GREGORY W. STAPLES
JENNIFER LARABEE
JOHN D. JACOBS
RAYMOND E. MCKOWN
Federal Trade Commission
10877 Wilshire Boulevard, Suite 700
Los Angeles, California 90024
(310) 824-4343
Attorneys for Plaintiff
FEDERAL TRADE COMMISSION

UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA

FEDERAL TRADE COMMISSION

Plaintiff,

v.

KEITH H. GILL, an individual doing business as the Law Offices of Keith Gill, and RICHARD MURKEY, an individual, 

Defendants.

CIVIL NO.

COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF

Plaintiff, the Federal Trade Commission ("Commission"), by its undersigned attorneys, alleges as follows:

1. The Commission brings this action under Sections 13(b) and 19 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. 53(b) and 57b, and Section 410(b) of the Credit Repair Organizations Act ("CRO Act"), 15 U.S.C. 1679h(b), to obtain preliminary and permanent injunctive relief, restitution, rescission, disgorgement and other equitable relief for defendants’ deceptive acts or practices in connection with the sale and offering for sale of credit repair services in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a), and the CRO Act , 15 U.S.C. 1679 et seq.

JURISDICTION AND VENUE

2. This Court has jurisdiction of this matter pursuant to 28 U.S.C. 1331, 1337(a), and 1345, and 15 U.S.C. 53(b), 57b and 1679h((b).

3. Venue in this district is proper under 28 U.S.C. 1391(b) and (c), and 15 U.S.C. 53(b).

THE PARTIES

4. Plaintiff, the Federal Trade Commission, is an independent agency of the United States Government created by statute. 15 U.S.C. 41 et seq. The Commission is charged, inter alia, with enforcement of Section 5(a) of the FTC Act, 15 U.S.C. 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The Commission also enforces the CRO Act. 15 U.S.C. 1679h(a). The Commission is authorized to initiate federal district court proceedings, by its own attorneys, to enjoin violations of the FTC Act and the CRO Act in order to secure such equitable relief, including consumer redress, as may be appropriate in each case. 15 U.S.C. 53(b), 57b, and 1679h(b).

5. Defendant Keith Gill ("Gill") is an individual who conducts business as the Law Offices of Keith Gill and whose office and principal place of business is located at 21550 Oxnard Street, Suite 300, Woodland Hills, California. At all times material to this complaint, acting alone or in concert with others, he has formulated, directed, controlled or participated in the acts and practices of the business of credit repair including the acts and practices set forth in this complaint. Gill transacts or has transacted business in this District.

6. Defendant Richard Murkey ("Murkey") is the general manager of the Law Offices of Keith Gill at 21550 Oxnard Street, Suite 300, Woodland Hills, California. At all times material to this complaint, acting alone or in concert with others, he has formulated, directed, controlled or participated in the acts and practices of credit repair including the acts and practices set forth in this complaint. Murkey transacts or has transacted business in this District.

COMMERCE

7. At all times relevant to this complaint, defendants have maintained a substantial course of trade in selling credit repair services, in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act, 15 U.S.C. 44.

DEFENDANTS' BUSINESS PRACTICES

8. Since at least 1995, defendants have advertised, promoted, offered for sale, and sold credit repair services to consumers throughout the United States.

9. Defendants have offered services to remove derogatory information from, or improve, consumers' credit histories, credit records, and credit ratings. These services were promoted by defendants Gill and Murkey through various advertisements, a weekly hour-length radio program, telephone conversations and written materials sent to inquiring consumers.

10. Consumers have contacted defendants by telephone and have been told that defendants can remove bankruptcies, liens, judgments, charge offs, late payments, foreclosures, repossessions, and other negative information from consumers' credit reports, even where such information is accurate and not obsolete.

11. Defendants sponsor a one hour weekly radio broadcast called "Turn Your Life Around" on a local Los Angeles radio station. Defendant Murkey regularly appears on the program discussing his offices can improve credit reports for consumers.

12. In the course of the program, as well as during telephone conversations, consumers are told that any sort of negative information, even information that is accurate and not obsolete, can be legally removed from the consumer’s credit report, through the use of defendants’ services. Consumers are encouraged to call defendants to obtain a free evaluation of the consumer’s credit report. Consumers are told defendants can help consumers anywhere in the United States remove any negative information from their credit reports.

13. Typical, and illustrative, of defendants’ claims about their credit repair services are the following:

a. "It doesn’t make a difference what type of negative you have: We have files in our offices verifying that we can legally remove bankruptcies, foreclosures, what they call short pays in the real estate community, judgments, tax liens, surrenders, repossessions, defaulted student loans, charge-offs, settlements, collections and even late accounts for child support. . . . It does not make a difference if that item was legally put on there or not and to us it doesn’t make a difference if you still owe money."

b. "We can take off bankruptcies from your credit report."

c. "When it comes to removing negatives that actually were yours in the first place, you can forget it, they [credit bureaus] aren’t going to help you at all. But yet we can, that’s where we come in and provide a service to the consumer."

d. "I’ll repeat this again: It doesn’t make a difference what kind of negative you have on the report, whether they’re paid or unpaid accounts, they can legally be removed from your report."

e. "We come in under the same law and we completely take it [the negative items] off."

f. "No matter what kind of negative you can possibly have, there are legal ways to take those items off your credit report and that can be done even without you paying off that account. Even tax liens or judgments can be removed from your report legally without you having to pay that charge. . . ."

g. "[I]n our offices, we can clean your credit in six weeks to two months."

h. "We legally improve your credit report no matter how bad you may think it is."

i. "There are legal ways to add credit to your credit report and in fact, years of good credit in less than thirty days."

j. "We want to tell you consumers out there that we’re available to help you clean your credit reports so you can turn your life around."

Many consumers have agreed to purchase defendants’ services based on these representations.

14. Defendants tell consumers that their services are available for a nominal fee based on the number of negative items to be removed and that they offer monthly payment plans. Consumers who agree to purchase defendants’ services typically sign contracts between themselves and defendant Gill d.b.a. Law Offices of Keith Gill.

15. Before providing any of the promised services, defendants’ representatives request, and obtain, at least partial payment of fifty percent of the estimated total cost for these services. Defendants have typically charged in excess of $500 or more for these services.

VIOLATIONS OF THE CREDIT REPAIR ORGANIZATIONS ACT

16. Defendants are "credit repair organizations" as that term is defined in the CRO Act, 15 U.S.C. 1679a(3).

17. The purposes of the CRO Act, according to Congress, are:

(1) to ensure that prospective buyers of the services of credit repair organizations are provided with the information necessary to make an informed decision regarding the purchase of such services; and (2) to protect the public from unfair or deceptive advertising and business practices by credit repair organizations. 15 U.S.C. 1679(b).

18. The CRO Act prohibits credit repair organizations from charging or receiving any money or other valuable consideration for services which the credit repair organization has agreed to perform before such service is fully performed. 15 U.S.C. 1679b (b).

19. The CRO Act prohibits all persons from making or using any untrue or misleading representation of the services of the credit repair organization. 15 U.S.C. 1679b (a) (3).

20. Pursuant to Section 410(b)(1) of the CRO Act, 15 U.S.C. 1679h(b)(1), any violation of any requirement or prohibition of the CRO Act constitutes an unfair and deceptive act or practice in commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a).

COUNT ONE

21. In numerous instances, in connection with the performance of services for consumers by a credit repair organization, as that term is defined in Section 403(3) of the CRO Act, 15 U.S.C. 1679a (3), defendants have charged or received money or other valuable consideration for the performance of services that the credit repair organization has agreed to perform before such service was fully performed. Defendants have thereby violated Section 404(b) of the CRO Act, 15 U.S.C. 1679b (b).

COUNT TWO

22. In numerous instances, in connection with the performance of services for consumers by a credit repair organization, as that term is defined in Section 403(3) of the CRO Act, 15 U.S.C. 1679a (3), defendants have made untrue or misleading statements to induce consumers to purchase their services, including, but not limited to, the representation that defendants can improve substantially most consumers’ credit reports or profiles by permanently removing bankruptcies, liens, judgments, charge-offs, late payments, foreclosures, repossessions, and other negative information from consumers' credit reports, even where such information is accurate and not obsolete.

23. In truth and fact, in numerous instances, defendants cannot improve substantially most consumers’ credit reports or profiles by permanently removing bankruptcies, liens, judgments, charge- offs, late payments, foreclosures, repossessions, and other negative information from consumers' credit reports, where such information is accurate and not obsolete.

24. Defendants have thereby violated Section 404(a)(3) of the CRO Act, 15 U.S.C. 1679b (a) (3).

VIOLATIONS OF SECTION 5 OF THE FTC ACT

25. Section 5(a) of the FTC Act, 15 U.S.C. 45, prohibits deceptive acts and practices in or affecting commerce.

26. Misrepresentations of material fact constitute deceptive acts or practices prohibited by Section 5(a) of the FTC Act.

COUNT THREE

27. In numerous instances, in connection with the advertising, marketing, promotion, offering for sale, or sale of credit repair services, Defendants have made untrue or misleading statements to induce consumers to purchase their services, including, but not limited to, the representation that Defendants can improve substantially most consumers’ credit reports or profiles by permanently removing bankruptcies, liens, judgments, charge-offs, late payments, foreclosures, repossessions and other negative information from consumers' credit reports, even where such information is accurate and not obsolete.

28. In truth and fact, in numerous instances, Defendants cannot improve substantially most consumers’ credit reports or profiles by permanently removing bankruptcies, liens, judgments, charge- offs, late payments, foreclosures, repossessions and other negative information from consumers' credit reports, even where such information is accurate and not obsolete.

29. Defendants have thereby violated Section 5(a) of the FTC Act, 15 U.S.C. 45 by engaging in deceptive acts and practices in or affecting commerce.

CONSUMER INJURY

30. Consumers have suffered substantial monetary loss as a result of defendants’ unlawful acts or practices. Absent injunctive relief by this Court, defendants are likely to continue to injure consumers and harm the public interest.

THIS COURT'S POWER TO GRANT RELIEF

31. Sections 13(b) and 19 of the FTC Act, 15 U.S.C. 53(b) and 57b, and Section 410(b) of the CRO Act, 15 U.S.C. 1679h(b), empower this Court to issue a permanent injunction against defendants’ violations of the CRO Act and the FTC Act and, in the exercise of its equitable jurisdiction, to order such ancillary relief as preliminary injunction, rescission, restitution, disgorgement of profits resulting from defendants’ unlawful acts or practices, and other remedial measures.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff requests that this Court, as authorized by Section 410(c)(1) of the CRO Act, 15 U.S.C. 1679h (b), and Section 13 of the FTC Act, 15 U.S.C. 53(b), and pursuant to its own equitable powers:

(a) Award Plaintiff such preliminary injunctive and ancillary relief as may be necessary to avert the likelihood of consumer injury during the pendency of this action and preserve the possibility of effective final relief;

(b) Permanently enjoin defendants from violating the CRO Act and the FTC Act in connection with advertising, marketing, promotion, offering for sale and sale of credit repair services;

(c) Award such relief as the Court finds necessary to redress injury to consumers resulting from defendants' violations of the CRO Act and the FTC Act, including, but not limited to, rescission of contracts, the refund of monies paid, and the disgorgement of unlawfully obtained monies; and

(d) Award Plaintiff the costs of bringing this action, as well as such other and additional relief as the Court may determine to be just and proper.

Respectfully Submitted,

DEBRA A. VALENTINE

General Counsel

DATED: __________________

__________________________
JENNIFER LARABEE
JOHN D. JACOBS
RAYMOND E. MCKOWN
Federal Trade Commission
10877 Wilshire Blvd., Suite 700
Los Angeles, CA 90024
(310) 824-4343