UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA

UNITED STATES OF AMERICA, Plaintiff,

v.

A. JAMES BLACK, individually and doing business as AJB Publishing, Defendant.

CASE NO. 99-1235-CIV-ORL-22C

STIPULATED ORDER FOR PERMANENT INJUNCTION

Plaintiff, United States of America, has filed its Complaint pursuant to Sections 5(a)(1), 5(m)(1)(A), 13(b), 16(a) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 45(a)(1), 45(m)(1)(A), 53(b), 56(a), and 57b, and Section 410(b) of the Credit Repair Organizations Act, 15 U.S.C. § 1679h(b), charging Defendant A. James Black, individually and doing business as AJB Publishing ("Defendant"), in this action with violations of Section 5 of the FTC Act, 15 U.S.C. § 45, and the Credit Repair Organizations Act, 15 U.S.C. § 1679 et seq. Defendant has been served with the Summons and Complaint.

Plaintiff and Defendant have agreed to the entry of this Stipulated Order for Permanent Injunction and Consumer Redress ("Order") by this Court in order to resolve all matters of dispute between them in this action.

NOW, THEREFORE, Plaintiff and Defendant having requested the Court to enter this Order, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows:

FINDING

1. This Court has jurisdiction over the subject matter of this case and over the parties consenting hereto.

2. This is an action by Plaintiff instituted under Sections 5(a)(1), 5(m)(1)(A), 13(b), 16(a) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 45(a)(1), 45(m)(1)(A), 53(b), 56(a), and 57b, and Section 410(b) of the Credit Repair Organizations Act, 15 U.S.C. § 1679h(b). Pursuant to these sections, Plaintiff has authority to seek the relief it has requested.

3. On September 28, 1999, Plaintiff filed its complaint for a permanent injunction and other equitable relief in this matter.

4. The Complaint states a claim upon which relief may be granted against Defendant under Sections 5 and 19 of the FTC Act, 15 U.S.C. §§ 45 and 57b, and the Credit Repair Organizations Act, 15 U.S.C. § 1679 et seq.

5. Entry of this Order is in the public interest.

6. Defendant has waived all rights to seek appellate review of, or otherwise challenge or contest the validity of, this Order.

7. This Order does not constitute and shall not be interpreted to constitute an admission by Defendant that he has engaged in violations of the FTC Act or the Credit Repair Organizations Act.

8. Defendant has waived all claims under the Equal Access to Justice Act, 28 U.S.C. § 2412.

DEFINITIONS

For purposes of this Order, the following definitions shall apply:

1. "Material" means likely to affect a person's choice of, or conduct regarding, goods or services;

 

2. "Defendant" means defendant A. James Black, doing business as AJB Publishing, and their successors, assigns, officers, agents, servants, employees, attorneys, and all persons or entities directly or indirectly under their control or under common control with them, 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, whether acting directly or through any corporation, subsidiary, division, or other device;

 

3. "Plaintiff" means the United States of America;

 

4. "Commission" means the Federal Trade Commission.

 

5. "Document" is synonymous in meaning and equal in scope to the usage of the term in Federal Rules of Civil Procedure 34(a) and includes writings, drawings, graphs, charts, photographs, audio, and video recordings, computer records, and other data compilations from which the 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.

 

6. "Credit-related function" means activities relating to or involving credit, as that term is defined at 15 U.S.C. § 1602, including but not limited to businesses and activities subject to Title 15 U.S.C. Chapter 41 (Consumer Credit Protection).

I. PROHIBITED BUSINESS ACTIVITIES

IT IS THEREFORE ORDERED that, Defendant, in connection with the sale of any products or services, is hereby permanently restrained and enjoined from:

A. Representing, expressly or by implication, that through the use of his products or services, consumers can alter their identifying information to conceal adverse credit information from consumers' credit records, credit histories, or credit ratings, including but not limited to the use of Employer Identification Numbers ("EINs"), Taxpayer Identification Numbers ("TINs"), or alternative Social Security Numbers in lieu of the consumers' own Social Security Numbers;

 

B. Representing that the building of a new credit record by applying for credit using an EIN, a TIN, or an alternate social security number instead of a consumer's own social security number is legal;

 

C. Misrepresenting any material fact concerning the ability of Defendant's products or services to perform or provide any credit-related function for consumers, including but not limited to improving consumers' credit reports or profiles, consolidating debt, obtaining or arranging a loan, or obtaining or arranging any extension of credit; and

 

D. Misrepresenting any fact material to a consumer's decision to purchase Defendant's products or services.

IT IS FURTHER ORDERED that Defendant is hereby restrained and enjoined from violating the Credit Repair Organizations Act, ("CROA"), 15 U.S.C. §§ 1679 to 1679j, as presently enacted or as it may hereinafter be amended, including, but not limited to violating 15 U.S.C. § 1679b(a)(2) by 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: (1) any consumer reporting agency; or (2) any person who has extended credit to the consumer or to whom the consumer has applied or is applying for an extension of credit.

IT IS FURTHER ORDERED that Defendant is hereby permanently restrained and enjoined from violating 15 U.S.C. § 1679b(b), including but not limited to charging or receiving any money or other consideration for services which Defendant has agreed to perform for the purpose of improving any consumer's credit record, credit history, or credit report before all such services have been fully performed.

IT IS FURTHER ORDERED that Defendant is hereby permanently restrained and enjoined from selling, renting, leasing, transferring, or otherwise disclosing the name, address, telephone number, social security number, or other identifying information of any person who paid any money to Defendant, at any time prior to the date this Order is entered, in connection with the sale of the products or services referenced in the complaint. Provided, however, that Defendant may disclose such identifying information to a law enforcement agency or as required by any law, regulation, or court order.

IT IS FURTHER ORDERED that Defendant shall, within ten (10) days after the date this Order is entered, mail notices by first class mail, postage prepaid, to all persons, companies, or other entities whose name and address is known by or reasonably available to the Defendant, to whom Defendant, or any person, company, or other entity with whom Defendant was or is affiliated, sold products or services in which it was represented, expressly or by implication, that through the use of such product consumers could alter their identifying information to conceal adverse credit information from consumers' credit records, credit histories, or credit ratings, including but not limited to the use of EINs, TINs, or alternative Social Security Numbers in lieu of the consumers' own Social Security Numbers. Such notices shall state as follows:

You recently purchased a product from [insert AJB Publishing] that gave information on how to apply for, obtain, and use an employer identification number ("EIN") in order to obtain a new credit file. You should be aware that it is a felony, punishable by up to five years imprisonment, to falsely represent a number as your social security number with the intent to deceive any other person. It is also a felony, punishable by up to thirty years imprisonment, to make any false statement, including one about your social security number, to a federally insured financial institution on an application for a loan or other credit document. Consequently, you should not use the information in that product on applying for, obtaining or using an EIN to seek to obtain a new credit file.

The notice shall be printed in typeface of at least 14 points, boldfaced, in clear contrast with the background, and shall contain no other information or enclosures except as may be approved in advance by counsel for Plaintiff or for the Federal Trade Commission. Defendant shall, within sixty (60) days after the date this Order is entered, provide the names and addresses of those consumers to whom such notices were sent to Federal Trade Commission, Chicago Regional Office, 55 E. Monroe St., Suite 1860, Chicago, IL 60603.

IT IS FURTHER ORDERED that the United States' agreement to and the Court's approval of this Stipulated Order with no civil penalty are expressly premised upon the truthfulness, accuracy, and completeness of the financial statements and information provided by defendant. If, upon motion by the United States, this Court finds that any of such financial statements failed to disclose any asset the value of which exceeds $1,000, or materially misrepresented the value of any asset, or made any other material misrepresentations in or omissions of assets, the United States may request that this Stipulated Order be reopened for the purpose of requiring civil penalties from the defendant who made such misrepresentation(s); provided however, that in all other respects this Stipulated Judgment and Order shall remain in full force and effect unless otherwise ordered by this Court; and provided further, that proceedings instituted under this Paragraph are in addition to, and not in lieu of, any other civil or criminal remedies available by law. 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.

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 Plaintiff a truthful sworn statement, in the form shown on Appendix A, that shall acknowledge receipt of this Final Order.

IT IS FURTHER ORDERED that, for a period of three (3) years from the date of entry of this Order, defendant shall:

A. Provide a copy of this Order 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 sales personnel, whether designated as employees, consultants, independent contractors or otherwise, immediately upon employing or retaining any such persons, for any business where: (1) defendant A. James Black is the majority owner of the business or directly or indirectly manages or controls the business, and where (2) the business is engaged in performing any credit-related function for consumers, including but not limited to improving consumers' credit reports or profiles, consolidating debt, obtaining or arranging a loan, or obtaining or arranging any extension of credit, or assisting others engaged in these activities;

 

B. Maintain for a period of three (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.

IT IS FURTHER ORDERED that, for a period of three (3) 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: (1) defendant A. James Black is the majority owner of the business or directly or indirectly manages or controls the business, and where (2) the business engages in performing any credit-related function for consumers, including but not limited to improving consumers' credit reports or profiles, consolidating debt, obtaining or arranging a loan, or obtaining or arranging any extension of credit, or assisting others engaged in these activities, 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:

A. Books, records and accounts that, in reasonable detail, accurately and fairly reflect the cost of goods or services sold, revenues generated, and the disbursement of such revenues;

 

B. Records accurately reflecting: the name, address, and telephone number of each person employed in any capacity by such business, including as an independent contractor; that person's job title or position; the date upon which the person commenced work; and the date and reason for the person's termination, if applicable. The businesses subject to this Paragraph shall retain such records for any terminated employee for a period of two (2) years following the date of termination;

 

C. Records containing the names, addresses, phone numbers, dollar amounts paid, quantity of items or services purchased, and description of items or services purchased, for all consumers to whom such business has sold, invoiced or shipped any goods or services;

 

D. Records that reflect, for every consumer complaint or refund request, whether received directly or indirectly or through any third party:

 

(1) the consumer's name, address, telephone number and the dollar amount paid by the consumer;

 

(2) the written complaint or refund request, if any, and the date of the complaint or refund request;

 

(3) the basis of the complaint, including the name of any salesperson complained against, and the nature and result of any investigation conducted concerning any complaint;

 

(4) each response and the date of the response;

 

(5) any final resolution and the date of the resolution; and

 

(6) in the event of a denial of a refund request, the reason for the denial; and

 

E. Copies of all sales scripts, training materials, advertisements, or other marketing materials utilized; provided that copies of all sales scripts, training materials, advertisements, or other marketing materials utilized shall be retained for (3) years after the last date of dissemination of any such materials.

IT IS FURTHER ORDERED that, in order that compliance with the provisions of this Order may be monitored:

A. For a period of three (3) years from the date of entry of this Order, defendant shall notify the Commission of the following:

 

(1) Any changes in defendant's residence, mailing addresses, and telephone numbers, within ten (10) days of the date of such change;

 

(2) Within ten (10) days of any change in defendant's employment status (including self-employment) when such change is into or out of a credit-related function. Such notice shall include the name and address of each business that defendant is affiliated with or employed by, a statement of the nature of the business, and a statement of defendant's duties and responsibilities in connection with the business or employment; and

 

(3) Any proposed change in the structure of defendant AJB Publishing, or any proposed change in the structure of any business entity owned or controlled by defendant A. James Black, such as creation, incorporation, dissolution, assignment, sale, merger, creation, dissolution of subsidiaries, proposed filing of a bankruptcy petition, or change in name or address, or any other change that may affect compliance obligations arising out of this Order, thirty (30) days prior to the effective date of any proposed change; provided, however, that, with respect to any proposed change 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;

 

B. One hundred eighty (180) days after the date of entry of this Order, defendant shall provide a written report to the Commission, sworn to under penalty of perjury, setting forth in detail the manner and form in which the defendant has complied and is complying with this Order. This report shall include but not be limited to:

 

(1) Defendant's then current residence address and telephone number;

 

(2) Defendant's then current employment, business addresses and telephone numbers, a description of the business activities of each such employer, and defendant's title and responsibilities for each employer;

 

(3) A copy of each acknowledgment of receipt of this Order obtained by defendant pursuant to Paragraph VIII; and

 

(4) A statement describing the manner in which defendant has complied and is complying with Paragraphs I through V of this Order;

 

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

Chicago Regional Office

Federal Trade Commission

55 E. Monroe St., Suite 1860

Chicago, IL 60603

Re: U.S. v. A. James Black (MD FL 1999)

 

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 A. James Black 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 A. James Black.

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:

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 defendant's compliance with any provision of this Order;

 

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

 

C. Nothing in this Order 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 defendant has violated any provision of this Order or Section 5 of the FTC Act, 15 U.S.C. § 45.

IT IS FURTHER ORDERED that, for a period of three (3) 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:

A. Access during normal business hours to any office, or facility storing documents, of any business where: (1) defendant A. James Black is the majority owner of the business or directly or indirectly manages or controls the business, and where (2) the business engages in performing any credit-related function for consumers, including but not limited to improving consumers' credit reports or profiles, consolidating debt, obtaining or arranging a loan, or obtaining or arranging any extension of credit, or assisting others engaged in these activities. In providing such access, defendant shall permit representatives of the Commission to inspect and copy all documents relevant to any matter contained in this Order; and shall permit Commission representatives to remove documents relevant to any matter contained in this Order for a period not to exceed five (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 Order. 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 defendant's business premises for the purposes of inspecting and copying all documents relevant to any matter contained in this Order.

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

The parties agree and stipulate to entry of the foregoing Order as a Final Judgment in this action.