BLAINE T. WELSH
Assistant United States Attorney
701 E. Bridger Ave., Ste. 800
Las Vegas, NV 89101
(702) 388-6336

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

FEDERAL TRADE COMMISSION
Plaintiff

v.

AFFORDABLE MEDIA, LLC; et al.,
Defendants.

CV-S-98-669-LDG (RLH)
[Plaintiff's Revised Proposed]
PRELIMINARY INJUNCTION AS TO DEFENDANTS AFFORDABLE MEDIA, LLC; FINANCIAL GROWTH CONSULTANTS, LLC; ERIC S. STEIN; DENYSE L. ANDERSON; AND MICHAEL K. ANDERSON

This matter comes before the Court on the Complaint for Injunction and Other Equitable Relief filed by plaintiff Federal Trade Commission ("Commission") on April 23, 1998. Also on that date, the Commission filed, and the Court granted, a motion for a temporary restraining order against all of the defendants. The order required the defendants to show cause on April 30, 1998, why a preliminary injunction should not be entered against them. The Court briefly heard argument on April 30 and, pursuant to Fed. R. Civ. P. 65(b), extended the Temporary Restraining Order until May 8, 1998. On that date, the Court heard additional argument and received documentary and testimonial evidence. Now, being advised in the premises, the Court finds as follows:

1. This Court has jurisdiction over the subject matter of this case and over of all the parties;

2. There is a substantial likelihood that the Commission will ultimately succeed in establishing that defendants Affordable Media, LLC, Financial Growth Consultants, LLC, Eric S. Stein, Denyse L. Anderson, and Michael K. Anderson (collectively, "Enjoined 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 Section 310.3(a)(2)(vi) of the Commission's Telemarketing Sales Rule, 16 C.F.R. Part 310, to wit, the nationwide promotion of a Ponzi scheme in which many unsuspecting consumers have lost and are likely to lose millions of investment dollars;

3. Despite their arguments to the contrary, the Court finds substantial evidence that defendants Denyse Anderson and Michael Anderson were at least recklessly indifferent to the deceptive profit representations of the telemarketers who worked for defendant Financial Growth Consultants ("FGC") and its independent sales offices, months before FGC ceased its sales of the investment offering at issue in this case;

4. There is a substantial likelihood that, absent the continuation of the asset freeze, the Enjoined Defendants will conceal, dissipate, or otherwise divert their assets, thereby defeating the possibility of the Court granting effective final relief in the form of equitable monetary relief for consumers; and

5. Weighing the equities and considering the Commission's likelihood of ultimate success, a preliminary injunction with asset freeze is in the public interest.

PROHIBITED BUSINESS PRACTICES

I. THEREFORE, IT IS HEREBY ORDERED that the Enjoined Defendants, and their agents, employees, officers, servants and attorneys, and those persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise, are hereby restrained and enjoined from:

A. Promoting or selling any investment or investment opportunity, or assisting others in selling any investment or investment opportunity, in which prospective investors purportedly will receive returns on their investments derived wholly or in part from the sale of products advertised by means of television commercials;

B. Making or assisting others in making, directly or by implication, any false or misleading oral or written statement or representation in connection with promoting or selling any investment or investment opportunity, including but not limited to:

1. Misrepresenting, directly or by implication, the returns that prospective investors are likely to receive;

2. Misrepresenting, directly or by implication, the returns that previous investors have received;

3. Misrepresenting, directly or by implication, that investors are likely to receive the return of their principal;

4. Misrepresenting, directly or by implication, the time frame in which investors are likely to receive a return on their investments, as well as the return of their principal;

5. Misrepresenting, directly or by implication, the profitability, risk, or any other material fact relating to such investments; and

6. Failing to disclose the existence of this lawsuit to any potential investor.

Provided that the Commission and its representatives are authorized to monitor the Enjoined Defendants' compliance with this Paragraph by placing telephone calls to the Enjoined Defendants or their sales personnel and posing as prospective investors.

RECORD KEEPING PROVISIONS

II. IT IS FURTHER ORDERED that the Enjoined Defendants, and their officers, agents, servants, employees, and attorneys, and all other persons or entities directly or indirectly under their control or under common control with them, and all other persons or other entities in active concert or participation with them, are hereby restrained and enjoined from:

A. Destroying, erasing, mutilating, concealing, altering, transferring, or otherwise disposing of, in any manner, any: books; records; "verification" or other audio or video tape recordings; computer tapes, discs or other computerized records; accounting data; personal and business checks (fronts and backs); correspondence; forms; advertisements; brochures; manuals; banking records; customer lists; customer files; invoices; telephone records; ledgers; payroll records; scripts; postal receipts; appointment books; state or federal income tax returns; or other documents of any kind in their possession, custody, or control; and

B. Failing to make and keep books, records, bank statements, documents indicating title to real or personal property, and any other data which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of defendants.

ASSET FREEZE

III. IT IS FURTHER ORDERED that the Enjoined Defendants, and their officers, agents, servants, employees, and attorneys, and all other persons or entities directly or indirectly under their control or under common control with them, and all other persons or other entities in active concert or participation with them, are hereby restrained and enjoined, except as expressly ordered by this Court, from:

A. Transferring, encumbering, selling, concealing, pledging, hypothecating, assigning, spending, withdrawing, disbursing, conveying, gifting, dissipating, or otherwise disposing of any funds, property, coins, lists of consumer names, shares of stock, or other assets, wherever located, that are (1) owned or controlled by any defendant, in whole or in part; (2) in the actual or constructive possession of any defendant; (3) held by an agent of any defendant as a retainer for the agent's provision of services to any defendant; or (4) owned, controlled by, or in the actual or constructive possession of, or otherwise held for the benefit of, any corporation, partnership, or other entity directly or indirectly owned, managed, or controlled by any defendant;

B. Opening or causing to be opened any safe deposit boxes titled in the name of any defendant, or subject to access by any defendant; and

C. Incurring charges or cash advances on any credit or debit card issued in the name, singly or jointly, of any defendant, or any corporation, partnership, or other entity directly or indirectly owned, managed, or controlled by any defendant.

D. The assets affected by Paragraph III shall include both existing assets and assets acquired after the effective date of this Order, including, without limitation, those acquired by loan or gift, and assets in the form of retainers paid to the Enjoined Defendants' agents as compensation for the provision of services to defendants. Any individual Enjoined Defendant, or any third party holding assets for the benefit of any individual Enjoined Defendant, shall hold all assets, including without limitation, payments, loans and gifts, received after service of this Order, and must deposit any funds received into a domestic account at a financial institution in Nevada or California that is titled in the individual Enjoined Defendant's name and is designated by prior written notice to counsel for the Commission. Each individual Enjoined Defendant shall maintain only one designated domestic account. Each business entity owned, managed or controlled by any individual Enjoined Defendant shall maintain only one such designated domestic account, unless the Commission stipulates otherwise in writing, and it shall be separate from the individual Enjoined Defendant's personal designated domestic account. Within three days of receipt, each Enjoined Defendant shall provide to Commission counsel copies of all bank statements and canceled checks from his or her respective designated domestic account.

E. The individual Enjoined Defendants (Eric Steven Stein, Denyse Lindaalyce Anderson, and Michael K. Anderson) may file a motion with the Court for the release of funds from their individual personal assets for the payment of reasonable and necessary living expenses, and attorneys' fees.

Provided, however, that no funds shall be released to any individual Enjoined Defendant until that defendant has complied fully with Paragraphs IV (financial reports) and VI (repatriation) below.

FINANCIAL REPORTS

IV. IT IS FURTHER ORDERED that each Enjoined Defendant shall, within two business days after the date of entry of this Order, prepare and deliver to counsel for the Commission:

A. A complete and accurate financial statement. The individual Enjoined Defendants shall include all financial information as requested in Department of Treasury - Internal Revenue Service Collection Information Statement for Individuals (Form 433-A. All other Enjoined Defendants shall include all financial information as requested in the Collection Information Statement for Businesses (Form 433-B); and

B. A complete statement, verified under oath, of all payments, transfers, or assignment of funds, assets, or property worth $2,000 or more since January 1, 1997. Such schedule shall include (1) the amount transferred or assigned; (2) the name of each transferee or assignee; (3) the date of the assignment or transfer; and (4) the type and amount of consideration paid the Enjoined Defendant.

Each statement shall specify the name and address of each financial institution and brokerage firm at which the Enjoined Defendant has accounts or safe deposit boxes, along with the account and box numbers. Said schedules shall include assets held in foreign as well as domestic accounts.

C. In addition, each Enjoined Defendant shall, within two business days after entry of this order, prepare and deliver to counsel for the Commission statements setting forth the following: (1) the identity (including name, address, telephone number, amount(s) invested, and date(s) of investment) of each consumer who has purchased investments involving television commercials from that defendant since January 1, 1997; (2) the amount of money returned by the defendants to each consumer identified pursuant to clause (1) above; (3) the commission received by that defendant for each investment identified in clause (1); and (4) the amount of revenues that defendant, or any other defendant, has received from the sale of products advertised on television.

Provided that an Enjoined Defendant does not have to provide the schedules described above if (1) that defendant has already provided the plaintiff the required statements in compliance with Paragraph IV of the Temporary Restraining Order; and (2) the information in the statements that defendant provided has not changed.

RETENTION OF ASSETS AND DOCUMENTS BY THIRD PARTIES

V. IT IS FURTHER ORDERED that any financial or brokerage institution, escrow agent, title company, commodity trading company, mail receiving agent, business entity, or person that holds, controls or maintains accounts, assets or documents of any Enjoined Defendant, or has held, controlled or maintained any account, asset or document of any Enjoined Defendant at any time since January 1, 1997, upon service with a copy of this Order, shall, until further order by this Court:

A. Hold and retain within its control and prohibit the withdrawal, removal, assignment, transfer, pledge, hypothecation, encumbrance, disbursement, dissipation, conversion, sale, gift, or other disposal of any of the assets, funds, or other property (including documents) held by or on behalf of any Enjoined Defendant in any account maintained in the name of or for the benefit of any Enjoined Defendant, in whole or in part, except as directed in writing by the Commission or by further order of the Court;

B. Deny access to any safe deposit boxes that are either:

1. titled in the name, individually or jointly, of any Enjoined Defendant, or

2. otherwise subject to access by any Enjoined Defendant;

C. Provide counsel for the Commission, within five business days of service of this Order, a statement setting forth:

1. the identification of each account or asset titled in the name, individually or jointly, of any Enjoined Defendant, or held on behalf of, or for the benefit of, any Enjoined Defendant;

2. the balance of each such account, or a description and appraisal of the value of such asset, as of the close of business on the day on which this Order is served;

3. the identification of any safe deposit box that is either titled in the name, individually or jointly, of any Enjoined Defendant, or is otherwise subject to access by any Enjoined Defendant; and

4. if an account, safe deposit box, or other asset has been closed or removed, the date closed or removed, the balance on such date, and the manner in which such account or asset was closed or removed;

Provided, that a financial institution does not have to provide the information required in this Subparagraph if (1) the financial institution has complied with the similar provision set forth in the Temporary Restraining Order; and (2) the information provided has not changed; and

D. The Commission is granted leave, pursuant to Fed. R. Civ. P. 45, to subpoena documents immediately from any such financial institution, account custodian, or other aforementioned entity concerning the nature, location, status, and extent of the Enjoined Defendants' assets, and compliance with this Order.

For the purposes of this Paragraph, the Commission may properly serve this Order on any financial or brokerage institution, mail receiving agent, business entity, or person that holds, controls, or maintains custody of any account or asset of any Enjoined Defendant, or has held, controlled or maintained custody of any account or asset of any Enjoined Defendant at any time since January 1, 1997, by facsimile transmission, hand, or overnight carrier. The assets and funds affected by this Paragraph shall include both existing assets and assets acquired after the effective date of this Order.

REPATRIATION

VI. IT IS FURTHER ORDERED that, within two (2) business days after the entry of this Order, the Enjoined Defendants shall:

A. Provide the plaintiff with a full accounting of all funds, documents and assets outside of the territory of the United States which are held either: (1) by them; (2) for their benefit; or (3) under their direct or indirect control, jointly or singly;

B. Transfer to the territory of the United States all funds, documents and assets in foreign countries held either: (1) by them; (2) for their benefit; or (3) under their direct or indirect control, jointly or singly;

C. Hold and retain all repatriated funds, documents and assets and prevent any transfer, disposition, or dissipation whatsoever of any such assets or funds, except as required by Paragraph III of this Order;

D. Provide plaintiff with a statement identifying the assets that have been repatriated, including the names and addresses of the domestic financial institutions holding the repatriated assets, along with account numbers and balances;

E. Provide plaintiff access to the Enjoined Defendants' records and documents held by financial institutions outside the territorial United States; and

F. Sign the Consent to Release of Financial Records attached to this Order.

EXPEDITED DISCOVERY

VII. IT IS FURTHER ORDERED that, for a 30-day period commencing the date of entry of this Order, the Commission is granted leave to conduct certain expedited discovery, and that, in lieu of the time periods, notice provisions, and other requirements of Rules 26, 30, 34, and 45 of the Federal Rules of Civil Procedure, and the Local Rules, expedited discovery shall proceed as follows, both as to parties and as to non-parties:

A. Pursuant to Fed. R. Civ. P. 30, the Commission may, upon two days notice, take depositions upon oral examination concerning the nature, location, status, and extent of the Enjoined Defendants' assets and business records, and compliance with this Order. Such depositions may be taken Monday through Saturday.

Provided, notwithstanding Fed. R. Civ. P. 30(a)(2), that this Subparagraph shall not preclude any future depositions by plaintiff.

B. Pursuant to Fed. R. Civ. P. 34(b), the Enjoined Defendants shall produce all documents requested by the Commission within two days of receipt of such request.

CREDIT REPORTS

VIII. IT IS FURTHER ORDERED that plaintiff Commission may obtain credit reports concerning the Enjoined Defendants pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(1), and that upon written request, any credit reporting agency from which such reports are requested shall provide them to plaintiff Commission.

CORRESPONDENCE WITH PLAINTIFF

IX. For the purposes of this Order, all correspondence and pleadings to the Commission shall be addressed to:

Gregg Shapiro

Federal Trade Commission

Sixth St. & Pennsylvania Ave., N.W.

Room H-200

Washington, D.C. 20580

(202) 326-3549 (voice)

(202) 326-3392 (facsimile)

RETENTION OF JURISDICTION

X. IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for all purposes.

IT IS SO ORDERED.

Entered this _______ day of ____________________, 1998.

LLOYD D. GEORGE
United States District Judge

Consent to Release of Financial Records

I, _________________________, of the State of _________________ in the United States of America, do hereby direct any bank or trust company at which I have a bank account of any kind or at which a corporation or other entity has a bank account of any kind upon which I am authorized to draw, and its officers, employees and agents, to disclose all information and deliver copies of all documents of every nature in your possession or control which relate to the said bank accounts to any attorney of the Federal Trade Commission, and to give evidence relevant thereto, in the matter of the Federal Trade Commission v. Affordable Media, LLC, et al., now pending in the United States District Court for the District of Nevada, and this shall be irrevocable authority for so doing. This direction is intended to apply to the laws of countries other than the United States which restrict or prohibit the disclosure of bank information without the consent of the holder of the account, and shall be construed as consent with respect thereto, and the same shall apply to any of the bank accounts for which I may be a relevant principal.

Dated: ____________________________, 1998

Signature: _________________________________

Printed full name: _________________________________