Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Federal Trade Commission v. American Mortgage Consulting Group

October 1, 2012

FEDERAL TRADE COMMISSION, PLAINTIFF,
v.
AMERICAN MORTGAGE CONSULTING GROUP, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, ALSO D.B.A. AMERICAN MORTGAGE GROUP AND AMERICAN MORTGAGE CONSULTING; HOME GUARDIAN MANAGEMENT SOLUTIONS, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, ALSO D.B.A. HOME GUARDIAN SOLUTIONS; AND MARK NAGY ATALLA, D.B.A. HOME GUARDIAN SOLUTIONS, HOME G SOLUTIONS FIRM, AND HOME G SOLUTIONS GROUP, DEFENDANTS.



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

PRELIMINARY INJUNCTION WITH ASSET FREEZE, APPOINTMENT OF TEMPORARY RECEIVER, AND OTHER EQUITABLE RELIEF Date: October 1, 2012 Time: 8:30 a.m. Place: Courtroom 9D, the Honorable Judge David O. Carter

Plaintiff Federal Trade Commission ("FTC"), pursuant to Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, and the 2009 Omnibus Appropriations Act, Pub. L. No. 111-8, § 626, 123 Stat. 524, 678 (Mar. 11, 2009) ("Omnibus Act"), as clarified by the Credit Card Accountability Responsibility and Disclosure Act of 2009, Pub. L. No. 111-24, § 511, 123 Stat. 1734, 1763-64 (May 22, 2009) ("Credit Card Act"), and amended by the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act, Pub. L. No. 111-203, § 1097, 124 Stat. 1376, 2102-03 (July 21, 2010) ("Dodd-Frank Act"), 12 U.S.C. § 5538, filed its Complaint for Permanent Injunction and Other Equitable Relief; an Ex Parte Application for Temporary Restraining Order and Other Equitable Relief, including an order to show cause why this Court should not enter a preliminary injunction enjoining the violations of law alleged in the FTC's Complaint, continuing the freeze of their assets, and imposing such additional relief as may be appropriate; and a supporting memorandum ("Memorandum of Points and Authorities in Support of Plaintiff's Ex Parte Application for Temporary Restraining Order with Asset Freeze and Other Equitable Relief and Order to Show Cause"), on September 18, 2012, pursuant to Rule 65 of the Federal Rules of Civil Procedure.

On September 18, 2012, this Court granted Plaintiff's Ex Parte Application for a Temporary Restraining Order and entered a Temporary Restraining Order ("TRO") with an Order to Show Cause Why a Preliminary Injunction Should Not Issue against Defendants American Mortgage Consulting Group, LLC ("AMC"), Home Guardian Management Solutions, LLC ("HGS"), and Mark Nagy Atalla. All Defendants were served with the Summons, Complaint, TRO, and other related papers filed in this action on September 20, 2012.

DISPOSITION

Having duly considered the parties' pleadings, papers, and argument, the Court hereby GRANTS the Preliminary Injunction against Defendants AMC, HGS, and Mark Nagy Atalla.

FINDINGS OF FACT

1. This Court has jurisdiction over the subject matter of this case, and there is good cause to believe it will have jurisdiction over the Defendants.

2. Venue lies properly with this Court.

3. There is good cause to believe that Defendants AMC, HGS, and Mark Nagy Atalla (collectively "Defendants") have engaged and are likely to continue to engage in acts or practices that violate Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and Regulation O, Mortgage Assistance Relief Services, 12 C.F.R. Part 1015 (effective December 30, 2011, recodifying 16 C.F.R. Part 322, which was effective December 29, 2010, except for Section 322.5, which became effective January 31, 2011), and that the FTC is therefore likely to prevail on the merits of this action.

4. There is good cause to believe that immediate and irreparable harm will result from Defendants' ongoing violations of Section 5(a) of the FTC Act and Regulation O unless Defendants are restrained and enjoined by Order of this Court.

5. There is good cause to believe that immediate and irreparable harm to the Court's ability to grant effective final relief for consumers in the form of monetary restitution and disgorgement of ill-gotten gains will occur from the transfer, dissipation, or concealment by Defendants of their assets or business records unless Defendants are restrained and enjoined by Order of this Court.

6. Good cause exists for continuing the appointment of the Temporary Receiver over Corporate Defendants AMC and HGS and the asset freeze imposed pursuant to the TRO in this case; permitting the FTC access to Defendants' business premises at the discretion of the Temporary Receiver; and the other equitable relief ordered herein.

7. Weighing the equities and considering the FTC's likelihood of ultimate success, this Order is in the public interest.

8. No security is required of any agency of the United States for issuance of a restraining order. Fed. R. Civ. P. 65(c).

ORDER

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

A. "Assets" means any legal or equitable interest in, right to, or claim to any real, personal, or intellectual property of any Defendant, or held for the benefit of any Defendant, wherever located, whether in the United States or abroad, including, but 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), cash, and trusts, including, but not limited to, any trust held for the benefit of any Defendant, any of the Individual Defendant's minor children, or the Individual Defendant's spouse, and shall include both existing assets and assets acquired after the date of entry of this Order.

B. "Commercial communication" means any written or oral statement, illustration, or depiction, whether in English or any other language, that is designed to effect a sale or create interest in purchasing any service, plan, or program, whether it appears on or in a label, package, package insert, radio, television, cable television, brochure, newspaper, magazine, pamphlet, leaflet, circular, mailer, book insert, free standing insert, letter, catalogue, poster, chart, billboard, public transit card, point of purchase display, film, slide, audio program transmitted over a telephone system, telemarketing script, onhold script, upsell script, training materials provided to telemarketing firms, program-length commercial ("infomercial"), the internet, cellular network, or any other medium. Promotional materials and items and Web pages are included in the term "commercial communication."

C. "Consumer-specific commercial communication" means a commercial communication that occurs prior to the consumer agreeing to permit the provider to seek offers of mortgage assistance relief on behalf of the consumer, or otherwise agreeing to use the mortgage assistance relief service, and that is directed at a specific consumer.

D. "General commercial communication" means a commercial communication that occurs prior to the consumer agreeing to permit the provider to seek offers of mortgage assistance relief on behalf of the consumer, or otherwise agreeing to use the mortgage assistance relief service, and that is not directed at a specific consumer.

E. "Corporate Defendants" means American Mortgage Consulting Group, LLC, Home Guardian Management Solutions, LLC, and their successors, assigns, affiliates, or subsidiaries, and each of them by whatever names each might be known.

F. "Defendants" means the Individual Defendant and all of the Corporate Defendants, individually, collectively, or in any combination, and each of them by whatever names each might be known.

G. "Document" and "electronically stored information" are synonymous in meaning and equal in scope to the usage of the terms in Rule 34(a) of the Federal Rules of Civil Procedure and include, but are not limited to:

1. The original or a true copy of any written, typed, printed, electronically stored, transcribed, taped, recorded, filmed, punched, or graphic matter or other data compilations of any kind, including, but not limited to, letters, email or other correspondence, messages, memoranda, interoffice communications, notes, reports, summaries, manuals, magnetic tapes or discs, tabulations, books, records, checks, invoices, work papers, journals, ledgers, statements, returns, reports, schedules, or files; and

2. Any electronically stored information stored on any Blackberries, flash drives, personal digital assistants ("PDAs"), desktop personal computer and workstations, laptops, notebooks, and other portable computers, or other electronic storage media, whether assigned to individuals or in pools of computers available for shared use, or personally owned but used for work-related purposes; backup disks and tapes, archive disks and tapes, and other forms of offline storage, whether stored onsite with the computer used to generate them, stored offsite in another company facility, or stored, hosted, or otherwise maintained offsite by a third party; and computers and related offline storage used by Defendants or Defendants' participating associates, which may include persons who are not employees of the company or who do not work on company premises.

H. "Electronic data host" means any person or entity that stores, hosts, or otherwise maintains electronically stored information.

I. "Financial institution" means any bank, savings and loan institution, credit union, or any financial depository of any kind, including, but not limited to, any brokerage house, trustee, broker-dealer, escrow agent, title company, commodity trading company, or precious metal dealer.

J. "Individual Defendant" means Mark Nagy Atalla and any other names by which he might be known.

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

L. "Mortgage assistance relief 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 for the consumer's dwelling, any repossession of the consumer's dwelling, or otherwise saving the consumer's dwelling from foreclosure or repossession;

2. 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;

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

4. 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;

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

6. 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 shall include any manner of claimed assistance, including, but not limited to, auditing or examining a consumer's mortgage or home loan application and offering to provide or providing legal services.

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

N. "Receivership Defendants" means American Mortgage Consulting Group, LLC, and Home Guardian Management Solutions, LLC, and their successors, assigns, affiliates, or subsidiaries, and each of them by whatever names each might be known, provided that the Temporary Receiver has reason to believe they are owned or controlled in whole or in part by any of the Defendants.

O. "Receivership Estate" means and includes the estate of the Receivership Defendants created by this Order, and as may be modified or expanded by subsequent orders of this Court, including, but not limited to, all Receivership Assets as defined herein, regardless of whether such Receivership Assets are held by any Defendant or Individual Defendant, or third party not presently a party to the above-referenced action.

I. PROHIBITION ON COLLECTION OF ADVANCE FEES

IT IS THEREFORE 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, facsimile transmission, email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, in connection with providing, offering to provide, or arranging for others to provide any mortgage assistance relief service, are hereby preliminarily restrained and enjoined from requesting or receiving payment of a fee or other consideration before the consumer has executed a written agreement between the consumer and the consumer's dwelling loan holder or servicer incorporating the offer of mortgage assistance relief that Defendants obtained from the consumer's dwelling loan holder or servicer, in violation of Section 1015.5(a) of the MARS Rule, 12 C.F.R. § 1015.5(a).

II. REPRESENTATIONS PROHIBITED BY SECTION 5 OF THE FTC ACT

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, facsimile transmission, email, 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 mortgage assistance relief service, are hereby preliminarily restrained and enjoined from engaging in, or assisting others in engaging in, the following conduct:

A. Misrepresenting, directly or indirectly, expressly or by implication, that Defendants generally will obtain mortgage loan modifications for consumers that will make consumers' payments substantially more affordable; and

B. Misrepresenting, directly or indirectly, expressly or by implication, that Defendants will refund the consumer's fee if Defendants fail to obtain the promised mortgage loan modification.

III. REPRESENTATIONS PROHIBITED AND DISCLOSURES REQUIRED BY MARS RULE

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, facsimile transmission, email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, in connection with providing, offering to provide, or arranging for others to provide any mortgage assistance relief service, are hereby preliminarily restrained and enjoined from engaging in the following conduct:

A. Representing, expressly or by implication, in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of any mortgage assistance relief service, that a consumer cannot or should not contact or communicate with his or her lender or servicer, in violation of Section 1015.3(a) of the MARS Rule, 12 C.F.R. § 1015.3(a);

B. Misrepresenting, expressly or by implication, any material aspect of any mortgage assistance relief service, including, but not limited to:

1. The likelihood of negotiating, obtaining, or arranging any represented service or result, including, but not limited to, the likelihood of 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, in violation of Section § 1015.3(b)(1) of the MARS Rule, 12 C.F.R. § 1015.3(b)(1);

2. The amount of time it will take the mortgage assistance relief service provider to accomplish any represented service or result, in violation of Section 1015.3(b)(2) of the MARS Rule, 12 C.F.R. § 1015.3(b)(2);

3. That a mortgage assistance relief service is affiliated with, endorsed or approved by, or otherwise associated with the government or the maker, holder, or servicer of the consumer's dwelling loan, in violation of Section 1015.3(b)(3) of the MARS Rule, 12 C.F.R. § 1015.3(b)(3);

4. The consumer's obligation to make scheduled periodic payments or any other payments pursuant to the terms of the consumer's dwelling loan, in violation of Section 1015.3(b)(4) of the MARS Rule, 12 C.F.R. § 1015.3(b)(4);

5. The terms or conditions of any refund, cancellation, exchange, or repurchase policy for a mortgage assistance relief service, including, but not limited to, the likelihood of obtaining a full or partial refund, or the circumstances in which a full or partial refund will be granted, for a mortgage assistance relief service, in violation of Section 1015.3(b)(6) of the MARS Rule, 12 C.F.R. § 1015.3(b)(6); or

6. That the consumer will receive legal representation, in violation of Section 1015.3(b)(8) of the MARS Rule, 12 C.F.R. § 1015.3(b)(8);

C. Making any representation, expressly or by implication, about the benefits, performance, or efficacy of any mortgage assistance relief service including, but not limited to, Defendants' representations that the vast majority of their clients obtain the solutions they contract for, unless, at the time such representation is made, Defendants possess and rely upon competent and reliable evidence that substantiates that the representation is true, in violation of Section 1015.3(c) of the MARS Rule, 12 C.F.R. § 1015.3(c);

D. Failing to disclose the following information in every consumer-specific commercial communication: "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," in violation of Section 1015.4(b)(1) of the MARS Rule, 12 C.F.R. § 1015.4(b)(1). For the purposes of this section, the amount "you will have to pay" shall consist of the total amount the consumer must pay to purchase, receive, and use all of the mortgage assistance relief services that are the subject of the sales offer, including, but not limited to, all fees and charges; and

E. Failing to disclose the following information in every general commercial communication and every consumer-specific commercial communication:

1. "[Name of Company] is not associated with the government, and our service is not approved by the government or your lender," in violation of Section 1015.4(a)(1) and (b)(2) of the MARS Rule,

12 C.F.R. § 1015.4(a)(1) and (b)(2); and 2. In cases where the mortgage assistance relief service provider has represented, expressly or by implication, that consumers will receive any service or result set forth in paragraphs (2) through (6) of the definition of "Mortgage Assistance Relief Service," Section 1015.2 of the MARS Rule, 12 C.F.R. § 1015.2, "Even if you accept this offer and use our service, your lender may not agree to change your loan," in violation of Section 1015.4(a)(2) and (b)(3), 12 C.F.R. § 1015.4(a)(2) and (b)(3).

IV. PRESERVATION OF RECORDS AND TANGIBLE THINGS

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, facsimile transmission, email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, are hereby preliminarily enjoined from destroying, erasing, mutilating, concealing, altering, transferring, or otherwise disposing of, in any manner, directly or indirectly, any documents or records that relate to the business practices, or business or personal finances, of Defendants, or other entity directly or indirectly under the control of Defendants.

V. DISABLEMENT OF WEBSITES

IT IS FURTHER ORDERED that, immediately upon service of the Order upon them and pending determination of the FTC's request for a preliminary injunction, (1) any person hosting any Internet website for, or on behalf of, any Defendant, and (2) 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, facsimile transmission, email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, shall:

A. Immediately do whatever is necessary to ensure that any Internet website used by Defendants for the advertising, marketing, promotion, offering for sale, or sale of any mortgage assistance relief service, including, but not limited to, www.homeguardiansolutions.com, www.americanmortgageconsulting.com, and www.americanmortagegroup.co, and containing statements or representations prohibited by Sections I, II, and III of this Order, cannot be accessed by the public;

B. Prevent the destruction or erasure of any Internet website used by Defendants for the advertising, marketing, promotion, offering for sale, or sale of any mortgage assistance relief service, by preserving such website in the format in which it is maintained currently; and

C. Immediately notify in writing counsel for the FTC of any other Internet website operated or controlled by any ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.