|DEBRA A. VALENTINE
LINDA M. STOCK (Bar No. 143774)
UNITED STATES DISTRICT COURT
FEDERAL TRADE COMMISSION,
INETINTL.COM, INC., a.k.a. Inet International; CRAIG A. LAWSON, a.k.a. Bob Bryan; ERIK R. ARNESEN; and STANLEY R. GOLDBERG, a.k.a. Geoff Stevens; Defendants.
Civ. No. 98-2140 CAS (CWx)
(Proposed) FINAL JUDGMENT AND ORDER
Date: March 29, 1999
Plaintiff Federal Trade Commission ("Commission"), having moved for summary judgment against defendant Stanley R. Goldberg on March 29, 1999, Hon. Christina A. Snyder presiding, and the evidence presented having been fully considered, the issues having been duly heard, and the Court having granted the motion pursuant to Federal Rule of Civil Procedure 56(c),
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows:
1. This is an action under Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, to obtain permanent injunctive relief, rescission or reformation of contracts, restitution, disgorgement, and other equitable relief for defendants' violations of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), in connection with defendants' sale of Internet-related investment opportunities.
2. This Court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 1331, 1337(a) and 1345 and 15 U.S.C. §§ 53(b) and 57b.
3. Venue in the United States District Court for the Central District of California, Western Division, is proper under 28 U.S.C. §§ 1391(b) and (c) and 15 U.S.C. § 53(b).
4. Plaintiff Federal Trade Commission is an independent agency of the United States Government created by statute, 15 U.S.C. §§ 41 et seq., charged, inter alia, with enforcement of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The Commission is authorized to initiate federal district court proceedings to enjoin violations of the FTC Act in order to secure such equitable relief as is appropriate in each case and to obtain consumer redress. 15 U.S.C. §§ 53(b) and 57b.
5. The acts and practices of defendants as set forth in the Complaint in this action are in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
6. Defendant Stanley R. Goldberg ("Goldberg") was Division Marketing Director and a sales representative for defendant Inetintl.Com, Inc., also known as "Inet International" or "Inet." Acting alone or in concert with others, he formulated, directed, controlled, or participated in the acts and practices of Inetintl.Com, Inc.
7. Defendant Goldberg has misrepresented material facts in violation of Section 5(a) of the FTC Act.
8. In the course of advertising, promoting, marketing, offering for sale, or selling Inetintl.Com, Inc. business ventures, Defendant Goldberg has represented, expressly or by implication, that purchasers of the business ventures could reasonably expect to achieve specific levels of earnings.
9. In the course of advertising, promoting, marketing, offering for sale, or selling Inetintl.Com, Inc. business ventures, Defendant Goldberg has represented, expressly or by implication, that certain company-selected references had purchased the defendants' business ventures and would provide reliable descriptions of the references' experiences with the defendants' business ventures.
10. Defendant Goldberg's representations set forth in Paragraphs 8 and 9 are false and misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
11. Consumers have in fact been injured in the amount of at least $478,088 (four hundred seventy-eight thousand, eighty-eight dollars) as a direct result of defendant Goldberg's violations of Section 5(a) of the FTC Act.
12. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to issue injunctive and other relief against violations of the FTC Act and, in the exercise of its equitable jurisdiction, to award redress and restitution to remedy the injury to consumers, order disgorgement of profits resulting from defendants' unlawful acts or practices, and issue other ancillary equitable relief.
13. There are no genuine issues of material fact as to the elements of the Commission's case, and the Commission is therefore entitled to judgment as a matter of law against Defendant Goldberg pursuant to Federal Rule of Civil Procedure 56(c).
14. The Commission is entitled to a Permanent Injunction as follows:
15. The Commission is entitled to judgment against defendant Goldberg in the amount of $478,088 (four hundred seventy-eight thousand eighty-eight dollars) for restitution and redress to consumers.
16. A discharge in bankruptcy does not discharge an individual debtor from any debt for money, property, or services to the extent obtained by false pretenses, a false representation, or actual fraud. 11 U.S.C. § 523(a)(2)(A). The monetary judgment herein reflects money obtained by Defendant Goldberg through false pretense, a false representation, and/or actual fraud.
17. This Judgment and Order shall be construed as remedial in nature and shall not be construed as the payment of a fine, penalty, punitive assessment, or forfeiture.
18. This action and the relief awarded herein are in addition to, and not in lieu of, other remedies as may be provided by law, including both civil and criminal remedies.
19. Entry of this Judgment and Order is in the public interest.
JUDGMENT AND ORDER
I. PERMANENT INJUNCTION
IT IS THEREFORE ORDERED that Defendant Goldberg is hereby permanently enjoined and restrained from engaging or participating in the advertising, promotion, marketing, offering for sale, sale, or distribution of any business venture, franchise, or investment opportunity, whether directly, in concert with others, or through any business entity or other device.
II. ADDITIONAL PROHIBITED BUSINESS ACTIVITIES
IT IS FURTHER ORDERED that Defendant Goldberg is hereby restrained and enjoined from:
III. CUSTOMER LISTS
IT IS FURTHER ORDERED that Defendant Goldberg is hereby restrained and enjoined from using or providing or arranging for the provision to any person (other than a federal, state or local law enforcement agency or pursuant to a court order) of any mailing or telephone list of customers of Inetintl.Com, Inc., or any of its affiliates or subsidiaries, or any other list containing identifying information relating to any customer of Inetintl.Com, Inc. or any of its affiliates or subsidiaries, including but not limited to a customer's name, address, telephone number, Social Security number, bank account number or credit card number, or names of a customer's employees. For purposes of this Paragraph, the term "customer" shall include any person or entity who contacted or was contacted by Inetintl.Com, Inc., or by any of its affiliates or subsidiaries, whether prior to or after the effective date of this Judgment and Order.
IV. ASSISTING AND FACILITATING
IT IS FURTHER ORDERED that Defendant Goldberg is hereby restrained and enjoined from transferring or in any other way providing to any person (other than a federal, state, or local law enforcement agency or pursuant to a court order), directly or indirectly, any books, records, tapes, disks, accounting data, manuals, electronically stored data, banking records, invoices, telephone records, ledgers, payroll records, or other documents of any kind, including information stored in computer-maintained form, in his possession, custody or control, or any trade secrets or knowledge, whether recorded or otherwise, that are in any way related to Inetintl.Com, Inc. or any of its affiliates or subsidiaries.
V. MONETARY REDRESS
IT IS FURTHER ORDERED that
A. Judgment in the amount of $478,088 (four hundred seventy-eight thousand eighty-eight dollars) is hereby entered in favor of the Commission against Defendant Goldberg, for equitable monetary relief, including but not limited to, consumer redress, restitution and/or disgorgement and for paying any attendant expenses of administering any redress fund. After payment of monetary redress by all defendants, the Commission or Permanent Receiver shall, if practical, propose a plan to the Court to conduct a claims procedure which will (1) enable consumers who purchased defendants' business ventures to make claims against those funds, and (2) provide for a means of distributing the funds recovered to the consumers who have approved claims. If the Commission, in its sole discretion, determines that redress is wholly or partially impractical, any funds not so used shall be deposited in the United States Treasury. The Commission in its sole discretion may use a designated agent to administer consumer redress. No funds paid pursuant to this Judgment and Order shall be returned to Defendant Goldberg.
VI. ASSET FREEZE
IT IS FURTHER ORDERED that the funds held in Defendant Goldberg's frozen account(s) at financial institutions, including but not limited to Bank of America, pursuant to the asset freeze ordered by this Court in the Temporary Restraining Order and Preliminary Injunction, shall be transferred to the Federal Trade Commission or its duly authorized agent (as directed by Commission counsel) in partial satisfaction of this monetary judgment. Funds in the account(s) shall not be used for any other purpose. Upon transfer of such funds, the asset freeze shall be lifted as to Defendant Goldberg.
VII. COMPLIANCE REPORTING BY DEFENDANT
IT IS FURTHER ORDERED that, in order that compliance with the provisions of this Judgment and Order may be monitored:
VIII. COMMISSION'S AUTHORITY TO MONITOR COMPLIANCE
IT IS FURTHER ORDERED that the Commission is authorized to monitor Defendant Goldberg's compliance with this Judgment and Order by all lawful means, including but not limited to the following:
IX. INDEPENDENCE OF OBLIGATIONS
IT IS FURTHER ORDERED that the expiration of any requirements imposed by this Judgment and Order shall not affect any other obligation arising thereunder.
X. ACKNOWLEDGMENT OF RECEIPT OF JUDGMENT AND ORDER BY DEFENDANT
IT IS FURTHER ORDERED that, within (5) business days after receipt by Defendant Goldberg of this Judgment and Order as entered by the Court, defendant Goldberg shall submit to the Commission a truthful sworn statement, in the form of Attachment A, that shall acknowledge receipt of this Judgment and Order.
XI. PERMANENT RECEIVER
IT IS FURTHER ORDERED that the permanent receivership ordered by this Court in the Preliminary Injunction entered on April 3, 1998, shall continue until further order of this Court.
XII. RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for all purposes.
XIII. ENTRY OF JUDGMENT
IT IS FURTHER ORDERED that, as there is no just reason for delay of entry of this judgment, the Clerk shall immediately enter this Final Judgment and Order for Permanent Injunction as to Stanley R. Goldberg.
SO ORDERED, this ____ day of ______________, 1999.
UNITED STATES DISTRICT COURT
FEDERAL TRADE COMMISSION,
INETINTL.COM, INC., et al., Defendants.
Civ. No. 98-2140 CAS (CWx)
AFFIDAVIT OF DEFENDANT
Stanley R. Goldberg, being duly sworn, hereby states and affirms as follows: