IN THE UNITED STATES DISTRICT COURT
FEDERAL TRADE COMMISSION,
Civil Action No. 3-97CV1508-G
Plaintiff, the Federal Trade Commission ("Commission"), commenced this action by filing its Complaint against defendants Gulfstar Corporation, Nova Gaz Corporation, Nova Financial Corporation, Daniel W. Fisher, and J. Todd Tidmore. The Complaint alleges that defendants engaged in unfair or deceptive acts or practices in violation of Section 5 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 45, and seeks a permanent injunction and monetary relief pursuant to Section 13(b) of the FTC Act. On November 3, 1997, this Court entered a default judgment against defendant Nova Financial Corporation for failing to plead or otherwise defend this action.
The Commission and defendant J. Todd Tidmore hereby stipulate and agree to the entry of this Final Order for Permanent Injunction and Settlement of Claims for Monetary Relief ("Order"). Being advised of the premises, the Court finds:
1. This is an action by the Commission instituted under Sections 5 and 13(b) of the Federal Trade Commission Act, 15 U.S.C. §§ 45 and 53(b). The Complaint seeks both permanent injunctive relief and consumer redress for alleged unfair or deceptive acts or practices by the defendant in connection with the promotion of investments in oil and gas drilling. The Complaint states a claim upon which relief may be granted against defendant under Sections 5 and 13(b) of the FTC Act.
2. This Court has jurisdiction over the subject matter of this case and has jurisdiction over the defendant. Venue in the Northern District of Texas is proper.
3. The activities of defendant are in or affecting commerce, as commerce is defined in 15 U.S.C. § 44.
4. Defendant neither admits nor denies the allegations set forth in the Complaint.
5. Defendant waives all rights to seek judicial review or otherwise challenge or contest the validity of this Order. Defendant also waives any claim that he may have held under the Equal Access to Justice Act, 28 U.S.C. § 2412 (as amended), concerning the prosecution of this action to the date of this Order. Defendant shall bear his own costs and attorneys fees.
6. Entry of this Order is in the public interest.
7. This Order is remedial in nature and shall not be construed as the payment of a fine, penalty, punitive assessment, or forfeiture.
For the purposes of this Order, the following definitions shall apply:
A. "Document" is synonymous in meaning and equal in scope to the usage of the term in Federal Rule of Civil Procedure 34(a), and includes writings, drawings, graphs, charts, Internet sites, photographs, audio and video recordings, computer records, and other data compilations from which information can be obtained and translated, if necessary, through detection devices into reasonably usable form. A draft or non-identical copy is a separate document within the meaning of the term.
B. "Defendant" means J. Todd Tidmore.
C. "Investment" or "investment offering" means any interest, product or service, including any partnership, interest in any partnership, stock or other beneficial interest, tangible or intangible, that in any way is (1) offered for sale, traded, or sold, to be held, wholly or in part, for purposes of economic benefit, profit, or income, or (2) offered for sale, traded, or sold, based on representations, wholly or in part, express or implied, about past or future income, appreciation, or resale value.
D. "Telemarketing" shall mean any business activity (whether or not covered by the Federal Trade Commission's Telemarketing Sales Rule, 16 C.F.R. Part 310 ("TSR")) and including, but not limited to, initiating or receiving telephone calls, managing others who initiate or receive telephone calls, operating an enterprise that initiates or receives telephone calls, owning an enterprise that initiates or receives telephone calls, or otherwise participating as an officer, director, employee or independent contractor in an enterprise that initiates or receives telephone calls) that involves attempts to induce consumers to purchase any item, good, service, partnership interest, trust interest or other beneficial interest, to make a charitable contribution, or to enter a contest for a prize, by means of telephone sales presentations, either exclusively or in conjunction with the use of other forms of marketing. Provided that the term "telemarketing" shall not include transactions that are not completed until after a face-to-face contact between the seller or solicitor and the consumers solicited.
E. "Assisting others" means knowingly providing any of the following goods or services to another entity: (1) performing customer service functions, including, but not limited to, receiving or responding to consumer complaints; (2) formulating or providing, or arranging for the formulation or provision of, any telephone sales script or any other marketing material; (3) providing names of, or assisting in the generation of, potential customers; (4) performing marketing services of any kind; or (5) performing accounting services of any kind.
I . PROHIBITED BUSINESS PRACTICES
A. IT IS THEREFORE ORDERED that defendant and his agents, employees, officers, servants and attorneys, and all other persons or entities in active concert or participation with him who receive actual notice of this Order by personal service or otherwise, are hereby restrained and enjoined from engaging in or assisting others to engage in any misleading or deceptive act or practice in connection with the promotion, advertising, marketing, sale, or offering for sale of investments in oil and gas drilling ventures, including, but not limited to:
B. IT IS FURTHER ORDERED that defendant and his agents, employees, officers, servants and attorneys, and all other persons or entities in active concert or participation with him who receive actual notice of this Order by personal service or otherwise, are hereby restrained and enjoined from engaging in or assisting others to engage in any misleading or deceptive act or practice in connection with the promotion, advertising, marketing, sale, or offering for sale of investments or investment offerings, including, but not limited to:
C. IT IS FURTHER ORDERED that defendant and his agents, employees, officers, servants and attorneys, and all other persons or entities in active concert or participation with him who receive actual notice of this Order by personal service or otherwise, are hereby restrained and enjoined from:
II. BOND REQUIREMENT
IT IS FURTHER ORDERED that defendant J. Todd Tidmore, whether directly or indirectly through any persons or entities under defendant's control, is hereby permanently enjoined and restrained from engaging in or assisting others engaged in telemarketing or in the promotion, advertising, marketing, sale, or offering for sale of investments or investment offerings, unless, prior to engaging in or assisting others engaged in such activities, defendant first obtains a performance bond ("the Bond") in the principal sum of ONE HUNDRED THOUSAND DOLLARS ($100,000). The terms and conditions of the Bond requirement are as follows:
III. MONETARY RELIEF
A. IT IS FURTHER ORDERED that judgment is hereby entered against defendant J. Todd Tidmore in the amount of TWO MILLION FIFTY THOUSAND Dollars ($2,050,000) for consumer redress and/or disgorgement, and for paying any attendant expenses of administration of any redress fund. Provided, however, that upon the fulfillment of the requirements of Section B of this Paragraph by defendant, this judgment shall be suspended until further order of the Court, and provided further that this judgment shall be subject to the conditions set forth in Paragraph IV of this Order.
B. IT IS FURTHER ORDERED that defendant J. Todd Tidmore shall, prior to or concurrently with the filing of this Order:
IV. FINANCIAL STATEMENTS
IT IS FURTHER ORDERED that the Commission's agreement to and the Court's approval of this Order is expressly premised upon the truthfulness, accuracy, and completeness of the financial statements and information provided by defendant and his counsel to the Commission dated December 31, 1997 which contains material information relied upon by the Commission in negotiating and agreeing to the terms of this Order. If the Commission has reason to believe that the above-referenced financial statement failed to disclose any material asset the value of which exceeds $1,000, materially misrepresented the value of any asset, or made any other material misrepresentation or omission, the Commission may request that this Order be reopened for the sole purpose of allowing the Commission to modify the monetary liability of defendant. If the Court finds that defendant failed to disclose any material asset, materially misrepresented the value of any asset, or made any other material misrepresentation or omission in the above-referenced financial statement, the Court shall enter judgment against defendant, in favor of the Commission, in the amount of TWO MILLION FIFTY THOUSAND Dollars ($2,050,000), as set forth in Paragraph III of this Order. Provided, however, that in all other respects this Order shall remain in full force and effect unless otherwise ordered by the Court; and, provided further, that proceedings instituted under this provision would be in addition to and not in lieu of any other proceedings the Commission may initiate to enforce this Order. Solely for the purposes of reopening or enforcing this Paragraph, defendant waives any right to contest any of the allegations set forth in the Complaint filed in this matter.
V. COLLECTING UNPAID REDRESS
IT IS FURTHER ORDERED that the defendant shall cooperate fully with the Commission and its agents in all attempts to collect any amounts which become due pursuant to Paragraphs III and IV of this Order. In such an event, defendant agrees to provide the Commission with his federal and state tax returns for the preceding three (3) years, and with full updated financial disclosures, in the form as was previously submitted by defendant as referenced in Paragraph IV, above, within ten (10) business days of receiving a request from the Commission to do so. The defendant further authorizes the Commission to verify all information provided on his financial disclosure forms with all appropriate third parties, including but not limited to, financial institutions. The defendant is hereby required, in accordance with 31 U.S.C. § 7701, to furnish the Commission his respective taxpayer identifying numbers (social security number or employer identification number), which shall be used for purposes of collecting and reporting on any delinquent amount arising out of defendant's relationship with the government.
VI. CUSTOMER LISTS
IT IS FURTHER ORDERED that defendant and his agents, employees, officers, servants and attorneys, and all other persons or entities in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, are permanently restrained and enjoined from selling, renting, leasing, transferring, or otherwise disclosing the name, address, telephone number, credit card number, bank account number, e-mail address, or other identifying information of any person who paid any money to defendant, at any time prior to entry of this Order, in connection with investments in oil and gas drilling ventures. Provided that defendant may disclose such identifying information to a law enforcement agency or as required by any law, regulation, or court order.
VII. RECORD KEEPING PROVISIONS
IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of this Order, defendant, and defendant's agents, employees, officers, and servants, corporations, successors, and assigns, and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, in connection with any business where defendant is the majority owner of the business or directly or indirectly manages or controls the business are hereby restrained and enjoined from failing to create, and from failing to retain for a period of three (3) years following the date of such creation, unless otherwise specified:
VIII. DISTRIBUTION OF ORDER BY DEFENDANT
IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of this Order, defendant shall:
IX. COMPLIANCE REPORTING BY DEFENDANT
IT IS FURTHER ORDERED that, in order that compliance with the provisions of this Order may be monitored:
A. For a period of five (5) years from the date of entry of this Order, defendant shall notify the Commission of the following:
B. One hundred eighty (180) days after the date of entry of this Order, defendant shall provide a written report to the FTC, sworn to under penalty of perjury, setting forth in detail the manner and form in which defendant has complied and is complying with this Order. This report shall include but not be limited to:
C. Upon written request by a representative of the Commission, defendant shall submit additional written reports (under oath, if requested) and produce documents on fifteen (15) days' notice with respect to any conduct subject to this Order;
D. For the purposes of this Order, defendant shall, unless otherwise directed by the Commission's authorized representatives, mail all written notifications to the Commission to: Regional Director
E. For the purposes of this Paragraph, "employment" includes the performance of services as an employee, consultant, or independent contractor; and "employers" include any individual or entity for whom defendant performs services as an employee, consultant, or independent contractor.
F. For purposes of the compliance reporting required by this Paragraph, the Commission is authorized to communicate directly with defendant.
X. COMMISSION'S AUTHORITY TO MONITOR COMPLIANCE
IT IS FURTHER ORDERED that the Commission is authorized to monitor defendant's compliance with this Order by all lawful means, including but not limited to, the following means:
XI. ACCESS TO BUSINESS PREMISES
IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of this Order, for the purpose of further determining compliance with this Order, defendant shall permit representatives of the Commission, within three (3) business days of receipt of written notice from the Commission:
Provided that, upon application of the Commission and for good cause shown, the Court may enter an ex parte order granting immediate access to defendant's business premises for the purposes of inspecting and copying all documents relevant to any matter contained in this Order.
XII. ACKNOWLEDGMENT OF RECEIPT OF ORDER BY DEFENDANT
IT IS FURTHER ORDERED that, within five (5) business days after receipt by defendant of this Order as entered by the Court, defendant shall submit to the Commission a truthful sworn statement, in the form shown on Appendix A, that shall acknowledge receipt of this Order.
XIII. RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that the Court shall retain jurisdiction of this matter for the purpose of enabling the parties to apply to the Court at any time for such further orders and directions as may be necessary or appropriate for the interpretation, modification or enforcement of this Order, or for the punishment of violations thereof.
SO ORDERED, this day of , 19 .
A. Joe Fish
The parties, by their respective counsel, hereby consent to the terms and conditions of the Order as set forth above and consent to the entry thereof.
UNITED STATES DISTRICT COURT
_______________ DISTRICT OF ______________
DEFENDANT, et al.
CIVIL ACTION NO.
AFFIDAVIT OF DEFENDANT --------
[Name of defendant], being duly sworn, hereby states and affirms as follows:
1. My name is_______________________. My current residence address is ______________________________________________________. I am a citizen of Canada and am over the age of eighteen. I have personal knowledge of the facts set forth in this Affidavit.
2. I am a defendant in FTC v. Defendant, et al. (United States District Court for the _____________ District of _____________).
3. On [date], I received a copy of the [state full name of the Final Order as it appears on the Order itself], which was signed by the Honorable [name of U.S. District Judge] and entered by the Court on [date of entry of Order]. A true and correct copy of the Order I received is appended to this Affidavit.
I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. Executed on [date], at [city and state].
[Full name of defendant]
State of ____________________, City of ____________________
Subscribed and sworn to before me
this _____ day of _________, 199___.