DEBRA A. VALENTINE
General Counsel

CONNIE WAGNER
SARAH L. KNAPP CA BAR #200694
Federal Trade Commission
Division of Enforcement
600 Pennsylvania Ave., N.W.
Washington, D.C. 20580
(202)326-3309 voice 326-2558 fax
Attorneys for Plaintiff

PAUL H. BYUS, Defendant, Pro Se
332 South Sunland
Ridgecrest, CA 93555
(760)375-4505

WAYNE SILVA CA BAR #96694
912 Perdew Ave. Suite C
Ridgecrest, CA 93555
(760)446-5300 voice 446-1107 fax
Attorney for Defendant Selket Precious Metals, Inc.

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA

FEDERAL TRADE COMMISSION,

Plaintiff,

v.

SELKET PRECIOUS METALS INC., and PAUL H. BYUS,

Defendants.

CIVIL ACTION

NO.

STIPULATED FINAL ORDER FOR PERMANENT INJUNCTION

Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), filed a Complaint for permanent injunction and other relief against Selket Precious Metals Inc., and Paul H. Byus, pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C.  53(b).

The Commission and defendants have stipulated to the entry of the following Stipulated Final Order for Permanent Injunction in settlement of the Commission's complaint against defendants. The Court, being advised in the premises, finds:

FINDINGS

1. This Court has jurisdiction of the subject matter and of the parties;

2. The Complaint states a claim upon which relief may be granted against Selket Precious Metals, Inc. ("Selket"), and Paul Byus ("Byus") under Sections 5(a) and 13(b) of the Federal Trade Commission Act, 15 U.S.C.  45(a) and 53(b);

3. Venue is proper as to all parties in the Eastern District of California;

4. The activities of Selket and Byus are in or affecting commerce, as defined in the FTC Act, 15 U.S.C.  44;

5. Defendant does not admit the Commission's allegations and nothing herein shall be construed as an admission or finding of liability or misrepresentation by defendant.

6. Selket and Byus have waived all 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);

7. This action and the relief awarded herein are in addition to, and not in lieu of, other remedies as may be provided by law;

8. Each party shall bear its own costs and attorneys' fees;

9. Entry of this Order is in the public interest; and

10. Pursuant to Federal Rule of Civil Procedure 65(d), the provisions of this Order are binding upon defendants, and their officers, agents, servants, employees 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.

DEFINITIONS

11. "Defendants" means Selket and Byus, their successors and assigns, and their officers, agents, servants and employees, and all persons in active concert or participation with any one or more of them who receive actual notice of this Stipulated Final Judgment ("Judgment") by personal service or otherwise.

12. "Investment" or "Investment offering" shall mean any service, product or interest, including any partnership, interest in any partnership, 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.

13. "Employment" shall mean any affiliation with any business, non-profit, or government entity, including the performance of services as an officer, owner, manager, supervisor, employee, consultant, or independent contractor; and "Employer" shall mean any and all individuals or entities for whom any defendant performs services as an employee, consultant, or independent contractor.

14. A requirement that any defendant "notify the Commission" shall mean that the defendant shall send the necessary information via first-class mail, costs prepaid, to the Associate Director for Enforcement, Federal Trade Commission, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580. Attn: FTC v. Selket Precious Metal Inc and Paul H. Byus, (E.D. CA).

15. The term "including" in this Order shall mean "without limitation."

16. The terms "and" and "or" in this Order shall be construed conjunctively or disjunctively as necessary, to make the applicable phrase or sentence inclusive rather than exclusive.

ORDER

I. PROHIBITED BUSINESS ACTIVITIES

IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that

defendants and their agents, servants, employees, attorneys, successors, assigns, and other entities or persons directly or indirectly under their control, and all persons or entities in active concert or participation with them who receive actual notice of this Order by personal service, facsimile or otherwise, in connection with the advertising, promotion, offering for sale, or sale of any investment opportunity are hereby permanently restrained and enjoined from:

A. Falsely representing, directly or by implication, that investors are likely to receive substantial short term returns from an investment in any gold or silver mining venture, or any other investment offering;

B. Falsely representing, directly or by implication, that an investment in any mining venture or other investment offering, is low risk, has minimal risk or is a safe investment;

C. Falsely representing, directly or by implication, that any mining venture has obtained requisite permits to operate mines;

D. Falsely representing, directly or by implication, that any mining venture will be fully operational within a given period of time;

E. Falsely representing, directly or by implication, that the value of any ore deposit has been proved;

F. Falsely representing, directly or by implication, the quantity of ore reserves to be mined; or

G. Falsely representing, directly or by implication any fact material to any investment or investment offering, including the risk, liquidity, market value, or expected income to be derived from said investment or investment offering.

II. ALLEGATIONS IN THE COMPLAINT

IT IS FURTHER ORDERED THAT the facts as alleged in the Complaint filed with this Judgment shall be taken as true solely for the purpose of any subsequent litigation filed by the FTC to enforce its rights under this Judgment.

III. ORDER DISTRIBUTION

IT IS FURTHER ORDERED THAT, for a period of 3 years from the date of entry of this Judgment, defendants shall:

A. Provide a copy of this Judgment to, and obtain a signed and dated acknowledgment of receipt of same from, each officer or director, each individual serving in a management capacity, all personnel involved in responding to consumer complaints or inquiries, and all individuals or entities engaged in marketing on behalf of defendants including but not limited to employees, consultants, independent contractors, marketing entities or venture capitalists, immediately upon employing, contracting with or retaining any such persons, for any business where:

1. Any defendant is the majority owner of the business or directly or indirectly manages or controls the business, and

2. the business is engaged in the advertising, promotion, or sale of investments or investment offerings or assisting others engaged in such activities; and

B. Maintain for a period of 3 years after creation, and upon reasonable notice, make available to representatives of the Commission, the original signed and dated acknowledgments of the receipt of copies of this Order, as required in Subsection A of this Paragraph.

IV. RECORD KEEPING

IT IS FURTHER ORDERED THAT for a period of 3 years from the date of entry of this Judgment, Selket and Byus shall create and maintain:

A. Records sufficient to demonstrate compliance with the provisions of this Judgment, including but not limited to:

1. All advertisements and promotional materials for any investment or investment offering offered for sale by defendants;

2. All materials that were relied upon in disseminating any representation covered by this Judgment; and

3. All tests, reports, studies, surveys, or other evidence in their possession or control that contradict, qualify, or call into question any representation covered by this Judgment, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations;

B. Records containing the name, address, and telephone number of each consumer who purchases investments from defendants either directly or through any third party.

V. ACCESS TO BUSINESS PREMISES

IT IS FURTHER ORDERED THAT, for a period of 3 years from the date of entry of this Judgment, for the purpose of further determining compliance with this Judgment, defendants shall permit representatives of the Commission, within 5 business days of receipt of written notice from the Commission:

A. Access during normal business hours to any office, or facility storing documents, of any business where:

1. Any defendant is the majority owner of the business or directly or indirectly manages or controls the business, and

2. the business is engaged in the marketing of investments or investment offerings or assisting others engaged in such activities.

In providing such access, defendants shall permit representatives of the Commission to inspect and copy all documents relevant to any matter contained in this Judgment; and shall permit Commission representatives to remove documents relevant to any matter contained in this Judgment for a period not to exceed 5 business days so that the documents may be inspected, inventoried, and copied; and

B. To interview the officers, directors, and employees, including all personnel involved in responding to consumer complaints or inquiries, and all sales personnel, whether designated as employees, consultants, independent contractors or otherwise, of any business to which Subsection A of this Paragraph applies, concerning matters relating to compliance with the terms of this Judgment. The person interviewed may have counsel present.

Provided that, upon application of the Commission and for good cause shown, the Court may enter an ex parte order granting immediate access to defendants' business premises for the purposes of inspecting and copying all documents relevant to any matter contained in this Judgment.

VI. MONITORING OF DEFENDANT BYUS

IT IS FURTHER ORDERED THAT for a period of 3 years from the date of entry of this Judgment, Defendant Byus shall promptly inform the Commission by written notification at least 30 days in advance, or in the case of involuntary termination of employment, within 30 days of such termination, of:

A. Any change in his residential address, occupation, place of business, or place of employment;

B. Any change in the name, address, type of business, or identity of each company, corporation, partnership, or business owned or controlled directly or indirectly by him;

C. Any proposed change in any company, corporation, partnership, or business that is owned or controlled, directly or indirectly, by him including, but not limited to, dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in their business relationship(s) that may affect compliance obligations arising out of this Judgment;

D. His affiliation with a new business or employment that involves the advertising, promotion, or sale of any investment or investment offering, including a description of such business, the business address, and of his interest in and duties in connection with such business or employment;

E. The formation of any corporation, sole proprietorship, partnership, or independent consulting business or any other business entity that is engaged directly or indirectly in the advertising, promotion, or sale of any investment or investment offering, in which he is or is to become an officer or director, or in which he is or is to become a holder of 10% or more of the stock; and

F. Any termination or suspension of business operations by him, the resumption of business operations, or any termination, suspension or establishment of any type of consulting relationship with any third party relating to the advertising, promotion, or sale of any investment or investment offering.

VII. NOTIFICATION OF CHANGES IN BUSINESS STRUCTURE

IT IS FURTHER ORDERED THAT Defendant Selket, its successors and assigns, shall notify the Commission, at least 30 days prior to any change in the business of Selket including, but not limited to, merger, incorporation, dissolution, assignment, sale resulting in the emergence of a successor corporation, the creation or dissolution of a subsidiary or parent, or any other change that may affect defendants' obligations under this Judgment.

VIII. COMPLIANCE REPORTING BY DEFENDANT

IT IS FURTHER ORDERED THAT 180 days after the date of entry of this Order, Defendant Byus shall provide a written report to the FTC, sworn to under penalty of perjury, setting forth in detail the manner and form in which each defendant has complied and is complying with this Judgment. This report shall include but not be limited to:

A. Byus's then current residence address and telephone number;

B. Byus's then current employment, business addresses and telephone numbers, a description of the business activities of each such employer, and his title and responsibilities for each employer;

C. A copy of each acknowledgment of receipt of this Judgment obtained by defendants pursuant to Paragraph IV; and

D. A statement describing the manner in which defendants have complied and are complying with Paragraphs I through V of this Judgment.

Upon written request by a representative of the Commission, defendants shall submit additional written reports (under oath, if requested) and produce documents on 15 days' notice with respect to any conduct subject to this Judgment.

For purposes of the compliance reporting required by this Paragraph, the Commission is authorized to communicate in writing directly with Byus.

IX. COMMISSION'S AUTHORITY TO MONITOR COMPLIANCE

IT IS FURTHER ORDERED THAT the Commission is authorized to monitor defendants' compliance with this Judgment by all lawful means, including but not limited to the following means:

A. The Commission is authorized, without further leave of court, to obtain discovery from any person in the manner provided by Chapter V of the Federal Rules of Civil Procedure, Fed. R. Civ. P. 26 - 37, including the use of compulsory process pursuant to Fed. R. Civ. P. 45, for the purpose of monitoring and investigating defendants' compliance with any provision of this Judgment;

B. The Commission is authorized to use representatives posing as consumers and suppliers to defendants, defendants' employees, or any other entity managed or controlled in whole or in part by defendants, without the necessity of identification or prior notice;

C. Nothing in this Judgment shall limit the Commission's lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. 49, 57b-1, to investigate whether defendants have violated any provision of this Judgment or Section 5 of the FTC Act, 15 U.S.C. 45.

X. ACKNOWLEDGMENT OF RECEIPT OF ORDER BY DEFENDANTS

IT IS FURTHER ORDERED THAT, within 5 business days after receipt by defendants of this Order as entered by the Court, Defendant Byus shall submit to the Commission a truthful sworn statement, in the form shown on Appendix A, that shall acknowledge receipt of this Judgment on behalf of himself and Selket.

XI. CONTINUING JURISDICTION

IT IS HEREBY ORDERED THAT this Court shall retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Judgment.

The parties hereby consent to the terms and conditions set forth above and consent to entry of the Final Judgment without further notice to the parties. Each party to this Judgment hereby agrees to bear its own costs and attorneys fees incurred in connection with this action.

FEDERAL TRADE COMMISSION

__________________________
Connie Wagner
Sarah L. Knapp
Counsel for Plaintiff
Federal Trade Commission
Washington, DC 20580
202-326-3309;2619

 

__________________________
Defendant Paul H. Byus
Indidually

_________________________
Wayne Silva
On behalf of Defendant Selket Precious Metals Inc.

IT IS SO ORDERED, this ______ day of __________, 1999 in ______________, California.

_______________________________________
UNITED STATES DISTRICT JUDGE

APPENDIX A

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF CALIFORNIA

FEDERAL TRADE COMMISSION, Plaintiff,

v.

SELKET PRECIOUS METALS, INC, and PAUL H. BYUS Defendants.

Civil Action No.

Paul H. Byus, being duly sworn, hereby states and affirms as follows:

1. My name is Paul H. Byus. My current residence address is _________________________________________________________________. I am a citizen of the United States and am over the age of eighteen. I have personal knowledge of the facts set forth in this Affidavit.

2. I am the individual defendant in FTC v. Selket Precious Metals and Paul H Byus (United States District Court for the Eastern District of California), Civil Action No. ___________.

3. I am also the President of Selket Precious Metals, Inc., the corporate defendant in the above referenced action.

4. On _____________, I received a copy of the Stipulated Final Judgment, which was signed by the Honorable __________________ and entered by the Court on _______________. A true and correct copy of The Order I received is appended to this Affidavit.

5. I accepted service of the Order on my own behalf and on behalf of Selket Precious Metals, Inc.

I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. Executed on __________________, at __________________.

_________________________
Paul H. Byus

State of ____________________, City of ____________________

Subscribed and sworn to before me this _____ day of _________, 199___.

_____________________________
Notary Public
My Commission Expires:

_____________________________