The opinion of the court was delivered by: James V. Selna United States District Judge
Preliminary Injunction With Asset Freeze, Appointment of Permanent Receiver and Other Equitable Relief
Plaintiffs Federal Trade Commission ("FTC"), the People of the State of California ("State of California"), and State of Missouri ("Plaintiffs") filed their Complaint against Defendants (1) US Foreclosure Relief Corp., a corporation, (2) George Escalante, individually and as an officer of US Foreclosure Relief Corp., (3) Cesar Lopez, individually and also trading and doing business as H.E. Service Company; and (4) Adrian Pomery, Esq., individually and also trading and doing business as Pomery & Associates ("Defendants"). Pursuant to Rule 65 of the Federal Rules of Civil Procedure, Plaintiffs concurrently applied ex parte for a temporary restraining order ("TRO") and for an order to show cause why a preliminary injunction should not be granted pursuant to Rule 65 of the Federal Rules of Civil Procedure, and why a permanent receiver should not be appointed..
The Court has considered the Complaint, Plaintiffs' Ex Parte Application for a TRO, the memorandum in support of Plaintiffs' application, other materials filed in support thereof, and all other papers filed herein, and it appears to the satisfaction of the Court that:
1. This Court has jurisdiction of the subject matter of this case. There is also good cause to believe that it will have jurisdiction over all parties hereto, and that venue in this district is proper.
2. There is good cause to believe that Defendants have engaged, and are likely to engage, in acts that violate Section 5 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 45; Sections 17200 and 17500 of the California Business and Professions Code; and Sections 407.020 and 407.935 to 407.943 of the Missouri Merchandising Practices Act, §§ 407.020 and 407.935-407.943 Mo. Rev. Stat.; and that the Plaintiffs are likely to prevail on the merits of this action.
3. There is good cause to believe that immediate and irreparable harm will result from Defendants' ongoing violations of the FTC Act, the California Business and Professions Code, and the Missouri Merchandising Practices Act unless Defendants are restrained and enjoined by order of this Court.
4. There is good cause to believe that immediate and irreparable damage to the Court's ability to grant effective final relief in the form of permanent injunctive relief, rescission, restitution, disgorgement, or other equitable monetary relief will occur from the sale, transfer, or other disposition or concealment by Defendants of assets or business documents or records unless Defendants are immediately restrained and enjoined by Order of this Court.
5. There is good cause for the Court to appoint a Permanent Receiver over the Receivership Defendants.
6. Considering Plaintiffs' likelihood of ultimate success and weighing the equities, a Preliminary Injunction ("Order") with an asset freeze, the appointment of a Permanent Receiver, and other equitable relief is in the public interest.
7. No security is required of any agency of the United States for issuance of a restraining order. Fed. R. Civ. P. 65(c).
For the purposes of this Order, the following definitions shall apply:
1. "Assets" means any legal or equitable interest in, right to, or claim to, any real or 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" means knowingly providing any of the following goods or services to another person: (A) performing customer service functions, including, but not limited to, receiving or responding to consumer 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. "Defendants" means US Foreclosure Relief Corp., a corporation, also d/b/a U.S. Foreclosure Relief, Inc., Lighthouse Services, and California Foreclosure Specialists; George Escalante, individually and as an officer of US Foreclosure Relief Corp.; Cesar Lopez, individually and also trading and doing business as H.E. Service Company, and Adrian Pomery, Esq., individually and also trading and doing business as Pomery & Associates; and each of them, by whatever names each might be known by, as well as their successors and assigns, whether acting directly or through any corporation, subsidiary, division, or other device, including, but not limited to, fictitious business names.
4. "Document" is equal in scope and synonymous in meaning to the terms "document" and "electronically stored information," as described and used in Federal Rule of Civil Procedure 34(a).
5. "Foreclosure consultant" is equal in scope and synonymous in meaning to the term "foreclosure consultant" as described and used in Section 2945.1(a) of the California Civil Code and Section 407.935 of the Missouri Merchandising Practices Act, § 407.935 Mo. Rev. Stat.
6. "Individual Defendants" means George Escalante, Cesar Lopez, and Adrian Pomery, Esq.
7. "Material fact" means any fact that is likely to affect a person's choice of, or conduct regarding, goods or services.
8. "Mortgage loan modification or foreclosure relief service" means any service, product, or program wherein the offeror, expressly or by implication, claims that it can assist a homeowner in any manner to (A) stop, prevent, or postpone any home mortgage foreclosure sale, (B) obtain or arrange a modification of any term of a home loan, deed of trust, or mortgage, (C) obtain any forbearance from any mortgage loan holder or servicer, (D) exercise any statutory right of reinstatement, (E) obtain any extension of the period within which the owner may reinstate his or her obligation, (F) obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a deed of trust or mortgage on a residence in foreclosure or contained in that deed of trust or mortgage, (G) obtain a loan or advance of funds that is connected to the consumer's home ownership, (H) avoid or ameliorate the impairment of the owner's credit standing, credit rating or credit profile resulting from the recording of a notice of default or the conduct of a foreclosure sale, (I) save the owner's residence from foreclosure, or (J) assist the owner in obtaining proceeds from the foreclosure sale of the owner's residence. The foregoing shall include any manner of claimed assistance, including, but not limited to, debt, budget, or financial counseling, receiving money for the purpose of distributing it to creditors, contacting creditors on behalf of the homeowner, arranging or attempting to arrange for an extension of the period within which the owner of property sold at foreclosure may cure his or her default, arranging or attempting to arrange for any delay or postponement of the time of a foreclosure sale, and giving advice of any kind with respect to filing for bankruptcy.
9. "Mortgage loan holder or servicer" means any beneficiary, mortgagee, trustee, loan servicer, or any other loan holder and/or their authorized agents.
10. "Person" means a natural person, organization, or other legal entity, including a corporation, partnership, proprietorship, association, cooperative, or any other group or combination acting as an entity.
11. "Plaintiffs" mean the Federal Trade Commission, the People of the State of California, and the State of Missouri.
12. "Receivership Defendants" means US Foreclosure Relief Corp and the Individual Defendants doing business as US Foreclosure Relief Corp., U.S. Foreclosure Relief, Inc., Lighthouse Services, California Foreclosure Specialists, H.E. Service Company, H.E. Servicing Inc., Pomery & Associates, and Homeowners Legal Assistance.
13. "Telemarketing" means a plan, program, or campaign (whether or not covered by the Telemarketing Sales Rule, 16 C.F.R. Part 310) which is conducted to induce the purchase of goods or services or a charitable contribution by use of one or more telephones.
I. IT IS THEREFORE ORDERED that Defendants and their officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any of them who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, in connection with the telemarketing, advertising, marketing, promotion, offering for sale or sale of any mortgage loan modification or foreclosure relief service, are hereby restrained and enjoined from falsely representing, or from assisting others who are falsely representing, expressly or by implication, any of the following:
A. That any Defendant or any other person will:
1. obtain or arrange a modification of any term of a home loan, deed of trust, or mortgage;
2. obtain or arrange lower monthly mortgage payments for any consumer;
3. obtain or arrange affordable monthly mortgage payments for any consumer;
4. stop, prevent, or postpone any home mortgage foreclosure sale;
5. save any consumer's residence from foreclosure;
6. prevent a notice of default from being filed with respect to any consumer's residence or home loan;
7. obtain or write a new home loan for any consumer;
8. obtain or arrange refinancing of a home loan for any consumer;
9. obtain or arrange a forbearance from any mortgage loan holder or servicer;
10. obtain or arrange any agreement whereby any consumer's mortgage payments are deferred for any period of time; or
11. immediately or promptly contact any consumer's mortgage loan holder or servicer;
B. The degree of success that any Defendant or any other person has had in performing mortgage loan modification or foreclosure relief services;
C. The length of time that any Defendant or any other person has been in the mortgage loan modification or foreclosure relief services business;
D. The terms that any mortgage loan holder or servicer will or is likely to offer or accept to cure any delinquency or default on, or to re-instate, any mortgage or other home loan;
E. The amount of time that it will take or is likely to take for any Defendant or other person to arrange or reach an agreement with any consumer's mortgage loan holder or servicer to prevent foreclosure or to cure any delinquency or default on, or to re-instate, any mortgage or other home loan;
F. The nature of the Defendant's or any other person's relationship with any mortgage loan holder or servicer, or other lender;
G. The cost of such service or of any aspect of such service;
H. That any Defendant or any other person is affiliated with, endorsed or approved by, or otherwise connected to any government agency, unit or department, including but not limited to the U.S. Department of Housing and Urban Development (H.U.D.);
I. The refund policy of any Defendant or any other person, including but not limited to the likelihood of a consumer obtaining a full or partial refund, or the circumstances in which a full or partial refund will be granted to the consumer; or
J. Any other material fact.
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