JOHN D. JACOBS
FEDERAL TRADE COMMISSION
UNITED STATES DISTRICT COURT
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), commenced this action by filing a Complaint pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), charging the defendants with engaging in unfair or deceptive acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45.
The Commission, by and through its counsel, and defendant Charles Johnson pro se, (hereinafter "Stipulating Defendant") has agreed to the entry of this Stipulated Permanent Injunction by this Court. The Commission and Stipulating Defendant have consented to entry of this Final Order without trial or adjudication of any issue of law or fact herein.
NOW, THEREFORE, upon the consent of the parties hereto, IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows:
For purposes of this Final Judgment and Order for Permanent Injunction, the following definitions shall apply:
INJUNCTION AGAINST PARTICIPATION
IT IS THEREFORE ORDERED that Stipulating Defendant is permanently enjoined from offering for sale or selling to any person the right to participate in any prohibited marketing scheme.
INJUNCTION AGAINST MISREPRESENTATIONS
IT IS FURTHER ORDERED that in connection with the offering for sale or sale of
the right to participate in any marketing scheme, Stipulating Defendant is hereby permanently restrained and enjoined from making or assisting in the making of, directly or by implication, orally or in writing, any statement or representation of material fact that is false or misleading including, but not limited to:
INJUNCTION AGAINST PROVIDING OTHERS WITH
IT IS FURTHER ORDERED that in connection with the offering for sale or sale of the right to participate in any marketing scheme, Stipulating Defendant is hereby permanently restrained and enjoined from providing to others the means and instrumentalities with which to make, directly or by implication, orally or in writing, any statement or representation of material fact that is false or misleading including, but not limited to:
PROHIBITION ON RELEASING NAMES
IT IS FURTHER ORDERED that the Stipulating Defendant is hereby permanently restrained and enjoined from providing to any person, except agents of the Commission, the Receiver, or other law enforcement authorities, the name, address, telephone number, or credit card or bank account number, of any person who purchased membership in the CDI/DSN program from any of the defendants.
IT IS FURTHER ORDERED that, within ten (10) days of notice of entry of this Order and for a period of three (3) years commencing with the date of entry of this Final Order, defendant Stipulating Defendant shall:
IT IS FURTHER ORDERED that for purposes of determining or securing compliance with this Final Order, in connection with any business owned or controlled in whole or in part by Stipulating Defendant, said defendant, upon reasonable written notice, shall permit representatives of the Federal Trade Commission:
DISTRIBUTION OF STIPULATED
IT IS FURTHER ORDERED that, for a period of three (3) years from the date of the entry of this Order, Stipulating Defendant, immediately upon being employed or retained, or employing, directing, or managing any person, in connection with that part of any business entity that is engaged in the advertising, offering for sale, promotion or sale of any program in which participants recruit other consumers to participate in a marketing scheme, and which has been engaged in such conduct for fewer than two years, shall provide a copy of this Order to any person or entity by whom Stipulating Defendant are employed or retained, whether as employee, consultant, independent contractor or otherwise, and to any person or entity whom Stipulating Defendant retains, whether as employee, consultant, independent contractor or otherwise. As to each such person, Stipulating Defendant shall either secure a signed statement acknowledging receipt of such Order or prepare a sworn affidavit attesting to the fact that Stipulating Defendant has provided a copy of the Order to that person. The information in the affidavit shall include, but is not limited to, the name and address of the person or entity to whom the order was provided and the date the order was provided.
RELEASE OF FROZEN ASSETS
IT IS FURTHER ORDERED that the freeze on the assets of Charles Johnson shall be lifted upon the entry of this Stipulated Permanent Injunction. Financial institutions holding the assets of Charles Johnson, including safe deposit boxes, shall release these assets immediately upon receiving a copy of this Stipulated Permanent Injunction.
RIGHT TO REOPEN BASED ON
IT IS FURTHER ORDERED that the Commissions acceptance and the Court's approval of this Stipulated Permanent Injunction is expressly premised upon the truthfulness, accuracy, and completeness of the financial statements provided by Charles Johnson to counsel for the Commission on or about November 24, 1997. If, upon motion by the Commission, this Court finds that the financial statement of Charles Johnson either failed to disclose any material asset, or materially misrepresented the value of any asset, or made any other material misrepresentations in or omissions of assets, the Commission may request that the Judgment herein be reopened for the purpose of requiring full restitution from Charles Johnson; provided, however, that in all other respects this Injunction shall remain in full force and effect unless otherwise ordered by this Court; and provided further, that proceedings instituted under this section are in addition to, and not in lieu of, any other civil or criminal remedies as may be provided by law, including any other proceedings the Commission may initiate to enforce this Final Order. Solely for the purposes of reopening or enforcing this Paragraph, Stipulating Defendant waives any right to contest any of the allegations contained in the Complaint in this matter.
IT IS FURTHER ORDERED that each party to this Final Order shall bear its own costs and attorneys fees, if any.
COOPERATION WITH RECEIVER
IT IS FURTHER ORDERED that Stipulating Defendant shall cooperate fully with the Receiver in: (A) pursuing any and all claims by the receivership against third parties; (B) assisting the Receiver in defending any and all actions or claims brought against the receivership by third parties; and (C) executing any documents necessary to transfer assets or ownership interests to the Receiver pursuant to the terms of this Final Order. Stipulating defendant further waives any claims he may have against the receivership or Receivership Defendants herein, and relinquish ownership of any property that may have been located at the business premises of the Receivership Defendants.
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 hereby consent to the entry of this Final Order at the Court's convenience and without further notice to the parties.