UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE DIVISION

FEDERAL TRADE COMMISSION, Plaintiff,

v.

ALL ABOUT COMMUNICATIONS USA, INC., MICHAEL CILONE, AND RACHEL CILONE,

Defendants.

____ - CIV - ______

Magistrate Judge _______________

COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF

Plaintiff, the Federal Trade Commission ("FTC" or "Commission") for its Complaint alleges:

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, 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 products in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a), and Section 404(a)(2) of the Credit Repair Organizations Act , 15 U.S.C. 1679b(a)(2).

    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 is proper under 28 U.S.C.  1391 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 Credit Repair Organizations 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 Credit Repair Organizations 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 All About Communications USA, Inc., is a Florida corporation, with its registered office located at 1975 E. Sunrise Blvd., Suite 512, Fort Lauderdale, Florida 33304. All About Communications USA, Inc., transacts or has transacted business in this District.

6. Defendant Michael Cilone is a director of defendant All About Communications USA, Inc. 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 Defendant All About Communications USA, Inc., including the acts and practices set forth in this complaint. He resides and transacts or has transacted business in this District.

7. Defendant Rachel Cilone is the incorporator, a director, and the registered agent of defendant All About Communications USA, Inc. At all times material to this complaint, acting alone or in concert with others, she has formulated, directed, controlled or participated in the acts and practices of defendant All About Communications USA, Inc., including the acts and practices set forth in this complaint. She resides and transacts or has transacted business in this District.

COMMERCE

8. At all times relevant to this complaint, defendants have maintained a substantial course of trade in the offering for sale and selling of credit repair products, in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.  44.

DEFENDANTS' BUSINESS PRACTICES

9. Since at least September, 1998, defendants have advertised, promoted, offered for sale, and sold credit repair goods to consumers through solicitations on the internet at the following web-site: http://www.cyberpass.net/~mcilone/how-to/. The subject solicitation appears or has appeared at http://www.cyberpass.net/~mcilone/credit/. In ordering the written materials available through these web-pages, customers are directed to make payment by, for example, sending checks or money orders payable to "Mike Cilone" at various addresses in Fort Lauderdale, Florida, including 825 Tequesta Street and 825 SW 4th Street.

10. Defendants have claimed that consumers can improve their credit histories, credit records, or credit ratings by establishing new credit profiles with credit bureaus by using an alternate Social Security Number in place of their Social Security Number, or an alias or different name with the same Social Security Number, for banking and credit purposes. Defendants have further claimed that the creation and use of the alternate social security number or alias or different name in this manner and for this purpose is legal.

11. Typical and illustrative of defendants' claims about their recommended credit repair method are the following:

EVERYONE DESERVES A SECOND CHANCE

Start all over again with brand new credit. ...

Anyone can have a new credit file INSTANTLY OVERNIGHT! This is the very same CREDIT SECRETS that CELEBRITIES use! It works with Bankruptcies, FBI (DUI) and Judgments. It's 100% LEGAL and best of all, the process is FREE!

Learn how to use the Credit Bureaus to get a TOTALLY NEW-CLEAN CREDIT FILE.....

12. Consumers who respond to defendants' advertisements receive a packet of materials that advise consumers to obtain a second Social Security Number or use an alias or different name. Using the new number or name, among other things the consumer is directed to open a bank account, to obtain a small loan from the bank using the account as collateral, and to use the loan proceeds to repeat the process with another bank. The consumer is told to repeat the process several times, which will result in the consumer obtaining an "A-1" credit rating allowing him or her to obtain various types of credit cards.

13. Defendants have charged $34.95 for this product material.

VIOLATIONS OF THE CREDIT REPAIR ORGANIZATIONS ACT

14. The Credit Repair Organizations Act, 15 U.S.C. 1679a-j (1997), was enacted on September 30, 1996, and has been in full force and effect since April 1, 1997.

15. Section 404(a)(2) of the Credit Repair Organizations Act prohibits all persons from making any statement, or counseling or advising any consumer to make any statement, the intended effect of which is to alter the consumer's identification to prevent the display of the consumer's credit record, history, or rating for the purpose of concealing adverse information that is accurate and not obsolete to any consumer reporting agency, as defined in 15 U.S.C.  1681(f), or to any person who has extended credit to the consumer or to whom the consumer has applied or is applying for an extension of credit. 15 U.S.C.  1679b(a)(2).

16. Pursuant to Section 410(b)(1) of the Credit Repair Organizations Act, 15 U.S.C.  1679h(b)(1), any violation of any requirement or prohibition of the Credit Repair Organizations 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

17. In numerous instances, defendants have counseled or advised consumers to make statements, the intended effect of which has been to alter the consumer's identification to prevent the display of the consumer's credit record, history, or rating for the purpose of concealing adverse information that is accurate and not obsolete to consumer reporting agencies, as that term is defined in 15 U.S.C.  1681(f), or to persons who have extended credit to those consumers or to whom those consumers have applied or are applying for extensions of credit.

18. Defendants have thereby violated Section 404(a)(2) of the Credit Repair Organizations Act, 15 U.S.C.  1679b(a)(2).

VIOLATIONS OF THE FEDERAL TRADE COMMISSION ACT

COUNT TWO

19. In connection with the advertising, marketing, promotion, offering for sale, or sale of credit repair products, to induce consumers to purchase their products, defendants have, expressly or by implication, represented that through the use of their products, consumers can legally alter their identifications to conceal adverse credit information from consumers' credit records, credit histories, or credit ratings.

20. In truth and in fact, through the use of defendants' products, consumers cannot legally alter their identifications to conceal adverse credit information from their credit records, credit histories, or credit ratings.

21. Therefore, the representation set forth in paragraph 19 is false and misleading and constitutes a deceptive act or practice in or affecting commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a).

CONSUMER INJURY

22. Consumers throughout the United States have suffered or are likely to suffer 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

23. Sections 13(b) and 19 of the FTC Act, 15 U.S.C.   53(b) and 57b, and Section 410(b) of the Credit Repair Organizations Act, 15 U.S.C. 1679h(b), empower this Court to issue a permanent injunction against defendants' violations of the Credit Repair Organizations 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 defendant's unlawful acts or practices, and other remedial measures.

PRAYER FOR RELIEF

WHEREFORE, plaintiff requests that this Court, as authorized by Section 410(b) of the Credit Repair Organizations Act, 15 U.S.C.  1679h(b), Sections 13(b) and 19 of the FTC Act, 15 U.S.C.  53(b) and 57b, 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 to preserve the possibility of effective final relief;
 
(b) Permanently enjoin defendants from violating the Credit Repair Organizations Act and the FTC Act, as alleged herein, in connection with the advertising, promoting, offering for sale, and sale of credit repair products or services;
 
(c) Award such relief as the Court finds necessary to redress injury to consumers resulting from defendants' violations of the Credit Repair Organizations Act and the FTC Act, including, but not limited to, rescission of contracts, the refund of monies paid, and the disgorgement of ill-gotten 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.

Dated:_____________, 1999 Respectfully Submitted,

DEBRA A. VALENTINE
General Counsel

_____________________________
DEAN S. DASKAL
Attorney (Georgia Bar No. 205715)
Federal Trade Commission
Atlanta Regional Office
60 Forsyth St. SW, Suite 5M35
Atlanta, GA 30303-2322
(404) 656-1362 (voice)
(404) 656-1379 (fax)
Attorneys for Plaintiff