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Federal Trade Commission v. Health Care One LLC

December 5, 2011

FEDERAL TRADE COMMISSION, PLAINTIFF,
v.
HEALTH CARE ONE LLC, AN ARIZONA LIMITED LIABILITY COMPANY, ALSO D/B/A "HEALTHCAREONE," "AMERICANS4 HEALTHCARE," "CITIZENS4HEALTHCARE," "AMERICAN EAGLE HEALTHCARE," "EASYLIFE HEALTHCARE," "ELITE HEALTHCARE," "GLOBAL HEALTHCARE," AND "REPUBLIC HEALTHCARE"; AMERICANS4HEALTHCARE INC., A DELAWARE CORPORATION; MICHAEL JAY ELLMAN, AN INDIVIDUAL; ELITE BUSINESS SOLUTIONS, INC., A NEVADA CORPORATION, ALSO D/B/A "EASYLIFE HEALTHCARE," "ELITE HEALTHCARE" AND "REPUBLIC HEALTHCARE"; ROBERT DANIEL FREEMAN, AN INDIVIDUAL; MILE HIGH ENTERPRISE INC., A NEVADA CORPORATION; AND BRYAN MATTHEW LOVING, AN INDIVIDUAL; DEFENDANTS.



The opinion of the court was delivered by: Honorable James V. Selna United States District Judge

STIPULATED FINAL JUDGMENT AND ORDER FOR PERMANENT INJUNCTION AND OTHER EQUITABLE RELIEF AGAINST DEFENDANTS HEALTH CARE ONE LLC, AMERICANS4HEALTHCARE INC., AND MICHAEL JAY ELLMAN

Plaintiff Federal Trade Commission ("FTC" or "Commission") commenced this civil action on August 3, 2010, pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b, and the Telemarketing Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101-6108, to obtain preliminary and permanent injunctive and other equitable relief for violations of Section 5 of the FTC Act, 15 U.S.C. § 45, and the FTC's Telemarketing Sales Rule ("TSR"), 16 C.F.R. Part 310, in connection with the marketing and sale of non-insurance healthcare discount programs. The Court entered a temporary restraining order against Defendants Health Care One LLC, Americans4Healthcare Inc., and Michael Jay Ellman ("Defendants") on August 3, 2010. The Court entered a preliminary injunction against Defendants on September 1, 2010.

The FTC and Defendants have agreed to entry of this "Stipulated Final Judgment and Order for Permanent Injunction and Other Equitable Relief Against Defendants Health Care One LLC, Americans4Healthcare Inc., and Michael Jay Ellman" ("Order"), to resolve all matters in dispute in this action between them.

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED as follows:

FINDINGS OF FACT

1. This Court has jurisdiction over the subject matter of this case pursuant to 15 U.S.C. §§ 45(a), 53(b), 57b, 6102(c), and 6105(b), and 28 U.S.C. §§ 1331, 1337(a), and 1345.

2. This Court has personal jurisdiction over each of the Defendants.

3. Venue in this District is proper under 15 U.S.C. §§ 53(b), and 28 U.S.C. §§ 1391(b) and (c).

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

5. The Complaint states a claim upon which relief may be granted under Sections 5(a), 13(b), and 19 of the FTC Act, 15 U.S.C. §§ 45(a), 53(b), and 57b, and the FTC's Telemarketing Sales Rule, 16 C.F.R. Part 310.

6. Defendants have entered into this Order freely and without coercion. Defendants further acknowledge that they have read the provisions of this Order and are prepared to abide by them.

7. Defendants waive all rights to seek judicial review or otherwise challenge or contest the validity of this Order. Defendants further waive and release any claim they may have against the Commission and its employees, representatives, and agents.

8. Defendants waive any claims they may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the date of the entry of this Order.

9. Nothing herein shall be deemed an admission of wrongdoing, an admission of any allegation in the complaint in this action, or a waiver of any defense or privilege, by Defendants.

ORDER

DEFINITIONS

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

1. "Assisting others" means 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 consumer complaints; or

b. formulating or providing, or arranging for the formulation or provision of, any telephone sales script or any other marketing material; or

c. providing names of, or assisting in the generation of, potential customers; or

d. performing marketing services of any kind.

2. "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.

3. "Corporate Defendants" means Defendants Health Care One LLC, Americans4Healthcare Inc., and their successors and assigns.

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

5. The term "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), and includes writings, drawings, graphs, charts, photographs, audio and video recordings, computer records, and any other data compilations from which information can be obtained. A draft or non-identical copy is a separate document within the meaning of the term.

6. The term "healthcare-related good or service" includes any program, membership, card, product, or other good or service, which is not insurance, that purports to offer discounts, savings, or benefits on healthcare, or access to such discounts, savings, or benefits.

7. "Individual Defendant" means Defendant Michael Jay Ellman.

8. The term "insurance" means any good or service that (1) has the effect of transferring or spreading risk; (2) is an integral part of the policy relationship between the insurer and the insured; and (3) is limited to entities within the insurance industry.

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

10. "Person" means a natural person, organization, or other legal entity, including a corporation, partnership, proprietorship, association, cooperative, limited liability company, or any other group or combination acting as an entity.

11. "Plaintiff" means the Federal Trade Commission.

12. "Receivership Defendants" means Defendants Health Care One LLC, Americans4Healthcare Inc., and Defendant Ellman's affiliated entities, including Secure Healthplan Corporation, HCO Marketing Inc., The American Mint, Ltd., Red Carpet Skincare Inc., Quad Digital Corporation, AutoPlanOne Inc., and Magnum Financial Management, Inc., as well as any successors, assigns, affiliates, and subsidiaries that conduct any business related to the Defendants' "national healthcare discount program" and which the Permanent Receiver has reason to believe are owned or controlled in whole or in part by any of the Defendants.

I.

BAN RE HEALTHCARE-RELATED GOODS OR SERVICES IT IS THEREFORE ORDERED that Defendants, whether acting directly or through any other person, are hereby permanently restrained and enjoined from:

A. Advertising, marketing, promoting, offering for sale, or selling any healthcare-related good or service; and

B. Assisting others engaged in advertising, marketing, promoting, offering for sale, or selling any healthcare-related good or service.

II.

PROHIBITION AGAINST MISREPRESENTING OTHER GOODS AND SERVICES

IT IS FURTHER ORDERED that Defendants and their officers, agents, servants, employees, and attorneys, and those persons or entities 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 advertising, marketing, promotion, offering for sale, or sale of any good or service, other than a healthcare-related good or service, are hereby permanently restrained and enjoined from misrepresenting or assisting others in misrepresenting, expressly or by implication, any material fact, including but not limited to:

A. That the program offered is insurance;

B. That the good or service is affiliated with or endorsed or sponsored by the federal government;

C. That any person or entity is an agency of or affiliated with, endorsed or approved by, or otherwise connected to the Federal ...


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