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United States v. Global Mortgage Funding

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA


July 17, 2009

UNITED STATES OF AMERICA, PLAINTIFF,
v.
GLOBAL MORTGAGE FUNDING, INC., A CALIFORNIA CORPORATION, ALSO F/D/B/A GLOBAL REALTY, INFORTE FINANCIAL, AND U.S. ESCROW; AND DAMIAN ROBERT KUTZNER, INDIVIDUALLY AND AS AN OFFICER OR DIRECTOR OF GLOBAL MORTGAGE FUNDING, INC., DEFENDANTS.

The opinion of the court was delivered by: David O. Carter United States District Judge

STIPULATED JUDGMENT AND ORDER FOR PERMANENT INJUNCTION

Plaintiff, the United States of America, acting upon notification and authorization to the Attorney General by the Federal Trade Commission ("FTC" or the "Commission"), commenced this action by filing the complaint herein, and Individual Defendant Damian Robert Kutzner and Corporate Defendant Global Mortgage Funding, Inc., each waived service of the summons and the complaint pursuant to Fed. R. Civ. P. 4(d). The parties are:

(1) the Plaintiff, represented by the attorneys whose names appear hereafter; (2) Individual Defendant Damian Robert Kutzner, represented by Michael L. Mallow, and by James J. Joseph in his capacity as Chapter 7 Bankruptcy Trustee for Damian Robert Kutzner (the "Trustee"); and (3) Corporate Defendant Global Mortgage Funding, Inc., by and through its President, Damian Robert Kutzner, its attorney, Michael L. Mallow, and James J. Joseph in his capacity as Chapter 7 Bankruptcy Trustee for Global Mortgage Funding, Inc. (the "Trustee"). The parties have agreed to settlement of this action without adjudication of any issue of fact or law (other than those decided by this Court's order granting the United States' motion to Strike Affirmative Defenses (R. 24; filed May 15, 2008)), and without Defendants' admitting liability for any of the violations alleged in the complaint.

THEREFORE, on the joint motion of Plaintiff, Individual Defendant Damian Robert Kutzner, and Corporate Defendant Global Mortgage Funding, Inc., it is hereby ORDERED, ADJUDGED AND DECREED as follows:

FINDINGS

1. This Court has jurisdiction over the subject matter and the parties pursuant to 28 U.S.C. §§ 1331, 1337(a), 1345 and 1355, and 15 U.S.C. §§ 45(m)(1)(A), 53(b), 56(a), and 57b.

2. Venue is proper as to all parties in this District.

3. The activities of Defendants are in or affecting commerce, as defined in Section 4 of the FTC Act, 15 U.S.C. § 44.

4. The allegations of the complaint state a claim upon which relief may be granted against Defendants, under Sections 5(a), 5(m)(1)(A), 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), and 57b.

5. The Commission previously sued present Defendants for alleged violations of the Federal Trade Commission Act, 15 U.S.C. § 53(b), and Sections 521(a) and 522(a) of the Gramm-Leach-Bliley Act ("GLB Act"), 15 U.S.C. §§ 6821(a) and 6822(a). FTC v. GM Funding, et al., No. 8:02-cv-01026-DOC (C.D. Cal. filed Nov. 6, 2002). The parties resolved that litigation with a consent decree signed and issued by this Court May 3, 2003.

6. On November 7, 2006, Corporate Defendant Global Mortgage Funding, Inc. filed a voluntary petition for relief under the liquidation provisions of Chapter 7 of the Bankruptcy Code, 11 U.S.C. § 101 et seq., in the United States Bankruptcy Court for this district, In re Global Mortgage, Inc., No. 8:06-12039-RK (Bankr. C.D. Cal. filed Nov. 7, 2006) (the "Global Mortgage Bankruptcy Case"). Subsequently, James J. Joseph was appointed Chapter 7 Trustee in the Global Mortgage Bankruptcy Case.

7. On May 15, 2008, Individual Defendant Damian Robert Kutzner filed a voluntary petition for relief under the liquidation provisions of Chapter 7 of the Bankruptcy Code, 11 U.S.C. § 101 et seq., in the United States Bankruptcy Court for this district, In re Damian Robert Kutzner, No. 8:08-bk-12656-ES (Bankr. C.D. Cal. filed May 15, 2008) (the "Kutzner Personal Bankruptcy Case") (together with the Global Mortgage Bankruptcy Case, "the Bankruptcy Cases"). Subsequently, James J. Joseph was appointed Chapter 7 Trustee for the Kutzner Personal Bankruptcy Case.

8. This action, including the enforcement of a judgment other than a money judgment, is not subject to the automatic bankruptcy stay provisions of 11 U.S.C. § 362(a)(1), (2), (3) or (6), because this action is brought by the United States pursuant to referral by the Commission to enforce the Commission's police or regulatory power as a governmental unit. Under 11 U.S.C. § 362(b)(4), it is thus exempt from the automatic stay. See FTC v. First Alliance Mortgage Co. (In re First Alliance Mortgage Co.), 264 B.R. 634, 645-51 (C.D. Cal. 2001) (Carter, J.).

9. The Trustee has filed motions in the Bankruptcy Cases and obtained the Bankruptcy Court's approval to enter into this Order and take any and all actions necessary and appropriate to implement and effectuate the terms and conditions of this Order.

10. Defendants have entered into this Stipulated Judgment and Order for Permanent Injunction ("Order") freely and without coercion. Defendants further acknowledge that they have read the provisions of this Order and are prepared to abide by them.

11. Plaintiff and Defendants hereby waive all rights to appeal or otherwise challenge or contest the validity of this Order.

12. Defendants agree that this Order does not entitle Defendants to seek or obtain attorneys' fees as a prevailing party under the Equal Access to Justice Act, 28 U.S.C. § 2412, and Defendants further waive any rights to attorneys' fees that may arise under said provision of law.

13. Entry of this Order is in the public interest.

DEFINITIONS

For the purpose of this Order, the following definitions shall apply:

1. "Asset" means any legal or equitable interest in, or right or claim to, any real and personal property, including without limitation, chattels, goods, instruments, equipment, fixtures, general intangibles, leaseholds, mail or other deliveries, inventory, checks, notes, accounts, credits, contracts, receivables, shares of stock, and all cash, wherever located.

2. "Assisting others," in the context of assisting others who are engaging or participating in telemarketing, means knowingly providing any of the following goods or services to another person or entity: (a) performing customer service functions, including, but not limited to, receiving or responding to customer complaints; (b) formulating or providing, or arranging for the formulation or provision of, any telephone sales script or any other marketing material; (c) providing names of, or assisting in the generation of, potential customers, or (d) performing marketing services of any kind.

3. "Commission" means Federal Trade Commission.

4. "Customer" means any person who is or may be required to pay for goods or services offered through telemarketing.

5. "Defendants" means the Individual Defendant and the Corporate Defendant, individually, collectively, or in any combination.

a. "Corporate Defendant" means Global Mortgage Funding, Inc., a California corporation, also f/d/b/a Global Realty, Inforte Financial, and U.S. Escrow;

b. "Individual Defendant" means Damian Robert Kutzner, individually and as an officer and director of Global Mortgage Funding, Inc.

6. "Donor" means any person solicited to make a charitable contribution.

7. "Engaging or participating in telemarketing" includes personally participating in telemarketing; managing others who participate in telemarketing; and owning or operating an enterprise conducting telemarketing.

8. "Established business relationship" means a relationship between a seller and a person based on:

(a) the person's purchase, rental, or lease of the seller's goods or services or a financial transaction between the person and seller, within the eighteen (18) months immediately preceding the date of the telemarketing call; or

(b) the person's inquiry or application regarding a product or service offered by the seller, within the three

(3) months immediately preceding the date of a telemarketing call.

9. "FTC" means Federal Trade Commission.

10. "National Do Not Call Registry" means the National Do Not Call Registry, which is the "do-not-call" registry maintained by the Commission pursuant to 16 C.F.R. § 310.4(b)(1)(iii)(B).

11. "Representatives" means Defendants' agents, servants, employees and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise.

12. "Seller" means any person who, in connection with a telemarketing transaction, provides, offers to provide, or arranges for others to provide goods or services to a customer in exchange for consideration, whether or not such person is under the jurisdiction of the Commission.

13. "Telemarketer" means any person who, in connection with telemarketing, initiates or receives telephone calls to or from a customer or donor.

14. "Telemarketing Sales Rule" or "Rule" means the FTC Rule entitled "Telemarketing Sales Rule," 16 C.F.R. Pt. 310 (2008), attached hereto as Appendix A and as may be hereafter amended.

15. "Telemarketing" means a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones. The term includes a plan, program, or campaign where callers purport to take an informational survey, but also offer to sell goods or services.

(a) The term does not include the solicitation of sales through the mailing of a catalog that: Contains a written description or illustration of the goods or services offered for sale; includes the business address of the seller; includes multiple pages of written material or illustrations; and has been issued not less frequently than once a year, when the person making the solicitation does not solicit customers by telephone but only receives calls initiated by customers in response to the catalog and during those calls takes orders only without further solicitation. For purposes of the previous sentence, the term "further solicitation" does not include providing the customer with information about, or attempting to sell, any other item included in the same catalog which prompted the customer's call or in a substantially similar catalog.

16. "Outbound telephone call" means a telephone call initiated by a telemarketer to induce the purchase of goods or services or to solicit a charitable contribution.

17. "Person" means any individual, group, unincorporated association, limited or general partnership, corporation, or other business entity.

ORDER

I. PROHIBITION AGAINST TELEMARKETING BY INDIVIDUAL DEFENDANT

IT IS ORDERED that for five (5) years from entry of this Order, Individual Defendant Damian Robert Kutzner and his Representatives are hereby prohibited from engaging or participating in telemarketing, and from assisting others who are engaging or participating in telemarketing, provided that for purposes of this provision "telemarketing" does not include telephone calls conducted to induce the purchase or goods or services by a business, except calls to induce the retail sale of non-durable office or cleaning supplies.

II. PROHIBITION AGAINST VIOLATIONS OF THE TELEMARKETING SALES RULE BY INDIVIDUAL DEFENDANT

IT IS FURTHER ORDERED that, in connection with telemarketing, Individual Defendant Damian Robert Kutzner and his Representatives are hereby permanently restrained and enjoined from engaging in, causing other persons to engage in, or assisting other persons to engage in, violations of the Telemarketing Sales Rule, including but not limited to:

A. Failing to transmit or causing to be transmitted the telephone number, and, when made available by the carrier, the name of the telemarketer or seller, to any caller identification service in use by a recipient of a telemarketing call; provided that it shall not be a violation to substitute (for the name and phone number used in, or billed for, making the call) the name of the seller or charitable organization on behalf of which a telemarketing call is placed, and the seller's or charitable organization's customer or donor service telephone number, which is answered during regular business hours;

B. Initiating any outbound telephone call to a person's telephone number on the National Do Not Call Registry of persons who do not wish to receive outbound telephone calls to induce the purchase of goods or services unless the seller proves:

1. the seller has obtained the express agreement, in writing, of such person to place calls to that person. Such written agreement shall clearly evidence such person's authorization that calls made by or on behalf of a specific party may be placed to that person, and shall include the telephone number to which the calls may be placed and the signature of that person; or

2. the seller has an established business relationship with such person and that person has not previously stated that he or she does not wish to receive outbound telephone calls made by or on behalf of the seller;

C. Initiating any outbound telephone call to a person when that person has previously stated that he or she does not wish to receive an outbound telephone call made by or on behalf of the seller whose goods or services are being offered or made by or on behalf of the charitable organization for which a charitable contribution is being solicited;

D. Initiating any outbound telephone call to a telephone number within a given area code without first paying the required annual fee for access to the telephone numbers within that area code that are on the National Do Not Call Registry;

E. Abandoning any outbound telephone call to a person by failing to connect the call to a representative within two seconds of the person's completed greeting, unless the following four conditions are met:

1. Individual Defendant and his Representatives employ technology that ensures abandonment of no more than three percent of all calls answered by a person, measured over the duration of a single calling campaign, if less than 30 days, or separately over each successive 30-day period or portion thereof that the campaign continues; and

2. Individual Defendant and his Representatives, for each telemarketing call placed, allow the telephone to ring for at least fifteen seconds or four rings before disconnecting an unanswered call; and

3. Whenever a Representative is not available to speak with the person answering the call within two seconds after the person's completed greeting, the seller or telemarketer promptly plays a recorded message that states the name and telephone number of the seller on whose behalf the call was placed; and

4. Individual Defendant and his Representatives retain records, in accordance with 16 C.F.R. § 310.5(b)-(d), establishing compliance with the preceding three conditions; provided, however, that Individual Defendant and his Representatives may not allocate to others any record-keeping responsibilities under 16 C.F.R. § 310.5(c);

And further provided, however, that if the Commission promulgates rules that modify or supersede the Telemarketing Sales Rule, in whole or part, Individual Defendant shall comply fully and completely with all applicable requirements thereof, on and after the effective date of any such rules.

III. CIVIL PENALTY, MONETARY JUDGMENT, AND RIGHT TO REOPEN

IT IS FURTHER ORDERED that:

A. Judgment in the amount of six million dollars exactly ($6,000,000.00) is hereby entered in favor of the United States and against Individual Defendant Damian Robert Kutzner and Corporate Defendant Global Mortgage Funding, Inc., jointly and severally, as a civil penalty, pursuant to Section 5(m)(1)(A) of the Federal Trade Commission Act, 15 U.S.C. § 45(m)(1)(A). Based upon Individual Defendant's sworn representations in his first-amended bankruptcy schedules and statement of financial affairs in the Kutzner Personal Bankruptcy Case, full payment for the foregoing civil penalty is suspended, contingent upon the accuracy and completeness of those representations, as set forth in Subparagraphs B and C of this Paragraph.

B. The civil penalty judgment against Individual Defendant shall be suspended subject to the conditions set forth in this subparagraph. Plaintiff's agreement to this Order is expressly premised upon the truthfulness, accuracy and completeness of Individual Defendant's initial bankruptcy schedules A, C, D, E, G, I, and J; initial statement of intention; first-amended bankruptcy schedules B, F, and H, and first-amended statement of financial affairs ("Individual Defendant's Bankruptcy Filings"). Individual Defendant signed the initial bankruptcy documents under penalties of perjury on June 30, 2008, and filed them the same date in the Kutzner Personal Bankruptcy Case; and he signed the first-amended documents August 25, 2008, and filed them the same date in the Kutzner Personal Bankruptcy Case. Individual Defendant voluntarily signed these documents with assistance of counsel and under penalties of perjury. They include material information upon which Plaintiff has relied in negotiating and agreeing to this Order.

C. If, upon motion by Plaintiff, this Court finds that Individual Defendant's Bankruptcy Filings failed to disclose any material asset or materially misstated the value of any asset, or made any other material misstatement or omission, then:

1. This Order shall be reopened and suspension of the judgment shall be terminated for the purpose of requiring payment of civil penalty in the full amount of the monetary judgment ($6 million);

2. Plaintiff shall be allowed general unsecured claims in the amount of six million dollars exactly ($6,000,000.00) (the "Bankruptcy Claims") in the Bankruptcy Cases, if not closed or dismissed, and in any subsequent bankruptcy cases that Defendants file;

3. Plaintiff's Bankruptcy Claims shall be classified and entitled to receive the treatment afforded to holders of allowed unsecured claims under the terms and conditions of any plan or plans of reorganization or liquidation confirmed by the Bankruptcy Court or any distribution by a Chapter 7 Trustee; and

4. Plaintiff shall participate in any payments in such bankruptcy cases paid on account of such allowed unsecured claims in accordance with the priorities of Section 726 of the Bankruptcy Code, 11 U.S.C. § 726.

Provided, however, that in all other respects this Order shall remain in full force and effect, unless otherwise ordered by the Court.

D. In accordance with 31 U.S.C. § 7701(c)(2)(D) and (c)(3), Defendants are hereby required, unless they have done so already, to furnish to Plaintiff and the FTC their taxpayer identifying numbers (social security numbers or employer identification numbers), which Plaintiff and the FTC shall use for purposes of collecting and reporting on any delinquent amounts arising out of Defendants' relationships with the government.

E. This judgment is a civil penalty owed to the United States Government and is not compensation for actual pecuniary loss. Defendants hereby waive any right to contest the facts as alleged in the Complaint in any bankruptcy case or subsequent civil litigation pursued by Plaintiff or the Commission to enforce rights to any payment or money judgment pursuant to this Order, including but not limited to a nondischargeability complaint in any bankruptcy case. Defendants further waive any right to contest that the facts found in the "Findings" section of this Order establish all elements necessary to sustain an action pursuant to, and that this Order shall have collateral estoppel effect for purposes of Section 523(a)(7) of the Bankruptcy Code, 11 U.S. C. § 523(a)(7) (relating to nondischargeability of any debt that "is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss...").

F. Proceedings instituted under this Paragraph are in addition to, and not in lieu of, any other civil or criminal remedies that may be provided by law, including any other proceedings Plaintiff or the Commission may initiate to enforce this Order.

IV. COMPLIANCE MONITORING OF INDIVIDUAL DEFENDANT

IT IS FURTHER ORDERED that, for the purpose of

(i) monitoring and investigating compliance with any provision of this Order, and (ii) investigating any discrepancies in the accuracy of Individual Defendant's bankruptcy petition, first-amended schedules, and statement of financial affairs, upon which Plaintiff's agreement to this Order is expressly premised:

A. Within ten (10) days of service of written notice from a representative of the Plaintiff or the Commission, Individual Defendant shall:

1. Submit additional written reports, which are true and accurate and sworn to under penalty of perjury;

2. produce documents for inspection and copying;

3. appear for deposition; and/or

4. provide entry during normal business hours to any business location in Defendant's possession or direct or indirect control to inspect the business operation.

B. Plaintiff and the Commission are authorized to use all other lawful means, including but not limited to:

1. obtaining discovery from any person, without further leave of court, using the procedures prescribed by Fed. R. Civ. P. 30, 31, 33, 34, 36, 45 and 69; and

2. posing as consumers and suppliers to Defendant, his employees, or any other entity managed or controlled in whole or in part by Defendant, without identification or prior notice.

C. Individual Defendant shall permit representatives of the Plaintiff and the Commission to interview any employer, consultant, independent contractor, Representative, agent, or employee who has agreed to such an interview, relating in any way to any conduct subject to this Order. The person interviewed may have counsel present.

Provided, however, that nothing in this Order shall limit the Commission's lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1, to obtain any documentary material, tangible things, testimony, or information relevant to unfair or deceptive acts or practices in or affecting commerce (within the meaning of 15 U.S.C. § 45(a)(1)).

V. COMPLIANCE REPORTING BY INDIVIDUAL DEFENDANT

IT IS FURTHER ORDERED that, in order that compliance with the provisions of this Order may be monitored:

A. For seven (7) years from the entry of this Order,

1. Individual Defendant shall notify the Commission of the following:

a. Any changes in his residence, mailing addresses, and/or telephone numbers, within ten (10) days of such change;

b. Any changes in his employment status (including self-employment), and any changes in his ownership or control of any business entity, within ten (10) days of such change. Such changes shall include:

(1) change in business name or address;

(2) incorporation, formation, or other organization;

(3) dissolution, assignment, sale, merger, or other action; and

(4) creation or dissolution of any subsidiary, parent, or affiliate.

c. Any changes in his name, and any uses of any aliases, fictitious names, or "doing business as" names, within ten (10) days of such change or usage.

d. Notices under this Paragraph V(A)(1) shall include:

(1) the name and address of each business Individual Defendant is affiliated with, employed by, creates or forms, or performs services for;

(2) a detailed description of the nature of each such business;

(3) a detailed description of Individual Defendant's duties and responsibilities in relation to each such business or employment; and

(4) any aliases, fictitious names, or "doing business as" names Individual Defendant is using.

2. Individual Defendant shall notify the Commission at least thirty (30) days prior to any changes in structure of any business entities (i) that he controls, directly or indirectly, or in which he has an ownership interest, and

(ii) that may affect compliance obligations arising under this Order, including but not limited to:

a. Any change in business name or address,

b. Any incorporation, formation, or other organization;

c. Any dissolution, assignment, sale, merger, or other action; and

d. Any creation or dissolution of any subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order;

Provided that, with respect to any proposed change about which Individual Defendant learns less than thirty (30) days prior to the date such action is to take place, Individual Defendant shall notify the Commission as soon as is practicable after obtaining such knowledge.

B. Individual Defendant shall prepare and submit written reports that are true and accurate and signed under penalty of perjury, setting forth in detail the manner and form in which he has complied and is complying with this Order. The first such report shall be submitted to Plaintiff and to the Commission thirty (30) days after the entry of this Order, and subsequent reports shall be submitted to the Commission annually thereafter for seven (7) years. Each such report shall include, but not be limited to:

1. Individual Defendant's then-current residence address, mailing addresses, and telephone numbers;

2. Individual Defendant's then-current employment status (including self-employment), including:

a. the name, addresses, and telephone numbers of each business he is affiliated with, employed by, or performs services for;

b. a detailed description of the nature of each such business; and

c. a detailed description of Individual Defendant's duties and responsibilities in relation to each such business or employment;

3. Any other changes required to be reported under Paragraph V(A); and

4. A copy of each acknowledgment Individual Defendant has obtained since submitting his previous report, acknowledging receipt of this Order, pursuant to Paragraph VII(C) of this Order.

C. Individual Defendant shall notify the Commission of the filing of any bankruptcy petition within fifteen (15) days of filing;

D. For the purposes of this Order, Individual Defendant shall, unless otherwise directed by the Commission's authorized representatives, send by overnight courier all reports and notifications required by this Order to the Commission, to the following address:

Associate Director for Enforcement Federal Trade Commission 600 Pennsylvania Ave. NW, Room NJ2122 Washington, DC 20580 RE: United States v. Kutzner, Case No. SACV07-1275 DOC (PJWx) (C.D. Cal.)

Provided, that, in lieu of overnight delivery, Individual Defendant may send such reports or notifications by first-class mail, but only if he contemporaneously sends an electronic version of such report or notification to the Commission at: DEBrief@ftc.gov.

E. For purposes of the compliance reporting and monitoring required by this Order, the Commission and its representatives are authorized to communicate directly with Individual Defendant.

VI. RECORD-KEEPING PROVISIONS AS TO INDIVIDUAL DEFENDANT

IT IS FURTHER ORDERED that, for ten (10) years from the entry of this Order, the following records must be created and retained by Individual Defendant Damian Robert Kutzner; by his agents, employees, officers, and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise; and by every business that Individual Defendant Damian Robert Kutzner controls, directly or indirectly, and/or in which he has a majority ownership interest. The records that must be created and retained are:

A. Accounting records that reflect the cost of goods or services sold, revenues generated, and the disbursement of such revenues;

B. Personnel records accurately reflecting: the name, address, and telephone number of each person employed in any capacity by such business, including as an independent contractor; that person's job title or position; the date upon which the person commenced work; and the date and reason for the person's termination, if applicable;

C. Customer files containing the names, addresses, phone numbers, dollar amounts paid, quantity of items or services purchased, and description of items or services purchased, to the extent such information is obtained in the ordinary course of business;

D. Complaints and refund requests (whether received directly, indirectly, or through any third party) and any responses to those complaints or requests;

E. Copies of all sales scripts, training materials, advertisements, or other marketing materials; and

F. All records and documents necessary to demonstrate full compliance with each provision of this Order, including but not limited to, copies of acknowledgments of receipt of this Order, required by Paragraph VII(C), and all reports and notices submitted to the FTC pursuant to Paragraph V(A)(1) (relating to notices of changes submitted within 10 days of the event), V(A)(2) (relating to notices of changes of business relating to the subject matter of this Order, required to be submitted 30 days prior to the change); V(B) (periodic reports of employment and business activity); and V(C) (relating to bankruptcy filings).

VII. DISTRIBUTION OF ORDER BY INDIVIDUAL DEFENDANT

IT IS FURTHER ORDERED that, for a period of seven (7) years from the entry of this Order, Individual Defendant shall deliver copies of the Order as directed below:

A. Individual Defendant as Control Person: For any business that Individual Defendant Damian Robert Kutzner controls, directly or indirectly, or in which he has a majority ownership interest, Individual Defendant shall deliver a copy of this Order to (1) all principals, officers, directors, and managers of that business, (2) all employees, agents, and representatives of that business who engage in conduct related to the subject matter of the Order, and (3) any business entity resulting from any change in structure set forth in Paragraph V(A)(2). For current personnel, delivery shall be within five (5) days of service of this Order upon Individual Defendant. For new personnel, delivery shall occur prior to their assuming their responsibilities. For any business entity resulting from any change in structure set forth in Paragraph V(A)(2), delivery shall be at least ten (10) days prior to the change in structure.

B. Individual Defendant as employee or non-control person: For any business where Individual Defendant is not a controlling person of the business but he otherwise engages in, or assists others in, telemarketing, he shall deliver a copy of this Order to all principals and managers of such business before engaging in such conduct. For any current businesses, delivery shall be within five (5) days of service of this Order upon Individual Defendant.

C. Individual Defendant shall secure a signed and dated statement acknowledging receipt of this Order within ten (10) days of delivery, from all persons receiving a copy of the Order pursuant to this Paragraph; and shall provide a copy of each such acknowledgment to the Commission as specified in Paragraph V(B)(4).

VIII. CESSATION OF BUSINESS ACTIVITIES OF CORPORATE DEFENDANT

IT IS FURTHER ORDERED that Corporate Defendant Global

Mortgage Funding, Inc., shall not engage in any business and the Trustee shall not seek authority to operate the business of Defendant Global Mortgage Funding, Inc., pursuant to Section 721 of the Bankruptcy Code, 11 U.S.C. § 721, or otherwise.

IX. PROHIBITION OF SELLING OF CORPORATE DEFENDANT'S CUSTOMER LISTS

IT IS FURTHER ORDERED that Corporate Defendant Global Mortgage Funding, Inc., is permanently restrained and enjoined from selling, renting, leasing, transferring, or otherwise disclosing the name, address, telephone number, credit or debit card number, bank account number, e-mail address, social security number, credit report, credit score, or other identifying information of any person who submitted such identifying information to Corporate Defendant Global Mortgage Funding, Inc., at any time prior to entry of this Order in connection with Corporate Defendant Global Mortgage Funding, Inc.'s advertising, marketing, promoting, offering for sale and sale of mortgage and related financing services.

Provided, however, that Corporate Defendant Global Mortgage Funding, Inc., may disclose such identifying information to a law enforcement agency or as required by any law, regulation, or court order.

Provided further that, if the Trustee is in possession of any customer lists or other such identifying information, he shall transfer such lists or information, including all copies, to the FTC.

X. CORPORATE BOOKS AND RECORDS OF CORPORATE DEFENDANT

IT IS FURTHER ORDERED that the Trustee shall provide notice to the FTC of the proposed abandonment or disposition of any corporate books and records of Corporate Defendant Global Mortgage Funding, Inc., in his possession. Upon the FTC's request, the Trustee shall transfer such books and records to the FTC.

XI. OTHER CORPORATE DEFENDANT ASSETS

IT IS FURTHER ORDERED that the Trustee shall provide notice to the FTC of the proposed abandonment or disposition of any other assets of Corporate Defendant Global Mortgage Funding, Inc. Corporate Defendant Global Mortgage Funding, Inc., waives any interest in all assets that the Trustee abandons, pursuant to 11 U.S.C. § 554, and directs that upon any abandonment its interest in same be transferred to the FTC.

XII. ACKNOWLEDGMENT OF RECEIPT OF ORDER BY DEFENDANTS

IT IS FURTHER ORDERED that each Defendant, within five (5) business days of receipt of this Order as entered by the Court, must submit to the Plaintiff and to the Commission a truthful sworn statement acknowledging receipt of this Order.

XIII. FEES AND COSTS

IT IS FURTHER ORDERED that each party to this Order shall bear its own costs and attorneys' fees incurred in connection with this action.

XIV. SEVERABILITY

IT IS FURTHER ORDERED that the provisions of this Order are separate and severable from one another. If any provision is stayed or determined to be invalid, the remaining provisions shall remain in full force and effect.

XV. RETENTION OF JURISDICTION

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for purposes of construction, modification and enforcement of this Order.

The Bankruptcy Trustee is entering into this Order only in his fiduciary capacity as Chapter 7 Trustee for Damian Robert Kutzner and for Global Mortgage Funding, Inc., and not individually. The Trustee's obligations under this Order are limited to those obligations specified in this Order and include the duty not to seek to operate Global Mortgage Funding, Inc.'s business under Section 721 of the Bankruptcy Code, to transfer to the FTC any customer list or identifying information he may have in his possession, and to notify the FTC of any proposed abandonment or disposition of any corporate books and records in his possession, and at the FTC's request, transfer these corporate books and records to the FTC.

XVI. COMPLETE SETTLEMENT

The parties, by their respective counsel, hereby consent to entry of the foregoing Order which shall constitute a final judgment and order in this matter. The parties further stipulate and agree that the entry of the foregoing Order shall constitute a full, complete and final settlement of this action.

JUDGMENT IS THEREFORE ENTERED in favor of Plaintiff and against Defendants, pursuant to all the terms and conditions recited above.

WE CONSENT TO ENTRY of the above Stipulated Judgment and Order for Permanent Injunction:

SO ORDERED this 17 day of July, 2009.

20090717

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