CHARLES A. HARWOOD
Regional Director

ELEANOR DURHAM
NADINE S. SAMTER
Federal Trade Commission
915 Second Avenue, Suite 2896
Seattle, WA 98174
(206) 220-4476
(206) 220-4479

ATTORNEYS FOR PLAINTIFF
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEVADA

CONSENT DECREE

Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), has filed a complaint for a permanent injunction and other relief pursuant to Section 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, and the Telemarketing and Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. § 6101 et seq., naming as defendants Konrad King and Konrad King, Inc., and alleging violations of the Telemarketing Sales Rule, 16 C.F.R. Part 310 ("the Rule").

Defendants Konrad King and Konrad King, Inc., and the Commission, by and through their respective counsel, have agreed to entry of this Order by this Court in order to resolve all matters in dispute between them in this action. These defendants have consented to the entry of this Order without trial or adjudication of any issue of law or fact herein, and this Decree shall not constitute an admission of liability by defendants nor constitute evidence of liability against defendants in any matter relating to the facts alleged in the Commission’s Complaint. NOW, THEREFORE, these defendants and the Commission having requested the Court to enter this Order, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows:

FINDINGS

A. This Court has jurisdiction of the subject matter of this action and the parties consenting hereto.

 

B. The complaint states a claim upon which relief may be granted against Konrad King and Konrad King, Inc., under Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b, The Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. § 6101 et seq,.and the Telemarketing Sales Rule ("the Rule") 16 C.F.R. Part 310.

 

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

 

D. These defendants have waived all rights to seek judicial review or otherwise challenge or contest the validity of this Order.

 

E. This Order does not constitute and shall not be interpreted to constitute either an admission by these defendants or a finding by the Court that Konrad King and Konrad King, Inc., have engaged in violations of FTC law.

DEFINITIONS

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

A. “Person” means a natural person, organization or other legal entity, including a corporation, partnership, proprietorship, association, cooperative, government or governmental subdivision or agency, or any other group or combination acting as an entity;

 

B. “Defendants” means Konrad King and Konrad King, Inc., as well as their successors and assigns, directors, officers, agents, servants, employees, salespersons, independent contractors, corporations, subsidiaries, affiliates and other persons directly or indirectly under their control or in active concert or participation with them who receive actual notice of this Order by personal service, facsimile or otherwise, whether acting directly or through any corporation, subsidiary, division or other device;

 

C. "Telemarketer" means any person who, in connection with telemarketing, initiates telephone calls to, or receives telephone calls from, a consumer; and

 

D. "Telemarketing" means a plan, program, or campaign that is conducted to induce the purchase of goods or services by use of one or more telephones.

I. INJUNCTION

IT IS THEREFORE ORDERED that defendants are hereby permanently restrained and enjoined from:

A. Providing credit card processing for any telemarketer in a manner that violates Part 310.3(c) of the Rule;

 

B. Engaging, participating or assisting in any manner or in any capacity whatsoever in any foreign or domestic lottery promotion (except as expressly provided for by relevant state or federal law), directly or through any intermediary. This prohibition includes, but is not limited to:

1. promoting, offering for sale, selling, reselling, purchasing on behalf of others, or registering, directly or indirectly, lottery tickets, chances, or interests; or
2. providing customer service or any other service to any telemarketer of lottery tickets, chances or interests.

II. MAINTENANCE OF RECORDS

IT IS FURTHER ORDERED that, for a period of three years from the date of entry of this Order, defendants are hereby restrained and enjoined from failing to create, maintain and make available to representatives of the Commission, upon reasonable notice:

A. All records relating to any VISA, MasterCard, Discover, American Express or other credit card merchant account maintained in the name of, or on the behalf of, any defendant.

 

B. Records for each telemarketer defendants provide a product or service for, including but not limited to providing customer service, product fulfillment, mailing services, marketing services, on-line services, list-brokering services, or computer programing services. Such records shall include:

1. the telemarketer’s legal name, and any other business name it has used, its address and telephone number;
2. the name(s) and position(s) of the contact(s) for each telemarketer;
3. accounting or bookkeeping records generated by any defendant relative to each telemarketer;
4. each complaint received by any defendant concerning each telemarketer, together with a description of the investigation and/or resolution of each complaint; and
5. copies of advertisements, promotional materials, direct mail pieces and telephone scripts.

III. ACCESS TO RECORDS

IT IS FURTHER ORDERED that for purposes of determining or securing compliance with this Order, defendants shall permit, for a period of three years from the date of entry of this Order, and upon reasonable written notice to defendants, representatives of the Federal Trade Commission:

A. Access during normal office hours to any office or facility in which documents relating to compliance with the terms of this Order are stored or held, to inspect and copy such documents; and

 

B. To interview, subject to the reasonable convenience of defendants and without restraint or interference from them, at a location reasonably convenient to both defendants and the Federal Trade Commission, the officers, directors, and employees of any company or other business entity owned, managed or controlled, in whole or in part, by any defendant, relating to compliance with the terms of this Order.

IV. NOTICE TO RELATED PERSONS AND ENTITIES

IT IS FURTHER ORDERED that defendants shall immediately provide a copy of this Order to each affiliate, subsidiary, division, sales entity, successor, assign, officer, director, employee, independent contractor, agent, and representative, and shall, within ten (10) days from the date of entry of this Order, provide plaintiff with a sworn statement that defendants have complied with this provision of the Order, which statement shall include the names and addresses of each such person or entity who received a copy of the Order.

V. NEW EMPLOYMENT

IT IS FURTHER ORDERED that for a period of three years from the date of entry of this Order, defendant Konrad King shall notify the FTC in writing of any affiliation or employment with any company that engages in telemarketing or provides services of any kind to telemarketers, in commerce, as “commerce” is defined in the FTC Act, within twenty-one (21) days of the commencement of that affiliation. Each notice shall include the defendant’s then- current business and home address and phone number, and a statement of the nature of the new business or employment along with a description of his or her interest, duties, and responsibilities in the business or employment.

VI. CORPORATE CHANGES

IT IS FURTHER ORDERED that for a period of three years from the date of entry of this Order, defendant Konrad King, Inc., shall notify the FTC at least thirty (30) days prior to the effective date of any proposed change in its corporate structure, such as dissolution, assignment, or sale resulting in the emergence of any successor corporation, the creation or dissolution of any subsidiaries, or any other changes in the corporation that may affect compliance obligations arising out of this Order.

VII. COMPLIANCE REPORT

IT IS FURTHER ORDERED that defendants shall, within 180 days after the date of entry of this Order, file with the Federal Trade Commission a report, in writing, setting forth the manner and form in which they have complied with this Order.

VIII. NOTICES

IT IS FURTHER ORDERED that all notices and reports required of defendants by this Order shall be made to the following address:

Regional Director
Federal Trade Commission
915 Second Avenue, Suite 2896
Seattle, Washington 98174

IV. RETENTION OF JURISDICTION

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

SO ORDERED, this _____ day of ___________________, 1998.

_________________________________
United States District Judge

The parties hereby consent to the terms and conditions set forth above and consent to entry of this Order without further notice to the parties. Defendants waive any rights that may arise under the Equal Access to Justice Act, 28 U.S.C. § 2412.

FOR PLAINTIFF

FEDERAL TRADE COMMISSION

Eleanor Durham

__________________________________
Nadine Samter

FOR THE DEFENDANTS

KONRAD KING,
KONRAD KING, INC.

__________________________________
Konrad King as President of King Inc.,
and individually
Kelly H. Swanson
1200 South Eastern Avenue
Las Vegas, NV 89104
Attorney for Defendants