UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

FEDERAL TRADE COMMISSION,
Plaintiff,
v.
B.B.M. INVESTMENTS, INC., and
TIMOTHY RYAN ATKINSON,
Defendants.

Civil No.
(PROPOSED)
TEMPORARY RESTRAINING ORDER FREEZING ASSETS AND ORDER TO SHOW CAUSE WHY PRELIMINARY INJUNCTION SHOULD NOT ISSUE

Plaintiff, Federal Trade Commission ("Commission"), having filed a complaint for a permanent injunction and other relief, including restitution to consumers, pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C.  53(b) and 57b, Sections 4(a) and 6(b) of the Telemarketing Act, 15 U.S.C.  6103(a) and 6105(b), and Section 1367 of the Judicial Improvements Act of 1990, 28 U.S.C. 1367, having applied for an ex parte temporary restraining order and for an order to show cause why a preliminary injunction should not be granted pursuant to Rule 65(b) of the Federal Rules of Civil Procedure, Fed. R. Civ. P. 65(b), and the Court having considered the pleadings, declarations, exhibits, and memorandum filed in support thereof, it is the finding of this Court that:

1. This Court has jurisdiction of the subject matter of this case and there is good cause to believe it will have jurisdiction over all parties hereto.

2. There is good cause to believe that plaintiff will ultimately succeed in establishing that defendants B.B.M. Investments, Inc., and Timothy Ryan Atkinson have engaged in and are likely to engage in acts and practices that violate Section 5(a) of the FTC Act, 15 U.S.C.  45(a) and Section 310.3(a) of the Telemarketing Sales Rule, 16 C.F.R. 310.3(a).

3. There is good cause to believe that immediate and irreparable damage will be done to the public and to this Court's ability to grant full and effective final relief among the parties hereto absent entry of this Order on an ex parte basis.

4. Weighing the equities and considering plaintiff's likelihood of ultimate success, a Temporary Restraining Order is in the public interest.

DEFINITIONS

For the purpose of this temporary restraining order, the following definitions shall apply:

1. "Lottonet" means Lottonet International Ltd. or Lotonet International Ltd.

2. "Person" means any individual, group, unincorporated association, limited or general partnership, corporation or other business entity.

I. CEASE AND DESIST

IT IS THEREFORE ORDERED that defendants, and their successors and assigns, whether acting directly or through any entity, corporation, subsidiary, division or other device and all persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, are hereby temporarily restrained and enjoined from:

    1. Promoting, offering for sale or selling, directly or indirectly, any interests, holdings, shares or registrations in any bond program with a lottery, random drawing or game of chance feature to any U.S. resident person, group of persons or entity;
    2. Purchasing or registering any interest, holding, share or registration in any bond program with a lottery, random drawing or game of chance feature for any U.S. resident person, group of persons or entity;
    3. In connection with the advertising, marketing, proposed sale, or sale of any product or service to any U.S. resident person, group of persons or entity, misrepresenting or omitting any fact material to a consumer's decision to purchase defendants' products or services; and
    4. In connection with telemarketing, as defined in the Telemarketing Sales Rule, 16 C.F.R. Part 310 ("the Rule"), a copy of which is attached and incorporated by reference, to any U.S. resident person, group of persons or entity, violating or assisting others to violate any provision of the Rule, including, but not limited to:
      1. Making a false or misleading statement to induce any person to pay for any good or service in violation of Section 310.3(a)(4) of the Rule, 16 C.F.R. 310.3(a)(4); and
      2. Failing to disclose, in a clear and conspicuous manner, before a customer pays for any goods or services, all material restrictions, limitations or conditions to purchase, receive or use those goods or services, in violation of Section 310.3(a)(1)(ii) of the Rule, 16 C.F.R. 310.3(a)(1)(ii).

II. ASSET FREEZE

IT IS FURTHER ORDERED that, except as stipulated by the parties or as directed by further order of the Court, defendants and their successors and assigns, whether acting directly or through any entity, corporation, subsidiary, division or other device and all persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, are hereby temporarily restrained and enjoined from transferring, converting, encumbering, selling, concealing, dissipating, disbursing, assigning, spending, withdrawing or otherwise disposing of any funds, real or personal property, accounts, contracts, membership or mailing (including "Email") lists, shares of stock or other assets, or any interest therein, wherever located, that are (a) owned or controlled by either defendant, in whole or in part; or (b) in the actual or constructive possession of either defendant, or (c) owned, controlled by or in the actual or constructive possession of any corporation, partnership or other entity, directly or indirectly owned, managed, controlled by or under common control with either defendant, including, but not limited to, any assets held by or for either defendant or their agent Lottonet at any bank, savings and loan institution, broker-dealer, escrow agent, title company, commodity trading company, precious metal dealer or other financial institution or depository of any kind. The assets affected by this section shall include both existing assets and assets acquired after issuance of this Order, and these defendants shall hold and account for these assets and all payments received by them, including, but not limited to, borrowed funds or property and gifts.

III. DUTIES OF ASSET HOLDERS

IT IS FURTHER ORDERED that, except as stipulated by the parties or as directed by further order of the Court, any financial or brokerage institution, business entity or person that holds, controls or maintains custody of any account or asset, including any membership or mailing (including "Email") lists, real or personal property of either defendant, or has held, controlled or maintained custody of any account or asset of either defendant, specifically including any account or asset maintained by defendants' agent Lottonet, at any time since March 10, 1999, shall:

    1. Prohibit all persons and entities from withdrawing, removing, assigning, transferring, pledging, encumbering, disbursing, dissipating, converting, selling or otherwise disposing of any of these assets;
    2. Provide counsel for plaintiff a certified statement setting forth:
      1. the identification number of each account or asset titled in the name of either defendant or their agent, Lottonet, or held on behalf of, or for the benefit of, either defendant or their agent, Lottonet, including all reserve or trust accounts managed on behalf of either defendant or their agent, Lottonet, or subject to the control of either defendant or their agent Lottonet; and
      2. the balance of each identified account, or a description of the nature and value of the asset as of the close of business on the day on which this Order is served, and, if the account or other asset has been closed or removed since March 10, 1999, the date closed or removed, the total funds removed in order to close the account, and the name of the person or entity to whom the account or other asset was remitted; and
    3. Upon request and within ten (10) business days, provide to counsel for plaintiff all records or other documentation pertaining to the account or asset described in Paragraph B above, including, but not limited to, originals or copies of account applications, account agreements, account statements, signature cards, checks, drafts, deposit tickets, transfers to and from the accounts, all other debit and credit instruments or slips, currency transaction reports, 1099 forms, and safe deposit box logs.

IV. REPATRIATION OF FOREIGN ASSETS

IT IS FURTHER ORDERED that defendants shall:

    1. Immediately upon service of this Order, or as soon as relevant banking hours permit, transfer to the territory of the United States all funds, documents, and assets in foreign countries held: (1) by either defendant; (2) for their benefit; or (3) under their direct or indirect control, jointly or singly;
    2. Hold and retain all repatriated funds, documents, and assets, and prevent any transfer, disposition or dissipation of these funds, documents, and assets;
    3. Provide plaintiff with access to defendants' records and documents held by financial institutions outside the territorial United States; and
    4. Provide plaintiff with a full accounting of all funds, documents and assets outside of the territory of the United States which are held : (1) by either defendant; (2) for their benefit; or (3) under their direct or indirect control, jointly or singly.

V. MAINTENANCE OF RECORDS

IT IS FURTHER ORDERED that defendants and their successors and assigns, whether acting directly or through any entity, corporation, subsidiary, division or other device are hereby temporarily restrained and enjoined from:

    1. Failing to create and maintain books, records, and accounts which, in reasonable detail, accurately, fairly, and completely reflect the incomes, disbursements, transactions, and use of monies by defendants;
    2. Failing to maintain complete records of any consumer complaints and disputes, whether coming from the consumer or any intermediary, such as a government agency or Better Business Bureau, and any responses made to those complaints or disputes; and
    3. Destroying, erasing, mutilating, concealing, altering, transferring or otherwise disposing of, in any manner, directly or indirectly, any contracts, client lists, membership or mailing lists, accounting data, correspondence, advertisements, computer tapes, disks or other computerized records, books, written or printed records, handwritten notes, telephone logs, telephone scripts, "verification" tapes or other audio or video tape recordings, receipt books, invoices, postal receipts, ledgers, personal and business canceled checks and check registers, bank statements, appointment books, copies of federal, state or local business or personal income or property tax returns, and other documents or records of any kind that relate to the business practices or business or personal finances of defendants.

VI. DEFENDANTS' FINANCIAL STATEMENTS

IT IS FURTHER ORDERED that defendants shall, within four (4) business days from service of this Order, prepare and deliver to counsel for plaintiff completed financial statements on the forms attached to this Order. The completed financial statements shall be accurate as of the date of service of this Order upon the defendants.

VII. CONSUMER CREDIT REPORTS

IT IS FURTHER ORDERED that pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. 1681b(1), any consumer reporting agency may furnish a consumer report concerning any defendant to plaintiff.

VIII. THIRD PARTY DISCOVERY

IT IS FURTHER ORDERED that the Commission is granted leave, at any time after service of this Order, to take the deposition of any person or entity for the purpose of discovering the nature, location, status, and extent of assets of defendants, and the location of documents reflecting the business transactions of defendants, and to demand the production of documents from any person or entity relating to the nature, status, and extent of the defendants' assets and the location of documents reflecting the business transactions of the defendants; forty-eight (48) hours notice shall be deemed sufficient for any such deposition and five (5) days notice shall be deemed sufficient for the production of any such documents. Expedited discovery for any other purpose shall not be allowed except by order of the Court for good cause shown. The limitations and conditions set forth in Fed. R. Civ. P. 30(a)(2) regarding subsequent depositions of an individual shall not apply to depositions taken pursuant to this paragraph.

IX. CREATION OF OTHER BUSINESSES

IT IS FURTHER ORDERED that defendants are hereby temporarily restrained and enjoined from creating, operating or controlling any business entity, whether newly-formed or previously inactive, including any partnership, limited partnership, joint venture, sole proprietorship or corporation, without first providing the Commission with a written statement disclosing: (1) the name of the business entity; (2) the address and telephone number of the business entity; (3) the names of the business entity's officers, directors, principals, managers, and employees; and (4) a detailed description of the business entity's intended activities.

X. NOTICE TO RELATED PERSONS AND ENTITIES

IT IS FURTHER ORDERED that defendants shall immediately provide a copy of this Order to each affiliate, subsidiary, division, sales entity, successor, assign, officer, director, employee, independent contractor, agent, attorney, and representative, and shall, within ten (10) days from the date of entry of this Order, provide plaintiff with a sworn statement that defendants have complied with this provision of the Order, which statement shall include the names and addresses of each such person or entity who received a copy of the Order.

XI. FILING OF PLEADINGS

IT IS FURTHER ORDERED that defendants shall file their opposition, including any declarations, exhibits, memoranda or other evidence on which defendants intend to rely, not less than three (3) business days before the hearing on the order to show cause why a preliminary injunction should not issue. Defendants shall serve copies of all these materials on plaintiff by delivery or facsimile to designated counsel for the Federal Trade Commission, at 915 Second Avenue, Suite 2896, Seattle, Washington 98174, prior to 4:00 p.m. on the day that it is filed.

XII. WITNESSES AT HEARINGS

IT IS FURTHER ORDERED that, if any party to this action intends to present the testimony of any witness at the hearing on a preliminary injunction in this matter, that party shall, at least three (3) business days prior to the scheduled date and time of hearing, file with this Court and serve on counsel for the other parties, a statement of the name, address, and telephone number of that witness, and either a summary of the witness' expected testimony or the witness' declaration or affidavit revealing the substance of the witness' expected testimony; and that, after the service of the statement, the served party thereafter shall have two (2) business days from the time of service of the witness information to provide information to the Court and to the serving party for any witness whose testimony the served party intends to present.

XIII. EXPIRATION

IT IS FURTHER ORDERED that the Temporary Restraining Order granted herein expires ten (10) days after entry unless, within that time, the Order, for good cause shown, is extended for an additional period not to exceed ten (10) days, or unless it is extended with the consent of the parties.

XIV. SHOW CAUSE

IT IS FURTHER ORDERED that the defendants shall appear before this Court on the _____ day of _______________, at __________ o'clock ___.m., to show cause, if any there be, why this Court should not enter a preliminary injunction, pending final ruling on the Complaint against these defendants, enjoining them from further violations of Section 5(a) of the FTC Act, 15 U.S.C.  45(a) and Section 310.3(a) of the Telemarketing Sales Rule, 16 C.F.R. 310.3(a), continuing the relief provided herein and imposing whatever additional relief may be appropriate.

XV. SERVICE OF TRO

IT IS FURTHER ORDERED that copies of this Order may be served by first class mail, overnight delivery, facsimile or personally, by employees or agents of the FTC, upon any bank, savings and loan institution, credit union, financial institution, brokerage house, escrow agent, money market or mutual fund, title company, commodity trading company, common carrier, storage company, trustee, commercial mail receiving agency, mail holding or forwarding company, or any other person, partnership, corporation or legal entity that may be in possession of any records, assets, property or property right of any defendant, and other person, partnership, corporation or legal entity that may be subject to any provision of this Order.

XVI. RETENTION OF JURISDICTION

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for all purposes.

Dated this ____ of______________________, 2000.

___________________________________
UNITED STATES DISTRICT JUDGE

PRESENTED BY:
Kathryn C. Decker
WSBA #12389
Attorney for Plaintiff
Federal Trade Commission