The Federal Trade Commission today announced "Project Scofflaw," a comprehensive law enforcement initiative. Project Scofflaw's purpose is to enforce federal district court orders that have been violated by utilizing the full range of powers available -- including both criminal and civil actions -- to stop repeat offenders from violating existing court orders and to deter other defendants from ignoring order provisions.
The two cases announced today by the FTC initiate the project and charge defendants Ronald Dante and Jeffrey Jordan with criminal contempt of court orders entered against them in separate civil actions brought by the Commission to stop and remedy their fraudulent business practices. The contempt actions were filed by the Department of Justice, with FTC attorneys appointed as Special Assistant United States Attorneys to assist with the prosecution of the cases.
"The FTC has litigated long and hard to secure orders that protect consumers from fraud and deception. The message we are sending with these cases is that the FTC will vigorously pursue defendants who do not obey these court orders," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. Bernstein warned recidivist defendants in particular to "Take heed: You will not get two bites at the apple. If you violate the court's orders, the FTC will seek appropriate sanctions -- including criminal penalties."
The cases announced today include the following charges filed in federal district courts in California and Nevada:
United States v. Ronald Dante: The U.S. District Court for the Central District of California has ordered defendant Ronald Dante to show cause why he should not be held in criminal contempt pursuant to a petition charging Dante with 11 counts of criminal contempt. The Government's request for an order to show cause stems from a March 1990 case in which the FTC charged Ronald Dante, doing business as Perma-Derm Academy and the American Dermalogy Association, with misrepresenting both the training he provided at his "permanent makeup" workshops and the certification he awarded to attendees. According to the complaint, the defendants allegedly misrepresented that students enrolled in the workshops, upon completion of the course, would: (1) be competent in applying permanent makeup -- a form of tattooing such things as eyeliner and lipliner -- and receive valuable credentials; (2) be able to apply permanent makeup legally in the state in which they reside without state regulations or restrictions; and (3) earn at least or up to $500 an hour.
In June 1991, the federal court issued a permanent injunction barring Dante from making certain misrepresentations in connection with permanent makeup classes, or any training courses or credentials he offered, and requiring him to pay $143,750 to the FTC for consumer redress. The order also required Dante to make certain affirmative disclosures in all promotional material advertising permanent makeup classes that he disseminates to consumers in the future.
According to the documents filed in connection with the Government's petition for an order to show cause, Dante violated the order by failing to make the required disclosures in connection with permanent makeup classes offered by the Permanetics Institute, a company he primarily owned and operated under an assumed name. Dante further violated the order by making misrepresentations regarding potential earnings in connection with paralegal courses offered by the American Professional Institute, a subsidiary of Permanetics, the Government alleges.
Dante was formally charged with the violations at a status conference on April 7, 1997. He entered a plea of not guilty, and the court set a trial date for September 16, 1997. According to papers submitted by the Government in support of the petition, if convicted, Dante could face a prison sentence of 27 months or more.
United States v. Jeffrey Jordan: The U.S. District Court for the District of Nevada has ordered defendant Jeffrey Jordan to show cause why he should not be held in criminal contempt pursuant to a petition charging him with five counts of criminal contempt for violating a court-ordered asset freeze. In August 1995, the FTC sued Meridian Capital Management, Inc.; Advisory Consultants, Inc., Jeffrey A. Jordan; Richard Randall; and Angelo DeLon, alleging that they operated a "recovery room" business that falsely represented to victims of previous telemarketing scams that, for an up-front fee, they would recover most of the monies the victims lost. In September 1995, the court entered an order temporarily halting the allegedly deceptive business practices and froze the defendants' assets to preserve them for consumer redress or disgorgement of ill-gotten gains. In February 1997, the court entered a default judgment against Jeffrey Jordan.
In a petition for an order to show cause filed with the court, the Government now alleges that on five occasions, Jeffrey Jordan willfully disobeyed the asset freeze provisions of the preliminary injunction by either cashing certain checks or selling an item of personal property without holding and accounting for the checks or item of property. Jordan was formally charged with the violations at a status conference on April 4, 1997. He entered a plea of not guilty and the court set a trial date for June 18, 1997.
NOTE: The issuance of an order to show cause why a defendant should not be held in criminal contempt does not constitute a finding or ruling that the defendant has actually violated the court's order. The order is merely an accusation, and the defendant is presumed innocent until and unless proven guilty. The cases will be decided by the court or by a jury following trial.
Copies of the court documents and today's news release, as well as other releases and legal documents filed in the Meridian Capital Management and Ronald Dante, d/b/a Perma-Derm Academy cases, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov
(J.Jordan -- Criminal Action No. CR-S-96-113-LRL)
(R. Dante -- Criminal Action ancillary to No. CV 90-945 ABC (GX)