United States of America v. Kern et al, No. 2:2018cv00283 - Document 32 (D. Nev. 2018)
Court Description: ORDER Granting 26 Stipulation Consent Decree and Final Judgment as to Defendants Del Rio and NSD Products. Signed by Judge Jennifer A. Dorsey on 4/18/2018. (Copies have been distributed pursuant to the NEF - ADR)
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United States of America v. Kern et al 1 2 3 4 5 6 7 8 9 10 11 12 Doc. 32 CHAD A. READLER Acting Assistant Attoney General ETHAN P. DAVIS Deputy Assistant Attoney General GUSTAV W. EYLER Acting Director, Consumer Protection Branch JILL P. FURMAN Deputy Director JACQUELINE BLAESI-FREED Trial Attoney Consumer Protection Branch U.S. Department of Justice P.O. Box 386 Washington, DC 20044 Telephone: (202) 353-2809 Facsimile: (202) 514-8742 Email: Jacqueline.M.Blaesi-Freed@usdoj.gov DAYLE ELIESON United States Attoney 14 TROY K. FLAKE Assistant United States Attoney 501 Las Vegas Blvd. South, Suite 1100 Las Vegas, Nevada 89101 15 Attorneys for the United States 13 16 UNITED STATES DISTRICT COURT 17 DISTRICT OF NEVADA 18 19 UNITED STATES OF AMERICA, 20 21 22 23 24 Plaintif, V. PATRICIA KEN, et al., Deendants. ) ) Civil Case No: 2: 18-cv-000283-JAD-PAL ) ) ) STIPULATED CONSENT DECREE ) AND FINAL JUDGMENT ) ) [ECF No. 26] ) ) 25 26 Plaintif, the United States of America, brought this action against Patricia Kem; 27 Advanced Allocation System, Inc.; Distribution Reporting Center, Inc.; Global Data Funding, 28 Inc.; Marketing Image Direct, Inc.; Montgomery Marketing, Inc. LLC.; North American Dockets.Justia.com 1 Disbursement Agency, Inc.; Paciic Allocation Systems, Inc.; Special Money Managers, Inc.; Al 2 American Awards, Inc.; Golden Products Service, Inc.; Edgar Del Rio; NSD Products, Inc.; Sea 3 O'Connor; Epifania Castro; New Generation Graphics, Inc.; Andrea Burrow; Stephen Fennell; 4 and Neptune Data Services, Inc., by iling a complaint pursuant to the Fraud Injunction Statute, 5 18 U.S.C. § 1345. This Court granted the United States' ex parte application for a temporary 6 restraining order on February 20, 2018, inding that (1) the United States could likely succeed in 7 deendants are violating or are about to violate 18 U.S.C. §§ 1341 and 1349 by executing a 8 scheme or artifice to deraud, or for obtaining money or property by means of false or fraudulent 9 representations with the intent to deraud using the U.S. Mail; (2) the equities weigh in avor of 1O an injunction; and (3) an injunction is in the public's interest. Finding good cause to do so, on 11 March 2, 2018, the Court extended the temporary restraining order until April 24, 2018. 12 Plaintif and deendant Edgar Del Rio and NSD Products, Inc. (hereinater the "Settling 13 Deendants") stipulate to entry of this Consent Decree and Final Judgment ("Consent Decree") 14 to resolve all matters in dispute in this action between them. 15 IT IS HEREBY ADJUDGED, ORDERED, AND DECREED as ollows: FINDINGS 16 17 1. This Court has jurisdiction over this matter and the parties. ]8 2. The Complaint charges that deendants violated are violating, or are about to 19 violate 18 U.S.C. §§ 1341 and 1349 by executing schemes and artiices to deraud or or 20 obtaining money or property my means of alse or raudulent representations with the intent to 21 deraud, and, in so doing, use the United States Mail. 22 3. Settling Deendants neither admit nor deny any allegations in the Complaint, 23 except as specifically stated in this Order. Only or purposes of this action, Settling Deendants 24 admit the acts necessary to establish jurisdiction. DEFINITIONS 25 26 27 1. "Caging Services" reers to opening mail; entering or inputting data about such mail into a database or orwarding such data; handling, orwarding, or depositing payments 28 2 1 received in such mail, including currency, bank checks, certiied checks, money orders, or credit 2 card charge authorizations; or handling or orwarding any such mail; 3 4 2. "Covered Materials" reers to any materials that contain advertisements, solicitations, promotions, and/or any other materials: a. that represent, directly or indirectly, expressly or impliedly that the recipient has 5 won, will win, or will receive cash, awards, or prizes; 6 7 b. that represent, directly or indirectly, expressly or impliedly that the recipient will 8 receive delivery of cash, awards, or other prizes in retun or payment of a ee; c. that ofer or sale inormation regarding sweepstakes or lotteries; 9 d. that represent, directly or indirectly, expressly or impliedly, that the recipient of 1O 11 the solicitation was speciically selected to receive the mailing based on a reason 12 other than the fact that the recipient's name appears on a mailing list; e. that ofer or a fee the ollowing items or services: 13 14 1. Wealth-Building Programs, meaning instructions, reports, or programs 15 which provide purportedly guaranteed results or methods or making 16 money or an item purportedly guaranteed to provide the user with luck or 17 wealth; 18 11. Psychics, meaning persons (actual or ictitious) that are presented in 19 mailed solicitations or other solicitations to consumers as having psychic, 20 clairvoyant, or other such similar special abilities; or . that contain any other alse or misleading representations. 21 22 3. "Customer List(s)" reers to any compilation including personal inormation- 23 such as the name, address, telephone number, email address, social security number, other 24 identiying inormation, or data that enables access to a person's account (including a credit 25 card, bank account, or other inancial account-that was compiled in whole or in part rom 26 individuals who have responded to any Covered Materials. 27 28 3 4. "Fee" reers to a payment of any kind, including but not limited to: processing 2 ees, service ees, expediting ees, purchase ees, nominal ees, symbolic payments, gits and 3 gratuities. 4 5. "Payment Processing Services" reers to handling credit card transactions, debit 5 card transactions, Automated Clearing House (ACH) transactions, check transactions, money 6 orders, travelers check transactions, or cash transactions. PROHIBITED ACTIVITIES 7 8 9 1O I. Pursuant to 18 U.S.C. § 1345 and the inherent power of this Court, Settling Deendants, their agents, oicers, employees, and successors and all other persons and entities i active concert or participation with them are permanently enjoined rom: 11 A. committing mail raud as deined by 18 U.S.C. §§ 1341 and 1349; 12 B. using the United States mail, or causing others to use the United States mail, to distribute any Covered Materials; 13 14 C. through the United States mail; 15 16 printing, or causing others to print, any Covered Materials that will be distributed D. receiving, handling, opening, or orwarding any correspondence transmitted 17 through the United States mail that responds, by sending payment or otherwise, t 18 any Covered Materials; 19 E. brokering or licensing any Customer Lists; 20 21 disclosing, using, beneitting rom, selling, offering or sale, leasing, renting, F. disclosing, using, beneitting rom, selling, ofering or sale, leasing, renting, 22 brokering or licensing any lists compiled rom or consisting in whole or in part o 23 United States residents where such lists will be used to address any Covered 24 Materials; 25 G. compiling Customer Lists; 26 H. perorming, or causing others to perorm, Caging Services on correspondence 27 transmitted through the United States mail in response to any Covered Materials; 28 4 1 perorming, or causing others to perorm, Payment Processing Services for I. payments received from U.S. residents in response to any Covered Materials; or 2 3 acting as a consultant (whether paid or unpaid) or any person engaged in any of J. the conduct described in Subparagraph I(A)-(1), above. 4 RETENTION OF CUSTOMER LISTS AND COVERED MATERIALS 5 6 II. Within seven (7) days of entry of this Consent Decree, the Settling Deendants ar 7 ordered to provide to Settling Deendants' legal counsel all copies of (1) any Customer Lists and 8 (2) any Covered Materials that are currently in their possession, custody or control. Settling 9 Defendants shall also provide a copy of such Customer Lists and Covered Materials to counsel 1O of record or the United States in this matter and shall not retain in their possession or control 11 any copies of such Customer Lists or Covered Materials. Within seven (7) days of entry of this 12 Consent Decree, Settling Deendants shall also direct any third parties that are in custody of 13 Settling Deendants' Customer Lists and Covered Materials, excluding Settling Defendants' 14 legal counsel, to provide all copies of such materials to counsel of record or the United States in 15 this matter and not to retain any copies of such materials in the third party's possession, custody 16 or control, provided however that these third parties may also provide a copy of such Customer 17 Lists and Covered Materials to their own retained counsel. Within ourteen (14) days of entry o J8 this Consent Decree, Settling Deendants shall provide counsel of record or the United States a 19 certiication in the orm attached here as Exhibit A, sworn under penalty of perjury beore a loca 20 notary, detailing what materials, if any, were provided to Settling Deendants' legal counsel and 21 to counsel of record or the United States in this matter, and certiying that Settling Deendants 22 no longer have in their possession any such materials. NOTICE TO THIRD PARTIES 23 24 Ill. Within ive (5) days of entry of this Consent Decree, Settling Deendants shall 25 provide copies of this Consent Decree to all direct mailers, graphic designers/artists, list brokers, 26 printer/distributors, mailing houses, caging services, and/or payment processors with which they 27 reasonably have determined they done business at any time with respect to any Covered 28 Materials distributed through the United States mail. Within seven (7) days of entry of this 5 1 Consent Decree, Settling Defendants shall provide proof of such notice to the Court and the 2 United States, including the name and addresses of the entities and/or individuals to whom the 3 notice was sent, how the notice was sent, when the notice was sent, and a copy of the notice. OWNERSHIP OF MAIL 4 5 IV. Settling Deendants disclaim any ownership interest in mail responsive to any 6 Covered Materials. The United States Postal Inspection Service is authorized to open any and al 7 United States Mail that was detained pursuant to any order of this Court and any mail responsive 8 to Covered Materials in its possession, custody, or control. The United States Postal Inspection 9 Service shall retun any currency, bearer instruments (including but not limited to money orders 1O and travelers checks), and any personal efects that can be positively identiied with its sender 11 contained in any mail opened pursuant to this paragraph. This retun shall include a letter 12 notiying the sender of the disposition of this matter, attached here as Exhibit B. The United 13 States Postal Inspection Service is authorized to destroy any and all remaining detained mail 14 (including but not limited to envelopes, order forms, correspondence, personal checks, and 15 payment card inormation (PCI)). ORDER ACKNOWLEDGEMENT 16 17 V. Within ive (5) days ater entry of this Consent Decree, the Settling Deendants 18 are ordered to submit to the United States' counsel of record in this action a written 19 acknowledgement of this Consent Decree sworn under penalty of perjury. SIGNATORIES, INTEGRATION, MODIFICATION, & WAIVER 20 21 VI. The undersigned parties and counsel each represent that he, she or it is fully 22 authorized to enter into the terms and conditions of this Consent Decree and to execute and 23 legally bind to this document the party which he, she, or it represents. 24 VII. This Consent Decree constitutes the inal, complete, and exclusive agreement and 25 understanding among the Parties with respect to the settlement embodied in the Consent Decree 26 and supersedes all prior agreements and understandings, whether oral or written, concerning the 27 settlement embodied herein (other than deliverables that are subsequently submitted and 28 approved pursuant to this Decree). The parties acknowledge that there are no representations, 6 agreements, or understandings relating to the settlement other than those expressly contained in 2 this Consent Decree. This Consent Decree may be signed by the parties and counsel in 3 counterparts, each of which constitutes an original and all of which constitute one of the same 4 Consent Decree. Signatures delivered by acsimile transmission, or as .pdf attachments to 5 emails, shall constitute acceptable, binding signatures or purposes of this Consent Decree. 6 7 8 VIII. The Consent Decree shall not be modified except in writing by Plaintif and the Settling Deendants and approved by the Court. IX. Settling Deendants agree: (1) to waive all rights to appeal or otherwise challeng 9 or contest the validity of this Consent Decree; (2) to waive, release, and remit any and all claims, IO either directly or indirectly against the United States and its agencies, employees, representatives 11 and agents, including but not limited to the Department of Justice, the United States Postal 12 Inspection Service, and their employees, with respect to this action. 13 X. 14 ees in this action. FINALITY AND RETENTION OF JURISDICTION 15 16 Plaintif and the Settling Defendants agree to bear their own costs and attoneys' XI. This Court retains jurisdiction of this action for the purposes of enforcing or 17 modiying this Consent Decree and or the purpose of granting such additional relief as may be 18 necessary or appropriate. 19 20 XII. This Consent Decree shall constitute a inal judgment and order in this action as to Settling Deendants. 21 IT IS SO ORDERED 22 23 24 25 U.S. District Judge Jennifer A. Dorsey 26 April 18, 2018 DATED: ________ _ 27 28 7 1 2 3 4 J Dated: )-· -1-Jl EL RJO, individually and as an oicer of NSD Products, Inc., also doing business as NSD Printing 5 6 7 Dated: s-2-12 BJMTH Law Oices of Brian J. Smith, Ltd. 9525 Hillwood Drive, Suite 190 Las Vegas, Nevada 9 10 Attoneys for Edgar Del Rio and NSD Products Inc. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 Exhibit A Exhibit A Certification I, ______________________, hereby declare as follows: Pursuant to Paragraph II of the Stipulated Consent Decree and Final Judgment entered on _____________, 2018 (the “Consent Decree”) in United States v. Kern, et al., 2:18-cv-000283JAD-PAL (D. Nev.) I certify as follows (check all that apply): _____ No Lists or Covered Materials in Possession or Control. As of the date of the Consent Decree, I did not have in my possession or control any Covered Materials, as defined in the Consent Decree, or any Customer Lists, as defined in the Consent Decree. _____ Lists Provided to Legal Counsel. Pursuant to the Consent Decree, I have provided to my legal counsel all Covered Materials and Customer Lists. The materials provided to legal counsel are as follows: Materials (describe) Counsel Name, Address, and Point of Contact (Attach additional sheets if necessary) [Continued on next page] 1 of 3 Date Provided _____ Requests to Third Parties. On the dates and in the manner listed below, I instructed the individuals identified below to provide to counsel for the United States all Covered Materials and Customer Lists, to the extent such individual has or had any such lists in his or her possession, and not to retain copies of any such materials or lists. I indicate below whether the individual, as of the date of this certification, has confirmed that he or she has complied with this directive and the date of such confirmation. Name of Third Party (name of corporate entity, if applicable, and address) Name of entity/individual contacted: Address: Communication of Instruction Date: Response Confirmed lists and Covered Materials destroyed Manner (e.g., phone, mail, email): Name of individual responding: Date of confirmation: Manner communicated (e.g., phone, mail, email): or No response received within five business days Name of entity/individual contacted: Date: Confirmed lists and Covered Materials destroyed Address: Manner (e.g., phone, mail, email): Name of individual responding: Date of confirmation: Manner communicated (e.g., phone email): or No response received within five business days (Attach additional sheets if necessary) 2 of 3 I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. Dated _________, and executed at __________. ______________________ Signature ______________________ Typed or Printed Name and Title State of [STATE] County of [XXX] ) ) ss.: ) On the _____ day of _________ in the year 2018, before me, the undersigned notary public, personally appeared _________________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument. Notary Public/State of [STATE][ 3 of 3 Exhibit B Exhibit B UNITED STATES POSTAL INSPECTION SERVICE DOJ MAIL FRAUD TEAM [Date] First Name, Last Name Address 1 Address 2 City, State Zip Re: United States of America v. Kern, et al. Civil Case No: 2:18-cv-000283-JAD-PAL Dear Sir/Madam: We are writing you because you previously mailed [merge field—money/bearer instrument/personal item and specific amount of remission] in response to a letter claiming you were entitled to receive a cash prize. We are returning your [merge field—money/bearer instrument/personal item and specific amount of remission]. The United States Department of Justice (DOJ) has filed civil charges against Patricia Kern; Advanced Allocation System, Inc.; Distribution Reporting Center, Inc.; Global Data Funding, Inc.; Marketing Image Direct, Inc.; Montgomery Marketing, Inc. LLC.; North American Disbursement Agency, Inc.; Pacific Allocation Systems, Inc.; Special Money Managers, Inc.; All American Awards, Inc.; Golden Products Service, Inc.; Edgar Del Rio; NSD Products, Inc.; Sean O’Connor; Epifanio Castro; New Generation Graphics, Inc.; Andrea Burrow; Stephen Fennell; and Neptune Data Services, Inc. The case, filed in the District of Nevada, alleged that the defendants conducted a scheme to defraud consumers through the mail. Specifically, DOJ alleged that the defendants solicited payments from consumers by sending letters representing that the recipient was entitled to receive a large cash prize or other valuable prize in return for a payment in the range of $20 to $30. DOJ alleged that these representations were fraudulent and that consumers who sent in payments did not receive the promised cash or prizes. The letters were sent in the names of multiple different companies and individuals. On February 20, 2018, the United States District Court made a determination that DOJ could likely succeed in proving that defendants were engaging in a fraudulent scheme. On _______ 2018, the District Court entered a permanent injunction against the defendants, prohibiting them from mailing advertisements representing that a consumer is entitled to receive a prize in return for a payment. This injunction also requires the U.S. Postal Inspection Service to return to consumers any currency or bearer instruments (such as money orders or travelers checks). Enclosed, please find the [merge field—money/bearer instrument and specific amount of remission] that was able to be identified as belonging specifically to you. Should you have any questions about this notice, please contact Sabrina Holmes with the U.S. Postal Inspection Service at (202) 616-5634. For more information, visit [insert URL for press release website.] PO Box 7404 Washington, DC 20044-7404
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