On February 24, 1996, this Court entered a Stipulated Final Judgment and Order as to Certain Defendants ("Order").(1) The Order settled FTC charges that defendants were operating an illegal pyramid scheme. The Order contained a permanent injunction prohibiting further operation of any pyramid or chain letter scheme and prohibiting material misrepresentations about any marketing or investment program. It required defendants to pay $2.8 million initially, plus any additional amounts necessary to pay all refund claims made during a program administered by a Redress Contractor employed by the FTC. It also required defendants to provide various contractual and promotional documents to the FTC so the FTC could monitor defendants' compliance with the Order.
Defendants began violating the Order the same day it was entered. To convince members not to seek refunds (i.e., to retain their memberships), they and their attorney, Robert Sailer, misrepresented that the settlement was a dismissal of all charges against Fortuna and a determination that Fortuna had been running a legitimate, multi-level marketing operation.(2) Concurrent with its efforts to convince consumers it had been fully vindicated, Fortuna was promoting its revised program, called "Fortuna Alliance II", which appears to differ little from the original program and which is being marketed heavily to participants in the original program. Over time, defendants and Mr. Sailer continued and enhanced these false claims of vindication with other related misrepresentations, including a direct attack on the integrity and fairness of this Court.
Defendants have refused to provide compliance materials that might reveal further misrepresentations about Fortuna Alliance II. They failed to assist the Redress Contractor in identifying members eligible for refund notices, necessitating significant extra work by the FTC and delaying the refund program. Most significantly, they have failed to provide the additional funds necessary to pay refund claims in excess of the amount available in the original redress fund, a deficiency of over $2 million. Had Fortuna complied with the Order, consumers could have received their refunds by the end of July 1997. Instead, more than 9,000 consumers with over $5 million in claims have received nothing because of defendants' delays and failure to pay the deficiency.(3)
The FTC has repeatedly asked defendants to comply with the Order, with no success. The FTC now seeks this Court's assistance to obtain compliance with the Order. The proposed civil contempt sanctions would require defendants immediately to pay the $2 million deficiency. If defendants do not do so, the FTC and the Redress Contractor would be authorized to make pro rata payments while collection efforts proceeded. Defendants would be required to publish and mail to all current and past members a statement retracting their misrepresentations and providing additional time to request refunds. They would have to provide to the FTC copies of various documents related to their activities since entry of the Order. Finally, defendants would be charged with attorney fees and costs for this contempt action.
II. BACKGROUND AND PRIOR CONTEMPT
Fortuna Alliance was another in a long line of pyramid schemes that have caused financial losses to consumers and occupied local, state, and federal law enforcement officials for decades. What distinguished Fortuna was its success in using the Internet to achieve rapid growth on an international scale. Fortuna itself claimed over 50,000 memberships worldwide.
The lowest level of membership was "Elite". Each Elite membership cost $250 and promised a $5,000 per month return without any product sales. Two higher levels of membership, Premier (at $600) and Ambassador (at $1,250), promised greater profits and other benefits. Members could purchase up to seven memberships at each level, with a total potential investment of $14,700. [p. 162, Ex. 5](4)
The FTC filed its complaint against the defendants on May 23, 1996, along with an ex parte motion for a Temporary Restraining Order ("TRO"). This Court issued the TRO on May 24 and, after a hearing where defendants were represented by counsel, the Court entered a Preliminary Injunction ("PI") on June 12. The TRO and PI both prohibited further marketing of the Fortuna Alliance pyramid scheme or any related program, froze Fortuna's assets, placed a receiver in charge of Fortuna, and required repatriation of millions of dollars that Fortuna had transferred to a bank in Antigua, West Indies. This Court also entered an Order of Contempt on June 12, citing defendants for failing to repatriate foreign funds and provide an accounting.
When Fortuna still failed to repatriate any money after the Order of Contempt, this Court issued civil arrest warrants against defendants Delgado, Welch, and Grant on June 27, 1996. The defendants avoided arrest only by staying out of the United States. They never complied with the repatriation order. The arrest warrants for Delgado and Welch were not lifted until the settlement was entered on February 24, 1997. Pursuant to the settlement, defendants repatriated $2.8 million from Antigua.
III. VIOLATIONS OF THE ORDER
Since entry of the Order, the defendants have been busy promoting their revised program, Fortuna Alliance II ("FA2"), and trying to convince members not to seek refunds. Their World Wide Web sites are filled with promotions for FA2. [pp. 25-42, 46-55 , Ex. 2] They have sent multiple and lengthy letters to individual members. [pp. 38-46, Ex. 2] They have held a "leadership conference" at a resort in Aruba. [pp. 166-67, Ex. 5] What they have not done is comply with the Order.
A court's authority to impose sanctions for contempt of its orders is an inherent and integral element of its powers. See, e.g., Gunn v. University Comm. to End War, 399 U.S. 383, 389 (1970); Davies v. Grossman, 930 F.2d 1390, 1393 (9th Cir. 1991). This Court has already imposed civil contempt sanctions for violations of its PI in this matter. The Court's continuing jurisdiction to enforce its decree is also made explicit in the Order (§ XVI). The standard of proof for a finding of civil contempt is clear and convincing evidence. Balla v. Idaho State Board of Corrections, 869 F.2d 461, 466 (9th Cir. 1989); U.S. v. Powers, 629 F.2d 619, 626 n.6 (9th Cir. 1980).
A. Failure to Pay the Deficiency in the Redress Fund
Order § III entitles Fortuna members to full refunds of all membership fees, under a program to be administered by a Redress Contractor employed by the FTC.(5) On July 17, 1997, the Redress Contractor delivered to defendants the first list of eligible claims. There were 9,158 claims totaling $4.81 million. [p. 128, Ex. 5] Since there was only $3.1 million in the redress fund,(6) defendants were then liable under the Order for the $1.7 million deficiency. Fortuna paid none of it.
The Order left to the Redress Contractor the job of administering the program in accordance with its standard procedures. In response to a request from defendants, the FTC agreed to allow them an opportunity to question claims, and directed the Redress Contractor to give defendants five days to challenge any approved refunds. Defendants reaffirmed their satisfaction with that schedule as recently as July 16, 1997. [p. 125, Ex. 5] Our mutual expectation was that defendants would document their challenges and the parties would attempt to resolve any differences without involving this Court.
Defendants "challenged" 674 of the claims. [pp. 131-32 , Ex. 5] However, a whole category of defendants' "challenges" appeared to be inapplicable. Defendants had earlier insisted that Premier and Ambassador membership fees were not subject to refunds, an exclusion that doesn't exist in the Order. Defendants argued that higher level members had made more "well thought out decision[s]" about their memberships and were therefore disqualified from refunds. [pp. 107-8 , Ex.5] However, the Order's restrictions on eligibility are very narrowly drawn.(7) They include no distinction based on the supposed thoughtfulness of the consumer.
Another problem with defendants' challenges was that the employee who prepared the 674 challenge figure stated in writing that
the number of "challenged" requests are much higher than they could be. If we could be allowed to continue the review, I feel that in another week we could have that number reduced considerably. [p. 133, Ex. 5]
We have never seen the results of the employee review that would have "reduced considerably" the number of challenges. Finally, the computer printout defendants supplied in supposed support of the challenges was indecipherable. We asked for further documentation of the challenges but defendants never provided it. [pp. 134-35, Ex. 5] The Redress Contractor made a similar request, also ignored by defendants. [pp. 1-3, Bennett Decl. ¶ 13, Ex. 1] As a result, we cannot tell how many of defendants 674 challenges were for Premier and Ambassador membership fees or even how much of the claims defendants challenged.
We waited over a month for defendants to document their challenges. Finally, on August 29, 1997 we requested that defendants pay the $1.7 million deficiency to the Redress Contractor. [pp. 134-35, Ex. 5] We offered to allow some of that money to be placed into escrow pending resolution of the few disputed claims. Defendants paid nothing. On September 9, they said they could not respond because they wanted more time to review the claims they had not challenged and their records were in too much disarray to give us any other reply. [pp. 136-37, Ex. 5]
This was not defendants' first major delay. Order § IV obliged Fortuna to provide membership information to the Redress Contractor,(8) who would then notify members of their right to a refund. All Fortuna did, however, was insist that the FTC provide most of the membership information. It provided barely 10% of the names, and even that list was so late that the Redress Contractor had to do two separate mailings to Fortuna members and delay completion of the claims program.(9)
While Fortuna was delaying Order compliance because of supposed problems with its files, its records were not in too much disarray to make repeated promotional mailings to members,(10) including individualized calculations of hypothetical profits members might have received if Fortuna had continued the pyramid scheme. [pp. 122, 159, Ex. 5]
On October 20, 1997, the Redress Contractor forwarded its update of the earlier tally of eligible claims to Fortuna. This report (with a database in computer-readable form) included all the new refund claims processed since the July 17, 1997 report, together with a small number of changes in the original list due to rescinded refund requests and technical revisions. Even taking into account all the rescissions and changes, Fortuna's deficiency still increased by approximately $300,000, to a total of $2,024,411, including projected administrative costs. [pp. 1-3, Bennett Decl. ¶ 14, Ex. 1]
The Redress Contractor followed its standard procedures for administering redress funds in FTC cases. It verified that any documentation submitted with a claim form conformed with the claim. It verified that each refund claim was signed under penalty of perjury. [p. 3, Bennett Decl. ¶ 16, Ex. 1] The contractor also provided documentation, both printed and electronic, to defendants whenever they requested it. [Id., ¶ 15] The FTC waited to file this motion until the challenge period for the new claims expired on October 27. Any longer would have been unfair to the consumers who have been waiting for months to receive their refunds. It is time for Fortuna to pay the ordered redress in full.
B. Failure to Provide Any Compliance Monitoring Materials
The Order requires that defendants provide to the FTC, upon request, copies of "each type of contract or agreement used with members or participants in the program" (§ X.A.1); "all printed advertisements or promotional materials relating to the program" (§ X.A.2); "all advertising or other promotional or commercial material made available through any fax-back service" (§ X.A.4); and "records for every consumer complaint or refund request and responses thereto" (§ X.B). Other provisions of § X require similar production of information and documents. The FTC has made repeated, written requests for these materials. [pp. 109,110, 118-19, 120-21, 127, Ex. 5] Defendants have expressly refused to provide them. [pp. 113-14, 129-30, Ex. 5#]
Defendants only gave reasons for refusing to provide certain categories of documents.(11) For example, defendants appear to contend that every document they have disseminated, except for a single, small brochure they did provide [p. 115, Ex. 5], is an "internal membership communication", subject to a supposed Constitutional protection applicable to "exchanges between members of a private company or organization." [pp. 113-14, Ex. 5] Defendants did not cite, and the FTC has not found, any legal basis for this argument. In addition, had there been such a protection, defendants would have waived it when they agreed to the settlement.
Defendants also contend that Order references to "promotional materials" mean only materials "used to solicit new members." [pp. 113-14, 129-30, Ex. 5] This restriction does not appear anywhere in the Order.(12) Nor does it make sense in the context of any program where members recruit other members. The essence of pyramid schemes and multi-level or network marketing is that members recruit other members. Program descriptions, training materials, and the like are all part of this ongoing promotional system.
It is obvious that Fortuna has engaged in ongoing promotions to its existing membership. It has exhorted them not to seek refunds, extolled at great length upon the virtues of its upcoming programs, and even solicited new investments. Some of the materials defendants refused to provide are available publicly, via paid newspaper ads and published press releases, the World Wide Web, and Fortuna's "fax-back" service. Fortuna itself calls many of the documents it has refused to provide "marketing materials."(13) Still, defendants have repeatedly failed or refused to provide copies to the FTC, in violation of Order § X. This has delayed and interfered with plaintiff's right to monitor defendants' new programs to protect the public interest.
There is good reason to be suspicious of Fortuna's motives in withholding the documents. A document [p. 153, Ex.5] Fortuna has sent to consumers says:
The new Fortuna Alliance II will be similar to the "original" Fortuna Alliance in most ways. It was very good as it was and the primary reasons to change any part of it are:
1. to protect it from interference by governmental agencies of any country . . .
This suggests that FA2 may be no more than a repackaged pyramid scheme, now offered in a manner (or from an offshore location) designed to evade scrutiny by law enforcement officials. If FA2 really is similar to the original Fortuna, it will certainly violate the Order. But without full documentation of the program, it would be a waste of the Court's time to examine FA2 now. The first step is to order production of the compliance monitoring documents.
C. Misrepresentations Concerning the Settlement and State Enforcement Actions
Since we do not have most of defendants' promotional materials, we are not yet prepared to say whether Fortuna's new program violates Order § I, which prohibits running pyramid or chain letter schemes. However, their false claims about the settlement and state enforcement actions do violate Order § II, which prohibits making material misrepresentations in connection with promoting Fortuna's programs.(14) Mr. Sailer, the author of many of those false claims, is liable for his own conduct both as an attorney and as a publicity agent for Fortuna.(15)
Defendants' initial promotional goal appears to have been to convince members not to seek refunds. One of the ways they have approached this is to repeatedly issue statements stating or implying that they won the case and that the Court ruled that Fortuna was not running an illegal pyramid scheme. Their press releases, mailings, and World Wide Web postings have contained numerous misrepresentations about the settlement. They have ignored our requests to correct the misrepresentations.
Within days of the settlement being issued, Fortuna issued a press release and a "Member Communication" document containing claims like:
"Fortuna Alliance Cleared of All Charges by Federal Trade Commission."
"The Federal Trade Commission today dropped all charges against Fortuna Alliance."
"But now we have been cleared of all charges . . ."
"The consent order acknowledges that Fortuna Alliance is a bona fide multi-level marketing program. The FTC withdrew it's [sic] charges that claimed Fortuna is a pyramid scheme."
". . . the complete vindication achieved by Fortuna."(16)
We immediately asked Fortuna's counsel and advertising agency to cease making claims that falsely state or imply an actual finding of innocence or legitimacy of its past practices.(17) To the extent that these statements may affect a consumer's decision of whether to maintain membership in or join Fortuna, they are materially misleading. The reply we received was from attorney Robert Sailer, whom we understood was the author of the press release. The reply did not contend that the quoted statements were true. It simply stated that the FTC's press releases contained misleading statements (which is untrue), implying that that justified his and his clients' Order violations. [p. 106, Ex. 5]
Subsequent press releases and "Latest Legal Report[s] by Bob Sailer" showed Mr. Sailer continuing to claim that Fortuna had been vindicated in court.(18) Many claims echoed the ones quoted above. For example, two May 1, 1997 documents included phrases like "full dismissal of the FTC case" and "the FTC dropped its case." [pp. 57, 70, Ex. 5] Fortuna's South Pacific regional office claimed on March 11, 1997 that "the company . . . can now carry on its business unrestrained." [p. 112, Ex. 5] Since the Order contains stringent restraints on how Fortuna does business, that claim was also false. We gave another, again unheeded warning to Fortuna in response to the regional office claim. [p. 109, Ex. 5]
Defendants and Mr. Sailer did not stop with falsely claiming dismissal of the FTC case. A "legal report" by Mr. Sailer distributed at defendants' recent conference in Aruba and posted on the World Wide Web added a claim implying that all state cases involving Fortuna had been dropped. [pp. 38-39, Ex. 2] In fact, the State of Washington issued a cease and desist order against Fortuna and Florida is pursuing its case against Fortuna distributors in that state.(19) Since Fortuna's marketing is through members, it is highly material that individual members may find themselves liable under state law for promoting Fortuna's schemes.
Fortuna made these claims a feature of its promotional campaign to convince members not to seek refunds. Mr. Sailer also made the claims in attempting to counteract unfavorable publicity.(20) Since much of the Fortuna Alliance II program appears to be a continuation of the original Fortuna, and since defendant Augustine Delgado continues to run Fortuna, a claim representing that the business had been proven legitimate would be highly material.(21) Therefore, these claims violate Order § II.
As this Court is aware, this is not the first time Mr. Sailer, acting directly and through publicity agencies, has misrepresented this Court's decisions in order to further Fortuna's business aims. A July 31, 1996 press release made numerous misleading claims, including that Fortuna "won another round in their battle to overturn a preliminary injunction" when the opposite was true. [p. 98, Ex. 5] No provision of the referenced July 26, 1996 order of this Court (nor any previous order) supported the claim. This release appeared on the Internet in conjunction with a solicitation for funds Mr. Sailer was collecting to pay Fortuna's legal bills. [pp. 99-100, Ex. 5] The complete file of claims and correspondence between the parties was submitted to the Court for review on August 14, 1996, in preparation for a conference held in chambers on August 16 to discuss the matter.
Most recently, defendants' promotional materials have included a document blaming all Fortuna's past troubles on the purported misdeeds of the FTC, US Department of Justice, and state enforcement officials, as well as this Court:
Early in our efforts to prevent the TRO from becoming a preliminary injunction, and efforts to get the offices back for Fortuna Alliance, Judge McGovern evidenced his dislike for what he could not understand. He admitted in open court during the first court hearing on the TRO that he had not fully read the FTC request and legal documents for the injunctive action. He admitted that he did not fully understand how network marketing worked. He gave full credibility to statements made by the FTC because they were a government agency, and clearly did not perceive Fortuna Alliance innocent until proven guilty.
In a hearing to seek a trial date, the judge granted a request by the FTC to issue civil arrest warrants for the individual defendants. He took it as a personal affront to him that the defendants would not return to the U.S. to face jail time in order to state their case to him. There was no compassion or attempt to understand that the defendants, who were willing to return and present their case, simply wanted to do so without facing arrest for something they had not even been convicted of doing. It almost seemed that in a burst of personal anger he decided to help defeat their case by forcing them to stay out of the country. There was no balanced attempt to provide a forum of justice for the defendants.
[p. 66, Ex. 2]
This 15-page document, on Judd & Sailer letterhead and called "Contempt Prior to Investigation," is available to any member of the public worldwide, via the Internet and through Fortuna's "fax-back" service. This document contains numerous other misstatements of fact, false claims, and baseless personal attacks on government attorneys.
Mr. Sailer has willingly and repeatedly acted as a publicist, furthering his client's business through misrepresentations about court actions. Defendants have repeatedly publicized Mr. Sailer's misrepresentations through their World Wide Web sites and fax-back services. These actions violate Order § II, which prohibits making material misrepresentations in connection with promoting Fortuna's programs.
A court may impose sanctions for civil contempt to coerce obedience to a court order or to compensate the party pursuing the contempt action for injuries resulting from the contemptuous behavior, or both. United States v. United Mine Workers, 330 U.S. 258, 303-04 (1947). Courts have broad discretion in fashioning coercive civil contempt remedies. Perfect Fit Industries, Inc. v. Acme Quilting Co., 673 F.2d 53, 57 (2nd Cir. 1982); see also United Mine Workers of Am., 330 U.S. at 304. In exercising its remedial powers, a court may require a contemnor to perform various affirmative acts, even though those actions were not mandated by the underlying decree. In re Arthur Treacher's Franchisee Litigation, 689 F.2d 1150, 1159 (3d Cir. 1982). The circuit court in Arthur Treacher's discussed with approval Franklin Mint Corp. v. Franklin Mint, Ltd., 360 F.Supp. 478 (E.D. Pa. 1973), which required the contemnor to publish corrective statements. Id.
Plaintiff also seeks compensatory payment of the fees and costs incurred by the Commission in pursuing this action. This relief is generally available where the violations were made willfully, as in this case. Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 258-59 (1975). In this Circuit, there is also clear precedent for the award of attorney fees even where the contempt is not willful. Perry v. O'Donell, 759 F.2d 702, 704 (9th Cir. 1985). Finally, Order § III provides for defendants paying attorney fees and costs of collection for non-payment of the redress deficiency without regard to any finding of contempt.
The proposed Contempt Order includes the following relief:
The defendants' and Mr. Sailer's conduct demonstrates flagrant disregard of the Order. The failure to pay the redress deficiency has caused hardship for thousands of consumers waiting for their refunds. Defendants have used their delay - and consumers' money - to engage in a massive promotional campaign for Fortuna Alliance II while at the same time concealing from the FTC the documents that would explain how this new program will work. This Court should find defendants and Mr. Sailer in contempt, and order sanctions to coerce compliance with the Order and remedy the damage done, including compensating the FTC for the costs of bringing this action.
Date: October 30, 1997
RANDALL H. BROOK, WSBA #4860
Attorneys for Plaintiff
Randall H. Brook
1. The "certain defendants" subject to the Order and this motion are Fortuna Alliance, L.L.C., Augustine Delgado, Libby Gustine Welch, and Donald R. Grant. Pursuant to FRCP Rule 65(d), one of Fortuna's counsel, Robert O. Sailer, is subject to this motion for his actions in promoting Fortuna's business.
2. Mr. Sailer's earlier misrepresentations about supposed successes in preliminary court actions were the subject of a court conference in chambers on August 16, 1996.
3. The Redress Contractor has been unable to make any payments because the Order requires payments in full. Had the Redress Contractor started making payments, some consumers would have received full payments and, when the money ran out, the rest would have gotten nothing.
4. All exhibits are page numbered consecutively in a single exhibit volume. The page number in brackets refers to that page numbering, not any page number internal to an individual exhibit.
5. Order § III provides:
6. $2.8 million from Fortuna's Antiguan bank accounts and $300,000 from the Receiver's frozen funds.
7. Order § III provides:
8. Order § IV provides:
9. Fortuna told the contractor it would only provide a list of members for April 15, 1996 to the end of May. It insisted that the FTC provide names for November, 1995 to April 15. It then delayed until April 14, 1997, when it provided a list containing only 2,600 names. Information the FTC obtained easily from Fortuna's databases showed 10,893 names for April and May, 1996. The history of these delays and the resulting bifurcation of refund notice mailings is described by Redress Contractor [pp. 1-3 , Bennett Decl. Ex. 1] and in extensive correspondence among the parties [not attached]. The first mailing, to 14,314 members, went out on April 14. The second, to 11,540 members, went out on May 9.
10. These mailings included an announcement and eight page newsletter [pp. 138-47, Ex. 5], a nine page packet including an offer of "profit sharing certificates" and an "Overview of Fortuna Alliance II [pp. 148-58, Ex. 5], and an invitation to rescind any previous refund request. [p. 161, Ex.5]
11. For example, when we requested copies of all refund correspondence, as required under Order § X.B, defendants replied that they would provide a list of consumers who sought refunds. There was no further explanation.
12. Defendants have not even tried to explain why they have withheld documents covered by Order provisions expressly calling for materials sent to and received from members, e.g., § X.A.1 (contracts with member) and § X.B (refunds requests from members and Fortuna's replies) .
13. A Fortuna document posted on the World Wide Web offers "marketing materials", including "video and audio marketing presentations" and tape recordings of conference calls, to members. [p. 32, Ex. 2] A newspaper ad referred to "new marketing literature." [p. 167, Ex. 5] We have seen some of these documents because consumers sent them to us or because they appeared on the World Wide Web. These illustrate the breadth of promotional materials defendants have withheld. They include: mailings describing the potential benefits of remaining a member [pp. 122-24 , Ex. 5]; mailings describing some of the operations and benefits of the newly re-constituted Fortuna program and investments old and new members are encouraged to make [pp. 138-58, Ex. 5]; mailings encouraging members not to leave the program by seeking a refund or to rescind their refund requests [pp. 122-24, Ex. 5]; newspaper advertising and promotions [pp. 163-67, Ex. 5]; lists of "fax-back" documents [p. 123, Ex. 5, listing 12 documents available in May 1997], and [pp. 48-49, Ex. 2, listing 22 documents currently available]; and programs teaching marketing techniques for members to use in finding new members. [p. 167, Ex. 5]
14. "[T]he Fortuna Defendants, . . . in connection with the advertising, promoting, offering for sale, or sale of any marketing or investment program, . . . are hereby permanently restrained and enjoined from making, or assisting another in making, directly or by implication, orally or in writing, any misrepresentation about any material fact . . . ."
15. "Every order granting an injunction . . . is binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys . . . " FRCP Rule 65(d).
16. In printed form [p. 102, Ex. 5] and as viewed on the Internet. [p. 46, Ex. 2]
17. The FTC wrote on Feb. 25, 1997:
18. Some documents contain Mr. Sailer's name [e.g., p. 38, Ex. 2] and some are on his firm's (Judd & Sailer) letterhead [e.g., p. 58, Ex. 2] We have no reason to believe that Mr. Judd was involved in the preparation of any of the Fortuna press releases and similar documents.
19. See declarations from the Washington Div. of Securities [p. 73, Ex. 3] and Florida State Attorney [pp. 83-84, Ex. 4] Florida's complaint included Fortuna and the Fortuna principals, who were in Antigua or Belize at the time. However, Florida has pursued the case only against Fortuna agents, because of an inability to get service on the principals and a belief that the FTC case would suffice against them. [Id. ¶¶ 5-6]
20. Mr. Sailer's letter to an Australian TV station appears on a Fortuna Internet site. [pp. 43-44, Ex. 2]
21. Similar misrepresentations of victory when all the court had done was deny one part of the plaintiff's sought relief were held to be a "blatant attempt to mislead defendants' investors" and a basis, in part, for appointment of a receiver. SEC v. Heritage Trust Co., 402 F.Supp 744, 753 (D. Ariz. 1975).