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Federal Trade Commission v. Consumer Advocates Group Experts

February 1, 2013

FEDERAL TRADE COMMISSION, PLAINTIFF,
v.
CONSUMER ADVOCATES GROUP EXPERTS, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, ALSO D.B.A. CONSUMER ADVOCATES GROUP; PARAMOUNT ASSET MANAGEMENT CORP., A CALIFORNIA CORPORATION, ALSO D.B.A. NATIONAL FINANCIAL RESCUE CORP., NATIONAL FINANCIAL RESCUE GROUP, AND AMERICAN FORENSIC LOAN AUDITORS; ADVOCATES FOR CONSUMER AFFAIRS EXPERT, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY; AND RYAN ZIMMERMAN, DEFENDANTS.



The opinion of the court was delivered by: The Honorable Dean D. PregersonUnited States District Judge

FINAL JUDGMENT AND ORDER FOR PERMANENT INJUNCTION AND OTHER EQUITABLE RELIEF

Plaintiff Federal Trade Commission ("FTC") commenced this civil action on May 30, 2012, 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, Public Law 111-8, Section 626, 123 Stat. 524, 678 (Mar. 11, 2009) ("Omnibus Act"), as clarified by the Credit Card Accountability Responsibility and Disclosure Act of 2009, Public Law 111-24, Section 511, 123 Stat. 1734-64 (May 22, 2009) ("Credit Card Act"), to obtain preliminary and permanent injunctive and other equitable relief for Defendants' alleged violations of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the Mortgage Assistance Relief Services Rule ("MARS Rule"), 16 C.F.R. Part 322, recodified as Mortgage Assistance Relief Services, 12 C.F.R. Part 1015 ("Regulation O"), in connection with the marketing and sale of mortgage assistance relief services. On June 7, 2012, the Court entered a Preliminary Injunction against Defendants. The FTC and Defendants Consumer Advocates Group Experts, LLC, Paramount Asset Management Corp., Advocates for Consumer Affairs Expert, LLC, and Ryan Zimmerman (collectively "Defendants") hereby stipulate to the entry of this Final Order for Permanent Injunction and Settlement of Claims ("Order").

FINDINGS

By stipulation of the parties and being advised of the premises, the Court finds:

1. This is an action by the FTC instituted under Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b and Section 626 of the Omnibus Act as clarified by Section 511 of the Credit Card Act. The Complaint seeks both permanent injunctive relief and equitable monetary relief for Defendants' alleged deceptive acts or practices as alleged therein.

2. The FTC has the authority under Sections 13(b) and 19 of the FTC Act to seek the relief it has requested, and the Complaint states a claim upon which relief may be granted against Defendants.

3. This Court has jurisdiction over the subject matter of this case and has jurisdiction over Defendants. Venue in the Central District of California is proper.

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. Defendants waive: (a) any right to seek judicial review or otherwise challenge or contest the validity of this Order; (b) any claim that they may have against the Commission, its employees, representatives or agents; (c) any claim under the Equal Access to Justice Act, 28 U.S.C. § 2412, as amended by Pub. L. 104-121, 110 Stat. 847, 863-64 (1996); and (d) any right to attorneys' fees that may arise under said provision of law. The Commission and Defendants shall each bear their own costs and attorney's fees incurred in this action.

6. Defendants neither admit nor deny the allegations set forth in the Complaint. This Order does not constitute and shall not be interpreted to constitute either an admission by Defendants, or a finding by the Court, of any liability or wrongdoing by any of the Defendants or any violation of any law, rule, or regulation.

7. 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.

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

9. This Order resolves all issues between the Commission and the Defendants raised in the Commission's Complaint.

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

DEFINITIONS

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

1. "Asset" or "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, the Individual Defendant's minor children, if any, or the Individual Defendant's spouse, if any, and shall include both existing assets and assets acquired after the date of entry of this Order.

2. "Assisting others" includes, but is not limited to:

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 advertising or marketing material, including, but not limited to, any telephone sales script, direct mail solicitation, or the design, text, or use of images of any Internet website, email, or other electronic communication;

c. 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;

d. Providing names of, or assisting in the generation of, potential customers;

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

f. Acting or serving as an owner, officer, director, manager, or principal of any entity.

3. "Competent and reliable evidence" means tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.

4. "Consumer" means any natural person.

5. "Customer" means any person who has paid, or may be required to pay, for products, services, plans, or programs offered for sale or sold by any other person.

6. "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, between a person and one or more unsecured creditors or debt collectors, including, but not limited to, a reduction in the balance, interest rate, or fees owed by a person to an unsecured creditor or debt collector.

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

a. "Corporate Defendants" means Consumer Advocates Group Experts, LLC, Paramount Asset Management Corp., and Advocates for Consumer Affairs Expert, LLC, and their successors, assigns, affiliates, or subsidiaries, and each of them by whatever names each might be known.

b. "Individual Defendant" means Ryan Zimmerman and any other names by which he might be known.

8. "Document" or "Documents" means any materials listed in Federal Rule of Civil Procedure Rule 34(a) and includes writings, drawings, graphs, charts, photographs, audio and video recordings, computer records, and other data compilations from which the information can be obtained and translated, if necessary, through detection devices into reasonably usable form. A draft or non-identical copy is a separate document within the meaning of the term. It also includes electronically stored information.

9. "Federal homeowner relief or financial stability program" means any program (including its sponsoring agencies, telephone numbers, and Internet websites) operated or endorsed by the United States government to provide relief to homeowners or stabilize the economy, including, but not limited to:

a. The Making Home Affordable Program;

b. The Financial Stability Plan;

c. The Troubled Asset Relief Program and any other program sponsored or operated by the United States Department of the Treasury;

d. The HOPE for Homeowners program, any program operated or created pursuant to the Helping Families Save Their Homes Act, and any other program sponsored or operated by the Federal Housing Administration; or

e. Any program sponsored or operated by the United States Department of Housing and Urban Development ("HUD"), the HOPE NOW Alliance, the Homeownership Preservation Foundation, or any other HUD-approved housing counseling agency.

10. "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.

11. "Financial related product or service" means any product, service, plan, or program represented, expressly or by implication, to:

a. Provide any consumer, arrange for any consumer to receive, or assist any consumer in receiving, credit, ...


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