Court Holds Defendants Liable for Civil Contempt for Violating 1999 Court Order

For Release

A U.S. District Judge has held Richard Murkey, his company Credit Restoration Corporation of America, Inc. (CRCA), and Keith Gill in civil contempt for violating the court's November 1999 final order in an FTC action in which the court banned Murkey and Gill from selling credit repair services after finding they had illegally sold such services. In a ruling from the U.S. District Court for the Central District of California, Judge Lourdes G. Baird has ordered Murkey to pay full restitution to all consumers who paid Murkey or CRCA money for credit repair services after November 11, 1999. The civil contempt ruling also establishes a fine of $5,000 per day for future violations of the ban. In addition, the order also appointed a permanent receiver over CRCA and directed the receiver to wind down and terminate CRCA. Richard Murkey is an ex-attorney who resigned his bar membership in 1990. Keith Gill is currently a practicing attorney.

In March 1998, the FTC charged Keith H. Gill, doing business as the Law Offices of Keith Gill, and Richard Murkey of Woodland Hills, California, with misrepresenting their credit repair services in violation of the FTC Act, and with collecting payment up-front for credit repair services before such services were fully performed, in violation of the Credit Repair Organization Act--the first federal law specifically targeting credit repair scams.

In November 1999, the court issued an order granting the FTC's motion for summary judgment against Murkey and Gill, finding Murkey individually liable as a participant and the primary violator and Gill liable as the owner of the business. The 1999 order permanently bans Murkey and Gill from the credit repair business; prohibits Murkey and Gill and persons under their control from making any misrepresentations of any material fact concerning credit repair and their ability to improve consumers' credit profiles; prohibits the defendants from representing that they can or will substantially improve any consumer's credit report by effectuating the permanent lawful removal of even accurate negative information, such as bankruptcies, late payments and judgments; and prohibits the defendants from demanding payment from consumers who purchased credit repair services from them prior to March 4, 1998. In addition, the order requires the defendants affirmatively to notify these consumers that payments are no longer due and that their contracts are rescinded.

In its motion for civil contempt sanctions filed with the court in May of this year, the FTC alleged that Richard Murkey was continuing to sell purported credit repair service to consumers through CRCA, which he founded and controlled. According to the FTC, Murkey advertised his services through infomercials on a cable television audio channel, in newspaper advertisements, and until earlier this year, on a website. Through CRCA, Murkey continued to represent that he could substantially improve consumers' credit reports by legally and permanently removing accurate negative information; continued to demand payments from pre-March 1998 clients; and had failed to notify those clients that their contracts were rescinded. In addition, the motion for sanctions alleged that Keith Gill had also failed to notify pre-March 1998 clients that their contracts had were rescinded.

In its order finding defendants Murkey, CRCA and Gill in contempt of the 1999 order, the court found that Murkey had violated the provisions of the 1999 order as alleged by the Commission. The contempt order was entered in the U.S. District Court for the Central District of California on July 16, 2001.

Copies of the order holding the defendants in contempt, as well as other documents related to this case, are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File Nos.012 3086; 982 3073; X980043)
(Civil Action No. 98-1436 LGB (MCx))

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