UNITED STATES DISTRICT COURT
UNITED STATES OF AMERICA, Plaintiff,
Civil Action No.
WHEREAS: Plaintiff, the United States of America, has commenced this action by filing the Complaint herein; defendant has waived service of the Summons and Complaint; the parties have been represented by the attorneys whose names appear hereafter; and the parties have agreed to settlement of this action upon the following terms and conditions, without adjudication of any issue of fact or law and without defendant admitting liability for any of the matters alleged in the Complaint;
THEREFORE, on the joint motion of plaintiff and defendant, it is hereby ORDERED, ADJUDGED, and DECREED as follows:
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 defendant under Sections 5(a)(1), 5(m)(1)(A), 9, 13(b), and 16(a) of the Federal Trade Commission Act, 15 U.S.C. §§ 45(a)(1), 45(m)(1)(A), 49, 53(b), and 56(a), and Section 814 of the Fair Debt Collection Practices Act ("FDCP Act"), 15 U.S.C. § 16921.
3. For purposes of this Consent Order, the definitions set forth in the FDCP Act, 15 U.S.C. § 1692, shall apply.
4. Defendant and its successors and assigns shall pay to plaintiff a civil penalty, pursuant to Section 5(m)(1)(A) of the Federal Trade Commission Act, 15 U.S.C. § 45(m)(1)(A), in the amount of $20,000, to be held in an escrow account administered by Ronald D. Jacobs, Esq., attorney for defendant.
5. Defendant shall make the $20,000 payment required by Paragraph 4 within ten (10) days of the date of entry of this Consent Order by certified or cashier's check made payable to the Treasurer of the United States and delivered to the Office of Consumer Litigation, Civil Division, U.S. Department of Justice, Washington, D.C. 20530.
6. In the event of any default in payment, which default continues for ten (10) days beyond the due date of payment, the entire unpaid penalty, together with interest, as computed pursuant to 28 U.S.C. § 1961 from the date of default to the date of payment, shall immediately become due and payable.
7. Plaintiff's agreement to this Consent Order is expressly premised upon the truthfulness, accuracy, and completeness of defendant's corporate disclosure form, sworn to on April 14, 1999; defendant's corporate financial statements for 1996, 1997, and 1998, sworn to on April 8, 1999; the 1998 personal financial statements of defendant's President, Robert H. Hernandez, and Secretary, George W. Kennedy, III, sworn to on April 8, 1999; and the affidavit of George W. Kennedy, sworn to on May 19, 1999, as well as the financial verification statements required by Paragraph 19 of this Consent Order. If, upon motion by plaintiff, this Court should find that defendant or either of its officers made a material misrepresentation or omission concerning its or his financial condition, then the Court shall enter a modified judgment holding that: (1) defendant is liable for a civil penalty of one hundred thousand dollars ($100,000) less all prior civil penalty payments made by defendant; and (2) defendant is required to provide to plaintiff a completed financial disclosure statement attached hereto as Exhibit 1 and copies of defendant's federal and state tax returns for the two (2) years preceding the date of entry of the modified judgment. In the event that, upon motion by the plaintiff, the Court modifies this judgment as described in the preceding sentence, then by the stipulation of plaintiff and defendant, the Court finds that one hundred thousand dollars ($100,000) less all prior civil penalty payments made by defendant will represent the civil penalty amount which shall become immediately due and payable, and interest computed at the rate prescribed in 28 U.S.C. § 1961, as amended, shall immediately begin to accrue on the unpaid balance. Plaintiff, or any of its designees, may collect said modified judgment.
Provided, however, that in all other respects, this Consent Order shall remain in full force and effect. Proceedings under this Paragraph are in addition to, and not in lieu of, any other proceedings the plaintiff may institute to enforce this Consent Order. Solely for the purpose of reopening or enforcing this Paragraph, defendant waives any right to contest any of the allegations in the Complaint filed in this matter.
8. Defendant, its successors and assigns, and its officers, agents, servants, employees and representatives, and all persons in active concert or participation with any one or more of them who receive actual notice of this Consent Order by personal service or otherwise, are hereby permanently enjoined, directly or through any corporation, subsidiary, division or other device, in connection with the collection of a "debt" from a "consumer" as those terms are defined in Sections 803(3) and (5) of the FDCP Act, 15 U.S.C. § 1692a(3) and (5), from
9. With respect to every consumer debt received for collection, beginning sixty (60) days after the date of entry of this Consent Order, defendant and its successors and assigns shall, for a period of five (5) years, make the following disclosure clearly and conspicuously on each written collection communication that is sent to a consumer:
10. Defendant and its successors and assigns shall provide a copy of the following Notice to all present officers, servants, agents, account representatives, and employees, having responsibility with respect to the collection of debts, within thirty (30) days of the date of entry of this Consent Order; and to each such employee hired for a period of five (5) years after that date, no later than the time the employee assumes responsibility with respect to the collection of debts; and shall secure from each such person a signed statement acknowledging receipt of a copy of the Notice:
DISTRIBUTION OF CONSENT ORDER AND FDCP ACT BY DEFENDANT
11. Defendant and its successors and assigns shall:
MONITORING COMPLIANCE OF PERSONNEL
12. For a period of five (5) years from the date of the entry of this Consent Order, for the purpose of monitoring compliance with this Consent Order, defendant and its successors and assigns, in connection with any consumer debt collection business, shall:
RECORD KEEPING PROVISIONS
13. For a period of five (5) years from the date of the entry of this Consent Order, defendant and its successors and assigns, in connection with any consumer debt collection business, shall take reasonable steps to create and maintain for a period of three (3) years following the date of such creation, unless otherwise specified:
COMPLIANCE REPORTING BY DEFENDANT
14. Defendant and its successors and assigns shall, within sixty (60) days of the date of entry of this Consent Order, and once each year thereafter for three (3) years within thirty (30) days of the anniversary of that date, file with the Director of the Northeast Region of the Federal Trade Commission, a written report setting forth in detail the manner and form in which defendant has complied and is complying with this Consent Order.
15. Upon written request by a representative of the Commission, defendant shall submit additional written reports (under oath, if requested) and produce documents, as set forth in Paragraph 13, on fifteen (15) days notice with respect to any conduct subject to this Consent Order.
16. For purposes of this Consent Order, the defendant shall, unless otherwise directed by the Commission's authorized representatives, mail all written reports, notifications, and other correspondence to the Commission to:
17. For purposes of the compliance reporting required by this Section, if current counsel no longer represents defendant, plaintiff is authorized to communicate directly with defendant through its officers or directors.
18. For a period of five (5) years from the date of entry of this Consent Order, defendant and its successors and assigns shall notify the Director of the Northeast Region of the Federal Trade Commission of any proposed change in the structure of defendant, such as creation, incorporation, dissolution, assignment, sale, merger, creation or dissolution of subsidiaries, proposed filing of a bankruptcy petition, or change in the corporate name or address or any other change that may affect compliance obligations arising out of this Consent Order, thirty (30) days prior to the effective date of any proposed change; provided, however, that with respect to any proposed change in the corporation about which defendant learns less than thirty (30) days prior to the date such action is to take place, defendant shall notify the Commission as soon as is practicable after learning of such proposed change; and provided further that this Paragraph does not authorize or require defendant to take any steps that violate any federal, state, or local laws.
19. Defendant, by its officers, shall, within ten (10) days of the date of entry of this Consent Order, submit a truthful sworn statement, in the form of Exhibit 2 to this Consent Order, that shall reaffirm and attest to the truthfulness, accuracy, and completeness of the information concerning its and its officers' financial condition referenced in Paragraph 7 herein.
FURNISHING OF TAXPAYER IDENTIFICATION NUMBER
20. Defendant is hereby required, in accordance with 31 U.S.C. § 7701, to furnish to the Federal Trade Commission its taxpayer identifying number (employer identification number), which shall be used for purposes of collecting and reporting on any delinquent amount arising out of such person's relationship with the government.
21. This Court shall retain jurisdiction of this matter for the purposes of enabling either 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.
The parties, by their respective counsel, hereby consent to the terms and conditions of the Consent Order as set forth above and consent to the entry thereof. Defendant waives 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).
STIPULATED AND AGREED TO: