DEBRA A. VALENTINE
General Counsel

CHARLES A. HARWOOD
Regional Director

PATRICIA A. HENSLEY
KATHRYN C. DECKER
ROBERT J. SCHROEDER
Federal Trade Commission
915 Second Ave., Suite 2896
Seattle, WA 98174
(206) 220-4483 (Hensley)
(206) 220-4486 (Decker)
(206) 220-4477 (Schroeder)
ATTORNEYS FOR PLAINTIFF

UNITED STATES DISTRICT COURT
DISTRICT OF IDAHO

FEDERAL TRADE COMMISSION,

Plaintiff,

v.

ED BOEHLKE, an individual,

Defendant.

Civ. No. CIV96-0482-E-BLW

CONSENT ORDER

Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), has filed a complaint for a permanent injunction and other relief pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. 53(b), charging defendant Ed Boehlke, trading as Advantage Marketing Company, with violations of Section 5 of the FTC Act, 15 U.S.C. 45. Defendant and the Commission, by and through their respective counsel, have agreed to entry of this Consent Order by this Court to resolve all matters in dispute in this action. Defendant and the Commission have consented to the entry of this Consent Order without trial or adjudication of any issue of law or fact herein.

NOW, THEREFORE, defendant and the Commission having requested the Court to enter this Consent Order, IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows:

FINDINGS

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

B. The complaint states a claim upon which relief may be granted against defendant under Sections 5(a) and 13(b) of the FTC Act, 15 U.S.C. 45(a) and 53(b);

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

D. Defendant has waived all rights to seek judicial review or otherwise to challenge or contest the validity of this Consent Order and has waived any rights that may arise under the Equal Access to Justice Act, 28 U.S.C. 2412, amended by Pub. L. 104-121, 110 Stat. 847, 863-64 (1996); and

E. This Consent Order does not constitute and shall not be interpreted to constitute either an admission by defendant or a finding by the Court that defendant has engaged in violations of the FTC Act.

DEFINITIONS

For the purposes of this Consent Order, the following definitions shall apply:

1. "Defendant" means Ed Boehlke, trading as Advantage Marketing Company, and any and all of his other business operations under any d.b.a., including but not limited to AMC, Auto-Link, Consumer Connection, and National Employment Services, his successors and assigns, officers, agents, servants, employees, salespersons, corporations, subsidiaries, affiliates, and other persons directly or indirectly under his control or in active concert or participation with him who receive actual notice of this Consent Order by personal service, facsimile or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device; and

2. "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.

ORDER

I.

IT IS THEREFORE ORDERED that defendant, in connection with the advertising, offering for sale, or sale of any work-at-home guide or any other work-at-home product or service, is hereby permanently enjoined from:

A. Making, or assisting in making, directly or by implication, orally or in writing, any false or misleading representation that:

1. He has actual job openings or actual job openings at stated salaries;

2. Consumers who pay a fee to defendant will be enrolled in a work-at-home job program through which they will obtain an actual job or an actual job paying stated salaries; or

3. Consumers who pay a fee to defendant do not have to pay additional fees or incur additional costs to pursue a work-at-home job;

B. Making, or assisting in making, directly or by implication, orally or in writing, any representation that consumers who pay a fee to defendant typically earn stated salaries or that most consumers who pay a fee to defendant earn stated salaries, unless defendant possesses and relies upon a reasonable basis that substantiates such representations at the time they are made;

C. Making, or assisting in making, directly or by implication, orally or in writing, any false or misleading representation about any material fact, including, but not limited to, any false or misleading representation about:

1. The pay or earnings a person is likely to make;

2. The availability of employment opportunities;

3. The product or service defendant sells; or

4. Defendant's refund policy; and

D. Failing, at the time of the initial contact with any prospective consumer, at the time a consumer agrees to purchase, and in response to questions from consumers about refunds, to provide an accurate and easily understandable statement of the material terms and conditions that consumers must meet to obtain a refund, if defendant offers refunds.

II.

IT IS FURTHER ORDERED that defendant, in connection with the advertising, offering for sale, or sale of any product or service through telemarketing, direct mail, or the Internet or any other medium, is hereby permanently enjoined from:

A. Making, or assisting in making, directly or by implication, orally or in writing, any false or misleading representation about any material fact, including, but not limited to, any false or misleading representation about:

1. The performance, benefits, or efficacy of any product or service; or

2. The terms under which any product or service is offered for sale or sold;

B. Failing, at the time of initial contact with any prospective customer, at the time a consumer agrees to purchase, and in response to questions from consumers, to provide an accurate and easily understandable statement of the material terms and conditions of any transaction being offered or pending, including, but not limited to, the conditions of defendant's refund policy, if defendant offers refunds; and

C. Failing to reasonably investigate and resolve promptly any consumer complaint received by defendant regarding the sale or offering for sale of any product or service, and to notify the consumer of the resolution of the complaint and the reason therefor.

III.

IT IS FURTHER ORDERED that defendant, in connection with the advertising, offering for sale, or sale of any product or service through telemarketing, is hereby permanently enjoined from:

A. Failing to take reasonable steps to monitor and ensure that all employees of defendant or of any company or business entity owned or controlled by defendant who are engaged in solicitation, order verification, or customer service functions comply with Paragraphs I and II of this Consent Order. Such steps may include monitoring solicitations and order verification and customer service telephone calls; blind testing of the oral representations made by each person engaged in solicitation, order verification, or customer service functions; random checking of consumers who communicated with each employee; and ascertaining the number and nature of consumer complaints regarding any transactions in which each employee is involved; and

B. Failing to terminate any employee upon his or her third action of any sort prohibited by Paragraphs I or II of this Consent Order within any eighteen (18) month period, once defendant knows or should know, either through steps taken pursuant to the requirements of this Consent Order or otherwise, that such person is or has been engaged in such conduct.

IV.

IT IS FURTHER ORDERED that:

A. While acting in any capacity, other than solely as an employee compensated on an hourly or salaried basis, defendant is hereby permanently enjoined from creating or entering into any of the following relationships in connection with the advertising, offering for sale, or sale of any work-at-home product or service, or in connection with the advertising, offering for sale, or sale of any other product or service through telemarketing, direct mail, or the Internet or any other medium:

1. Any partnership, corporation, or joint venture with any person, or

2. Any business or contractual relationship with any person engaged in solicitation, order verification, or customer service functions with respect to any product or service advertised, offered for sale, or sold by defendant, unless defendant takes reasonable steps to determine, at the beginning of any such relationship, and continuing thereafter on a periodic basis throughout the relationship, whether such person is conducting business in a manner prohibited by Paragraphs I or II of this Consent Order. Reasonable steps shall include, but are not limited to, evaluating:

(a) the nature of such person's business practices;

(b) the nature of any product or service such person advertises, offers for sale, or sells;

(c) the representations made to consumers by such person, or any of his or her agents or employees, concerning any product or service;

(d) the truthfulness, accuracy, and completeness of these representations made to consumers;

(e) the person's advertisements, solicitation scripts, and substantiation for the representations for truthfulness, accuracy, and completeness; and

(f) the number and nature of consumer complaints concerning such person and the manner in which such complaints are handled; and

B. Defendant shall immediately dissolve or terminate any such partnership, corporation, joint venture, or relationship with any person who defendant knows or should know is conducting business in any manner that would be prohibited by Paragraphs I or II of this Consent Order if such person were a defendant.

V.

IT IS FURTHER ORDERED that defendant is hereby permanently enjoined from providing to any third party the name, address, telephone number, or bank account number of any person to whom the defendant shipped the work-at-home guide prior to November 11, 1996.

VI.

IT IS FURTHER ORDERED that:

A. Within three (3) business days from the date of entry of this Consent Order, defendant shall submit to the Commission a sworn statement, in the form shown in Attachment A to this Consent Order, that shall reaffirm and attest to the truthfulness, accuracy, and completeness of defendant's financial statement that was submitted to the plaintiff on February 11, 1997 (hereinafter "Financial Statement"). The Commission's agreement to this Consent Order is expressly premised upon the truthfulness, accuracy, and completeness of defendant's financial condition as represented in the Financial Statement referenced above, which contains material information upon which the Commission relied in negotiating and agreeing to the terms of this Consent Order;

B. If, upon motion by the FTC, this Court finds that defendant failed to file the sworn statement required by this Paragraph, or filed a Financial Statement that failed to disclose any material asset, or materially misrepresented the value of any asset, or made any other material misrepresentation in or omission from the Financial Statement, the judgment herein shall be reopened for the purpose of determining an appropriate amount for defendant to pay as redress to consumers; and

C. For purposes of determining the amount of redress: (1) if the Financial Statement failed to disclose a material asset or materially misrepresented the value of an asset, forfeiture of the asset or the fair market value (or difference in fair market value) thereof, calculated as of the date of the entry of this Consent Order, shall constitute an appropriate amount of redress; and (2) if the Financial Statement failed to report the transfer of any asset to another person, the fair market value of the asset shall constitute an appropriate amount of redress. If defendant cannot pay the fair market value of the asset, and such transfer was not to a bona fide purchaser for value, then this Court shall impose a constructive trust for the benefit of injured consumers over the asset, and the asset shall be conveyed by the transferee to the FTC; provided, however, that in all other respects, this Consent Order shall remain in full force and effect unless otherwise ordered by this Court, and that defendant has no right to contest any allegation in the complaint in this matter in any proceedings brought pursuant to this Paragraph; and provided, further, that proceedings instituted under this Paragraph 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 FTC may initiate to enforce this Consent Order. No portion of any payment or forfeiture under this Paragraph shall be deemed a payment of any fine, penalty, or punitive assessment.

VII.

IT IS FURTHER ORDERED that the freeze of defendant's assets as ordered in Paragraphs II and VI of the Preliminary Injunction entered in this matter on December 15, 1996, to the extent not previously released by any separate Order of this Court, shall be lifted upon:

(1) the entry of this Consent Order; (2) defendant's submission to the Federal Trade Commission of the sworn statement required by Paragraph VI of this Consent Order; and (3) defendant's payment or release of payment of all Court-approved fees and expenses of the Receiver.

VIII.

IT IS FURTHER ORDERED that the appointment by this Court of L.D. Fitzgerald as Receiver is vacated upon: (1) defendant's payment or release of payment of all Court-approved fees and expenses of the Receiver; (2) the Receiver having submitted his final report to the Court concerning the disposition of the assets of the Receivership estate and the Court having approved the Receiver's final report; and (3) the Receiver having received a discharge from the Court.

IX.

IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of this Consent Order, defendant, in connection with the advertising, offering for sale, or sale of any work-at-home guide or other work-at-home product or service, or the advertising, offering for sale, or sale of any product or service through telemarketing, direct mail, or the Internet or any other electronic medium, is hereby enjoined from failing to create, maintain, and make available to representatives of the Commission, upon at least five (5) days' written notice:

A. Copies of any advertisement, script, or promotional material relating to such venture;

B. Books, records, and accounts that, in reasonable detail, accurately and fairly reflect the cost of goods or services sold, and the income, disbursements, transactions, and use of monies by the defendant;

C. Records that accurately reflect the name, address, and telephone number of each person employed by defendant in any capacity, that person's job title or position, the date upon which the employee commenced work, and the date and reason for the employee's termination, if applicable. Defendant shall retain such records for any terminated employee for a period of two (2) years following the date of termination;

D. Records containing the name, address, and telephone number of each consumer to whom defendant sells or ships any product or service; and

E. Records that, for any consumer complaint or refund request, whether received directly or indirectly, reflect:

1. The consumer's name, address, and telephone number and the dollar amount paid by the consumer;

2. The written complaint, if any, and the date of the complaint or refund request;

3. The basis of the complaint or refund request, and the nature and result of any investigation conducted as to the validity of any complaint;

4. Each response by defendant and the date of the response;

5. Any final resolution and the date of resolution; and

6. In the event of a denial by defendant of a refund request, the reason for such denial, or, if cured, the basis for determining that such complaint has been cured.

X.

IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of this Permanent Order, defendant shall:

A. In connection with the advertising, offering for sale, or sale of any work-at-home guide or other work-at-home product or service, or the advertising, offering for sale, or sale of any product or service through telemarketing, direct mail, or the Internet or any other electronic medium, provide a copy of this Consent Order to, and obtain a signed and dated acknowledgment of receipt of the same from, each current and future officer, director, and partner of any business owned or controlled by the defendant;

B. Provide in the form of Attachment B a memorandum of policy and instruction to and obtain a signed and dated acknowledgment of receipt of same from each managing agent, and from each employee and independent contractor of defendant engaged in solicitation, order verification, or customer service activities in connection with the advertising, offering for sale, or sale of any work-at-home guide or other work-at-home product or service;

C. Provide in the form of Attachment C a memorandum of policy and instruction to and obtain a signed and dated acknowledgment of receipt of same from each managing agent, and from each employee and independent contractor of defendant engaged in solicitation, order verification, or customer service activities in connection with the advertising, offering for sale, or sale of any other product or service through telemarketing, direct mail, or the Internet or any other electronic medium; and

D. Maintain, and upon reasonable notice make available to representatives of the Commission, the original signed and dated acknowledgments of the receipts of copies of this Consent Order and of the memoranda set forth in Attachments B and C as required by Paragraphs X.A, X.B, and X.C above.

XI.

IT IS FURTHER ORDERED that for purposes of determining or securing compliance with this Consent Order and upon at least five (5) days' written notice to defendant, defendant shall, for a period of five (5) years from the date of entry of this Consent Order, permit representatives of the Commission:

A. Access during normal office hours to any office or facility in which documents relating to compliance with the terms of this Consent Order are stored or held, to inspect and copy such documents; provided, however, that this access shall not operate or be construed as a waiver of any privilege recognized under the Federal Rules of Evidence;

B. To interview defendant, who may have counsel present, subject to the reasonable convenience of defendant and without restraint or interference from him, at defendant's place of business or at another location mutually agreed upon by defendant and the Commission; and

C. To interview, subject to the reasonable convenience of defendant and without restraint or interference from him, at a location reasonably convenient both to defendant and the Commission, the officers, directors, and employees of defendant or of any company or other business entity owned or controlled by defendant that is engaged in the advertising, offering for sale, or sale of any work-at-home guide or other work-at-home product or service, or in the advertising, offering for sale or sale of any product or service through telemarketing, direct mail, or the Internet or any other electronic medium. The person interviewed may have counsel present.

XII.

IT IS FURTHER ORDERED that defendant, for a period of five (5) years from the date of entry of this Consent Order, shall give written notice to the Federal Trade Commission, Regional Director, 915 Second Avenue, Suite 2896, Seattle, WA 98174, of his affiliation or employment with any business, or the creation or operation by defendant of any business entity, within twenty-one (21) days of the commencement of such affiliation or the creation or operation of such business entity. Such notice shall include the name and address of the new business, a statement of the nature of the business, and a statement of the defendant's duties and responsibilities in connection with the business.

XIII.

IT IS FURTHER ORDERED that defendant shall, within ninety (90) days from the date of entry of this Consent Order, file with the FTC a written compliance report setting forth in detail the manner and form in which he has complied with this Consent Order.

XIV.

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

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

XV.

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for the purposes of enabling any of the parties to this Consent Order to apply to the Court at any time for such further orders or directives as may be necessary or appropriate for the interpretation or modification of this Consent Order, for the enforcement of compliance therewith, or for the punishment of violations thereof.

SO ORDERED, this day of , 1998.

Judge B. Lynn Winmill

United States District Judge

FOR THE PLAINTIFF: FOR THE DEFENDANT:

____________________________ ____________________________
Patricia A. Hensley Ed Boehlke

____________________________
Kathryn C. Decker
Attorneys

____________________________
Robert J. Schroeder
Assistant Regional Director

____________________________
Charles A. Harwood
Regional Director
Federal Trade Commission