Judge William Dwyer
On September 13, 1999, this Court entered a Stipulated Order for Permanent Injunction, Consumer Redress, and Other Equitable Relief ("1999 Stipulated Order") as to defendants Maurice Verrelli and Creditmart Financial Strategies, Inc. ("CFS"). Defendants defaulted on the payments ordered by the Court, and on September 12, 2000, plaintiff Federal Trade Commission ("FTC") filed a Motion to Reopen the Judgment pursuant to Paragraphs V and VI of the 1999 Stipulated Order. The parties have now resolved the pending dispute between them and hereby request entry of this Stipulated Modification to the 1999 Stipulated Order.
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED that the 1999 Stipulated Order be modified as follows: that Paragraphs V and VI of the 1999 Stipulated Order be replaced and superseded by Paragraphs V and VI below:
IT IS FURTHER ORDERED that:
A. Defendants CFS and Verrelli shall pay to the Commission as full satisfaction of all monetary claims asserted by plaintiff in the Complaint the sum of $9,186,838.00 USD. In lieu of the foregoing monetary amount, which shall be suspended subject to the conditions set forth in Part VI of this Order, defendants CFS and Verrelli shall pay to the Commission $140,000.00 USD, plus accrued interest at 5.15% per annum. $100,000 USD of this amount was owed as of October 1999, and interest on that amount began accruing as of October 1999.
B. As of October 2000, defendants owed $105,150.00 USD, including accrued interest. Defendants paid $25,000.00 USD in October 2000, and an additional $5,000.00 USD on February 1, 2001, leaving a balance owed of $76,513.00 USD including accrued interest. The interest shall continue to accrue on this amount.
C. On February 2, 2001, the parties stipulated to payment of an additional $40,000 USD by defendants for consumer redress. Interest on the resulting increased balance owed by defendants shall begin accruing as of the date of entry of this Order.
D. The Commission may apply any or all redress funds received from defendants pursuant to this Order and any interest received thereon, to a consumer redress program and to related administrative expenses; provided, however, that if the Commission determines, in its sole discretion, that redress to consumers is wholly or partially impracticable, any funds not so used shall be deposited into the United States Treasury. The Commission shall have full and sole discretion to:
E. Defendants expressly waive their rights to litigate the issue of disgorgement. Defendants acknowledge and agree that all money paid pursuant to this Order is irrevocably paid to the Commission for purposes of settlement between plaintiff and the defendants.
F. Defendants CFS and Verrelli shall provide the Commission, or its agent, within thirty (30) days of such a request, the name, last known address, telephone number, date of purchase, credit card or bank account information, and the complete file record, including computer records and correspondence, of each consumer who purchased defendants' credit card protection service or who defendants caused to be charged for that service during the time period between July 1998 and the date this Order is entered, as well as any further information plaintiff deems necessary to effecting a consumer redress program; and
G. Within forty-five (45) days of the entry of this Order, in addition to the above, defendants Verrelli and CFS shall provide refunds to consumers who have contacted defendants, the FTC, or other law enforcement agency since July, 1998, and requested refunds. Defendants CFS and Verrelli shall maintain a record of the name, address, and telephone number of each consumer who received a refund.
A. Defendants shall pay the total balance owing, plus whatever interest has accrued pursuant to Paragraphs V.A., V.B., and V.C. of this Order, in monthly installments of $5,000 USD plus accrued interest. Payment shall be made: a) by certified check or other guaranteed funds payable to and delivered to the Federal Trade Commission, or by wire transfer in accord with directions provided by the FTC; b) on the 1st of each month, with the first payment due on the first day of the month following entry of this Order until the full amount, plus interest, is paid in full. If defendants fail to make a payment within ten days of notification of late payment by the Federal Trade Commission by overnight courier to defendants' attorneys, James Magee, 1420 Fifth Avenue, 33rd Floor, Seattle, WA 98101, and Michael P. Maloney, 2638 Allard, Montreal, Quebec H4E 2L6, Canada, the full amount of the suspended judgment of $9,186,838.00 USD shall become immediately due and payable, minus any amounts already paid by defendants.
B. The Court's approval of this Order is expressly premised upon the truthfulness, accuracy, and completeness of the financial statements provided to counsel for plaintiff by defendants CFS and Verrelli, dated April 27, 2001. If, at any time following entry of this Order, the Commission obtains information indicating that any of defendants' representations on their financial statements concerning their assets, income, liabilities, or net worth were fraudulent, materially misleading, inaccurate, or incomplete, the Commission may, upon motion to the Court, request that the Order herein be reopened for the purpose of requiring additional consumer redress; provided, however, that in all other respects this Order shall remain in full force and effect unless otherwise ordered by this Court; and provided further, that proceedings instituted under this Part are in addition to, and not in lieu of, any other civil or criminal remedies as may be provided by law, including any other proceedings plaintiff may initiate to enforce this Order.
A finding of material misrepresentation or omission as to the financial statement of any defendant will render immediately due and payable the entire amount of the suspended judgment herein entered against said defendants, minus any amounts already paid by defendants, provided that the Federal Trade Commission will not seek an amount in excess of said judgment.
SO ORDERED, this day of , 2001.
The parties hereby consent to the terms and conditions set forth above and consent to entry of this Order without further notice to the parties.
Maurice Verrelli and Creditmart Financial Strategies, Inc.
CERTIFICATE OF SERVICE
I hereby certify that I caused the foregoing document to be served on all defendants on the date set forth below by the following indicated methods:
__ by personal service at .
__ by sending a full, true, and correct copy thereof via overnight courier in a sealed, prepaid envelope,
addressed to counsel for defendants, , at , on the date set forth below.
__ by faxing a full, true, and correct copy thereof to counsel for defendants, , at the fax number ( ) . The receiving fax machine was operating at the time of service and the transmission was properly completed, according to the confirmation report.
Dated , 19__.