNTARY COMPLIANCE

PURSUANT io the provisions of Chapter 501, Part Il, Florida Statutes, the Florida

Deceptive and Unfair Trade Practices Act, the STATE OF FLORIDA, DEPARTMENT OF LEGAL AFFAIRS, OFFICE OF THE ATTORNEY GENERAL, hereinafter referred to as the “Department” caused an investigation to be made into the business practices of NATION’S CHOICE FINANCIAL SOLUTIONS, LLC, a Florida Limited Liability Corporation which presently conducts business in the state of Florida with a principal place of business at 500 Gulf Stream Boulevard, Delray Beach, Florida 33483, and James P. Adorna, Principal owner of the business and Michael Harper, Principal owner of the business, Nation’s Choice Financial Solutions and are hereinafler referred to as Respondents.”

IT APPEARS THAT Respondents are prepared to enter into this Assurance of Voluntary Compliance, hereinafter “AVC”, without an adinission that Respondents have violated the law and for the purpose of resolution of this matter with the Department, and the Department, by and through the undersigned Assistant Attorney General, and the undersigned Director,

Economic Crimes Division, being in agreement, does in this matter accept this AVC in

1 Initials

Page 35

termination of this investigation, pursuant to Section 501.207(6), Florida Statutes, and by virtue of the authority vested in the Department by said statute. I. STIPULATED FACTS

1.1 The Department has investigated allegations that Respondents are not fully compliant with provisions of Florida Statute 501.1377,

12 Respondent offered services to Florida homeowners to assist with arranging an alternative payment plan, a temporary modification, forbearance, short sale, and /or a modification of loan with the homeowner’s lender for the purposes of avoiding foreclosure and/or obtaining rates and payments affordable to the homeowner.

1,3. Respondents and the Department desire to resolve all issues arising during the course of this investigation while permitting the Respondent at least and additional ninety (90) days to work with lenders and continuing processing current clients’ files.

14 This AVC is based upon the stipulated facts set forth in Paragraphs 1.1 through 1.3 above. This agreement is an agreement between Nation’s Choice Financial Solutions LLC and the Department. Unless any material misrepresentations are contained herein the Department’s further action is limited to actions for violations of the AVC. The Department shall not be estopped from taking further action in this matter should the facts described herein be shown to be incorrect in any material way, or the AVC not be complied with in full.

1. TERMS

2.) Respondents voluntarily ceased new business sales and have not solicited new business since Aprill0, 2009. Respondents continue to process files for clients who contracted with and paid Respondents between October 1, 2008 and April 10", 2009.

2.2 Respondents and their representatives, agents, employees, successors, assigns or

2 Hilffals

Page 36

any other person who acts under, by, through, or on behalf of Respondents, directly or indirectly, or through any corporate or other device, shall comply with the Florida Deceptive and Unfair Trade Practices Act, Chapter 501, Part II, Florida Statutes,

2.3 Respondents shall make the terms and conditions of this AVC known to the Respondents’ managers, members, officers, directors, and successors.

2.4 Respondents shall not affect any change in any form of doing business or organizational identity as a method of avoiding the terms of this AVC.

2.5 Nothing in this AVC shall be construed as a waiver of any private rights of any person or release of any private rights, causes of action, or remedies of any person against the Respondents.

2.6 Florida Statute 501,1377, effective October 1, 2008, prohibits foreclosure-related rescue businesses from collecting payment from clients prior to the completion of contracted for foreclosure-related rescue services. The Department has received complaints from clients identified in Exhibit “A” and Respondents agree to refund clients identified in Exhibit A and in accordance with the spreadsheet Exhibit “A”. Further, the Respondents agree to the following:

a. No Refund is required for any contracts signed or clients who engaged Respondent prior to October 1, 2008.

b. No refund is required, if Respondents have completed the contracted foreclosure-related rescue services as of the date of signing of this AVC.

c. No refund is required if within ninety (90) calendar days of the date of Respondents’ signature to this AVC, Respondents complete the contracted foreclosure-related rescue services of those Florida consumers listed in Exhibit B and commencing thirty (30) calendar days after the execution of this AVC, Respondents provide the Department an update

() a

3 initials

Page 37

each thirty (30) calendar days to identify the status of each client account included in Exhibit B. Exhibit B consists of those Florida consumers who have already contracted with and paid Respondents whose services are still pending at the time this AVC is executed. Completion may include, but is not limited to, whether the Respondents have received an offer from a consumer’ s lender to Temporary Modify a loan, forbearance upon a loan; develop a new repayment plan, create and/engage in a short sale; modify a loan. Completion of services to a consumer is not necessarily contingent upon whether or not the consumer chooses to accept the offer from the lender,

d. Respondents and the Department shall review client files listed in Exhibit B, ninety (90) days after the execution of this AVC to determine the status for each non completed. file, At such time, it is at the Department’s discretion whether Respondents will receive an extension to complete the loan modification services for consumers listed in Exhibit B. Regardless of whether the extension is given or not, each consumer listed in Exhibit B shall either be presented with a possible loan modification, a temporary modification, forbearance agreement, repayment plan, short sale, modification or the consumer shall be fully refunded by Respondents,

e. No refund is required if the Respondents have previously refunded the consumer in accordance with Respondents contract, communication and/or executed general release.

2.7 Respondents further agree that they are strictly prohibited pursuant to this AVC from transferring any monies or upfront fees from any former Nations Choice Financial Solutions clients or persuading any actual or prospective customer of Respondent to transition to

or contract with any future business of Respondent.

Page 38

2.8 Respondents shall not engage, involve or compensate Florida attorneys or out of state attorneys, to provide legal services to Florida homeowners for mortgage foreclosure defense and/or foreclosure related services in violation of The Florida Bar rules or Florida Statute 877.02 regarding the unlicensed practice of law and referral fees, Nothing in this

provision prohibits Respondent from engaging legal counsel for its own benefit and needs.

2.9 Respondents shall not violate Florida Statute 501.1377 and any future violation of Florida Statute 501.1377, will be a violation of this AVC, which is by statute prima facie evidence of a violation of Chapter 501, Part II, Florida Statutes, and will subject Respondents to any and all civil penalties and sanctions authorized by law, including attomey’s fees and costs

2.10 Respondents have placed an acceptable disclaimer on the www.nationschoice.org website, which will run for a period 60 days after the effective date of this AVC, that alerts those visiting the site that Nation’s Choice is no longer soliciting new applications and should existing clients need to inquire, consumers should contact the phone number posted on the above site,

IL STIPULATED PAYMENT 3.1 Upon partial execution of this AVC, Respondents agree to pay, a total of $5000.00 (FIVE THOUSAND DOLLARS ) in the aggregate for attorneys’ fees and costs. The below check, along with the AVC signed by Respondents and Respondents’ attorney are to be delivered to Assistant Attorney General Samantha Schosberg Feuer, Office of the Attorney General, 1515 North Flagler Drive, Suite 900, West Palm Beach, Florida 33401. a) $ $12,623.00 ( TWELVE THOUSAND, SIX HUNDRED AND TWENTY-THREE

DOLLARS) in consumer restitution to be paid by Respondents to consumers identified in

Page 39

Exhibit A, attached and incorporated herein, prior to the signing of this AVC and shall provide documentation, via a notarized affidavit and spreadsheet of these payments, to Assistant Attorney General, Samantha Schosberg Feuer. Consumers who request refunds based upon conditions identified in paragraph 1.2 above will be refunded within thirty (30) calendar days of their request. After the 30 days, are finished, Respondents will provide the Department with a notarized affidavit attesting to the fact that all of the identified consumers in Exhibit A have been refunded. The schedule referenced in Exhibit B will be maintained current to accurately reflect the status of consumer’s file and loan modification application, refunds and foreclosure-related. service actions and those who require a refund under the terms of 2.6 of this Agreement shall receive one.

b) Upon signing this AVC, Respondent will tender and additional deposit TWENTY THOUSAND DOLLARS ($20,000.00) (“the Escrow Funds”) in Respondents’ attorney’s escrow account for the purpose of making refunds to other eligible consumers who have not yet made contact with the Respondents or the Department, but come forward subsequent to the execution of the AVC seeking a refund for services with Respondents contracted prior to the execution of the AVC. Those who receive refunds out of the Escrow Funds will be at the sole discretion of the Department. Respondents’ obligation to maintain the Escrow Funds for the purposes stated herein terminates sixty (60) days from the date this AVC is executed, following written confirmation from the Department regarding any pending new complaints. In the event actual restitution for future complainants exceeds the amount of the Escrow Funds, then the Escrow Funds will be distributed pro-rata to the complainants who come forward within the sixty (60) day period, and Respondents will have no further monetary obligation said complainants and/or

consumers pursuant to this AVC, unless there is a violation of the terms of this AVC, However,

Page 40

no individual consumer will receive more than the amount they are actually owed. If there are any excess funds remaining after the distribution, those funds will be returned to the Respondents,

3.2 Respondents interest in funds paid in conjunction with this AVC shall fully and completely divest when the AVC is fully executed by all parties, including the Deputy General. Notwithstanding any other provision of this AVC, no portion of any funds, excepting Escrow Funds if all are not distributed, shall in any event be returned to Respondents provided that the AVC has been fully executed, ,

3.3. Upon receipt of the partially executed AVC and accompanying Settlement Funds check, Samantha Schosberg Feuer will sign the AVC and then forward the AVC to the Deputy Attorney General, together with the aforementioned fands. The Deputy General has the final authority to approve or disapprove the entry of the AVC, Should the Deputy General or his authorized designee decline to authorize and execute this AVC, then all Settlement Funds, including escrowed funds, would be promptly returned to Respondents,

3.4 In the event that a court of competent jurisdiction makes a determination that a violation of any condition of this AVC has occurred, then, Respondents shall be liable for damages, penalties, attorney’s fees and costs as determined by the Court.

IV EFFECTIVE DATE

The Effective Date of this AVC is the date on which the AVC is fully executed by the | parties. This will be the date that the AVC is signed by the Deputy Attorney General or Division Director. The receipt of or deposit by the Department of any monies pursuant to this AVC does not constitute acceptance by said Department, and monies received will be returned if this AVC

is not accepted, Upon entry of the AVC and upon full payment of restitution and attorneys fees,

ve

7 initials

Page 41

the Attorney General agrees to close its investigation into the activities of Respondents. V. AVAILABLITY OF RECORDS

All of Respondents records must be retained for a minimum of two (2) years. Respondents shall maintain and make available to the Department, upon its written request, all books, records and other documents which reflect the implementation of the terms of this AVC and compliance with its terms, Any such records requested by the State shall be made available for inspection within twenty (20) business days. The Respondent shall honor any request from the State to make such records available without further legal process.

IT 18 HEREBY AGREED by the parties that any failure to comply with the terms and conditions of this AVC is by statute prima facie evidence of a violation of Chapter 501, Part Il, Florida Statutes, and will subject Respondents to any and all civil penalties and sanctions authorized by law, including attorney's fees and costs.

7.1 ITIS HEREBY AGREED by the parties that this AVC shall become effective upon its acceptance by the Director, Economic Crimes Division, who may refuse to accept it at her discretion. The receipt of or deposit by the Department of any monies pursuant to this AVC does not constitute acceptance by said Department, and monies received will be retumed if this AVC is not accepted.

VIII. MISCELLANEOUS PROVISIONS

8.1 The Attorney General has not approved any of Respondents past, current or proposed business practices, other than those specifically mentioned in this AVC, and therefore

no portion of this AVC shall be construed as such an approval.

8 Initials

Page 42

8.2 In consideration for the fulfillment of the various obligations set forth herein, no penalties are imposed under this AVC. However, the Attomey General reserves the right to seek Chapter 501 penalties for any future violation(s) of Chapter 501 Part II Florida Statutes, The Attorney General also reserves the right to seek attorneys’ fees and casts upon any future noncompliance.

8.3. Nothing herein shall be construed as a waiver of any private rights, causes of action, or remedies of any private person, business, corporation, government or legal entity

8.4 The parties jointly participated in the negotiation of the terms articulated in this AVC. No provision of this AVC shall be construed for or against either party on the ground that one party or another was more heavily involved in the preparation.

IN WITNESS WHEREOF, Respondents have caused this AVC to be executed by an authorized representative, as a true act and deed, in the county and state listed below, as of the date affixed thereon.

BY MY SIGNATURE f hereby affirm that I am acting in my capacity and within my authority as a Principal Owner, and in my individual capacity, and that by my signature I am

binding myself and the business to the terms and conditions of this AVC.

aK fi FINANCIAL SOLUTIONS, LLC

By/Jamds P, Adorna, anager Nation’ s Choice Financial Soultions, LLC

State of Florida STATE OF FLORIDA

COUNTY OF “Pa\w beac,

BEFORE ME, a notary public of the State of Florida appeared James P. Adorna who swore under oath that he is a Prinetpal Owner of Nation’s Choice Financial Solutions and who is either (Check One) | known to me or who produced the following

| flat

Page 43

identification:

NOTARY PUBLICE AFFIX NOTARY SEAL.

% eA %

BY MY SIGNATURE | hereby affirm that I am acting in my capacity and within my authority as a Principal Owner, and in my individual capacity, and that by my signature I am binding myself and the business to the terms and conditions of this AVC.

NATION’S CHOICE FINANCIAL SOLUTIONS, LLC

* (ral Hark t | ] , Manager, Nation’s Chéice Financial Solutions, LLC

State of Florida STATE OF FLORIDA

COUNTY OF awa Seals

BEFORE ME, a notary public of the State of Florida appeared Michael Harper who swore under oath that he is a Principal Owner of Nation’s Choice Financial Solutions and who is either (Check One) t-—~ __ known to me or who produced the following identification: ng }

brrtmnveritreerernio = a a %

=F my Comm. empires

_ = August #2009 3

eed Sry No, DY 456555 ied

NOTARY PUBLIC 2s. aya 0.6 OF AFFIX NOTARY SEAL %@& EER OS

\ “eerie

_f.

Elissa 8. Vessal Esq.

Fla Bar No. 694002 Attorney for Respondents _

Page 44

ACCEPTANCE BY ATTORNEY GENERALS OFFICE “ “om Signed-tiiis day of ie "2009. a

Assistant Florida B 1515 North Flagler Drive

Suite 900

West Palm Beach, Florida, 33401 561-837-5000

561-837-5109 (FAX)

Accepted this 77 day of LL 2, 2009,

MARY LEONTAKIANAKOS

Director, Economic Crimes Division

- Department of Legal Affairs

OFFICE OF THE ATTORNEY GENERAL The Capitol

Tallahassee, FL 32399-1050

(850) 245-0140

41 @ : Initlals

Page 45

Exhibit 2

Page 46

LAWRENCE G. WASDEN Attorney General

JOSEPH B. JONES — LS.B. #2768 Deputy Attorney General

State of Idaho

Department of Finance

P.O. Box 83720

Boise, Idaho 83720-0031 Telephone: (208) 332-8091 Facsimile: (208) 332-8016 joseph [email protected]

BEFORE THE DIRECTOR OF THE DEPARTMENT OF FINANCE OF THE STATE OF IDAHO STATE OF IDAHO, DEPARTMENT OF

FINANCE, FINANCIAL INSTITUTIONS

BUREAU, Docket No, 2012-41-02

Complainant, ORDER TO CEASE AND DESIST

VS,

THE RESIDENTIAL LITIGATION GROUP, P.A.,

Respondent.

Gavin M. Gee, Director of the Idaho Department of Finance (Director), being authorized and directed to administer and enforce the Idaho Financial Fraud Prevention Act, Idaho Code § 67-2750 et seg. (IFFPA), and the Idaho Bank Act, Idaho Code § 26-101 et seq., hereby makes the following factual findings which constitute a basis for the issuance of an ORDER TO CEASE AND DESIST (Order) pursuant to Idaho Code § 67-2755(1) requiring THE RESIDENTIAL LITIGATION GROUP, P.A., fo cease and desist from violating the IFFPA by disseminating information to the public that is confusing, misleading, and deceptive; and to cease

and desist from any other activities which violate the IFFPA and the Idaho Bank Act.

ORDER TO CEASE AND DESIST — Page 1

Page 47

RESPONDENT.

1, THE RESIDENTIAL LITIGATION GROUP, P.A, (Respondent) was formed as a Florida corporation on April 13, 2012, The company lists its business address with the Florida Secretary of State (Florida SOS) as 777 South Flagler Drive, Suite 800-West Tower, West Palm Beach, Florida. However, on its website, Respondent lists its address as 2200 Pennsylvania Avenue NW, 4" Floor, Washington, D.C. Respondent’s Officer/Director and Registered Agent is Marc Hoffman.

2. Mr. Hoffman is licensed to practice law in the state of Florida and in the District of Columbia. He does not hold a license to practice law in the state of Idaho. The Florida Bar lists Mr. Hoffman’s firm as The Residential Litigation Group and also lists the website, www.theresidentiallitigationgroup.com. In addition, the Florida Bar indicates that Mr. Hoffman is admitted to practice before the Florida State and District of Columbia Courts, in addition to the U.S. Supreme Court, the Fifth and Eleventh U.S. Circuit Court of Appeals, and the U.S. District Court, Southern District of Florida. Mr. Hoffman lists the West Palm Beach address with the Florida Bar, and the Washington D.C. address with the DC Bar.

3. Respondent uses the website, www.theresidentiallitigationgroup.com, wherein it represents the following:

The Residential Litigation Group is a leading litigation law firm based out of

Washington D.C. Our firm focuses its practice on litigation against all of the

major banks and lenders in the United States.

The Residential Litigation Group is suing the nation’s biggest banks and lenders

for deceptive loan practices, deceptive and illegal foreclosure actions, and

deceptive mortgage modification practices, among other causes of action. We are

seeking to hold the banks and lenders accountable for their harmful and illegal behavior, and we are working to find real relief for homeowners. The lawsuits are

also targeting banks’ use of fraudulent paperwork in the foreclosure process,

foreclosing without actually holding a mortgage, corrupting the local title and land recording systems, and failing to uphold promises of loan modifications,

ORDER TO CEASE AND DESIST — Page 2

Page 48

One of our most significant causes of action that we are taking is to go after the

banks’ use of phony documents and forged signatures (“robo-signing”) for the

purpose of illegally foreclosing ‘on tens-of-thousands of homeowners.

FINDINGS OF FACT

4. On or about September 19, 2012, the State of Idaho, Department of Finance, Financial Institutions Bureau (Department) received a complaint from an Idaho bank concerning Respondent’s recent dissemination to Idaho residents of advertisements relating to Respondent’s services, The bank provided the Department with a copy of the advertisement received by one of its customers. On or about September 27, 2012, the Department received a second complaint from another Idaho bank concerning Respondent’s dissemination to Idaho residents of advertisements relating to Respondent’s services. That bank provided the Department with a copy of the advertisement received by one of its customers. |

5, Among other things, the advertisements stated that Respondent “is intending to file a potential claim against [the individual’s lender] aimed at improper lender actions.” Further, the advertisements state that the recipient “may be a potential plaintiff in a national

lawsuit.” The advertisements specifically name the recipients’ mortgage lenders, which are both

banks.

6. In the fine print appearing at the bottom of the advertisements, Respondent

confirms that the document which purports to be a “Litigation Notification” is actually an advertisement. .

7. Respondent’s advertisements were received by at least two (2) Idaho residents during the month of September 2012. To date, the Department has been unable to determine the

total number of Idaho residents who received Respondent’s advertisements.

ORDER TO CEASE AND DESIST — Page 3

Page 49

8. The advertisements Respondent sent to Idaho residents suggest to the recipient that the recipient’ s motigage lender may have engaged in fraudulent lending practices.

9, Posing as @ prospective customer, on September 21, 2012, a Department representative called the telephone number listed on Respondent’s advertisements. The representative’s phone call was answered by an individual who identified the business as “The Residential Litigation Group.” The individual taking the representative’s call identified himself as Nick McNesky.

10. Mr. McNesky pressed to obtain information from the representative regarding her mortgage balance, current lender, current interest rate, the market value of her residence, and whether her current lender had filed a foreclosure action. Mr. McNesky further stated that the law firm is assisting homeowners in a lawsuit against 22 lenders, and that the firm is currently working on 17 different fraudulent practices suits.

11. Mr. McNesky told the representative that to begin working with the law firm, she needed to send. Respondent a retainer fee of $6,000, which would be refunded after the lawsuit is settled, and additionally, that the representative needed to pay a monthly fee of $450 during the pendency of the lawsuit.

CONCLUSIONS OF LAW

VIOLATIONS OF § 67-2752(7) OF THE IFFPA 12. The allegations set forth in paragraphs 1 through 11 above are fully incorporated herein by this reference.

13. The IFFPA, at Idaho Code § 67-2752(7), prohibits persons from using “in a

manner likely to cause confusion or mistake or to deceive, the name, trademark, service mark, or

ORDER TO CEASE AND DESIST - Page 4

Page 50

logo of a financial institution in connection with the sale, offering for sale, distribution, or advertising of any product or service without the consent of the financial institution.”

14. In the advertisements Respondent sent to two (2) Idaho residents, Respondent specifically named the recipient's financial institution and suggested or implied that the institution had engaged in lender misconduct or fraudulent lending practices. Respondent did not have the consent of the financial institution to use the name of the financial institution in Respondent’s advertisements,

15. Respondent’s use of the name of the recipient’s financial institution in Respondent’s advertisements was likely to cause confusion or to deceive the recipient,

16. Respondent’s sending of two (2) advertisements naming the recipient’s financial institution, without the institution’s consent, to at least two (2) Idaho residents constitutes two (2) violations of the IFFPA.

FINDING OF IMMEDIATE DANGER

17. Idaho Cade §§ 26-1203 and 26-1204 of the Idaho Bank Act make it unlawful for a person to circulate or transmit to another any false statement, rumor, or suggestion, written, printed ot by word of mouth which is directly or by inference derogatory to the financial condition or affects the financial standing of a financial institution.

18. The public’s belief that a financial institution has engaged in lender misconduct ot predatory lending practices endangers the financial condition or financial ‘standing of the financial institution, its depositors and customers, and the public. These facts require the Director to issue this Order immediately to protect the public and the financial institutions named

in Respondent’s advertisements/solicitations.

ORDER TO CEASE AND DESIST —Page5 _

Page 51

REMEDIES

19. Idaho Code § 67-2755(1) authorizes the Director to order a person to cease and desist from violations or attempted violations of the IFFPA if, in the determination Director, it is necessary to protect any financial institution or the public, or a person is violating or is about to violate the IFFPA.

20. Idaho Code § 26-1116(a) authorizes the Director to order a person to cease and desist from violations of the Idaho Bank Act if the Director believes that a person not authorized to engage in banking or trust business has engaged or is about to engage in any act or practice constitution a violation of the Idaho Bank Act or any rule or order thereunder.

ORDER

The Director, having reviewed the foregoing, and good cause being shown therefor,

THE DIRECTOR HEREBY FINDS that Respondent has violated the Idaho Financial Fraud Prevention Act, Idaho Code § 67-2750, et seq.; and the Idaho Bank Act, Idaho Code § 26- 101 et seq., and that issuance of this Order is necessary to protect the financial institutions named in Respondent’s advertisements and the public.

THE DIRECTOR FURTHER FINDS, pursuant to Idaho Code § 67-5247, that Respondent’s violations of the IFFPA, as set forth above, involve an immediate danger to the public safety and welfare, requiring inumediate agency action.

NOW, THEREFORE, IT IS HEREBY ORDERED:

Pursuant to § 67-2755(1) of the IFFPA, and § 26-1116(a) of the Idaho Bank Act, THE RESIDENTIAL LITIGATION GROUP, P.A. shall CEASE AND DESIST from violations of the Idaho Financial Fraud Prevention Act, to include engaging in advertising that is misleading,

confusing, and deceptive and which use the name of a financial institution without the financial

ORDER TO CEASE AND DESIST -— Page 6

Page 52

institution’s consent; and from violations of the Idaho Bank Act. Because of the danger to the

public presented by Respondent’s violations of the IFFPA and the Idaho Bank Act, this action

constitutes an emergency contested case, and this Order is effective upon its issuance

IT IS SO ORDERED,

DATED this 14™ aayor Novemsse.

, 2012.

a ghBNT Gy, STATE OF IDAHO Oe tae ay, DEPARTMENT QF FINANCE © as om Croat vo : . é Oe a 3Z é 3 wn SEAL $ wee Ste gt HS GAVIN M. ae Director by T Pygreansast® 40 ey 9, OR TDS ca erent Cola

NOTICE

Respondent is hereby notified that the foregoing ORDER TO CEASE AND DESIST is a

final order of the Director. Pursuant to Idaho Code §.67-5246, Respondent may file a motion for

reconsideration of this Order within fourteen (14) days of the issuance of this Order, The motion for reconsideration or request for a hearing shall be served on

Mary E. Hughes

Financial Institutions Bureau Chief Idaho Department of Finance P.O. Box 83720

Boise, Idaho 83720-0031

A copy of such motion for reconsideration shall also be served on the Depariment’s counsel

Joseph B. Jones, Deputy Attorney General at the same address

Any hearing and subsequent proceedings in this matter will be conducted in accordance

with the Idaho Administrative Procedure Act, Idaho Code § 67-5201 ef seq

ORDER TO CEASE AND DESIST — Page 7

Page 53

if Respondent timely files a motion for reconsideration, the Department will dispose of such motion within twenty-one (21) days of its receipt, or the motion will be considered denied by operation of law, pursuant to Idaho Code § 67-5246(4).

If Respondent timely requests a hearing, Respondent will be notified of the date, time, and place of the hearing, as well as the name of the presiding officer. At the hearing, Respondent will be entitled to enter an appearance, introduce evidence, examine and crossexamine witnesses, make arguments, and generally participate in the conduct of the proceedings. Respondent may also be represented by legal counsel at its own expense.

Pursuant to Idaho Code §§ 67-5270 and 67-5272, any party aggrieved by this final order may appeal from such order to the district court by filing a petition in the district court of the county in which: | a hearing was held;

the final agency action was taken;

the party seeking review of the order resides, or

the real property or personal property that was the subject of the agency action is located, |

ao oP

An appeal must be filed within twenty-eight (28) days: (a) of the issuance of this Order, (b) of the issuance of an order denying a motion for reconsideration, or (c) the failure within twenty-one (21) days ls grant or deny a petition for reconsideration, whichever is later. Idaho Code § 67-5273(2). The filing of an appeal to the district court does not itself stay the

effectiveness of enforcement of the order being appealed.

ORDER TO CEASE AND DESIST — Page 8

Page 54

CERTIFICATE OF SERVICE

| HEREBY CERTIFY that on this (Oday of AGuertErer-_, 2012, I caused a true and correct copy of the foregoing ORDER TO CEASE AND DESIST to be served on the

_ following by the designated means:

The Residential Litigation Group, P.A, 2200 Pennsylvania Ave. NW, 4” Floor Washington, D.C, 20037

The Residential Litigation Group, P.A. 777 S. Flagler Dr., Ste. 800-West Tower West Palm Beach, FL 33401

ORDER TO CEASE AND DESIST — Page 9

[ ¥] U.S. mail, postage prepaid [ X] certified mail

[ ] overnight mail

[ x] fax: (800) 620-0070

[ ]email:

[X] U.S. mail, postage prepaid

[ X] certified mail

[ ] overnight mail

[ X] fax: (800) 620-0070

{ X] email: [email protected]

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Exhibit 3

Page 56

Attorney General of New Mexico

GARY K. KING ALBERT J. LAMA Attorney General ; Chief Deputy Attorney General July 5, 2013

Mr. Marc H. Hoffman

The Residential Litigation Group 860 U.S. Hwy 1

Suite 206

North Palm Beach, FL 33408

Via certified U.S, Mail and e-mail to [email protected]

RE: Cease and Desist Order Dear Mr. Hoffman,

For the reasons that follow, it is the opinion of this Office that your firm engaged in unlawful conduct in New Mexico and has continued to offer unlawful services in violation of both New Mexico and federal law. Further, because your conduct constitutes the practice of law in New Mexico when you or any attorney at your firm is not properly admitted to practice in this state, this matter is being referred to the New Mexico Disciplinary Board pursuant to Rules 16-505(D), 16-803 and 16-805 NMRA. This Office does not discipline attorneys but does enforce various consumer protection laws including the Unfair Practices Act (“UPA” hereinafter), NMSA 1978, § 57-12-1, et seq., the federal MARS Rule, 12 C.F.R § 1015.2., and the Mortgage Foreclosure Consultant Fraud Prevention Act, NMSA 1978, § 47-15-1, et seq. .

The following facts do not appear to genuinely be in dispute, or if they are in dispute, there is sufficient evidence to show that:

1. Your firm offered to include a New Mexico consumer, Kristine Romero, in a massplaintiff lawsuit against Bank of America but also offered to defend any legal action relating to her home and obtain a loan modification for her.

2. Your firm’s website includes the words “Foreclosure Defense” in the title which would reasonably support the belief of a consumer that your legal services would include foreclosure defense for that consumer’s home.

3. Ms, Romero sought aid from your firm because she was in default on her home loan and she was afraid of a foreclosure.

111 Lomas Blvd, Suite 300, Albuquerque, New Mexico 87102 (505) 222-9000 Fax (505) 222-9006 Wwylliviag. gay

Page 57

Page 2 of $

10.

11.

12,

13.

14,

Ms. Romero sought aid from your firm to defend a foreclosure action after she discovered the action was filed, .

Your firm sought an up-front payment of $6,000.00 in three payments to represent Ms,

Romero and save her home from foreclosure, and she paid the first installment of ©

$2,000.00.

Your firm acted by and through a Sean Farley who represented himself as an attorney. It is unclear whether Mr. Farley is a licensed attorney in any state, but he may be the attorney in Florida. known as “Sean Francis Farley.” If that is the same person, Mr, Fatley is not eligible to practice law according to the Florida State Bar as his licensed lapsed, but the date of the lapse is not reported. If Mr. Farley was not licensed at the time he told Ms. Romero he was “an attorney” that would be an unfair and deceptive trade practice under the UPA.

Your firm, through its agents or employees, represented that Ms. Romero was not in jeopardy because a sale date had not been scheduled and she was in a loan modification, Yet, there is no evidence tending to show that your firm obtained any loan modification for Ms, Romero or that she had received any loan modification, To the contrary, Bank of America denied her application for a loan modification in early 2013 and instead proposed a formal forbearance plan,

Your firm has made affirmative statements on its own website and others that it seeks to aid homeowners by stopping or delaying a foreclosure.

There-is no evidence tending to show that the forbearance Ms. Romero received was a result of any effort by your firm. The agreement was obtained by Ms, Romero applying directly with her lender. ,

There is no evidence tending to show that your firm performed any substantive legal work for Ms. Romero.

Your firm did not send or provide any billing statements or invoices to Ms, Romero that reflected any legal work performed for her,

You assert that your firm performed six (6) hours of legal work on behalf of Ms. Romero for a total of $1,493.75 in legal fees, You have failed to produce evidence of any such work actually being performed such as evidence of work product, correspondence, or pleadings filed on behalf of Ms. Romero, Ms..Romero was unaware of any actual work performed for her, Instead, you simply claim that your firm was “going to” include Ms, Romero in a lawsuit against her lender. . You state that her name was “removed” as a plaintiff from the suit, but there is no evidence that Ms. Romero was ever a named plaintiff in any lawsuit filed in any court, Rather, it appears that you accepted and retained the $2,000,00 for no actual legal work.

Your firm failed to identify any New Mexico licensed attorney who was assigned to this case, who communicated with Ms. Romero, or who placed her payment of legal fees into an attorney trust account (sometimes called an IOLTA account),

Your firm, through its agents or employees, told Ms. Romero that once a foreclosure action was commenced against her, a local attorney would be assigned to her.

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Page 3 of 5

15. Once Ms, Romero found out that a foreclosure lawsuit had been filed against her and she notified your firm of this fact, your firm did not provide a New Mexico attorney to Ms, Romero.

16, Instead, your firm, through its agents or employees, represented that Ms, Romero would be provided with a local attorney once she was served with a summons, By this time, Ms, Rometo was realizing that your firm was not providing any substantive legal services, was not defending her in her suit, and was not helping in her dispute with her lender, Bank of America, Thus, Ms. Romero sought the aid of this Office with Bank of America and her dispute with your firm,

17. Your firm has offered its services to other New Mexico residents in 2013, solicits New Mexico consumers via phone calls, and publishes or maintains web sites that are accessible to New Mexico consumers.

For the reasons that follow, we believe the above facts reflect clear violations of the following laws,

Mortgage Foreclosure Consultant Fraud Prevention Act (“MFCKPA”)

New Mexico law bars the collection of up-front fees for foreclosure prevention work unless certain narrow exceptions are met, NMSA 1978, § 47-15-1, ef seg. Your fitm was both expressly and by implication acting as a “foreclosure consultant” under New Mexico law because it was offering to “save” Ms. Romero’s home from foreclosure, Under the MFCFPA, the attorney exemption only applies to “a person licensed to practice law in this state when the person renders service in the course of the person’s practice as an attorney.” NMSA 1978, § 47-15-2(B)(2). There is no factual support for the view that you or any attorney at your firm xendered service in the course of his or her practice as an attorney and that you or any other attorney at your firm are licensed to practice law in New Mexico. You have failed to identify any attorney licensed in New Mexico who represented Ms, Romero.

As a foreclosure consultant, therefore, you violated the MFCFPA by accepting an up-front fee prior to the completion of all work and also by failing to use a form of contract required by law. NMSA 1978, § § 47-15-5, 47-15-3, A violation of the MFCFPA is a per se violation of the UPA and imposes a civil penalty of up to $5,000.0 plus restitution. NMSA 1978, § 47-15-7.

Unfair Practices Act (“UPA”)

New Mexico law bars the use of unfair, deceptive or unconscionable trade practices, NMSA 1978, § 57-12-3, You also likely violated the UPA by misrepresenting to Ms, Romero the scope of the legal services to be provided to her, stating or implying that you or your attorneys could or

would practice law in New Mexico, stating or implying that she would receive services from a ,

local attorney, and by stating or implying that your services could stop her foreclosure, Charging $6,000.00 to perform no legal work is also likely unconscionable as it is results in a gross disparity between the value of the services and the price paid. NMSA 1978, § 57-12-2(B),

Page 59

Page 4 of 5

Professional services, including those provided by attorneys, are also governed by the UPA in

New Mexico.

wle . Part 1015, previously 16 C.F.R. Part 322

The federal Mortgage Assistance Relief Services Rule (“MARS Rule”) also bars the collection of up-front fees for motigage relief work. and requires specific disclosures to consumers. The MARS Rule broadly defines mortgage relief work to mean any service offered elthor expressly or by implication to stop or prevent any foreclosure of a dwelling and/or obtain any forbearance of modification of a home loan. 12 C.F.R § 1015.2.

The exemption for an attorney to engage in mortgage relief work under the MARS Rule is narrow and requires that the attorney be licensed in the home state of the consumer and also place the retainer funds into an IOLTA account, 12 C.F.R. § 1015.7. The official commentary to the attorney exemption clarifies that for the protection of consumers, the exemption was for an attorney licensed in the home state of the consumer. Fed. Reg., Vol. 75, No. 230, 12/1/2010, p. 75131.

You have not provided any facts to date showing that you or any attorney at your firm are licensed in New Mexico and that you placed Ms, Romero’s funds into a trust account that you drew from as fees were earned. Therefore, neither you nor any attorney at your firm are within the ambit of the attorney exemption for the MARS Rule. By accepting an upfront fee, hy implying that you would provide legal services, and. by failing to include certain disclosures required by federal law, you violated 12 C.F.R. §§ 1015.3, 1015.4, and 1015.5, The Attorney General of New Mexico may enforce the MARS Rule pursuant te 12 C.F.R, § 1015.10,

Unauthorized Practice of Law

New Mexico law bars any person who is not licensed to practice law in New Mexico from commencing or maintaining any action or dofense of an action. NMSA 1978, § 36-2-27, A person also may not hold himself or herself out as an attorney in New Mexico unless he or she has been issued a certificate to practice law by the New Mexico Supreme Court. Jd You and your firm clearly offered to commence an action (and defend an action) for Ms. Romero and others, and have held yourselves out as attorneys to New Mexico residents while not licensed in this state. The Attorney General is authorized by statute to enjoin such practices including seeking an order of contempt, NMSA 1978, § 36-2-28.2.

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Page 5 of §

Cease and Desist

se_of 0 oing violations of law, and because j ears that your firm continues to solicit New Mexico consumers, you, your firm and any affiliated or associated attorneys are here! d to cease and desist from: :

1. Offering legal services to New Mexico consumers unless and until you are licensed to do so of affiliate with an attorney licensed in New Mexico so that such representation would be lawful.

2, Offering Mortgage Foreclosure Consultant services as defined under the MFCFPA,

3. Offering Mortgage Relief Services as defined under the MARS Rule,

4. Engaging in other unfair or deceptive acts or practices, including representations that you can or will represent New Mexico consumers in mass-plaintiff actions, that such actions will stop a foreclosure action, or any other unlawful representation. .

Additional violations of law from conduct after the date that this letter was issued would be deemed to be willful violations because you are notice of the nature of the violations,

Because this matter also likely entails the violation of the Rules of Professional Responsibility, including the unauthorized practice of law in New Mexico, this matter is being referred to the appropriate disciplinary entities for New Mexico, Florida and Washington, D.C!,

If you wish to discuss this matter, please feel free to call David Kramer at 505-222-9134,

Sincerely,

vid Kramer aren J, Meyers Assistant Attorneys General

CC: Kristine Romero via U.S. Mail Mr, William D, Slease, New Mexico Disciplinary Counsel via e-mail only Ms. Shanell M, Schuyler, Florida Bar ACAP, via e-mail only - Ms. Elizabeth A, Herman, Office of Bar Counsel, 515 5" Street NW, Suite 117, Washington, D.C, 20001 yia U.S, Mail

1 You firm’s website indicates that its offices are located at “2220 Pennsylvania Ave, NW, 4" Floor, Washington, D.C. 20037.” However, mail sent to you at that address was recently returned as undeliverable, It appears your firm operates in Florida.

Judgment (May 2015)

PDF of this document (22 pages)

Page 61

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA CASE NO. 14-80931-CIV-COHN-SELTZER CONSUMER FINANCIAL PROTECTION BUREAU and THE STATE OF FLORIDA, Office of the Attorney General, Department of Legal Affairs Plaintiffs, v.

MICHAEL HARPER, an individual; BENN WILLCOX, an individual; MARC HOFFMAN, an individual; THE HOFFMAN LAW GROUP, P.A. f/k/a THE RESIDENTIAL LITIGATION GROUP, P.A., a Florida corporation; NATIONWIDE MANAGEMENT SOLUTIONS, LLC, a Florida limited liability company; LEGAL INTAKE SOLUTIONS, LLC, a Florida limited liability company; FILE INTAKE SOLUTIONS, LLC, a Florida limited liability company; and BM MARKETING GROUP, LLC, a Florida limited liability company, Defendants.

DEFAULT JUDGMENT AND ORDER AS TO CORPORATE DEFENDANTS Plaintiffs, the Consumer Financial Protection Bureau ("CFPB" or "Bureau") and the State of Florida ("Florida"), commenced this civil action on July 14, 2014, pursuant to: (1) Sections 1054 and 1055 of the Consumer Financial Protection Act of2010 ("CFPA"), 12 U.S.C. §§ 5564, 5565; (2) Section 626 of the Omnibus Appropriations Act of2009, as amended by Section 1097 Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 1 of 22

Page 62

of the CFPA, 12 U.S.C. § 5538, and the Mortgage Assistance Relief Services Rule, 12 C.F.R. Part 1015 ("Regulation 0"); (3) the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Chapter 501, Part II, Florida Statutes; and (4) Florida's Civil Theft Law, Sections 812.035(5), 812.014, Florida Statutes. On that date, Plaintiffs filed a Complaint for Permanent Injunction and Other Relief ("Complaint"), seeking preliminary and permanent injunctive relief, rescission or reformation of contracts, the refund of monies paid, restitution, disgorgement of illgotten monies, civil money penalties, and other equitable relief for Defendants' acts or practices related to the marketing and sale of mortgage assistance relief services in violation of Regulation 0, FDUTPA, and Florida's Civil Theft Law. Compl., DE 4.

On July 16, 2014, the Court issued an ex parte Temporary Restraining Order against the Defendants, which froze the Defendants' assets and placed The Hoffman Law Group (f/k/a The Residential Litigation Group, P.A.) ("HLG"), Nationwide Management Solutions, Legal Intake Solutions, File Intake Solutions, and BM Marketing Group (together, "Corporate Defendants") into receivership. DE 13.

The Corporate Defendants failed to file an answer or otherwise defend in this action, and the Clerk entered default against them on September 12, 2014. DE 71, 72. The Court approved and entered a preliminary injunction against Corporate Defendants on March 2, 2015. DE 131. The Court approved and entered Stipulated Final Judgments and Orders as to each of the Individual Defendants - Michael Harper, Benn Willcox, and Marc Hoffman- on May 5 and May 6, 2015. DE 139, 140, 144.

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. Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 2 of 22

Page 63

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). Default judgment is appropriate here against Corporate Defendants because they have failed to file answers or otherwise appear and defend the claims brought against them. Corporate Defendants' liability is well-pled in the Complaint, and Corporate 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 Corporate Defendants for violations of Regulation 0, 12 C.F.R. Part 1015; FDUTPA, Ch. Part II; and Florida's Civil Theft law, Sections 812.035(5), 812.014, Florida Statutes.

It is therefore ORDERED, ADJUDGED, AND DECREED as follows: I. Findings 1.

This Court has jurisdiction over the subject matter of this case and over Corporate Defendants 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 12 U.S.C. § 5564(t).

3.

Corporate Defendants have been properly served with the Summons and Complaint. 4.

Corporate Defendants have failed to answer or otherwise defend this action. 5.

The Clerk entered defaults against Corporate Defendants on September 12, 2014. DE 71, 72.

6.

The Complaint states a claim upon which relief can be granted. 7.

Because of Corporate Defendants' default, Corporate 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.

Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 3 of 22

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8.

Section 1055 ofthe CFPA, 12 U.S.C. § 5565, as well as Sections 501.207 and 812.035, Florida Statutes, which this Court has supplemental jurisdiction over pursuant to 28 U.S.C. § 1367, empower this Court to order injunctive and other relief, restitution, and civil money penalties.

9.

Plaintiffs are entitled to an Order imposing permanent injunctive relief; requiring Corporate Defendants to make restitution of $11, 730,579; and requiring Corporate Defendants to pay civil money penalties.

10.

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. Corporate Defendants Operated as a Common Enterprise 11.

Corporate Defendants operated as a common enterprise, and are therefore jointly and severally liable for the misconduct alleged in the Complaint. Plaintiffs alleged that "the Individual Defendants operated their scheme by using the Corporate Defendants as a common enterprise." Com pl. ~ 63.

12.

Each corporation existed "to participate in the same mortgage relief operation," with roles ranging from giving "consumers the impression of a legitimate law firm" to "funnel[ing] revenue to non-attorneys," to operating the "telemarketing boiler rooms that convince[ d) consumers to pay HLG's fees." Compl. ~ 64. Corporate Defendants commingled finances; paid each other's rents; shared a common address; shared employees; and operated under the common control of the same principals: Harper, Willcox, and Hoffman. Compl. ~~ 65-68. Corporate Defendants "all exist[ ed] for the single purpose of selling consumers mortgage assistance relief services and splitting the profits among the individual defendants." Compl. ~ 69. None of the companies had any other business purpose. !d.

Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 4 of 22

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13.

These facts are borne out through documents and testimony gathered in Plaintiffs' investigation, and by the Receiver's investigation of Corporate Defendants since his appointment by the Court. For instance, the Receiver found no evidence of a written contract between Nationwide Management Services and Hoffman Law Group, or any set fee that was charged by Nationwide. Receiver's Initial Report at 16, DE 84 (Sept. 18, 2014). Based on extensive document review and interviews, the Receiver concluded that Corporate Defendants shared services, were controlled by the same three individuals- Harper, Hoffman, and Willcox- and were engaged in a single, common business scheme, with no other sources of revenue. !d. at 16-- 18.

14.

Corporate Defendants operated as a common enterprise in effectuating the alleged mortgage relief scheme, and are therefore jointly and severally liable for all of the violations alleged in the complaint. Where one or more corporate entities operate in a common enterprise, each may be held liable for the deceptive acts and practices of the other. Sunshine Art Studios, Inc. v. FTC, 481 F.2d 1171, 1175 (1st Cir.l973); FTC v. Wolf, No. 94-8119-CIV -FERGUSON, 1996 WL 812940, *7-8 (S.D. Fla. Jan. 31, 1996); Commodity Futures Trading Comm 'n. v. Int'l Berkshire Grp. Holdings, No. 05-61588-CIV-ALTONAGA, 2006 WL 3716390, *7 (S.D. Fla. Nov. 3, 2006).

15.

The Court, in its discretion, enters injunctive and monetary relief, without holding an evidentiary hearing. Tara Prods., Inc. v. Hollywood Gadgets, Inc., 449 F. App'x 908, 911-12 (11th Cir. 2011 ).

16.

Entry of this Order is in the public interest.

Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 5 of 22

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Corporate Defendants Violated Regulation 0 COUNTS I-IV 17.

The Complaint contains well-pled factual allegations supporting a finding of liability on each of these provisions of Regulation 0:

a. Corporate Defendants offered a service, in exchange for a fee, that purported to assist consumers to prevent the foreclosure of their home or to obtain a loan modification on their home mortgage. Compl. ~~ 2, 28-38, 40--42, 45, 73. b. Corporate Defendants charged consumers a varying upfront fee, which typically consisted of a $6,000 initial fee and $495 per month thereafter. Com pl. ~ 46. Defendants Harper and Willcox, two of the principals of the HLG Enterprise, both admitted to those facts. See Defendant Michael Harper's Amended Answer to Complaint~ 46, DE 91 (Sept. 23, 2014) (admitting the allegations made in Complaint ~ 46); Defendant Benn Willcox's Corrected Amended Answer to Complaint~ 46, DE 97 (Sept. 25, 2014) (same admission).

c. The upfront fees were charged before the consumers had executed a written agreement with the loan holder or servicer that incorporated the offer obtained by the defendants. Compl. ~~ 45, 46, 52, 84. Thus, Corporate Defendants' upfront fees violated 12 C.F.R. § 1015.5(a).

d. In numerous instances, Corporate Defendants "discouraged consumers from communicating directly with their lenders or servicers and claimed that they [would] handle all communications with consumers' lenders and servicers. Com pl. ~~ 48, 86. Corporate Defendants' representations to consumers about contacting their lenders violated 12 C.F.R. § 1015.3(a).

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e. Corporate Defendants made numerous misrepresentations to consumers about material aspects of the defendants' mortgage assistance relief services. Compl. ~ 88. For instance, in "numerous instances, the HLG Enterprise ... encouraged consumers to stop making mortgage payments, and in some instances told consumers that delinquency will demonstrate the consumers' hardship to the consumers' lenders." Com pl. ~ 49. Corporate Defendants did "not disclose that if consumers stop[ped] making mortgage payments, they could lose their homes and damage their credit ratings." /d.

f.

Corporate Defendants also misrepresented their staffing and the likelihood that their mass-joiner cases would result in the consumer receiving a loan modification with favorable terms. Compl. ~ 42. These and other material misrepresentations alleged in the Complaint violated 12 C.F.R. § 1015.3(b)(4). g. Corporate Defendants' solicitations to consumers failed to state that: 1.

The consumer may stop doing business with Corporate Defendants or reject an offer of mortgage assistance, if one is made, without having to pay for the servtces;

11.

Corporate Defendants are not associated with the government or approved by the government or the consumer's lender; and 111.

Even if the consumer uses the HLG Enterprise's service, the consumer's lender may not agree to modify the loan.

Com pl. ~~ 50, 90. Moreover, where any of these disclosures were made, they were not made in a "clear and prominent manner," they were "not preceded by the heading "IMPORTANT NOTICE" or made in the font size required by law. Compl. Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 7 of 22

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~~ 51, 90. Thus, Corporate Defendants' failure to provide the required, "clear and prominent" disclosures violated 12 C.F.R. § 12 C.F.R. § 1015.4. 18.

Given these well-pled allegations and Corporate Defendants' failure to answer or defend, the Court exercises its discretion to enter a default judgment against Corporate Defendants for violations of Regulation 0. See, e.g., CFPB v. Jalan, No. 12-02088 (C.D. Cal. July 23, 2013) (awarding default judgment against a corporation and two individual defendants for violations of Regulation 0 and other consumer protection laws).

Corporate Defendants Violated Florida State Laws COUNTV 19.

The Complaint contains well-pled factual allegations that Corporate Defendants violated FDUTPA. Compl. ~~ 96, 98.

20.

Pursuant to Section 50 1.204(1) of FDUTPA, "unfair or deceptive acts or practices in the conduct of any trade or commerce" are unlawful. Florida follows the "standards of unfairness and deception set forth and interpreted by the Federal Trade Commission or the federal courts." Section 50 1.203(3)(b ), Florida Statutes. To that end, the Florida Supreme Court has noted a deceptive practice is one which "involves a material misrepresentation or omission that is likely to mislead consumers acting reasonably under the circumstances." See PNR Inc. v. Beacon Prop. Mgmt., Inc., 842 So.2d 773, 777 (Fla. 2003).

21.

FDUTP A is liberally construed to protect the consuming public from those who engage in deceptive or unfair acts or practices in trade or commerce. See Fla. Stat. § 50 1.202(2). 22.

Whether a representation or practice is deceptive is a matter of judicial determination. Dept. of Legal Affairs v. Father and Son Moving & Storage, Inc. 643 So.2d 22, 26 (Fla. 4th DCA 1994).

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23.

To determine whether a representation is deceptive, courts must consider "the impression created by the representation, not its literal truth or falsity." FTC v. Peoples Credit First, LLC, 2005 WL 3468588 (M.D. Fla. 2005), affd 2007 WL 2071712 (11th Cir. 2007) (citing Removatron Int'l Corp. v. FTC, 884 F.2d 1489, 1496 (1st Cir. 1989) (quoting Am. Home Prods. Corp. v. FTC, 695 F.2d 681,687 (3d Cir. 1982)). Advertising claims are deceptive if they have the capacity to convey misleading impressions to consumers even though non-misleading interpretations may be possible. Father and Son Moving & Storage, 643 So.2d at 26. 24.

The facts pled in the Complaint allege that Corporate Defendants utilized false and deceptive statements disseminated through websites, direct mailings, television advertisements, and telemarketing sales presentations to induce consumers to pay advance fees, typically in the amount of $6000, plus monthly fees of $495 to participate in the purported mass-joinder litigation against mortgage lenders. Compl. ~~ 39-46, 52-56, 96. 25.

Corporate Defendants led consumers to believe that the mass-joinder litigation had a high likelihood of success, and that plaintiffs in the litigation were likely to receive relief including favorable modifications of the terms of their mortgage, reductions in principal and interest rates, and even recover punitive damages against the lenders. Compl. ~~ 41, 42, 45, 53. 26.

Through the various methods of sales presentations employed, Corporate Defendants led consumers to believe that HLG was staffed with experienced, competent attorneys who had significant experience in complex tort litigation, and that the attorneys had spent, and would continue to spend, a significant amount of time researching, planning, and pursuing each individual client's claims in the proposed mass-joinder litigation. Compl. ~~ 41, 42, 96. 27.

Although litigation was eventually filed on behalf of some clients by other law firms that were hired by Corporate Defendants, the pleadings filed were facially insufficient to obtain the Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 9 of 22

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relief promised to HLG clients, and Corporate Defendants did nothing to move the cases forward once filed. Compl. ~~53, 56. This was because Corporate Defendants, including the law firm HLG, were controlled mostly by the non-lawyer Individual Defendants, without significant regard for litigation theories, litigation strategy, or even a sound legal basis upon which the litigation would be brought. Compl. ~ 97 28.

Corporate Defendants collaborated in a deceptive scheme to first provide potential clients misleading information about the likely outcomes of the proposed litigation, and who would be actually litigating the matter, in order to convince them to sign up and pay the large enrollment fee, then to continue to deceive the clients about the progress of said litigation in order to continue to collect monthly fees from them. Compl. ~~ 46, 52-56. 29.

Given these well-pled allegations and Corporate Defendants' failure to answer or defend, the Court exercises its discretion to enter a default judgment against Corporate Defendants for willful violations of FDUTP A, as alleged in Count V by Florida. COUNT VI 30.

The Complaint contains well-pled factual allegations that Corporate Defendants committed Theft, as defined by Section 812.014, Florida Statutes, and Florida seeks civil remedies pursuant to Section 812.035, Florida Statutes. Compl. ~~ 103, 107, 109. 31.

Corporate Defendants knowingly obtained money from HLG clients through fraud and willful misrepresentation of the benefits of participation in the mass-joinder lawsuits and misrepresenting what clients were paying for. Corporate Defendants obtained payments with the intent to deprive the clients of their money, and these monies were appropriated to the Individual Defendants, and other persons. Com pl. ~~ 42, 45, 46, 52-56, 103-105, 108. Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 10 of 22

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32.

Corporate Defendants made numerous false claims to potential clients about the likely outcome of the litigation in order to induce them to sign up for participation in the mass-joinder litigation. Consumers signed up as clients based on Corporate Defendants' false promises that participation in the litigation would enable them to receive loan modifications and/or help them avoid or stop foreclosure proceedings. Com pl. ~~ 1 03, 1 08. 33.

Corporate Defendants' practices of routinely misleading consumers, saying and doing whatever it took in order to collect a fee, knowing that the information was false or not substantiated, combined with the fact that no relief was actually being obtained as promised, demonstrates that Corporate Defendants' sole intent, and the purpose of their existence, was to obtain money from clients which was then appropriated to Corporate Defendants and others not entitled to it, through fraud and deception. Compl. ~~ 103-105, 108. 34.

Given these well-pled allegations and Corporate Defendants' failure to answer or defend, the Court exercises its discretion to enter a default judgment against Corporate Defendants for Theft, as alleged in Count VI by Florida.

COUNTV/11 35.

The Complaint contains well-pled factual allegations that Defendant File Intake Solutions, LLC, falsified or intentionally omitted material information in an application for a Florida commercial telephone seller license, and that doing so violates FDUTPA. Compl. ~ 126. 36.

A violation of FDUTPA may also be based on a violation of "any law, statute, rule, regulation or ordinance which proscribes ... unfair, deceptive, or unconscionable acts or practices." Section 50 1.203(3)( c), Florida Statutes.

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3 7.

Defendant File Intake Solutions, LLC, filed an application with the Florida Department of Agriculture and Consumer Services in 2013 for licensure as a commercial telephone seller, pursuant to Section 501.605, Florida Statutes. Compl. ~ 120. 38.

The application contained several incorrect answers to certain questions, and information was intentionally omitted from other answers, to questions relating to the business activities of File Intake Solutions, as well as the previous activities of Individual Defendants Benn Willcox and Michael Harper. Compl. ~ 121.

39.

In general, a state has the power to regulate and license certain activities for the purpose of protecting its citizens, and to ensure that businesses do not act in a manner detrimental to the public interest. See, e.g., United Enterprises v. Dubey, 128 F. 2d 843 (5th Cir. 1942). 40.

Falsifying or omitting material information on an application for a professional license creates an unfair advantage over other businesses that are in compliance with the law, offends established public policy, and is substantially injurious to consumers, as well as competitors, and is therefore a violation of FDUTP A.

41.

Given these well-pled allegations and Corporate Defendants' failure to answer or defend, the Court exercises its discretion to enter a default judgment against File Intake Solutions for willfully violating FDUTP A, as alleged in Count VIII by Florida. DAMAGES 42.

The proper measure of consumer redress is the total amount consumers paid to purchase goods or services, less refunds already returned. McGregor v. Chierico, 206 F.3d 1378, 1389 (11th Cir. 2000); Order, CFPB v. Jalan, No. 12-02088, slip op. at 11 (C.D. Cal. July 23, 2013); FTC v. 1st Guar. Mortg. Corp., No. 09-61840-CIV-O'SULLIVAN, 2011 WL 1233207, *22 (S.D. Fla. Mar. 30, 2011); Wolf, 1996 WL 812940, *9.

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43.

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." Chierico, 206 F.3d at 1389 (quoting FTC v. Figgie Int'l, Inc., 994 F.2d 595, 606 (9th Cir. 1993)).

44.

Plaintiffs bear 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 (11th Cir. 2011).

45.

Plaintiffs have established, through competent evidence, that approximately 2,000 consumers were victimized by and paid money to Corporate Defendants between April 2012 and the end of the scheme.

46.

Plaintiffs have further established, through competent evidence, that the consumer victims of Corporate Defendants' scheme paid at least $12,608,600 over the lifetime of the scheme.

47.

During the same period, consumers received $878,021 in refunds and returns. 48.

As explained in the declaration of Theresa Ridder attached to Plaintiffs' Motion, these figures were derived from Corporate Defendants' records, including QuickBooks accounting records obtained through the TRO, and from the records of the defendants' third-party payment processors and bank statements, obtained through document requests. 49.

The net amount, $11,730,579, represents a reasonable approximation of consumer loss. 50.

Because the five Corporate Defendants operated as a single enterprise for purposes of this illegal scheme, the apportionment of proceeds received by the various entities cannot be determined with any certainty.

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51.

The Court holds the Corporate Defendants jointly and severally liable for the consumer loss caused by the conduct alleged in the Complaint. II. Definitions 52.

The following definitions apply to this Order:

a. "Affected Consumer" means any consumer who paid the Defendants or their officers, agents, servants, employees, or attorneys for mortgage assistance relief products or services between April 1, 2012, and the Effective Date. b. "Asset" 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 Corporate 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;

c. "Corporate Defendants" means The Hoffman Law Group, P.A. (f/k/a The Residential Litigation Group, P.A.); Nationwide Management Solutions, LLC; Legal Intake Solutions, LLC; File Intake Solutions, LLC; and BM Marketing Group, LLC; and their officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any of them, successors and assigns. d. "Defendants" means the Individual Defendants and Corporate Defendants, individually, collectively, or in any combination, and each of them by whatever names each might be known, and their successors and assigns. Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 14 of 22

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e. "Effective Date" means the date on which this Order is signed by the Court. f.

"Enforcement Director" means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his or her delegee. g. "Individual Defendants" means Michael Harper, Benn Willcox, and Marc Hoffman, individually, collectively, or in any combination, and each of them by any other names by which they might be known; and their successors and assigns. h.

"Person" means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.

i.

"Receiver" means Mark Bernet, Esq., or any person subsequently appointed by this Court as a Receiver in this action.

J.

"Receivership Estate" means the Assets held by the Receiver, in whatever form they exist, pursuant to the Court's Orders in this matter. k. "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 Defendants based on substantially the same facts as described in the Complaint. 1.

"Termination Date" means December 31,2015, unless extended by the Court. The Court may extend the Termination Date if it determines the Receivership needs to continue beyond December 31, 2015 in order to pursue viable claims of the Receivership Estate.

m. The words "and" and "or" will be understood to have both conjunctive and disjunctive meanings as necessary to make the applicable phrase or sentence inclusive rather than exclusive.

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ORDER III. Dissolution of Corporate Defendants 53.

The Preliminary Injunction entered against Corporate Defendants dated March 2, 2015, will remain in effect for the duration of the Receivership. 54.

Upon dissolution of the Receivership, the Corporate Defendant entities will be permanently dissolved.

55.

The Florida Department of Agriculture and Consumer Services shall cancel the Commercial Telephone Seller license held by Defendant File Intake Solutions, LLC. IV. Order to Pay Redress IT IS FURTHER ORDERED that:

56.

A judgment for equitable monetary relief is entered in favor of the Plaintiffs and against Corporate Defendants, jointly and severally, in the amount of $11,730,579, which represents the monetary value of consumer damages proven through competent evidence. 57.

The Receiver's Third Interim Report (DE 134), filed onApril29, 2015, reports that the balance of funds in the Receivership Estate, less administrative expenses and funds required to pursue additional recoveries, is $655,736.98. Based on that report, Corporate Defendants are ordered to pay $655,736.98 toward the judgment provided for in Paragraph 56. This monetary judgment is enforceable against any Asset owned by, on behalf of, for the benefit of, or in trust by or for, any Corporate Defendant. Due to the cessation of Corporate Defendants' operations and the permanent dissolution of Corporate Defendants, and the fact that the total value of Corporate Defendants' seized and liquidated Assets is insufficient to pay the full amount of relief ordered in Paragraph 56, the remainder of the monetary relief ordered in Paragraph 56 is deemed uncollectable and suspended.

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58.

The partial suspension provided in this Section is expressly premised on the truthfulness, accuracy, and completeness of the Receiver's Third Interim Report regarding the balance of funds in the Receivership Estate as of the date of the Third Interim Report. If the Court determines that the Third Interim Report contains any material misrepresentation, omission, or error, then the suspension of the monetary judgment will be terminated, and Plaintiffs can seek to enforce the full monetary judgment entered in Paragraph 56, less any amounts paid under this Section.

59.

Any person that holds Assets of any Corporate Defendant shall turn over such Asset to the Receiver within 10 days of receiving notice of this Order. 60.

Within 10 days of the Effective Date, the Receiver is ordered to pay to the Bureau, by wire transfer to the Bureau or to the Bureau's agent, and according to the Bureau's wiring instructions, $655,736.98, in partial satisfaction of the monetary judgment for equitable monetary relief provided for in Paragraph 56.

61.

Any funds received by the Bureau in satisfaction of this judgment will be deposited into a fund or funds administered by the Bureau or the Bureau's agent according to applicable statutes and regulations to be used for redress for injured consumers, including, but not limited to, refund of moneys, restitution, damages or other monetary relief for Affected Consumers, and for any attendant expenses for the administration of any such redress. 62.

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, the Bureau, after notifying Florida, may apply any remaining funds toward other equitable relief (including consumer information remedies) as determined to be reasonably related to the allegations described in the Complaint. Any funds not used for equitable relief will Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 17 of 22

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be deposited in the U.S. Treasury as disgorgement. Corporate Defendants will have no right to challenge the choice of remedies under this Section, and will have no right to contest the manner of distribution chosen.

63.

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 on Federal Claims IT IS FURTHER ORDERED that:

64.

Judgment is entered against Corporate Defendants, in favor of Plaintiffs, on Counts I through IV.

65.

Under Section 1055(c) of the CFPA, 12 U.S. C. § 5565(c), by reason of the violations of law described in the Complaint, and taking into account the factors in 12 U.S.C. § 5565(c)(3), Corporate Defendants must pay a civil money penalty of $10,000,000 to the Bureau. 66.

The civil money penalty paid under this Section 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). 67.

Corporate Defendants must treat the civil money penalty paid under this Section as a penalty paid to the government for all purposes.

68.

If Corporate Defendants receive, directly or indirectly, any reimbursement or indemnification from any source, including, but not limited to, payment made under any insurance policy, or if Corporate Defendants secure tax deductions or tax credits with regard to any federal, state, or local tax, the Receiver, on behalf of Corporate Defendants, must: (a) immediately notify the Enforcement Director in writing, and (b) within 20 days of receiving the funds or monetary benefit, transfer the full amount, less fees approved by the court, of such funds or monetary benefit ("Additional Payment") to the Bureau or to the Bureau's agent Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 18 of 22

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according to the Bureau's wiring instructions. The Additional Payment will be applied toward satisfaction of the monetary judgments in this Order.

VI. State Civil Penalties 69.

Judgment is entered against Corporate Defendants, in favor of Florida, on Count V for willful violation of FDUTP A, for creation and dissemination of false and misleading statements in direct mail pieces, on the Hoffman Law Group website, and during telephone sales presentations.

70.

Corporate Defendants knew or should have known that their conduct violated FDUTP A. The undisputed allegations in the Complaint and competent evidence put forth by Plaintiffs demonstrated that approximately 2,000 clients paid monies to Corporate Defendants based upon their deceptive and misleading practices. Accordingly, a civil penalty of $3,000 per violation is imposed for a total civil penalty of $6,000,000 against Corporate Defendants, jointly and severally.

71.

Judgment is entered against File Intake Solutions, in favor of Florida, on Count VIII for willful violation of FDUTP A for knowingly submitting a false commercial telephone seller license application to the Florida Department of Agriculture and Consumer Services. File Intake Solutions shall pay a civil penalty of$5,000 to the State of Florida, General Revenue Fund for this violation.

VII.

Additional Monetary Provisions IT IS FURTHER ORDERED that:

72.

In the event of any default on Corporate Defendants' obligations to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 19 of 22

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outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable.

73.

Corporate 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 Corporate Defendants.

74.

The Court retains jurisdiction to consider any motion by Plaintiffs for an award of reasonable attorney's fees and costs.

VIII. Cooperation with the Plaintiffs IT IS FURTHER ORDERED that:

75.

The Receiver is directed to cooperate fully to help the Plaintiffs to determine the identity and location of, and the amount of injury sustained by, each Affected Consumer. IX. Liquidation of Receivership Assets and Other Matters Related to the Receivership IT IS FURTHER ORDERED that:

76.

The Receiver is directed to liquidate all remaining Assets of Corporate Defendants. 77.

Within 30 days from the Effective Date, the Receiver will make available to the Bureau all documents containing information regarding consumer payments made to Defendants. 78.

By November 1, 2015, the Receiver will file an interim report disclosing all Assets of the Receivership Estate and the value of said property; the amount of Receiver's fees and expenses, including any outstanding fees and expenses to be paid from the Receivership Estate; any outstanding claims or judgments of the Receivership or Corporate Defendants and the expected date of payment on those claims, if any; and the amount of money and time needed for the Receiver to collect on any outstanding claims or judgments ("Interim Report"). The Interim Report will inform the Court whether the Receivership needs to continue to exist beyond Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 20 of 22

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December 31, 2015, to pursue viable claims. If the Receiver believes that viable outstanding claims ofthe Receivership Estate will not be resolved by December 31, 2015, the Receivership will move for the Court for an appropriate extension of the Termination Date. 79.

The Receiver is directed to continue to pursue viable Assets of the Receivership until the Termination Date.

80.

On the Termination Date, the Receiver will pay any remaining funds in the Receivership Estate, less the Receiver's proposed reasonable fees and costs, to Plaintiffs toward any unpaid penalties and fees set forth in this Order. The payment will be made in accordance with instructions provided by Plaintiffs.

81.

On the Termination Date, the Receiver shall file and serve on the parties a report and accounting ("Final Report"). The Final Report must include an accounting of Corporate Defendants' finances and total Assets. Included with the Final Report, the Receiver shall file its final application for payment of fees and expenses associated with its performance of its duties as a Receiver.

82.

Ten days after the Termination Date, the Receiver will submit to the Court the Final Report and any objections to the report and the Court will determine if it should issue an order directing that the Receiver:

a. Pay the reasonable costs and expenses of administering the Receivership pursuant to the Receiver's application for payment of costs and expenses; and b. To the extent that funds remain, remit such funds to the Bureau within ten days by wire transfer to the Bureau or to the Bureau's agent, and according to the Bureau's wiring instructions.

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83.

Until the Termination Date, 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, if any, that any Corporate 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. 84.

Upon the transfer of funds pursuant to this Section, the Receivership will be dissolved. X. Retention of Jurisdiction IT IS FURTHER ORDERED that this Court will retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. XI. Service IT IS FURTHER ORDERED that this Order may be served upon Corporate Defendants by certified mail or United Parcel Service, either by the United States Marshal, the Clerk of Court, or any representative or agent of the Bureau.

IT IS SO ORDERED, on /J? Itt:! .2.<i/ , 2015.

ates District Judge Case 9:14-cv-80931-JIC Document 148 Entered on FLSD Docket 05/28/2015 Page 22 of 22

Stipulation (May 2015)

PDF of this document (25 pages)

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA CASE NO. 14-80931-CIV-COHN-SELTZER CONSUMER FINANCIAL PROTECTION BUREAU and THE STATE OF FLORIDA, Office of the Attorney General, Department of Legal Affairs Plaintiffs, v.

MICHAEL HARPER, an individual; BENN WILLCOX, an individual; MARC HOFFMAN, an individual; THE HOFFMAN LAW GROUP, P.A. f/k/a THE RESIDENTIAL LITIGATION GROUP, P.A., a Florida corporation; NATIONWIDE MANAGEMENT SOLUTIONS, LLC, a Florida limited liability company; LEGAL INTAKE SOLUTIONS, LLC, a Florida limited liability company; FILE INTAKE SOLUTIONS, LLC, a Florida limited liability company; and BM MARKETING GROUP, LLC, a Florida limited liability company, Defendants.

STIPULATED FINAL JUDGMENT AND ORDER AS TO DEFENDANT BENN WILLCOX Plaintiffs, the Consumer Financial Protection Bureau ("CFPB" or "Bureau") and the State of Florida ("Florida"), commenced this civil action on July 14, 2014, pursuant to: (1) Sections 1054 and 1055 of the Consumer Financial Protection Act of 2010 ("CFPA"), 12 U.S.C. §§ 5564, 5565; (2) Section 626 of the Omnibus Appropriations Act of 2009, as amended by Section 1097 of the CFPA, 12 U.S.C. § 5538, and the Mortgage Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 1 of 25

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Assistance Relief Services Rule, 12 C.F.R. Part 1015 ("Regulation 0"); (3) the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Chapter 501, Part II, Florida Statutes; and (4) Florida's Civil Theft Law, Sections 812.035(5), 812.014, Florida Statutes. On that date, Plaintiffs filed a Complaint for Permanent Injunction and Other Relief ("Complaint"), seeking preliminary and permanent injunctive relief, rescission or reformation of contracts, the refund of monies paid, restitution, disgorgement of illgotten monies, civil money penalties, and other equitable relief for Defendants' acts or practices related to the marketing and sale of Mortgage Assistance Relief Services in violation of Regulation 0, FDUTPA, and Florida's Civil Theft Law. Compl., DE 4. On July 16, 2014, the Court issued an ex parte Temporary Restraining Order against the Defendants, which froze the Defendants' assets and placed The Hoffman Law Group and the other Corporate Defendants (defined below) into receivership. DE 13.

The Corporate Defendants failed to file an answer or otherwise defend in this action, and the Clerk entered default against them on September 12, 2014. DE 71, 72. The Court approved stipulated preliminary injunctions for Defendant Marc Hoffman on September 15, 2014, and for Defendants Benn Willcox and Michael Harper on September 23, 2014. DE 76, 89, go. The Court approved and entered a preliminary injunction against the Corporate Defendants on March 2, 2015. DE 131. Plaintiffs and Defendant Benn Willcox, by and through their respective counsel, have agreed to the entry of this Stipulated Final Judgment and Order as to Defendant Benn Willcox ("Order") by this Court.

It is therefore ORDERED, ADJUDGED, AND DECREED as follows: Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 2 of 25

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I. Findings 1.

This Court has jurisdiction over the subject matter of this case and over Defendant Benn Willcox 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 12 u.s.c. § 5564(f).

3· Plaintiffs and Mr. Willcox agree to entry of this Order, without adjudication of any issue of fact or law, 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 Regulation 0, 12 C.F.R. Part 1015; FDUTPA, Chapter 501, Part II, Florida Statutes; and Florida's Civil Theft Law, Sections 812.035(5), 812.014, Florida Statutes. 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 Section 501.207 et seq. and Section 812.035(5), Florida Statutes.

5.

For the purposes of this Order, Mr. Willcox admits the facts necessary to establish the Court's jurisdiction over him and the subject matter of this action, but does not admit the allegations in the Complaint or waive any privilege, including his privilege against self-incrimination.

6.

Mr. Willcox waives all rights to seek judicial review or otherwise challenge or contest the validity of this Order. Mr. Willcox also waives any claim he may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action. Each party will bear its own costs and expenses, including, without limitation, attorneys' fees, except as otherwise provided in Section XV of this Order. Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 3 of 25

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7.

Entry of this Order is in the public interest. II. Definitions 8.

The following definitions apply to this Order: a. "Affected Consumer" means any consumer to whom the Defendants or their officers, agents, servants, employees, or attorneys sold or provided Mortgage Assistance Relief Products or Services between April1, 2012 and the Effective Date.

b. "Asset" 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, 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 Individual Defendant, any of the Individual Defendants' minor children, or any of the Individual Defendants' spouses. c. "Assisting others" includes, but is not limited to: 1.

Consulting in any form whatsoever;

ii.

Performing customer service functions including, but not limited to, receiving or responding to consumer complaints; iii.

Formulating or providing, or arranging for the formulation or provision of, any advertising or marketing material, including, but not Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 4 of 25

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limited to, any telephone sales script, direct mail solicitation, or the text of any Internet website, email, or other electronic communication; IV.

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;

v.

Providing names of, or assisting the generation of, potential customers;

VI.

Performing marketing, billing, or payment services of any kind; or vii.

Acting or serving as an employee, independent contractor, owner, officer, director, manager, or principal. d. "Commercial Telephone Solicitation" means: 1.

An unsolicited telephone call to a person for the purpose of inducing the person to purchase or invest in consumer goods or services; ii.

Communication with a person where (1) a gift, award, or prize is offered or (2) a telephone call response is invited, and (3) the salesperson intends to complete a sale or enter into an agreement to purchase consumer goods or services during the course of the telephone call; or iii.

Any other communication with a person that represents a price, quality, or availability of consumer goods or services and invites a response by telephone or which is followed by a call to the person by a salesperson.

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e. "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 CFP A, 12 U.S.C. § 5481(5), and, subject to applicable restrictions contained in the CFPA, includes, but is not limited to:

1.

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);

ii.

Providing real estate settlement services or performing appraisals of real estate or personal property;

iii.

Providing financial advisory services (other than services relating to securities provided by a person regulated by the Securities and Exchange Commission or a person regulated by a state securities commission, but only to the extent that such person acts in a regulated capacity) to consumers on individual financial matters or relating to proprietary financial products or services (other than by publishing any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation, including publishing market data, news, or data analytics or investment information or recommendations that are not tailored to the individual needs of a particular consumer), including- CO providing credit counseling to any consumer; and Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 6 of 25

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(II) providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure;

IV.

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 v.

Collecting debt related to any Consumer Financial Product or Service. f. "Corporate Defendants" means The Hoffman Law Group, P .A. (f/k/ a The Residential Litigation Group, P.A.); Nationwide Management Solutions, LLC; Legal Intake Solutions, LLC; File Intake Solutions, LLC; and BM Marketing Group, LLC; and their successors and assigns. g. "Debt Relief Product or Service" means any product, service, plan, or program represented, expressly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt or obligation, including, but not limited to, a tax debt or obligation, between a person 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. h. "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, and their successors and assigns.

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i. "Effective Date" means the date on which this Stipulated Final Judgment and Order as to Defendant Benn Willcox is signed by the Court. j. "Enforcement Director" means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his or her delegee.

k. "Individual Defendants" means Michael Harper, Benn Willcox, and Marc Hoffman, individually, collectively, or in any combination, and each of them by any other names by which they might be known, and their successors and assigns.

1. "Material fact" means any fact that is likely to affect a person's choice of, or conduct regarding, goods or services.

m. "Mortgage Assistance Relief Product or Service" means any product, service, plan, or program, offered or provided to the consumer in exchange for consideration, that is represented, expressly or by implication, to assist or attempt to assist the consumer with any of the following: 1.

Stopping, preventing, or postponing any mortgage or deed of trust foreclosure sale of the consumer's dwelling, any repossession of the consumer's dwelling, or otherwise saving the consumer's dwelling from foreclosure or repossession;

ii.

Negotiating, obtaining, or arranging a modification of any term of a dwelling loan, including a reduction in the amount of interest, principal balance, monthly payments, or fees; 111.

Obtaining any forbearance or modification in the timing of payments from any dwelling loan holder or servicer on any dwelling loan; Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 8 of 25

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IV.

Negotiating, obtaining, or arranging any extension of the period of time within which the consumer may: (i) cure his or her default on a dwelling loan, (ii) reinstate his or her dwelling loan, (iii) redeem a dwelling, or (iv) exercise any right to reinstate a dwelling loan or redeem a dwelling;

v.

Obtaining any waiver of an acceleration clause or balloon payment contained in any promissory note or contract secured by any dwelling; or vi.

Negotiating, obtaining, or arranging: (i) a short sale of a dwelling, (ii) a deed-in-lieu of foreclosure, or (iii) any other disposition of a dwelling other than a sale to a third party who is not the dwelling loan holder. The foregoing includes any manner of claimed assistance to consumers with respect to mortgages, including, but not limited to, auditing or examining a consumer's mortgage or home loan application. n. "Person" means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.

o. "Personal Property" means the items listed in Schedule A, attached to this Order. The items are the subject of the Agreed Motion For Leave to Liquidate Certain Personal Assets of Defendant Benn Willcox, filed with the Court. p. "Receiver" means Mark Bernet, Esq., or any person subsequently appointed by this Court as a Receiver in this action.

q. "Related Consumer Action" means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 9 of 25

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brought against Defendants based on substantially the same facts as described in the Complaint.

r. "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.

s. The words "and" and "or" will be understood to have both conjunctive and disjunctive meanings as necessary to make the applicable phrase or sentence inclusive rather than exclusive.

ORDER III. Permanent Ban on Offering Consumer Financial Products or Services IT IS ORDERED that:

g.

Mr. Willcox, whether acting directly or indirectly, is permanently restrained from:

a. Advertising, marketing, promoting, offering for sale, or selling any Consumer Financial Product or Service, including any Mortgage Assistance Relief Product or Service or any Debt Relief Product or Service; and b. Assisting others engaged in advertising, marketing, promoting, offering for sale, or selling any Consumer Financial Product or Service, including any Mortgage Assistance Relief Product or Service or any Debt Relief Product or Service.

10.

However, Paragraph 9 does not prohibit Mr. Willcox, if he is licensed or registered as a real estate broker or real estate agent, in accordance with state law, from: (1) acting as a real estate agent or broker for a buyer, seller, lessor, or lessee of real Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 10 of 25

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property; (2) bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property; (3) negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property (other than in connection with the provision of financing with respect to any such transaction); or (4) offering to engage in any activity, or act in any capacity, described in subparagraphs (1), (2), or (3) above.

IV. Restrictions on Telemarketing IT IS FURTHER ORDERED that:

11.

Mr. Willcox, whether acting directly or indirectly, is restrained from engaging in, participating in, or assisting others in Telemarketing or in any other Commercial Telephone Solicitation for a period of five years.

12.

Mr. Willcox is permitted to engage in any activity that is exempt from the provisions of the Florida Telemarketing Act, Chapter 501, Part IV, Florida Statutes, pursuant to Section 501.604, Florida Statutes, that is not otherwise prohibited by this Order.

13.

After five years, Mr. Willcox is permitted to engage in Telemarketing or other Commercial Telephone Solicitation only if he obtains a Commercial Telephone Salesperson license, as defined by Section 501.607, Florida Statutes, from the state of Florida, and only if said activities are in compliance with the Florida Telemarketing Act and the terms of this Order.

14.

While he is permitted to work as a licensed Commercial Telephone Salesperson after five years, Mr. Willcox will never seek licensure, nor will he act as, a Commercial Telephone Seller, as defined by Section 501.603(2), Florida Statutes. Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 11 of 25

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V. Prohibited Practices Relating to Offering Any Goods or Services IT IS FURTHER ORDERED that:

15.

Mr. Willcox, whether acting directly or indirectly, is permanently restrained from:

a. Misrepresenting or assisting others in misrepresenting, directly or indirectly, expressly or by implication, any material fact including, but not limited to: 1.

The total costs to purchase, receive, or use any good or service; ii.

Any material restriction, limitation, or condition to purchase, receive, or use any good or service;

iii.

Any material aspect of the nature or terms of a refund, cancellation, exchange, or repurchase policy for any good or service; iv.

The income, profits, or sales likely to be achieved from any good or service; and v.

Any material aspect of the performance, efficacy, nature, or central characteristic of any good or service.

b. Assisting others to make any material misrepresentation in connection with the advertising, marketing, promotion, offering for sale, or sale of any good or service including, but not limited to, the misrepresentation listed in subparagraph (a) immediately above; and c. Violating, or assisting others in violating, any federal or state consumer protection laws, including, but not limited to, any provision of the FDUTPA or Regulation 0.

VI. Prohibited Use of Consumer Information IT IS FURTHER ORDERED that:

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16.

Mr. Willcox, whether acting directly or indirectly, may not disclose, use, or benefit 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), that Defendants obtained before the Effective Date in connection with Consumer Financial Products or Services, Mortgage Assistance Relief Products or Services, or Debt Relief Products or Services offered or provided by the Defendants. 17.

However, consumer information may be disclosed if requested by a government agency or required by law, regulation, or court order. 18.

Mr. Willcox, whether acting directly or indirectly, may not attempt to collect, collect, sell, assign, or otherwise transfer any right to collect payment from any consumer who purchased or agreed to purchase Consumer Financial Products or Services, Mortgage Assistance Relief Products or Services, or Debt Relief Products or Services from Defendants.

VII. Order to Pay Redress IT IS FURTHER ORDERED that:

19.

A judgment for equitable monetary relief is entered in favor of Plaintiffs and against Mr. Willcox, in the amount of $11,730,579; however, this judgment will be automatically suspended upon satisfaction of the obligations in Paragraph 20 of this Section, subject to Section VIII of this Order.

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20.

Within ten days of the Effective Date, Mr. Willcox will turn over to the Receiver the Personal Property listed on Schedule A. The estimated value of said Personal Property is $go,ooo. 1 21.

Mr. Willcox waives the right to recuperate or make any claim to any assets in the possession, custody, or control of the Receiver, including the Personal Property described above. 2 22.

With regard to Mr. Willcox's relinquishment of assets to the Receiver, if Mr. Willcox receives, directly or indirectly, any reimbursement or indemnification from any source, including, but not limited to, payment made under any insurance policy, or if Mr. Willcox secures a tax deduction or tax credit with regard to any federal, state, or local tax, Mr. Willcox must: (a) immediately notify the Enforcement Director in writing, and (b) within 20 days of receiving the funds or monetary benefit, transfer 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. The Additional Payment will be applied toward satisfaction of the judgment referenced in Paragraph 19. After the Bureau receives the Additional Payment, the amount of the suspended judgment referenced in Paragraph 19 will be reduced by the amount of the Additional Payment.

23.

Any funds received by the Bureau in satisfaction of this judgment will be deposited into a fund or funds administered by the Bureau or to the Bureau's agent 1 The estimated values ofthe surrendered jewelry are based upon appraisals of replacement value conducted by a Certified Gemologist Appraiser for insurance purposes on November 15, 2013 and April25, 2014, which has been furnished by Mr. Willcox. The estimated value of other assets was estimated and furnished by Mr. Willcox in a sworn declaration.

2 Pursuant to the Court's Temporary Restraining Order, Mr. Willcox surrendered to the Receiver $1,394.23 in cash and two jet skis and trailer, auctioned for $16,770.00. Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 14 of 25

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according to applicable statutes and regulations to be used for redress for injured 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.

24.

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, the Bureau, after notifying Florida, may apply any remaining funds toward other equitable relief (including consumer information remedies) as determined to be reasonably related to the alleged violations described in the Complaint. Any funds not used for equitable relief will be deposited in the U.S. Treasury as disgorgement. Mr. Willcox will have no right to challenge the choice of remedies under this Section, and will have no right to contest the manner of distribution.

25.

Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right. VIII. Effect of Misrepresentation Regarding Financial Condition IT IS FURTHER ORDERED that:

26.

The suspension of the monetary judgment entered in Section VII of this Order is expressly premised on the truthfulness, accuracy, and completeness of Mr. Willcox's financial statement and supporting documents submitted to Plaintiffs on September 19, 2014 and February 25, 2015 and Mr. Willcox's oral testimony provided on September 4, 2014 and November 19, 2014, which Mr. Willcox asserts are truthful, accurate, and complete.

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27.

The suspension of the monetary judgment entered in Section VII of this Order is further expressly premised on the truthfulness, accuracy, and completeness of Mr. Willcox's representations regarding the assets of the Corporate Defendants as of the Effective Date.

28.

If the Court determines that Mr. Willcox has failed to disclose any material asset or that any of his financial statements contain any material misrepresentation or omission, including materially misstating the value of any asset, then the suspension of the monetary judgment entered in Section VII will be terminated, and the Bureau can seek to enforce in any Federal district court as immediately due and payable the full judgment entered in Paragraph 19 of this Order-$11,730,579-less any amounts already paid under Section VII of this Order.

29.

After the reinstatement of the monetary judgment under this Section, Plaintiffs will be entitled to interest on the judgment, computed from the Effective Date, at the rate prescribed by 28 U.S.C. § 1961, as amended, on any outstanding amounts not paid. IX. Order to Pay Civil Money Penalties IT IS FURTHER ORDERED that:

30.

Under Section 1055(c) of the CFPA, 12 U.S.C. § ss6s(c), by reason of the alleged violations of law described in the Complaint, and taking into account the factors in 12 U.S.C. § ss6s(c)(3), Mr. Willcox must pay a civil money penalty of $1.00 to the Bureau. This nominal penalty is based on Mr. Willcox's limited ability to pay following the entry of this Court's Ex Parte Temporary Restraining Order with Asset Freeze, as attested to in Mr. Willcox's financial statements.

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31.

Within 10 days of the Effective Date, Mr. Willcox 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.

32.

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).

33· Mr. Willcox must treat the civil money penalty paid under this Order as a penalty paid to the government for all purposes.

X. Additional Monetary Provisions IT IS FURTHER ORDERED that:

34.

In the event of any default on Mr. Willcox'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.

35· Mr. Willcox 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 Mr. Willcox.

36.

Under 31 U.S.C. § 7701, Mr. Willcox, unless he has already done so, must furnish to Plaintiffs his taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. 37· Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, Mr. Willcox must notify the Enforcement Director of the final judgment, consent order, or settlement in writing. That notification must indicate the amount of redress, if any, that any Defendant paid or is required to pay to consumers Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 17 of 25

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and describe the consumers or classes of consumers to whom that redress has been or will be paid.

38.

Under Section 604(a)(1) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(a)(1), any consumer reporting agency may furnish a consumer report concerning Mr. Willcox to the Bureau or the Florida Attorney General, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. XI. Reporting Requirements IT IS FURTHER ORDERED that:

39.

For five years from the Effective Date, Mr. Willcox must notify the Bureau and Florida 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 relating to the Corporate Defendants that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate of the Corporate Defendants that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Mr. Willcox; or a change in Mr. Willcox's name or address. Mr. Willcox must provide this notice at least 30 days before the development or as soon as practicable after learning about the development, whichever is sooner.

40.

Within 7 days of the Effective Date, Mr. Willcox must: a. Designate at least one telephone number and email, physical, and postal address as points of contact, which Plaintiffs may use to communicate with Mr. Willcox;

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b. Identify all businesses for which Mr. Willcox is the majority owner, or that Mr. Willcox 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 Mr. Willcox's telephone numbers and all email, Internet, physical, and postal addresses, including all residences;

e. Describe in detail Mr. Willcox's involvement in any business for which he performs services in any capacity or which he wholly or partially owns, including Mr. Willcox's titles, roles, responsibilities, participation, authority, control, and ownership.

41.

For five years from the Effective Date, Mr. Willcox must report any change in the information required to be submitted under Paragraph 40 at least 30 days before the change or as soon as practicable after learning about the change, whichever is sooner. XII. Order Distribution and Acknowledgment IT IS FURTHER ORDERED that:

42.

Within 30 days of the Effective Date, Mr. Willcox, 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 this Order. 43· For five years from the Effective Date, Mr. Willcox, 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 Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 19 of 25

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Section XI, 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 this Order before they assume their responsibilities.

44.

Mr. Willcox 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 theE-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. XIII. Recordkeeping IT IS FURTHER ORDERED that:

45· Mr. Willcox must create, for at least five years from the Effective Date, the following business records for any business for which Mr. Willcox, 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 and Florida;

b. Copies of all sales scripts, training materials, advertisements, websites, and other marketing materials, including any such materials used by a third party on behalf of Mr. Willcox or his business; and c. Documents sufficient to demonstrate the experience of consumers interacting with Mr. Willcox, whether acting directly or through any sole proprietorship, partnership, limited liability company, corporation, subsidiary, branch, division, affiliate, or other entity, when Mr. Willcox advertised, promoted, Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 20 of 25

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marketed, offered for sale, sold, or provided products or services to consumers.

46.

Mr. Willcox must retain the documents identified in Paragraph 45 for at least five years.

47· Mr. Willcox must make the documents identified in Paragraph 45 available to the Bureau and Florida upon either Plaintiffs request. XIV. Notices IT IS FURTHER ORDERED that:

48.

Unless otherwise directed in writing by Plaintiffs, Mr. Willcox must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, "CFPB and State of Florida v. Harper, Willcox, et al., CASE NO. 14-80931-CIV-COHN-SELTZER," and send them either: a. By first-class U.S. mail to the below address and contemporaneously by email to:

Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1700 G Street, N.W.

Washington D.C. 20552 Enforcement [email protected]; and Florida Attorney General c/o Director of Consumer Protection Division 3507 East Frontage Road #325 Tampa, Florida 33607 [email protected] b. By overnight courier (not the U.S. Postal Service) and contemporaneously by email, as follows:

Assistant Director for Enforcement Consumer Financial Protection Bureau Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 21 of 25

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ATTENTION: Office of Enforcement 1625 Eye Street, N.W.

Washington D.C. 20006 Enforcement [email protected]; and Office of the Attorney General cj o Director of Consumer Protection Division 3507 East Frontage Road #325 Tampa, Florida 33607 [email protected] XV. Resolution of State Claims IT IS FURTHER ORDERED that:

49.

Mr. Willcox shall pay civil penalties to the State of Florida, General Revenue Fund, in the following amounts:

a. $20,000 for settlement of state claims of violation of FDUTPA for Mr. Willcox's role in the creation and dissemination of false and misleading statements in direct mail pieces and on The Hoffman Law Group website; and b. $5,000 for settlement of state claims of violation of FDUTPA for knowingly submitting a false commercial telephone seller license application to the Florida Department of Agriculture and Consumer Services. so.

In consideration of Mr. Willcox's compliance with the permanent injunctive relief mandated in this Order, and based upon the information supplied by Mr. Willcox in sworn financial statements submitted to Plaintiffs on September 19, 2014 and February 25, 2015, and in the interest of consumer restitution, the payment of $25,000 of this penalty is suspended. However, the parties agree that the $25,000 penalty shall be imposed and due and owing if Mr. Willcox is found to have provided false or misleading information about his financial condition, or if he violates any of the terms of Sections III through VI of this Order.

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51.

Florida reserves the right to seek investigative and attorneys' fees and costs upon default, or upon any future noncompliance. Time is of the essence in all payments required under this Order.

XVI. Cooperation with Plaintiffs IT IS FURTHER ORDERED that:

52.

Mr. Willcox must cooperate fully to help Plaintiffs to determine the identity and location of, and the amount of injury sustained by, each Affected Consumer. Mr. Willcox must provide such information in his or his agents' possession or control within 14 days of receiving a written request from either Plaintiff. 53· Mr. Willcox must cooperate fully with Plaintiffs in this matter and in any investigation related to or associated with the conduct described in the Complaint. Mr. Willcox must provide truthful and complete information, evidence, and testimony. Mr. Willcox must appear for interviews, discovery, hearings, trials, and any other proceedings that Plaintiffs may reasonably request upon five days' written notice, or other reasonable notice, at such places and times as Plaintiffs may designate, without the service of compulsory process.

XVII. Cooperation with Receiver IT IS FURTHER ORDERED that:

54.

Mr. Willcox, and his successors, assigns, officers, agents, directors, employees, salespersons, independent contractors, attorneys, and corporations, and all other persons or entities in active concert or participation with him, who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any trust, corporation, subsidiary, or other device, or any of them, must fully cooperate with and assist the Receiver.

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XVIII.

Compliance Monitoring IT IS FURTHER ORDERED that, to monitor Mr. Willcox's compliance with this Order, including the financial representations upon which the judgment for equitable monetary relief was suspended:

55· Within 14 days of receipt of a written request from one of the Plaintiffs, Mr. Willcox must submit additional requested information, which must be made under penalty of perjury; provide sworn testimony; or produce documents. 56.

For purposes of this Section, Plaintiffs may communicate directly with Mr. Willcox, unless Mr. Willcox retains counsel related to these communications. 57· Mr. Willcox must permit Plaintiffs' representatives to interview any employee or other person affiliated with Defendants who has agreed to such an interview. The person interviewed may have counsel present.

58.

Nothing in this Order will limit Plaintiffs' lawful use of compulsory process under 12 C.F.R. § 1080.6 or any other applicable law.

XIX. Retention of Jurisdiction IT IS FURTHER ORDERED that this Court will retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. XX. Final Judgment and Order Plaintiffs and Mr. Willcox have consented to the terms and conditions of this Order as set forth above and have consented to the entry thereof. IT IS SO ORDERED, _frl:,.___.:.A-!J~_;;_5 _____ , 2015. orable James I. Cob tates District Judge Case 9:14-cv-80931-JIC Document 140 Entered on FLSD Docket 05/05/2015 Page 24 of 25

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Schedule A

List of Personal Property to be Relinquished to Receiver by Defendant Willcox

Zenith watch

Breitling Bentley watch Breitling Super Avenger watch Rolex watch

Tag watch

Two-tone and diamond bracelet Diamond drop earrings Square diamond necklace Square diamond earrings Diamond necklace Diamond ring

Diamond earrings Diamond pendant necklace Diamond bracelet

Diamond hoop earrings Diamond studs

Diamond teardrop necklace Chain

Two-toned necklace

Ring

380 Ruger

Glock 45

Computer — HP

Sharp TV

Stipulation (May 2015)

PDF of this document (25 pages)

Page 108

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA CASE NO. 14-80931-CIV-COHN-SELTZER CONSUMER FINANCIAL PROTECTION BUREAU and THE STATE OF FLORIDA, Office of the Attorney General, Department of Legal Affairs Plaintiffs, v.

MICHAEL HARPER, an individual; BENN WILLCOX, an individual; MARC HOFFMAN, an individual; THE HOFFMAN LAW GROUP, P.A. f/k/a THE RESIDENTIAL LITIGATION GROUP, P.A., a Florida corporation; NATIONWIDE MANAGEMENT SOLUTIONS, LLC, a Florida limited liability company; LEGAL INTAKE SOLUTIONS, LLC, a Florida limited liability company; FILE INTAKE SOLUTIONS, LLC, a Florida limited liability company; and BM MARKETING GROUP, LLC, a Florida limited liability company, Defendants.

STIPULATED FINAL JUDGMENT AND ORDER AS TO DEFENDANT MARC HOFFMAN Plaintiffs, the Consumer Financial Protection Bureau ("CFPB" or "Bureau") and the State of Florida ("Florida"), commenced this civil action on July 14, 2014, pursuant to: (1) Sections 1054 and 1055 of the Consumer Financial Protection Act of 2010 ("CFPA"), 12 U.S.C. §§ 5564, 5565; (2) Section 626 of the Omnibus Appropriations Act of 2009, as amended by Section 1097 of the CFPA, 12 U.S.C. § 5538, and the Mortgage Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 1 of 25

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Assistance Relief Services Rule, 12 C.F.R. Part 1015 ("Regulation 0"); (3) the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Chapter 501, Part II, Florida Statutes; and (4) Florida's Civil Theft Law, Sections 812.035(5), 812.014, Florida Statutes. On that date, Plaintiffs filed a Complaint for Permanent Injunction and Other Relief ("Complaint"), seeking preliminary and permanent injunctive relief, rescission or reformation of contracts, the refund of monies paid, restitution, disgorgement of illgotten monies, civil money penalties, and other equitable relief for Defendants' acts or practices related to the marketing and sale of mortgage assistance relief services in violation of Regulation 0, FDUTPA, and Florida's Civil Theft Law. Compl., DE 4· On July 16, 2014, the Court issued an ex parte Temporary Restraining Order against Defendants, which froze Defendants' assets and placed The Hoffman Law Group and the other Corporate Defendants (defined below) into receivership. DE 13. The Corporate Defendants failed to file an answer or otherwise defend in this action, and the Clerk entered default against them on September 12, 2014. DE 71, 72. The Court approved stipulated preliminary injunctions for Defendant Marc Hoffman on September 15,2014, and for Defendants Benn Willcox and Michael Harper on September 23, 2014. DE 76, 89, 90. On March 2, 2015, the Court entered preliminary injunctions against each of the Corporate Defendants. DE 131. Plaintiffs and Defendant Marc Hoffman, by and through their respective counsel, have agreed to the entry of this Stipulated Final Judgment and Order as to Defendant Marc Hoffman ("Order") by this Court.

It is therefore ORDERED, ADJUDGED, AND DECREED as follows: Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 2 of 25

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I. Findings 1.

This Court has jurisdiction over the subject matter of this case and over Defendant Marc Hoffman 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 12 u.s.c. § 5564(0.

3.

Plaintiffs and Mr. Hoffman agree to entry of this Order, without adjudication of any issue of fact or law, 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 Regulation 0, 12 C.F.R. Part 1015; FDUTPA, Chapter 501, Part II, Florida Statutes; and Florida's Civil Theft Law, Sections 812.035(5), 812.014, Florida Statutes. 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 Sections 503.207 et seq. and Section 812.035(5), Florida Statutes.

5.

For the purposes of this Order, Mr. Hoffman admits the facts necessary to establish the Court's jurisdiction over him and the subject matter of this action, but does not admit the allegations in the Complaint or waive any privilege, including his privilege against self-incrimination.

6.

Mr. Hoffman waives all rights to seek judicial review or otherwise challenge or contest the validity of this Order. Mr. Hoffman also waives any claim he may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action. Each party will bear its own costs and expenses, including, without limitation, attorneys' fees, except as otherwise provided in Section XVI of this Order. Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 3 of 25

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7· Entry of this Order is in the public interest. II. Definitions 8.

The following definitions apply to this Order: a. "Affected Consumer" means any consumer to whom Defendants or their officers, agents, servants, employees, or attorneys sold or provided Mortgage Assistance Relief Products or Services between April1, 2012 and the Effective Date.

b. "Asset" 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, 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 Individual Defendant, any of Individual Defendants' minor children, or any of Individual Defendants' spouses. c. "Assisting others" includes, but is not limited to: i.

Consulting in any form whatsoever;

ii.

Performing customer service functions including, but not limited to, receiving or responding to consumer complaints; iii.

Formulating or providing, or arranging for the formulation or provision of, any advertising or marketing material, including, but not Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 4 of 25

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limited to, any telephone sales script, direct mail solicitation, or the text of any Internet website, email, or other electronic communication; iv.

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;

v.

Providing names of, or assisting the generation of, potential customers;

vi.

Performing marketing, billing, or payment services of any kind; or vii.

Acting or serving as an employee, independent contractor, owner, officer, director, manager, or principal. d. "Commercial Telephone Solicitation" means: i.

An unsolicited telephone call to a person for the purpose of inducing the person to purchase or invest in consumer goods or services; ii.

Communication with a person where (1) a gift, award, or prize is offered or (2) a telephone call response is invited, and (3) the salesperson intends to complete a sale or enter into an agreement to purchase consumer goods or services during the course of the telephone call; or iii.

Any other communication with a person that represents a price, quality, or availability of consumer goods or services and invites a response by telephone or which is followed by a call to the person by a salesperson.

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e. "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 CFP A, 12 U.S.C. § 5481(5), and, subject to applicable restrictions contained in the CFPA, includes, but is not limited to:

1.

Extending credit and servicing loans, including acquiring, purchasing, selling, broke ring, or other extensions of credit (other than solely extending commercial credit to a person who originates consumer credit transactions);

ii.

Providing real estate settlement services or performing appraisals of real estate or personal property;

iii.

Providing financial advisory services (other than services relating to securities provided by a person regulated by the Securities and Exchange Commission or a person regulated by a state securities commission, but only to the extent that such person acts in a regulated capacity) to consumers on individual financial matters or relating to proprietary financial products or services (other than by publishing any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation, including publishing market data, news, or data analytics or investment information or recommendations that are not tailored to the individual needs of a particular consumer), including- (!) providing credit counseling to any consumer; and Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 6 of 25

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(II) providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure;

iv.

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 v.

Collecting debt related to any Consumer Financial Product or Service. f. "Corporate Defendants" means The Hoffman Law Group, P.A. (f/k/a The Residential Litigation Group, P.A.); Nationwide Management Solutions, LLC; Legal Intake Solutions, LLC; File Intake Solutions, LLC; and BM Marketing Group, LLC; and their successors and assigns. g. "Credit Repair Product or Service" means any service, in return for the payment of money or other valuable consideration, for the express or implied purpose of improving any consumer's credit record, credit history, or credit rating.

h. "Debt Relief Product or Service" means any product, service, plan, or program represented, expressly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt or obligation, including, but not limited to, a tax debt or obligation, between a person 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.

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1. "Defendants" means Individual Defendants and Corporate Defendants, individually, collectively, or in any combination, and each of them by whatever names each might be known, and their successors and assigns. J.

"Effective Date" means the date on which this Stipulated Final Judgment and Order as to Defendant Marc Hoffman is signed by the Court. k. "Enforcement Director" means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his or her delegee.

1. "Individual Defendants" means Michael Harper, Benn Willcox, and Marc Hoffman, individually, collectively, or in any combination, and each of them by any other names by which they might be known, and their successors and assigns.

m. "Material Fact" means any fact that is likely to affect a person's choice of, or conduct regarding, goods or services.

n. "Mortgage Assistance Relief Product or Service" means any product, service, plan, or program, offered or provided to the consumer in exchange for consideration, that is represented, expressly or by implication, to assist or attempt to assist the consumer with any of the following: i.

Stopping, preventing, or postponing any mortgage or deed of trust foreclosure sale of the consumer's dwelling, any repossession of the consumer's dwelling, or otherwise saving the consumer's dwelling from foreclosure or repossession;

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ii.

Negotiating, obtaining, or arranging a modification of any term of a dwelling loan, including a reduction in the amount of interest, principal balance, monthly payments, or fees; iii.

Obtaining any forbearance or modification in the timing of payments from any dwelling loan holder or servicer on any dwelling loan; iv.

Negotiating, obtaining, or arranging any extension of the period of time within which the consumer may: (i) cure his or her default on a dwelling loan, (ii) reinstate his or her dwelling loan, (iii) redeem a dwelling, or (iv) exercise any right to reinstate a dwelling loan or redeem a dwelling;

v.

Obtaining any waiver of an acceleration clause or balloon payment contained in any promissory note or contract secured by any dwelling; or VI.

Negotiating, obtaining, or arranging: (i) a short sale of a dwelling, (ii) a deed-in-lieu of foreclosure, or (iii) any other disposition of a dwelling other than a sale to a third party who is not the dwelling loan holder. The foregoing includes any manner of claimed assistance to consumers with respect to mortgages, including, but not limited to, auditing or examining a consumer's mortgage or home loan application. o. "Person" means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.

p. "Receiver" means Mark Bernet, Esq., or any person subsequently appointed by this Court as a Receiver in this action. Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 9 of 25

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q. "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 Defendants based on substantially the same facts as described in the Complaint.

r. "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.

s. The words "and" and "or" will be understood to have both conjunctive and disjunctive meanings as necessary to make the applicable phrase or sentence inclusive rather than exclusive.

ORDER III. Restrictions on Offering Consumer Financial Products or Services IT IS ORDERED that:

g.

Mr. Hoffman, whether acting directly or indirectly, is permanently restrained from:

a. Advertising, marketing, promoting, offering for sale, or selling any Mortgage Assistance Relief Product or Service, Credit Repair Product or Service, or Debt Relief Product or Service; and b. Assisting others engaged in advertising, marketing, promoting, offering for sale, or selling any Mortgage Assistance Relief Product or Service, Credit Repair Product or Service, or Debt Relief Product or Service. 10.

In addition to the restrictions stated in Paragraph 9, Mr. Hoffman, whether acting directly or indirectly, is permanently restrained from offering or providing any Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 10 of 25

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other Consumer Financial Product or Service unless he holds a valid, state-issued license permitting him to do so.

11.

Nothing in this Section prohibits Mr. Hoffman, if he is licensed or registered as a real estate broker or real estate agent, in accordance with state law, from: (1) acting as a real estate agent or broker for a buyer, seller, lessor, or lessee of real property; (2) bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property; (3) negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property (other than in connection with the provision of financing with respect to any such transaction); or (4) offering to engage in any activity, or act in any capacity, described in subparagraphs (1), (2), or (3) above.

12.

Mr. Hoffman is permitted to be employed by a company in a capacity that involves collection of debts owed to that company, but is not permitted to act as, or on behalf of, a "debt collector," as defined by 15 U.S.C. § 1692a or Section 559.55, Florida Statutes.

IV. Restrictions on Telemarketing IT IS FURTHER ORDERED that:

13.

Mr. Hoffman, whether acting directly or indirectly, is permanently restrained from engaging in, participating in, or assisting others in Telemarketing or in any other Commercial Telephone Solicitation unless he obtains a Commercial Telephone Salesperson license from the state of Florida, and only if said activities are in compliance with the Florida Telemarketing Act, Chapter 501, Part IV, Florida Statutes, and the terms of this Order.

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14.

While he is permitted to work as a licensed Commercial Telephone Salesperson, Mr. Hoffman will not seek licensure, nor will he act as, a Commercial Telephone Seller, as defined by Section 501.603(2), Florida Statutes. V.

Restrictions on Professional Licensure IT IS FURTHER ORDERED that:

15.

Mr. Hoffman will notify Plaintiffs when the Florida Supreme Court has taken final action on his petition for disciplinary revocation of his license to practice law within the state of Florida, pursuant to Florida Bar Rule 3-5.1(g). 16.

Mr. Hoffman will not falsify or intentionally omit any information in any application for a professional license from any federal, state, or local regulatory agency. 17.

Mr. Hoffman will notify Plaintiffs prior to applying for a license to practice law or any other professional license to engage in a profession that reasonably relates to the activities prohibited by this Order. As of the Effective Date, Mr. Hoffman does not hold any professional licenses in Florida other than his license to practice law. VI.

Prohibited Practices Relating to Offering Any Goods or Services IT IS FURTHER ORDERED that:

18.

Mr. Hoffman, whether acting directly or indirectly, is permanently restrained from:

a. Misrepresenting or assisting others in misrepresenting, directly or indirectly, expressly or by implication, any material fact including, but not limited to: i.

The total costs to purchase, receive, or use any good or service; ii.

Any material restriction, limitation, or condition to purchase, receive, or use any good or service;

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iii.

Any material aspect of the nature or terms of a refund, cancellation, exchange, or repurchase policy for any good or service; IV.

The income, profits, or sales likely to be achieved from any good or service; and v.

Any material aspect of the performance, efficacy, nature, or central characteristic of any good or service.

b. Assisting others to make any material misrepresentation in connection with the advertising, marketing, promotion, offering for sale, or sale of any good or service including, but not limited to, the misrepresentation listed in subparagraph (a) immediately above; and c. Violating, or assisting others in violating, any federal or state consumer protection laws, including, but not limited to, any provision of the FDUTPA or Regulation 0.

VII. Prohibited Use of Consumer Information IT IS FURTHER ORDERED that:

19.

Mr. Hoffman, whether acting directly or indirectly, may not disclose, use, or benefit 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), that Defendants obtained before the Effective Date in connection with Consumer Financial Products or Services, Mortgage Assistance Relief Products or Services, or Debt Relief Products or Services offered or provided by the Defendants. 20.

However, consumer information may be disclosed if requested by a government agency or required by law, regulation, or court order. Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 13 of 25

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21.

Mr. Hoffman, whether acting directly or indirectly, may not attempt to collect, collect, sell, assign, or otherwise transfer any right to collect payment from any consumer who purchased or agreed to purchase Consumer Financial Products or Services, Mortgage Assistance Relief Products or Services, or Debt Relief Products or Services from Defendants.

VIII. Order to Pay Redress IT IS FURTHER ORDERED that:

22.

A judgment for equitable monetary relief is entered in favor of Plaintiffs and against Mr. Hoffman, in the amount of $11,730,579; however, this judgment will be automatically suspended, subject to Section IX of this Order. 23.

Mr. Hoffman will execute an agreement with the Receiver entitling the Receivership to an interest in any outstanding estates, inheritances, or unclaimed property that is being maintained by any third parties, including, but not limited to, the Florida Department of Financial Services Bureau of Unclaimed Property. 24.

Mr. Hoffman waives the right to recuperate or make any claim to any assets currently in the possession, custody, or control of the Receiver. 1 25.

With regard to Mr. Hoffman's assets currently in the possession, custody, or control of the Receiver, if Mr. Hoffman receives, directly or indirectly, any reimbursement or indemnification from any source, including, but not limited to, payment made under any insurance policy, or if Mr. Hoffman secures a tax deduction or tax credit with regard to any federal, state, or local tax, Mr. Hoffman must: (a) immediately notify the Enforcement Director in writing, and (b) within 20 days of 1 Pursuant to the Court's Temporary Restraining Order, Mr. Hoffman has surrendered to the Receiver $73,022.55 in cash.

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receiving the funds or monetary benefit, transfer 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. The Additional Payment will be applied toward satisfaction of the judgment referenced in Paragraph 22. After the Bureau receives the Additional Payment, the amount of the suspended judgment referenced in Paragraph 22 will be reduced by the amount of the Additional Payment. 26.

Any funds received by the Bureau in satisfaction of this judgment 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 for redress for injured 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.

27.

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, the Bureau, after notifying Florida, may apply any remaining funds toward other equitable relief (including consumer information remedies) as determined to be reasonably related to the alleged violations described in the Complaint. Any funds not used for equitable relief will be deposited in the U.S. Treasury as disgorgement. Mr. Hoffman will have no right to challenge the choice of remedies under this Section, and will have no right to contest the manner of distribution.

28.

Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right. Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 15 of 25

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IX.

Effect of Misrepresentation Regarding Financial Condition IT IS FURTHER ORDERED that:

29.

The suspension of the monetary judgment entered in Section VIII of this Order is expressly premised on the truthfulness, accuracy, and completeness of Mr. Hoffman's financial statement and supporting documents submitted to Plaintiffs on July 30, 2014, Mr. Hoffman's oral testimony provided on August 15,2014, and Mr. Hoffman's bankruptcy documents filed in federal bankruptcy court, which Mr. Hoffman asserts are truthful, accurate, and complete.

30.

The suspension of the monetary judgment entered in Section VIII of this Order is further expressly premised on the truthfulness, accuracy, and completeness of Mr. Hoffman's representations regarding the assets of Corporate Defendants as of the Effective Date.

31.

If the Court determines that Mr. Hoffman has failed to disclose any material asset or that any of his financial statements contain any material misrepresentation or omission, including materially misstating the value of any asset, then the suspension of the monetary judgment entered in Section VIII will be terminated, and the Bureau can seek to enforce in any Federal district court as immediately due and payable the full judgment entered in Paragraph 22 of this Order-$11,730,579-less any amounts paid under Section VIII of this Order.

32.

After the reinstatement of the monetary judgment under this Section, Plaintiffs will be entitled to interest on the judgment, computed from the Effective Date, at the rate prescribed by 28 U.S.C. § 1961, as amended, on any outstanding amounts not paid. X. Order to Pay Civil Money Penalties IT IS FURTHER ORDERED that:

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33.

Under Section 1055(c) of the CFPA, 12 U.S.C. § ss6s(c), by reason of the alleged violations of law described in the Complaint, and taking into account the factors in 12 U.S.C. § ss6s(c)(3), Mr. Hoffman must pay a civil money penalty of $1.oo to the Bureau. This nominal penalty is based on Mr. Hoffman's limited ability to pay following the entry of this Court's Ex Parte Temporary Restraining Order with Asset Freeze, as attested to in Mr. Hoffman's financial statements. 34.

Within 10 days of the Effective Date, Mr. Hoffman 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.

35· 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).

36.

Mr. Hoffman must treat the civil money penalty paid under this Order as a penalty paid to the government for all purposes.

XI.

Additional Monetary Provisions IT IS FURTHER ORDERED that:

37· In the event of any default on Mr. Hoffman'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.

38.

Mr. Hoffman 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 Mr. Hoffman.

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39.

Under 31 U.S.C. § 7701, Mr. Hoffman, unless he has already done so, must furnish to Plaintiffs his taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. 40.

Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, Mr. Hoffman must notify the Enforcement Director of the final judgment, consent order, or settlement in writing. That notification must indicate the amount of redress, if any, that any 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.

41.

Under Section 604(a)(1) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(a)(1), in response to a request from the Bureau or the Florida Attorney General, any consumer reporting agency may furnish a consumer report to the Bureau or the Florida Attorney General concerning Mr. Hoffman, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. XII. Reporting Requirements IT IS FURTHER ORDERED that:

42.

For five years from the Effective Date, Mr. Hoffman must notify the Bureau and Florida 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 relating to the Corporate Defendants that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate of the Corporate Defendants that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Mr. Hoffman; or a change in Mr. Hoffman's name or address. Mr. Hoffman must provide this notice at Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 18 of 25

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least 30 days before the development or as soon as practicable after learning about the development, whichever is sooner.

43.

Within 7 days of the Effective Date, Mr. Hoffman must: a. Designate at least one telephone number and email, physical, and postal address as points of contact, which Plaintiffs may use to communicate with Mr. Hoffman;

b. Identify all businesses for which Mr. Hoffman is the majority owner, or that Mr. Hoffman 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 Mr. Hoffman's telephone numbers and all email, Internet, physical, and postal addresses, including all residences;

e. Describe in detail Mr. Hoffman's involvement in any business for which he performs services in any capacity or which he wholly or partially owns, including Mr. Hoffman's titles, roles, responsibilities, participation, authority, control, and ownership.

44· For five years from the Effective Date, Mr. Hoffman must report any change in the information required to be submitted under Paragraph 43 at least 30 days before the change or as soon as practicable after learning about the change, whichever is sooner. XIII. Order Distribution and Acknowledgment IT IS FURTHER ORDERED that:

45.

Within 30 days of the Effective Date, Mr. Hoffman, for any business for which he is the majority owner or which he directly or indirectly controls, must deliver a copy of Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 19 of 25

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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 this Order. 46.

For five years from the Effective Date, Mr. Hoffman, 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 XII, 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 this Order before they assume their responsibilities.

47.

Mr. Hoffman 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 theE-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. XIV. Recordkeeping IT IS FURTHER ORDERED that:

48.

Mr. Hoffman must create, for at least five years from the Effective Date, the following business records for any business for which Mr. Hoffman, 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 and Florida;

b. Copies of all sales scripts, training materials, advertisements, websites, and Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 20 of 25

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other marketing materials, including any such materials used by a third party on behalf of Mr. Hoffman or his business; and c. Documents sufficient to demonstrate the experience of consumers interacting with Mr. Hoffman, whether acting directly or through any sole proprietorship, partnership, limited liability company, corporation, subsidiary, branch, division, affiliate, or other entity, when Mr. Hoffman advertised, promoted, marketed, offered for sale, sold, or provided products or services to consumers.

49.

Mr. Hoffman must retain the documents identified in Paragraph 48 for at least five years.

so.

Mr. Hoffman must make the documents identified in Paragraph 48 available to the Bureau and Florida upon either Plaintiffs request. XV.

Notices IT IS FURTHER ORDERED that:

51.

Unless otherwise directed in writing by Plaintiffs, Mr. Hoffman must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, "CFPB and State of Florida v. Harper, Hoffman, et al., CASE NO. 14-80931-CIV-COHN-SELTZER," and send them either: a. By first-class U.S. mail to the below address and contemporaneously by email to:

Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1700 G Street, N.W.

Washington D.C. 20552 Enforcement_ [email protected]; and Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 21 of 25

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Florida Attorney General cf o Director of Consumer Protection Division 3507 East Frontage Road #325 Tampa, Florida 33607 [email protected] b. By overnight courier (not the U.S. Postal Service) and contemporaneously by email, as follows:

Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1625 Eye Street, N.W.

Washington D.C. 20006 [email protected]; and Office of the Attorney General c/o Director of Consumer Protection Division 3507 East Frontage Road # 325 Tampa, Florida 33607 [email protected] XVI. Resolution of State Claims IT IS FURTHER ORDERED that:

52.

Mr. Hoffman shall pay civil penalties to the State of Florida, General Revenue Fund, in the amount of $20,000 for willful violation of FDUTPA for Mr. Hoffman's role in the creation and dissemination of false and misleading statements in direct mail pieces and on The Hoffman Law Group website; 53· In consideration of Mr. Hoffman's compliance with the permanent injunctive relief mandated in this Order, in the interests of providing for consumer restitution, and based upon the information supplied by Mr. Hoffman in a sworn financial statement submitted to Plaintiffs, the payment of this penalty is suspended. However, the parties agree that the $20,000 penalty shall be imposed and due and owing if Mr. Hoffman Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 22 of 25

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violates any of the terms of this Order, or is found to have submitted false information or intentionally omitted information in the sworn financial statement. 54· Florida reserves the right to seek additional investigative and attorneys' fees and costs upon default or upon any future noncompliance. Time is of the essence in all payments required under this Order.

XVII. Cooperation with Plaintiffs IT IS FURTHER ORDERED that:

55· Mr. Hoffman must cooperate fully to help Plaintiffs to determine the identity and location of, and the amount of injury sustained by, each Affected Consumer. Mr. Hoffman must provide such information in his or his agents' possession or control within 14 days of receiving a written request from either Plaintiff. 56.

Mr. Hoffman must cooperate fully with Plaintiffs in this matter and in any investigation related to or associated with the conduct described in the Complaint. Mr. Hoffman must provide truthful and complete information, evidence, and testimony. Mr. Hoffman must appear for interviews, discovery, hearings, trials, and any other proceedings that Plaintiffs may reasonably request upon five days' written notice, or other reasonable notice, at such places and times as Plaintiffs may designate, without the service of compulsory process.

XVIII. Cooperation with Receiver IT IS FURTHER ORDERED that:

57.

Mr. Hoffman, and his successors, assigns, officers, agents, directors, employees, salespersons, independent contractors, attorneys, and corporations, and all other persons or entities in active concert or participation with him, who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 23 of 25

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trust, corporation, subsidiary, or other device, or any of them, must fully cooperate with and assist the Receiver.

XIX. Compliance Monitoring IT IS FURTHER ORDERED that, to monitor Mr. Hoffman's compliance with this Order, including the financial representations upon which the judgment for equitable monetary relief was suspended:

58.

Within 14 days of receipt of a written request from one of the Plaintiffs, Mr. Hoffman must submit additional requested information, which must be made under penalty of perjury; provide sworn testimony; or produce documents. 59.

For purposes of this Section, Plaintiffs may communicate directly with Mr. Hoffman, unless Mr. Hoffman retains counsel related to these communications. 60.

Mr. Hoffman must permit Plaintiffs' representatives to interview any employee or other person affiliated with Defendants who has agreed to such an interview. The person interviewed may have counsel present.

61.

Nothing in this Order will limit Plaintiffs' lawful use of compulsory process under 12 C.F.R. § 1080.6 or any other applicable law.

XX. Retention of Jurisdiction IT IS FURTHER ORDERED that this Court will retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 24 of 25

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XXI. Final Judgment and Order Plaintiffs and Mr. Hoffman have consented to the terms and conditions of this Order as set forth above and have consented to the entry thereof. Case 9:14-cv-80931-JIC Document 144 Entered on FLSD Docket 05/06/2015 Page 25 of 25

Stipulation (May 2015)

PDF of this document (27 pages)

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUfHERN DISTRICf OF FLORIDA CASE NO. 14-80931-CIV-COHN-SELTZER CONSUMER FINANCIAL PROTECTION BUREAU and THE STATE OF FLORIDA, Office of the Attorney General, Department of Legal Affairs Plaintiffs, v.

MICHAEL HARPER, an individual; BENN WILLCOX, an individual; MARC HOFFMAN, an individual; THE HOFFMAN LAW GROUP, P.A. f/k/a THE RESIDENTIAL LITIGATION GROUP, P.A., a Florida corporation; NATIONWIDE MANAGEMENT SOLUTIONS, LLC, a Florida limited liability company; LEGAL INTAKE SOLUTIONS, LLC, a Florida limited liability company; FILE INTAKE SOLUTIONS, LLC, a Florida limited liability company; and BM MARKETING GROUP, LLC, a Florida limited liability company, Defendants.

STIPULATED FINAL JUDGMENT AND ORDER AS TO DEFENDANT MICHAEL HARPER Plaintiffs, the Consumer Financial Protection Bureau ("CFPB" or "Bureau") and the State of Florida ("Florida"), commenced this civil action on July 14, 2014, pursuant to: (1) Sections 1054 and 1055 of the Consumer Financial Protection Act of 2010 ("CFPA"), 12 U.S.C. §§ 5564, 5565; (2) Section 626 of the Omnibus Appropriations Act of 2009, as amended by Section 1097 of the CFPA, 12 U.S.C. § 5538, and the Mortgage Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 1 of 27

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Assistance Relief Services Rule, 12 C.F.R. Part 1015 ("Regulation 0"); (3) the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Chapter 501, Part II, Florida Statutes; and (4) Florida's Civil Theft Law, Sections 812.035(5), 812.014, Florida Statutes. On that date, Plaintiffs filed a Complaint for Permanent Injunction and Other Relief ("Complaint"), seeking preliminary and permanent injunctive relief, rescission or reformation of contracts, the refund of monies paid, restitution, disgorgement of illgotten monies, civil money penalties, and other equitable relief for Defendants' acts or practices related to the marketing and sale of mortgage assistance relief services in violation of Regulation 0, FDUTPA, and Florida's Civil Theft Law. Com pl., DE 4. On July 16, 2014, the Court issued an ex parte Temporary Restraining Order against the Defendants, which froze the Defendants' assets and placed The Hoffman Law Group and the other Corporate Defendants (defined below) into receivership. DE 13.

The Corporate Defendants failed to file an answer or otherwise defend in this action, and the Clerk entered default against them on September 12, 2014. DE 71, 72. The Court approved stipulated preliminary injunctions for Defendant Marc Hoffman on September 15, 2014, and for Defendants Benn Willcox and Michael Harper on September 23, 2014. DE 76, 89, go.

The Plaintiffs and Defendant Michael Harper, by and through their respective counsel, have agreed to the entry of this Stipulated Final Judgment and Order as to Defendant Michael Harper ("Order") by this Court.

It is therefore ORDERED, ADJUDGED, AND DECREED as follows: Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 2 of 27

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I. Findings 1.

This Court has jurisdiction over the subject matter of this case and over Defendant Michael Harper 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 12 u.s.c. § 5564(0.

3· The Plaintiffs and Mr. Harper agree to entry of this Order, without adjudication of any issue of fact or law, 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 Regulation 0, 12 C.F.R. Part 1015; FDUTPA, Chapter 501, Part II, Florida Statutes; and Florida's Civil Theft Law, Sections 812.035(5), 812.014, Florida Statutes. 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 Sections 503.207 et seq. and Section 812.035(5), Florida Statutes.

5· For the purposes of this Order, Mr. Harper admits the facts necessary to establish the Court's jurisdiction over him and the subject matter of this action, but does not admit the allegations in the Complaint or waive any privilege, including his privilege against self-incrimination.

6.

Mr. Harper waives all rights to seek judicial review or otherwise challenge or contest the validity of this Order. Mr. Harper also waives any claim he may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action. Each party will bear its own costs and expenses, including, without limitation, attorneys' fees, except as otherwise provided in Section XV of this Order. Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 3 of 27

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7· Entry of this Order is in the public interest. II. Definitions 8.

The following definitions apply to this Order: a. "Affected Consumer" means any consumer to whom the Defendants or their officers, agents, servants, employees, or attorneys sold or provided Mortgage Assistance Relief Products or Services between April1, 2012 and the Effective Date.

b. "Asset" 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, 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 Individual Defendant, any of the Individual Defendants' minor children, or any of the Individual Defendants' spouses. c. "Assisting others" includes, but is not limited to: 1.

Consulting in any form whatsoever;

n.

Performing customer service functions including, but not limited to, receiving or responding to consumer complaints; iii.

Formulating or providing, or arranging for the formulation or provision of, any advertising or marketing material, including, but not Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 4 of 27

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limited to, any telephone sales script, direct mail solicitation, or the text of any Internet website, email, or other electronic communication; iv.

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;

v.

Providing names of, or assisting the generation of, potential customers;

vi.

Performing marketing, billing, or payment services of any kind; or vii.

Acting or serving as an employee, independent contractor, owner, officer, director, manager, or principal. d. "Commercial Telephone Solicitation" means, as defined in Section 501.603(1), Florida Statutes:

1.

An unsolicited telephone call to a person for the purpose of inducing the person to purchase or invest in Consumer Goods or Services; ii.

Communication with a person where (1) a gift, award, or prize is offered or (2) a telephone call response is invited, and (3) the salesperson intends to complete a sale or enter into an agreement to purchase Consumer Goods or Services during the course of the telephone call; or iii.

Any other communication with a person that represents a price, quality, or availability of Consumer Goods or Services and invites a Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 5 of 27

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response by telephone or which is followed by a call to the person by a salesperson.

e. "Consumer Goods or Services" means, as defined in Section 501.603(3), Florida Statutes, any real property or any tangible or intangible personal property which is normally used for personal, family, or household purposes or any property of any nature which is solicited for the purpose of providing for a profit or investment opportunity, including, without limitation, any such property intended to be attached to or installed in any real property, without regard to whether it is so attached or installed, as well as timeshare estates and licenses, and any services related to such property. f.

"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 CFP A, 12 U.S.C. § 5481(5), and, subject to applicable restrictions contained in the CFPA, includes, but is not limited to:

i.

Extending credit and servicing loans, including acquiring, purchasing, selling, broke ring, or other extensions of credit (other than solely extending commercial credit to a person who originates consumer credit transactions);

ii.

Providing real estate settlement services or performing appraisals of real estate or personal property;

iii.

Providing financial advisory services (other than services relating to securities provided by a person regulated by the Securities and Exchange Commission or a person regulated by a state securities commission, but only to the extent that such person acts in a regulated Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 6 of 27

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capacity) to consumers on individual financial matters or relating to proprietary financial products or services (other than by publishing any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation, including publishing market data, news, or data analytics or investment information or recommendations that are not tailored to the individual needs of a particular consumer), including- (!) providing credit counseling to any consumer; and (II) providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure;

iv.

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 v.

Collecting debt related to any Consumer Financial Product or Service. g. "Corporate Defendants" means The Hoffman Law Group, P.A. (f/k/a The Residential Litigation Group, P.A.); Nationwide Management Solutions, LLC; Legal Intake Solutions, LLC; File Intake Solutions, LLC; and BM Marketing Group, LLC; and their successors and assigns. h. "Credit Repair Product or Service" means any service, in return for the payment of money or other valuable consideration, for the express or implied Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 7 of 27

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purpose of improving any consumer's credit record, credit history, or credit rating.

i. "Debt Relief Product or Service" means any product, service, plan, or program represented, expressly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt or obligation, including, but not limited to, a tax debt or obligation, between a person 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. J. "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, and their successors and assigns.

k. "Effective Date" means the date on which this Stipulated Final Judgment and Order as to Defendant Michael Harper is signed by the Court. I. "Enforcement Director" means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his or her delegee.

m. "Individual Defendants" means Michael Harper, Benn Willcox, and Marc Hoffman, individually, collectively, or in any combination, and each of them by any other names by which they might be known, and their successors and assigns.

n. "Material fact" means any fact that is likely to affect a person's choice of, or conduct regarding, goods or services.

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o. "Mortgage Assistance Relief Product or Service" means any product, service, plan, or program, offered or provided to the consumer in exchange for consideration, that is represented, expressly or by implication, to assist or attempt to assist the consumer with any of the following: i.

Stopping, preventing, or postponing any mortgage or deed of trust foreclosure sale of the consumer's dwelling, any repossession of the consumer's dwelling, or otherwise saving the consumer's dwelling from foreclosure or repossession;

ii.

Negotiating, obtaining, or arranging a modification of any term of a dwelling loan, including a reduction in the amount of interest, principal balance, monthly payments, or fees; iii.

Obtaining any forbearance or modification in the timing of payments from any dwelling loan holder or servicer on any dwelling loan; iv.

Negotiating, obtaining, or arranging any extension of the period of time within which the consumer may: (i) cure his or her default on a dwelling loan, (ii) reinstate his or her dwelling loan, (iii) redeem a dwelling, or (iv) exercise any right to reinstate a dwelling loan or redeem a dwelling;

v.

Obtaining any waiver of an acceleration clause or balloon payment contained in any promissory note or contract secured by any dwelling; or VI.

Negotiating, obtaining, or arranging: (i) a short sale of a dwelling, (ii) a deed-in-lieu of foreclosure, or (iii) any other disposition of a dwelling other than a sale to a third party who is not the dwelling loan holder. Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 9 of 27

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The foregoing includes any manner of claimed assistance to consumers with respect to mortgages, including, but not limited to, auditing or examining a consumer's mortgage or home loan application.

p. "Person" means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.

q. "Receiver" means Mark Bernet, Esq., or any person subsequently appointed by this Court as a Receiver in this action.

r. "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 Defendants based on substantially the same facts as described in the Complaint.

s. "Solicit" means, as defined in Section 501.603(12), Florida Statutes, to initiate contact with a purchaser for the purpose of attempting to sell Consumer Goods or Services, where such purchaser has expressed no previous interest in purchasing, investing in, or obtaining information regarding the property, goods, or services attempted to be sold.

t. "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.

u. The words "and" and "or" will be understood to have both conjunctive and disjunctive meanings as necessary to make the applicable phrase or sentence inclusive rather than exclusive.

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ORDER III. Permanent Ban on Offering Consumer Financial Products or Services and Related Restrictions IT IS ORDERED that:

g.

Mr. Harper, whether acting directly or indirectly, is permanently restrained from: a. Advertising, marketing, promoting, offering for sale, or selling any Consumer Financial Product or Service, including any Mortgage Assistance Relief Product or Service, Credit Repair Product or Service, or Debt Relief Product or Service; and b. Assisting others engaged in advertising, marketing, promoting, offering for sale, or selling any Consumer Financial Product or Service, including any Mortgage Assistance Relief Product or Service, Credit Repair Product or Service, or Debt Relief Product or Service.

10.

However, Paragraph 9 does not prohibit Mr. Harper, if he is licensed or registered as a real estate broker or real estate agent, in accordance with state law, from: (1) acting as a real estate agent or broker for a buyer, seller, lessor, or lessee of real property; (2) bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property; (3) negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property (other than in connection with the provision of financing with respect to any such transaction); or (4) offering to engage in any activity, or act in any capacity, described in subparagraphs (1), (2), or (3) above. This paragraph allows Mr. Harper to assist customers with the purchase of real property through a short sale if Mr. Harper is acting Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 11 of 27

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as a licensed real estate agent or broker during the transaction, as long as he does not collect a fee prior to the closing of the transaction. 11.

Paragraph 9 does not prohibit Mr. Harper from working in the behavioral and mental health fields, or in the provision of substance abuse programs and services (collectively "Health Services"), in accordance with applicable law, from: (1) working for a properly licensed and compliant Health Services facility; (2) owning and operating a Health Services facility; and (3) engaging in appropriate and lawful consumer financial transactions in connection with a properly licensed and compliant Health Services facility.

12.

Mr. Harper will not receive any commission, bonus, kickback, or rebate from any entity or person for the provision of Consumer Financial Products or Services to a patient of the Health Services facility.

13.

Mr. Harper will not falsify or intentionally omit any information in any application for a professional license from any federal, state, or local regulatory agency. 14.

Mr. Harper is not permitted to act as, or on behalf of, a "debt collector," as defined by 15 U.S.C. § 1692a or Section 559.55, Florida Statutes. IV. Restrictions on Telemarketing IT IS FURTHER ORDERED that:

15.

Mr. Harper, whether acting directly or indirectly, is restrained from engaging in, participating in, or assisting others in Telemarketing or in any other Commercial Telephone Solicitation for a period of five years.

16.

Mr. Harper is permitted to engage in any activity that is exempt from the provisions of the Florida Telemarketing Act, Chapter 501, Part IV, Florida Statutes, Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 12 of 27

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pursuant to Section 501.604, Florida Statutes, that is not otherwise prohibited by this Order.

17.

After five years, Mr. Harper is permitted to engage in Telemarketing or other Commercial Telephone Solicitation only if he obtains a Commercial Telephone Salesperson license, as defined by Section 501.607, Florida Statutes, from the state of Florida, and only if said activities are in compliance with the Florida Telemarketing Act and the terms of this Order.

18.

While he is permitted to work as a licensed Commercial Telephone Salesperson after five years, Mr. Harper will never seek licensure, nor will he act as, a Commercial Telephone Seller, as defined by Section 501.603(2), Florida Statutes. V. Prohibited Practices Relating to Offering Any Goods or Services IT IS FURTHER ORDERED that:

19.

Mr. Harper, whether acting directly or indirectly, is permanently restrained from: a. Misrepresenting or assisting others in misrepresenting, directly or indirectly, expressly or by implication, any material fact including, but not limited to: i.

The total costs to purchase, receive, or use any good or service; ii.

Any material restriction, limitation, or condition to purchase, receive, or use any good or service;

iii.

Any material aspect of the nature or terms of a refund, cancellation, exchange, or repurchase policy for any good or service; iv.

The income, profits, or sales likely to be achieved from any good or service; and v.

Any material aspect of the performance, efficacy, nature, or central characteristic of any good or service.

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b. Assisting others to make any material misrepresentation in connection with the advertising, marketing, promotion, offering for sale, or sale of any good or service including, but not limited to, the misrepresentation listed in subparagraph (a) immediately above; and c. Violating, or assisting others in violating, any federal or state consumer protection laws, including, but not limited to, any provision of the FDUTPA or Regulation 0.

VI. Prohibited Use of Consumer Information IT IS FURTHER ORDERED that:

20.

Mr. Harper, whether acting directly or indirectly, may not disclose, use, or benefit 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), that Defendants obtained before the Effective Date in connection with Consumer Financial Products or Services, Mortgage Assistance Relief Products or Services, or Debt Relief Products or Services offered or provided by the Defendants. 21.

However, consumer information may be disclosed if requested by a government agency or required by law, regulation, or court order. 22.

Mr. Harper, whether acting directly or indirectly, may not attempt to collect, collect, sell, assign, or otherwise transfer any right to collect payment from any consumer who purchased or agreed to purchase Consumer Financial Products or Services, Mortgage Assistance Relief Products or Services, or Debt Relief Products or Services from Defendants.

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VII. Order to Pay Redress IT IS FURTHER ORDERED that:

23.

A judgment for equitable monetary relief is entered in favor of Plaintiffs and against Mr. Harper, in the amount of $11,730,579; however, this judgment will be automatically suspended upon satisfaction of the obligations in Paragraph 24, subject to Section VIII of this Order.

24.

Within ten days of the Effective Date, Mr. Harper will turn over to the Receiver the Personal Property listed on Schedule A. The estimated value of said Personal Property is $50,000. 1 25.

Mr. Harper waives the right to recuperate or make any claim to any assets currently in the possession, custody, or control of the Receiver, including the Personal Property described above. 2 26.

With regard to Mr. Harper's relinquishment of assets to the Receiver, if Mr. Harper receives, directly or indirectly, any reimbursement or indemnification from any source, including, but not limited to, payment made under any insurance policy, or if Mr. Harper secures a tax deduction or tax credit with regard to any federal, state, or local tax, Mr. Harper must: (a) immediately notify the Enforcement Director in writing, and (b) within 20 days of receiving the funds or monetary benefit, transfer 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. The Additional Payment will be applied toward satisfaction of the judgment referenced in Paragraph 23. 1 The estimated values of the surrendered jewelry have been provided by Mr. Harper in a sworn declaration and are based upon appraisals of replacement value for insurance purposes. 2 Pursuant to the Court's Temporary Restraining Order, Mr. Harper surrendered to the Receiver $676,360 in cash. Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 15 of 27

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After the Bureau receives the Additional Payment, the amount of the suspended judgment referenced in Paragraph 23 will be reduced by the amount of the Additional Payment.

27.

Any funds received by the Bureau in satisfaction of this judgment will be deposited into a fund or funds administered by the Bureau or the Bureau's agent according to applicable statutes and regulations to be used for redress for injured 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.

28.

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, the Bureau, after notifying Florida, may apply any remaining funds toward other equitable relief (including consumer information remedies) as determined to be reasonably related to the alleged violations described in the Complaint. Any funds not used for equitable relief will be deposited in the U.S. Treasury as disgorgement. Mr. Harper will have no right to challenge the choice of remedies under this Section, and will have no right to contest the manner of distribution.

29.

Payment of redress to any Affected Consumer under this Order may not be conditioned on that Affected Consumer waiving any right. VIII. Effect of Misrepresentation Regarding Financial Condition IT IS FURTHER ORDERED that:

30.

The suspension of the monetary judgment entered in Section VII of this Order is expressly premised on the truthfulness, accuracy, and completeness of Mr. Harper's Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 16 of 27

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financial statement and supporting documents submitted to Plaintiffs on July 29, 2014, September 10, 2014, and February 19, 2015; Mr. Harper's oral testimony provided on September 4, 2014, and November 17, 2014; and Mr. Harper's written deposition answers supplied on December 31, 2014, which Mr. Harper asserts are truthful, accurate, and complete.

31.

The suspension of the monetary judgment entered in Section VII of this Order is further expressly premised on the truthfulness, accuracy, and completeness of Mr. Harper's representations regarding the assets of the Corporate Defendants as of the Effective Date.

32.

If the Court determines that Mr. Harper has failed to disclose any material asset or that any of his financial statements contain any material misrepresentation or omission, including materially misstating the value of any asset, then the suspension of the monetary judgment entered in Section VII will be terminated, and the Bureau can seek to enforce in any Federal district court as immediately due and payable the full judgment entered in Paragraph 23 of this Order-$11,730,579-less any amounts already paid under Section VII of this Order.

33.

After the reinstatement of the monetary judgment under this Section, Plaintiffs will be entitled to interest on the judgment, computed from the Effective Date, at the rate prescribed by 28 U.S.C. § 1961, as amended, on any outstanding amounts not paid. IX. Order to Pay Civil Money Penalties IT IS FURTHER ORDERED that:

34.

Under Section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the alleged violations of law described in the Complaint, and taking into account the factors in 12 U.S.C. § 5565(c)(3), Mr. Harper must pay a civil money penalty of $1.00 to the Bureau. Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 17 of 27

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This nominal penalty is based on Mr. Harper's limited ability to pay following the entry of this Court's Ex Parte Temporary Restraining Order with Asset Freeze, as attested to in Mr. Harper's financial statements.

35· Within 10 days of the Effective Date, Mr. Harper 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.

36.

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).

37.

Mr. Harper must treat the civil money penalty paid under this Order as a penalty paid to the government for all purposes.

X. Additional Monetary Provisions IT IS FURTHER ORDERED that:

38.

In the event of any default on Mr. Harper'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.

39.

Mr. Harper 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 Mr. Harper.

40.

Under 31 U.S.C. § 7701, Mr. Harper, unless he has already done so, must furnish to Plaintiffs his taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 18 of 27

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41.

Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, Mr. Harper must notify the Enforcement Director of the final judgment, consent order, or settlement in writing. That notification must indicate the amount of redress, if any, that any 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.

42.

Under Section 604(a)(1) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(a)(1), any consumer reporting agency may furnish a consumer report concerning Mr. Harper to the Bureau or the Florida Attorney General, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. XI. Reporting Requirements IT IS FURTHER ORDERED that:

43· For five years from the Effective Date, Mr. Harper must notify the Bureau and Florida 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 relating to the Corporate Defendants that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate of the Corporate Defendants that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Mr. Harper; or a change in Mr. Harper's name or address. Mr. Harper must provide this notice at least 30 days before the development or as soon as practicable after learning about the development, whichever is sooner.

44.

Within 7 days of the Effective Date, Mr. Harper must: Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 19 of 27

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a. Designate at least one telephone number and email, physical, and postal address as points of contact, which Plaintiffs may use to communicate with Mr. Harper;

b. Identify all businesses for which Mr. Harper is the majority owner, or that Mr. Harper 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 Mr. Harper's telephone numbers and all email, Internet, physical, and postal addresses, including all residences; e. Describe in detail Mr. Harper's involvement in any business for which he performs services in any capacity or which he wholly or partially owns, including Mr. Harper's titles, roles, responsibilities, participation, authority, control, and ownership.

45.

For five years from the Effective Date, Mr. Harper must report any change in the information required to be submitted under Paragraph 44 at least 30 days before the change or as soon as practicable after learning about the change, whichever is sooner. XII. Order Distribution and Acknowledgment IT IS FURTHER ORDERED that:

46.

Within 30 days of the Effective Date, Mr. Harper, 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 this Order. Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 20 of 27

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47.

For five years from the Effective Date, Mr. Harper, 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 XI, 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 this Order before they assume their responsibilities.

48.

Mr. Harper 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 theE-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. XIII. Recordkeeping IT IS FURTHER ORDERED that:

49.

Mr. Harper must create, for at least five years from the Effective Date, the following business records for any business for which Mr. Harper, 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 and Florida;

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 Mr. Harper or his business; and c. Documents sufficient to demonstrate the experience of consumers interacting Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 21 of 27

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with Mr. Harper, whether acting directly or through any sole proprietorship, partnership, limited liability company, corporation, subsidiary, branch, division, affiliate, or other entity, when Mr. Harper advertised, promoted, marketed, offered for sale, sold, or provided products or services to consumers.

so.

Mr. Harper must retain the documents identified in Paragraph 49 for at least five years.

51.

Mr. Harper must make the documents identified in Paragraph 49 available to the Bureau and Florida upon either Plaintiffs request. XIV. Notices IT IS FURTHER ORDERED that:

52.

Unless otherwise directed in writing by Plaintiffs, Mr. Harper must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, "CFPB and State of Florida v. Harper, CASE NO. 14- 80931-CIV-COHN-SELTZER," and send them either: a. By first-class U.S. mail to the below address and contemporaneously by email to:

Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1700 G Street, N.W.

Washington D.C. 20552 Enforcement_ [email protected]; and Florida Attorney General c/o Director of Consumer Protection Division 3507 East Frontage Road # 325 Tampa, Florida 33607 [email protected] Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 22 of 27

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b. By overnight courier (not the U.S. Postal Service) and contemporaneously by email, as follows:

Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1625 Eye Street, N.W.

Washington D.C. 20006 [email protected]; and Office of the Attorney General cf o Director of Consumer Protection Division 3507 East Frontage Road #325 Tampa, Florida 33607 [email protected] XV. Resolution of State Claims IT IS FURTHER ORDERED that:

53· Mr. Harper shall pay civil penalties to the State of Florida, General Revenue Fund, in the following amounts:

a. $20,000 for settlement of state claims of the alleged violation of FDUTPA, for Mr. Harper's role in the creation and dissemination of false and misleading statements in direct mail pieces and on The Hoffman Law Group website; b. $5,000 for settlement of state claims of the alleged violation ofFDUTPA, for knowingly submitting a false commercial telephone seller license application to the Florida Department of Agriculture and Consumer Services; and c. $10,000 for settlement of state claims of the alleged violation of the Assurance of Voluntary Compliance, entered into between Florida and Mr. Harper in 2009.

54· Within 30 days of the Effective Date, Mr. Harper must pay $10,000 to the State of Florida, to resolve the alleged violation of the Assurance ofVoluntary Compliance. Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 23 of 27

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Payment shall be made by certified funds, payable to the Department of Legal Affairs, and remitted to the address in Paragraph 52 above.

55· In consideration of Mr. Harper's compliance with the permanent injunctive relief mandated in this Order, and based upon the information supplied by Mr. Harper in a sworn financial statement submitted to Plaintiffs on July 29, 2014, September 10, 2014, and February 19, 2015, and in the interest of funding consumer restitution, the payment of $25,000 of this penalty is suspended. However, the parties agree that the remaining $25,000 penalty shall be imposed and due and owing if Mr. Harper violates any of the terms of this Order, or is found to have submitted false information or intentionally omitted information in the sworn financial statement. 56.

Florida reserves the right to seek additional investigative and attorneys' fees and costs upon default or upon any future noncompliance. Time is of the essence in all payments required under this Order.

XVI. Cooperation with Plaintiffs IT IS FURTHER ORDERED that:

57.

Mr. Harper must cooperate fully to help Plaintiffs to determine the identity and location of, and the amount of injury sustained by, each Affected Consumer. Mr. Harper must provide such information in his or his agents' possession or control within 14 days of receiving a written request from either Plaintiff. 58.

Mr. Harper must cooperate fully with Plaintiffs in this matter and in any investigation related to or associated with the conduct described in the Complaint. Mr. Harper must provide truthful and complete information, evidence, and testimony. Mr. Harper must appear for interviews, discovery, hearings, trials, and any other proceedings that Plaintiffs may reasonably request upon five days' written notice, or Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 24 of 27

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other reasonable notice, at such places and times as Plaintiffs may designate, without the service of compulsory process.

XVII. Cooperation with Receiver IT IS FURTHER ORDERED that:

59· Mr. Harper, and his successors, assigns, officers, agents, directors, employees, salespersons, independent contractors, attorneys, and corporations, and all other persons or entities in active concert or participation with him, who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any trust, corporation, subsidiary, or other device, or any of them, must fully cooperate with and assist the Receiver.

XVIII.

Compliance Monitoring IT IS FURTHER ORDERED that, to monitor Mr. Harper's compliance with this Order, including the financial representations upon which the judgment for equitable monetary relief was suspended:

60.

Within 14 days of receipt of a written request from one of the Plaintiffs, Mr. Harper must submit additional requested information, which must be made under penalty of perjury; provide sworn testimony; or produce documents. 61.

For purposes of this Section, Plaintiffs may communicate directly with Mr. Harper, unless Mr. Harper retains counsel related to these communications. 62.

Mr. Harper must permit Plaintiffs' representatives to interview any employee or other person affiliated with Defendants who has agreed to such an interview. The person interviewed may have counsel present.

63.

Nothing in this Order will limit Plaintiffs' lawful use of compulsory process under 12 C.F.R. § 1080.6 or any other applicable law.

Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 25 of 27

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XIX. Retention of Jurisdiction IT IS FURTHER ORDERED that this Court will retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. XX. Final Judgment and Order Plaintiffs and Mr. Harper have consented to the terms and conditions of this Order as set forth above and have consented to the entry thereof. IT IS SO ORDERED, _fv..~lt~_;_s-___ ----+--' 2015.

arable James I. Cob tates District Judge Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 26 of 27

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Schedule A List of Personal Property to be Relinquished to Receiver by Defendant Harper • Rolex Yachtmaster Watch • Ladies' Rolex Watch • Cartier Roadster Watch • Ladies' Cartier Roadster Watch • Breitling Chronomat Watch • Tag Heuer Watch • Bangle Bracelet Case 9:14-cv-80931-JIC Document 139 Entered on FLSD Docket 05/05/2015 Page 27 of 27