Federal Trade Commission v. Elegant Solutions, Inc. et al, No. 8:2019cv01333 - Document 191 (C.D. Cal. 2020)
Court Description: AMENDED FINAL JUDGMENT 184 by Judge James V. Selna. The Court, having considered the arguments, memoranda, and exhibits in support of the FTC's Motion for Summary Judgment, and all other pleadings and files in this action, hereby GRANTS th e FTC's motion. IT IS FURTHER ORDERED that: A. Judgment in the amount of Twenty-Seven Million, Five Hundred Eighty-Four Thousand, Nine Hundred Sixty-Nine Dollars ($27,584,969.00) is entered in favor of the Commission against Defendants, jointly and severally, as equitablemonetary relief. (see document for details.) (es)
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Federal Trade Commission v. Elegant Solutions, Inc. et al 1 2 3 4 5 6 7 8 9 10 11 12 13 Doc. 191 ALDEN F. ABBOTT General Counsel K. MICHELLE GRAJALES mgrajales@ftc.gov SAMUEL F. JACOBSON sjacobson@ftc.gov FEDERAL TRADE COMMISSION 600 Pennsylvania Ave., NW Mail Stop: CC-10232 Washington, DC 20580 (202) 326-3172 JOHN D. JACOBS, Cal. Bar No. 134154 Local Counsel jjacobs@ftc.gov FEDERAL TRADE COMMISSION 10990 Wilshire Blvd., Ste. 400 Los Angeles, CA 90024 Tel: (310) 824-4343; Fax: (310) 824-4380 14 15 Attorneys for Plaintiff 16 17 18 19 20 21 22 23 24 25 26 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ) Case No. SACV 19-1333JVS (KESx) FEDERAL TRADE COMMISSION, ) ) AMENDED FINAL JUDGMENT Plaintiff, ) ) ) vs. ) ELEGANT SOLUTIONS, INC., et al., ) ) Defendants. ) ) 27 28 Dockets.Justia.com 1 Having considered the objections of defendant Elegant Solutions, Inc. et al. 2 (collectively “Elegant Solutions”) (Docket No. 189) and the Federal Trade 3 Commission’ response thereto (Docket No. 190), the Court now enters its 4 Amended Final Judgment.1 5 6 Plaintiff, the Federal Trade Commission, filed its Complaint for a permanent 7 injunction and other equitable relief in this matter, pursuant to Sections 13(b) and 8 19 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 53(b) and 9 57(b), and the Telemarketing and Consumer Fraud and Abuse Prevention Act 10 (“Telemarketing Act”), 15 U.S.C. §§ 6101-6108. On motion by the FTC, on July 11 8, 2019, the Court entered an ex parte temporary restraining order with asset 12 freeze, appointment of a Receiver, and other equitable relief. Dkt. No. 23. On July 13 17, 2019, the Court entered a stipulated preliminary injunction continuing the 14 terms of the preliminary injunction. Dkt. No. 52. On March 9, 2020, the FTC 15 moved for summary judgment as to all Defendants on all counts of the Complaint. 16 The Court, having considered the arguments, memoranda, and exhibits in 17 support of the FTC’s Motion for Summary Judgment, and all other pleadings and 18 files in this action, hereby GRANTS the FTC’s motion. 19 20 THEREFORE, IT IS ORDERED as follows: FINDINGS 21 1. This Court has jurisdiction over this matter. 22 2. Venue in this District is proper under 15 U.S.C. § 53(b) and 28 U.S.C. §§ 23 1391(b)(1), (b)(2), (c)(1), (c)(2), and (d). 24 25 26 27 28 1 The Court’s usual practice is to wait seven days for objections where a proposed judgment is not endorsed as to form by the opposing party. Apparently, there was some confusion in this case. (See Application, Docket No. 185.) To ensure due process, the Court granted Elegant Solutions’ application for file objections. (Docket No. 188.) Those objections have been fully considered. -2- 1 3. The Complaint charges that Defendants participated in acts or practices that 2 violate Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the FTC’s 3 Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310. The Complaint seeks both 4 permanent injunctive relief and equitable monetary relief for Defendants’ 5 deceptive and unlawful acts or practices as alleged therein. 6 4. The FTC has authority to seek the relief it has requested, pursuant to 7 Sections 13(b) and 19 of the Federal Trade Commission Act (“FTC Act”), 15 8 U.S.C. §§ 53(b) and 57(b) and the Telemarketing and Consumer Fraud and Abuse 9 Prevention Act (“Telemarketing Act”), 15 U.S.C. §§ 6101-6108. 10 11 12 13 14 5. The activities of Defendants are in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act, 15 U.S.C. § 44. 6. The Complaint states a claim on which relief can be granted against Defendants. 7. The allegations in the Complaint and the evidence supporting them establish 15 that Defendants violated Section 5 of the FTC Act, 15 U.S.C. § 45, and the TSR, 16 16 C.F.R. Part 310, in connection with the telemarketing of student loan debt relief 17 services. 18 8. In numerous instances, Defendants, in connection with the advertising, 19 marketing, promotion, offering for sale, or sale of student loan debt relief services, 20 have represented, directly or indirectly, expressly or by implication, that: 21 a. Consumers who purchased Defendants’ debt relief services would be 22 enrolled in a repayment plan that would reduce their monthly 23 payments to a lower, specific amount or have their loan balances 24 forgiven in whole or in part; 25 b. applied toward consumers’ student loans; or 26 27 28 Most or all of consumers’ monthly payments to Defendants would be c. Defendants would assume responsibility for the servicing of consumers’ student loans. -3- 1 In fact, in numerous instances in which Defendants have made these 2 representations, such representations were false or not substantiated at the time 3 Defendants made them. Therefore, the making of these representations constitute a 4 deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 5 45(a). 6 9. In numerous instances, in connection with the telemarketing of student loan 7 debt relief services, Defendants have requested or received payment of a fee or 8 consideration for debt relief services before: (a) Defendants have renegotiated, 9 settled, reduced, or otherwise altered the terms of at least one debt pursuant to a 10 settlement agreement, debt management plan, or other such valid contractual 11 agreement executed by the customer; and (b) the customer has made at least one 12 payment pursuant to that settlement agreement, debt management plan, or other 13 valid contractual agreement between the customer and the creditor, in violation of 14 Section 310.4(a)(5)(i) of the TSR, 16 C.F.R. § 310.4(a)(5)(i). 15 10. In numerous instances, Defendants, in connection with the telemarketing of 16 student loan debt relief services, have misrepresented, directly or indirectly, 17 expressly or by implication, material aspects of their debt relief services, including 18 but not limited to that: (a) Consumers who purchased Defendants’ debt relief 19 services would be enrolled in a repayment plan that would reduce their monthly 20 payments to a lower, specific amount or have their loan balances forgiven in whole 21 or in part; (b) Most or all of consumers’ monthly payments to Defendants would be 22 applied toward consumers’ student loans; or (c) Defendants would assume 23 responsibility for the servicing of consumers’ student loans, in violation of Section 24 310.3(a)(2)(x) of the TSR, 16 C.F.R. § 310.3(a)(2)(x). 25 11. Defendants received revenues of at least $31,140,943.00 derived 26 unlawfully from payments by consumers as a direct result of Defendants’ 27 violations of Section 5 of the FTC Act and the TSR. Of those revenues, they have 28 refunded approximately $408,089.00, and paid approximately $3,147,885.00 to -4- 1 consumers’ student loan servicers. Defendants have therefore caused consumer 2 injury in the amount of at least $27,584,969.00. 3 12. Defendants Elegant Solutions, Inc., Trend Capital Ltd., Dark Island 4 Industries, Inc., Heritage Asset Management, Inc., and Tribune Management, Inc. 5 (collectively, “Corporate Defendants”) operated as a common enterprise while 6 engaging in the unlawful acts and practices set forth in Findings 7 to 11 above. 7 Defendants have conducted the business practices described above through an 8 interrelated network of companies that have common ownership or officers, 9 business functions, employees, office locations, and that commingled funds. 10 Because these Corporate Defendants have operated as a common enterprise, each 11 of them is jointly and severally liable for the acts and practices set forth in Findings 12 7 to 11 above. 13 13. At all times material to the Complaint, Defendants Mazen Radwan, Rima 14 Radwan, Labiba Velazquez, and Dean Robbins (collectively, “Individual 15 Defendants”) formulated, directed, controlled, had the authority to control, or 16 participated in the acts and practices of the Corporate Defendants that constitute 17 the common enterprise. Individual Defendants also each had actual knowledge of 18 the acts and practices set forth in Findings 7 to 11 above. Thus, Individual 19 Defendants are each jointly and severally liable for monetary and injunctive relief. 20 14. Sections 13(b) and 19 of the Federal Trade Commission Act (“FTC Act”), 21 15 U.S.C. §§ 53(b) and 57(b), empower this Court to issue injunctive and other 22 relief against violations of the FTC Act and, in the exercise of its equitable 23 jurisdiction, to award redress and restitution to remedy the injury to consumers, to 24 order disgorgement of profits resulting from Defendants’ unlawful acts or 25 practices, and issue other ancillary equitable relief. 26 15. This Court is persuaded that the danger of future violations by Defendants 27 justifies the issuance of injunctive relief. Specifically, it is proper in this case to 28 issue an injunction that: (a) permanently bans Defendants from advertising, -5- 1 marketing, promoting, offering for sale, selling, or Assisting Others in the 2 advertising, marketing, promoting, offering for sale, or selling, of any Secured or 3 Unsecured Debt Relief Product or Service; (b) permanently bans Defendants from 4 participating or Assisting Others in Telemarketing, whether directly or through an 5 intermediary; (c) prohibits misrepresenting, or Assisting Others in misrepresenting, 6 expressly or by implication, any fact material to a consumer’s decision to purchase 7 a Financial Product or Service; (d) prohibits making any unsubstantiated 8 representation or Assisting Others in making any unsubstantiated representation, 9 expressly or by implication, about the benefits, performance, or efficacy of any 10 product or service; and (e) provides such other ancillary relief as is necessary to 11 assist the FTC and the Court in monitoring Defendants’ compliance with such 12 injunctive relief. 13 16. As set forth above, Defendants have unlawfully derived revenues of 14 $27,584,969.00 from payments by consumers as a direct result of Defendants’ 15 violations of Section 5 of the FTC Act and the TSR. It is therefore proper in this 16 case to enter a monetary judgment of $27,584,969.00 against Defendants, jointly 17 and severally, as equitable monetary relief in the form of restitution, rescission of 18 contracts, and disgorgement for their violations of the FTC Act and the TSR. 17. This action and the relief awarded herein are in addition to, and not in lieu 19 20 of, other remedies as may be provided by law, including both civil and criminal 21 remedies. 18. Pursuant to Federal Rule of Civil Procedure 65(d), the provisions of this 22 23 Order are binding upon each Defendant, their successors and assigns, and their 24 officers, agents, employees and attorneys, and upon those persons or entities in 25 active concert or participation with them who receive actual notice of this Order by 26 personal service or otherwise. 19. Entry of this Order is in the public interest. 27 28 . -6- DEFINITIONS 1 For purposes of this Order, the following definitions apply: 2 3 A. 1. 4 5 “Assisting Others” includes: performing customer service functions, including receiving or responding to consumer complaints; 2. 6 formulating or providing, or arranging for the formulation or 7 provision of, any advertising or marketing material, including any telephone sales 8 script, direct mail solicitation, or the design, text, or use of images of any Internet 9 website, email, or other electronic communication; 3. 10 formulating or providing, or arranging for the formulation or 11 provision of, any marketing support material or service, including web or Internet 12 Protocol addresses or domain name registration for any Internet websites, affiliate 13 marketing services, or media placement services; 4. 14 15 providing names of, or assisting in the generation of, potential customers; 16 5. performing marketing, billing, or payment services of any kind; or 17 6. acting or serving as an owner, officer, director, manager, or principal 18 of any entity. 19 B. 20 as Federal Direct Group, Trend Capital Ltd., also doing business as Mission Hills 21 Federal, Dark Island Industries, Inc., also doing business as Federal Direct Group 22 and Cosmopolitan Funding Inc., Heritage Asset Management, Inc., also doing 23 business as National Secure Processing, Tribune Management, Inc., also doing 24 business as the Student Loan Group, and each of their subsidiaries, affiliates, 25 successors, and assigns. 26 C. 27 aka Michael or Mike Radwan, Rima Radwan, Labiba Velazquez aka Labiba 28 Radwan, and Dean Robbins, individually, collectively, or in any combination. “Corporate Defendants” means Elegant Solutions, Inc., also doing business “Defendants” means all of the Corporate Defendants and Mazen Radwan -7- 1 D. 2 program represented, expressly or by implication, to: 1. 3 4 2. provide any consumer, arrange for any consumer to receive, or assist any consumer in receiving, credit, debit, or stored value cards; 3. 7 8 provide any consumer, arrange for any consumer to receive, or assist any consumer in receiving, a loan or other extension of credit; 5 6 “Financial Product or Service” means any product, service, plan, or improve, repair, or arrange to improve or repair, any consumer’s credit record, credit history, or credit rating; or 4. 9 provide advice or assistance to improve any consumer’s credit record, 10 credit history, or credit rating. 11 E. 12 including a corporation, partnership, proprietorship, association, cooperative, or 13 any other group or combination acting as an entity. 14 F. “Receiver” means Thomas W. McNamara. 15 G. “Receivership Entity” means the Corporate Defendants, as well as any 16 other business related to Defendants’ mortgage assistance relief services business 17 and which the Receiver has reason to believe is owned or controlled in whole or in 18 part by any Defendant, including but not limited to any other mortgage assistance 19 relief services business operated by the Individual Defendants. 20 H. 21 “Person” means a natural person, organization, or other legal entity, “Secured or Unsecured Debt Relief Product or Service” means: 1. With respect to any mortgage, loan, debt, or obligation between a 22 person and one or more secured or unsecured creditors or debt collectors, any 23 product, service, plan, or program represented, expressly or by implication, to: 24 a. stop, prevent, or postpone any mortgage or deed of foreclosure 25 sale for a person’s dwelling, any other sale of collateral, any repossession of a 26 person’s dwelling or other collateral, or otherwise save a person’s dwelling or 27 other collateral from foreclosure or repossession; 28 b. negotiate, obtain, or arrange a modification, or renegotiate, -8- 1 settle, or in any way alter any terms of the mortgage, loan, debt, or obligation, 2 including a reduction in the amount of interest, principal balance, monthly 3 payments, or fees owed by a person to a secured or unsecured creditor or debt 4 collector; c. 5 obtain any forbearance or modification in the timing of 6 payments from any secured or unsecured holder or servicer of any mortgage, loan, 7 debt, or obligation; d. 8 negotiate, obtain, or arrange any extension of the period of time 9 within which a person may (i) cure his or her default on the mortgage, loan, debt, 10 or obligation, (ii) reinstate his or her mortgage, loan, debt, or obligation, (iii) 11 redeem a dwelling or other collateral, or (iv) exercise any right to reinstate the 12 mortgage, loan, debt, or obligation or redeem a dwelling or other collateral; e. 13 obtain any waiver of an acceleration clause or balloon payment 14 contained in any promissory note or contract secured by any dwelling or other 15 collateral; or f. 16 negotiate, obtain, or arrange (i) a short sale of a dwelling or 17 other collateral, (ii) a deed-in-lieu of foreclosure, or (iii) any other disposition of a 18 mortgage, loan, debt, or obligation other than a sale to a third party that is not the 19 secured or unsecured loan holder. 20 The foregoing shall include any manner of claimed assistance, including auditing 21 or examining a person’s application for the mortgage, loan, debt, or obligation. 22 2. With respect to any loan, debt, or obligation between a person and one 23 or more unsecured creditors or debt collectors, any product, service, plan, or 24 program represented, expressly or by implication, to: 25 a. repay one or more unsecured loans, debts, or obligations; or 26 b. combine unsecured loans, debts, or obligations into one or more 27 new loans, debts, or obligations. 28 -9- 1 I. “Telemarketing” means any plan, program, or campaign which is 2 conducted to induce the purchase of goods or services by use of one or more 3 telephones, and which involves a telephone call, whether or not covered by the 4 Telemarketing Sales Rule. 5 I. 6 BAN ON SECURED AND UNSECURED 7 DEBT RELIEF PRODUCTS AND SERVICES IT IS ORDERED that Defendants are permanently restrained and enjoined 8 9 from advertising, marketing, promoting, offering for sale, selling, or Assisting 10 Others in the advertising, marketing, promoting, offering for sale, or selling, of any 11 Secured or Unsecured Debt Relief Product or Service. 12 II. 13 BAN ON TELEMARKETING IT IS FURTHER ORDERED that Defendants are permanently restrained 14 15 and enjoined from participating or Assisting Others in Telemarketing, whether 16 directly or through an intermediary. 17 III. 18 PROHIBITION AGAINST MISREPRESENTATIONS 19 RELATING TO FINANCIAL PRODUCTS AND SERVICES IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, 20 21 employees, and attorneys, and all other Persons in active concert or participation 22 with any of them, who receive actual notice of this Order, whether acting directly 23 or indirectly, in connection with the advertising, marketing, promoting, offering for 24 sale, or selling of any Financial Product or Service, are permanently restrained and 25 enjoined from misrepresenting, or Assisting Others in misrepresenting, expressly 26 or by implication: 27 A. 28 including: the terms or rates that are available for any loan or other extension of credit, -10- 1 1. closing costs or other fees; 2 2. the payment schedule, monthly payment amount(s), any balloon 3 payment, or other payment terms; 3. 4 5 whether they are fixed or adjustable; 4. 6 7 the interest rate(s), annual percentage rate(s), or finance charge(s), and the loan amount, credit amount, draw amount, or outstanding balance; the loan term, draw period, or maturity; or any other term of credit; 5. 8 the amount of cash to be disbursed to the borrower out of the 9 proceeds, or the amount of cash to be disbursed on behalf of the borrower to any 10 third parties; 6. 11 12 whether any specified minimum payment amount covers both interest and principal, and whether the credit has or can result in negative amortization; or 7. 13 that the credit does not have a prepayment penalty or whether 14 subsequent refinancing may trigger a prepayment penalty and/or other fees; 15 B. 16 history, credit rating, or ability to obtain credit, including that a consumer’s credit 17 record, credit history, credit rating, or ability to obtain credit can be improved by 18 permanently removing current, accurate negative information from the consumer’s 19 credit record or history; 20 C. that a consumer will receive legal representation; or 21 D. any other fact material to consumers concerning any good or service, such 22 as: the total costs; any material restrictions, limitations, or conditions; or any 23 material aspect of its performance, efficacy, nature, or central characteristics. the ability to improve or otherwise affect a consumer’s credit record, credit 24 IV. 25 PROHIBITION AGAINST MISREPRESENTATIONS 26 27 28 RELATING TO ANY PRODUCTS OR SERVICES IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees, and attorneys, and all other Persons in active concert or participation -11- 1 with any of them, who receive actual notice of this Order, whether acting directly 2 or indirectly, in connection with the advertising, marketing, promoting, offering for 3 sale, or selling of any product, service, plan, or program, are permanently 4 restrained and enjoined from misrepresenting, or Assisting Others in 5 misrepresenting, expressly or by implication: 6 A. 7 exchange, or repurchase policy, including the likelihood of a consumer obtaining a 8 full or partial refund, or the circumstances in which a full or partial refund will be 9 granted to the consumer; 10 B. 11 connected to any other Person; government entity; public, non-profit, or other non- 12 commercial program; or any other program; 13 C. 14 product, service, plan, or program; or 15 D. 16 as: the total costs; any restrictions, limitations, or conditions; or any aspect of its 17 performance, efficacy, nature, or central characteristics. any material aspect of the nature or terms of any refund, cancellation, that any Person is affiliated with, endorsed or approved by, or otherwise the nature, expertise, position, or job title of any Person who provides any any other fact material to consumers concerning any good or service, such 18 V. 19 PROHIBITION AGAINST UNSUBSTANTIATED CLAIMS 20 IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, 21 employees, and attorneys, and all other Persons in active concert or participation 22 with any of them, who receive actual notice of this Order, whether acting directly 23 or indirectly, in connection with the sale of any product or service, are permanently 24 restrained and enjoined from making any representation or Assisting Others in 25 making any representation, expressly or by implication, about the benefits, 26 27 28 performance, or efficacy of any product or service, unless the representation is non-misleading, and, at the time such representation is made, that Defendant possesses and relies upon competent and reliable evidence that is sufficient in -12- 1 quality and quantity based on standards generally accepted in the relevant fields, 2 when considered in light of the entire body of relevant and reliable evidence, to 3 substantiate that the representation is true. 4 VI. 5 MONETARY JUDGMENT AND PARTIAL SUSPENSION IT IS FURTHER ORDERED that: 6 7 A. Judgment in the amount of Twenty-Seven Million, Five Hundred Eighty- 8 Four Thousand, Nine Hundred Sixty-Nine Dollars ($27,584,969.00) is entered in 9 favor of the Commission against Defendants, jointly and severally, as equitable 10 monetary relief. 11 B. The monetary judgment set forth in this Section VI is enforceable against any 12 asset, real or personal, whether located within the United States or outside the 13 United States, owned jointly or singly by, on behalf of, for the benefit of, in trust 14 by or for, or as a deposit for future goods or services to be provided to, any 15 Defendant, whether held as tenants in common, joint tenants with or without the 16 right of survivorship, tenants by the entirety, and/or community property. 17 C. Any financial or brokerage institution, escrow agent, title company, 18 commodity trading company, business entity, or Person, whether located within the 19 United States or outside the United States, that holds, controls, or maintains 20 accounts or assets of, on behalf of, or for the benefit of, any Receivership Entity, 21 whether real or personal, whether located within the United States or outside the 22 United States, shall, within ten (10) business days from receipt of a copy of this 23 Order, turn over such accounts or assets to the Receiver or his designated agent. 24 25 26 27 28 D. In partial satisfaction of the judgment against Defendants in Section VI.A, any financial or brokerage institution, escrow agent, title company, commodity trading company, business entity, or person, whether located within the United States or outside the United States, that holds, controls, or maintains accounts or assets of, on behalf of, or for the benefit of, any Individual Defendant, whether real -13- 1 or personal, whether located within the United States or outside the United States, 2 shall, within ten (10) business days from receipt of a copy of this Order, turn over 3 such account or asset to the FTC or its designated agent, including, but not limited 4 to: 5 1. Wescom shall, within ten (10) business days of receipt of a copy of this 6 Order, transfer to the FTC or its designated agent all holdings in account 7 number xxxx9841 in the name of Dean Robbins; 8 2. Wescom shall, within ten (10) business days of receipt of a copy of this 9 Order, transfer to the FTC or its designated agent all holdings in account 10 number xxxx5924 in the name of Dean Robbins; 11 3. Orange County’s Credit Union shall, within ten (10) business days of 12 receipt of a copy of this Order, transfer to the FTC or its designated agent 13 all holdings in checking and savings account numbers xxxx8000 in the 14 name of Mazen Radwan; 15 4. Orange County’s Credit Union shall, within ten (10) business days of 16 receipt of a copy of this Order, transfer to the FTC or its designated agent 17 all holdings in account number xxxx3156 in the name of Mazen Radwan; 18 5. CalWest Bank shall, within ten (10) business days of receipt of a copy of 19 this Order, transfer to the FTC or its designated agent all holdings in 20 account number xxxx3941 in the name of Rima Radwan; 21 6. JP Morgan Chase shall, within ten (10) business days of receipt of a copy 22 of this Order, transfer to the FTC or its designated agent all holdings in 23 account number xxxx7434 in the name of Mazen Radwan; 24 7. JP Morgan Chase shall, within ten (10) business days of receipt of a copy 25 of this Order, transfer to the FTC or its designated agent all holdings in 26 account number xxxx7906 in the name of Mazen Radwan; 27 28 -14- 1 8. JP Morgan Chase shall, within ten (10) business days of receipt of a copy 2 of this Order, transfer to the FTC or its designated agent all holdings in 3 account number xxxx1828 in the name of Rima Radwan; 4 9. JP Morgan Chase shall, within ten (10) business days of receipt of a copy 5 of this Order, transfer to the FTC or its designated agent all holdings in 6 account number xxxx5760 in the name of Dean Robbins; 10. Edward Jones shall, within ten (10) business days of receipt of a copy of 7 8 this Order, transfer to the FTC or its designated agent all holdings in 9 account number xxxxxx4015 in the name of Dean Robbins; 10 11. Computershare shall, within ten (10) business days of receipt of a copy 11 of this Order, liquidate all holdings in account number xxxx5169 in the 12 name of Rima Radwan and transfer the proceeds of such liquidation to 13 the FTC or its designated agent; and 12. Golden 1 Credit Union shall, within ten (10) business days of receipt of a 14 15 copy of this Order, transfer to the FTC or its designated agent all 16 holdings in account number xxx9685 in the name of Dean Robbins. 17 E. 18 Upon completion of those transfers, the asset freeze as to Defendants is dissolved. 19 F. 20 interest in all assets transferred pursuant to this Order and may not seek the return 21 of any assets. 22 G. 23 fund administered by the FTC or its designee to be used for equitable relief, 24 including consumer redress and any attendant expenses for the administration of 25 any redress fund. If a representative of the FTC decides that direct redress to 26 27 28 The asset freeze is modified to permit the transfers identified in this Section. Defendants relinquish dominion and all legal and equitable right, title, and All money paid to the FTC pursuant to this Order may be deposited into a consumers is wholly or partially impracticable or money remains after redress is completed, the FTC may apply any remaining money for such other equitable relief (including consumer information remedies) as it determines to be reasonably -15- 1 related to Defendants’ practices alleged in the Complaint. Any money not used for 2 such equitable relief is to be deposited to the U.S. Treasury as disgorgement. 3 VII. 4 CONTINUATION OF RECEIVERSHIP IT IS FURTHER ORDERED that Thomas McNamara, Esq., shall continue 5 6 as a permanent receiver over the Receivership Entities with full powers of a 7 permanent receiver, including but not limited to those powers set forth in the 8 Preliminary Injunction (ECF No. 52), and including full liquidation powers. The 9 Receiver is directed to wind up the Receivership Entities and liquidate all assets 10 within 180 days after entry of this Order. Any party or the Receiver may request 11 that the Court extend the Receiver’s term for good cause. Upon termination of the 12 receivership and final payment to the Receiver of all approved fees, costs, and 13 expenses, the Receiver shall turn over to the FTC or its designated agent all 14 remaining assets in the receivership estate. 15 VIII. 16 CUSTOMER INFORMATION IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, 17 18 employees, attorneys, and all other Persons or entities in active concert or 19 participation with any of them, who receive actual notice of this Order, are 20 permanently restrained and enjoined from directly or indirectly: 21 A. 22 to efficiently administer consumer redress. If a representative of the Commission 23 requests in writing any information related to redress, Defendants must provide it, 24 in the form prescribed by the Commission, within 14 days. 25 B. 26 name, address, telephone number, email address, social security number, FSA ID, 27 other identifying information, or any data that enables access to a customer’s 28 account (including a student loan account, credit card, bank account, or other failing to provide sufficient customer information to enable the Commission disclosing, using, or benefitting from customer information, including the -16- 1 financial account), that any Defendant obtained prior to entry of this Order in 2 connection with the marketing or sale of secured or unsecured debt relief products 3 or services; and 4 C. 5 custody, or control within 30 days after receipt of written direction to do so from a 6 representative of the Commission. failing to destroy such customer information in all forms in their possession, Provided, however, that customer information need not be disposed of, and 7 8 may be disclosed, to the extent requested by a government agency or required by 9 law, regulation, or court order. 10 IX. 11 COOPERATION IT IS FURTHER ORDERED that Defendants must fully cooperate with 12 13 representatives of the Commission in this case and in any investigation related to 14 or associated with the transactions or the occurrences that are the subject of the 15 Complaint. Defendants must provide truthful and complete information, evidence, 16 and testimony. Defendants must appear and must cause Defendants’ officers, 17 employees, representatives, or agents to appear for interviews, discovery, hearings, 18 trials, and any other proceedings that a Commission representative may reasonably 19 request upon 5 days written notice, or other reasonable notice, at such places and 20 times as a Commission representative may designate, without the service of a 21 subpoena. 22 X. 23 ORDER ACKNOWLEDGMENTS IT IS FURTHER ORDERED that Defendants obtain acknowledgments of 24 25 receipt of this Order: 26 A. 27 Commission an acknowledgment of receipt of this Order sworn under penalty of 28 perjury. Each Defendant, within 7 days of entry of this Order, must submit to the -17- 1 B. For 5 years after entry of this Order, Defendants Mazen Radwan, Rima 2 Radwan, Labiba Velazquez, and Dean Robbins for any business that he or she, 3 individually or collectively with any other Defendant, is the majority owner or 4 controls directly or indirectly, and Corporate Defendants must deliver a copy of 5 this Order to: (1) all principals, officers, directors, and LLC managers and 6 members; (2) all employees having managerial responsibilities for Financial 7 Products or Services, and all agents and representatives who participate in 8 Financial Products or Services; and (3) any business entity resulting from any 9 change in structure as set forth in the Section titled Compliance Reporting. 10 Delivery must occur within 7 days of entry of this Order for current personnel. For 11 all others, delivery must occur before they assume their responsibilities. 12 C. 13 acknowledgment of receipt of this Order from each individual or entity to which 14 Defendants delivered a copy of this Order. Defendants must obtain, within 30 days, a signed and dated 15 XI. 16 COMPLIANCE REPORTING IT IS FURTHER ORDERED that Defendants make timely submissions to 17 18 the Commission: 19 A. 20 report, sworn under penalty of perjury: 21 One year after entry of this Order, each Defendant must submit a compliance 1. Each Defendant must: 22 (a) identify the primary physical, postal, and email address and 23 telephone number, as designated points of contact, which 24 representatives of the Commission may use to communicate with that 25 Defendant; 26 (b) identify all of that Defendant’s businesses by all of their names, 27 telephone numbers, and physical, postal, email, and Internet 28 addresses; -18- 1 (c) describe the activities of each business, including the goods and 2 services offered, the means of advertising, marketing, and sales, and 3 the involvement of any other Defendant (which Defendants Mazen 4 Radwan, Rima Radwan, Labiba Velazquez and Dean Robbins must 5 describe if he or she knows or should know due to his or her own 6 involvement); 7 (d) describe in detail whether and how that Defendant is in 8 compliance with each Section of this Order; and 9 (e) provide a copy of each Order Acknowledgment obtained pursuant 10 to this Order, unless previously submitted to the Commission. 2. 11 12 Additionally, Defendants Mazen Radwan, Rima Radwan, Labiba Velazquez and Dean Robbins must each: 13 (a) identify all telephone numbers and all physical, postal, email and 14 Internet addresses, including all residences; 15 (b) identify all business activities, including any business for which 16 such Defendant performs services whether as an employee or 17 otherwise and any entity in which such Defendant has any ownership 18 interest; and 19 (c) describe in detail such Defendant’s involvement in each such 20 business, including title, role, responsibilities, participation, authority, 21 control, and any ownership. 22 B. 23 compliance notice, sworn under penalty of perjury, within 14 days of any change 24 in the following: 25 For 20 years after entry of this Order, each Defendant must submit a 1. Each Defendant must report any change in: 26 (a) any designated point of contact; or 27 (b) the structure of any Defendant or any entity that any Defendant 28 has any ownership interest in or controls directly or indirectly that -19- 1 may affect compliance obligations arising under this Order, including: 2 creation, merger, sale, or dissolution of the entity or any subsidiary, 3 parent, or affiliate that engages in any acts or practices subject to this 4 Order. 2. 5 Additionally, Defendants Mazen Radwan, Rima Radwan, Labiba 6 Velazquez and Dean Robbins must report any change in (a) name, including alias 7 or fictional name, or residence address; or (b) title or role in any business activity, 8 including any business for which he or she performs services whether as an 9 employee or otherwise and any entity in which such Defendant has any ownership 10 interest, and identify the name, physical address, and any Internet address of the 11 business or entity. 12 C. 13 bankruptcy petition, insolvency proceeding, or similar proceeding by or against 14 such Defendant within 14 days of its filing. 15 D. 16 penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, 17 such as by concluding: “I declare under penalty of perjury under the laws of the 18 United States of America that the foregoing is true and correct. Executed on: 19 _____” and supplying the date, signatory’s full name, title (if applicable), and 20 signature. 21 E. 22 submissions to the Commission pursuant to this Order must be emailed to 23 DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to: 24 Associate Director for Enforcement, Bureau of Consumer Protection, Federal 25 Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The 26 subject line must begin: FTC v. Elegant Solutions, et al., X190036. Each Defendant must submit to the Commission notice of the filing of any Any submission to the Commission required by this Order to be sworn under Unless otherwise directed by a Commission representative in writing, all 27 XII. 28 RECORDKEEPING -20- IT IS FURTHER ORDERED that Defendants must create certain records for 1 2 20 years after entry of the Order, and retain each such record for 5 years. 3 Specifically, each Defendant for any business that such Defendant, individually or 4 collectively with any other Defendants, is a majority owner or controls directly or 5 indirectly, must create and retain the following records: 6 A. accounting records showing the revenues from all goods or services sold; 7 B. personnel records showing, for each person providing services, whether as 8 an employee or otherwise, that person’s: name; addresses; telephone numbers; job 9 titles or positions; dates of service; and (if applicable) the reason for termination; 10 C. 11 directly or indirectly, such as through a third party, and any response thereto; 12 D. 13 this Order, including all submissions to the Commission; and 14 E. records of all consumer complaints and refund requests, whether received all records necessary to demonstrate full compliance with each provision of a copy of each unique advertisement or other marketing material. 15 XIII. 16 COMPLIANCE MONITORING 17 IT IS FURTHER ORDERED that, for the purpose of monitoring 18 Defendants’ compliance with this Order, including any failure to transfer any 19 assets as required by this Order: 20 A. 21 FTC, each Defendant must: submit additional compliance reports or other 22 requested information, which must be sworn under penalty of perjury; appear for 23 depositions; and produce documents for inspection and copying. The Commission 24 is also authorized to obtain discovery, without further leave of court, using any of 25 the procedures prescribed by Federal Rules of Civil Procedure 29, 30 (including 26 telephonic depositions), 31, 33, 34, 36, 45, and 69. 27 B. 28 directly with Defendants. Defendants must permit representatives of the Within 14 days of receipt of a written request from a representative of the For matters concerning this Order, the FTC is authorized to communicate -21- 1 Commission to interview any employee or other person affiliated with any 2 Defendant who has agreed to such an interview. The person interviewed may have 3 counsel present. 4 C. 5 its representatives as consumers, suppliers, or other individuals or entities, to 6 Defendants or any individual or entity affiliated with any Defendant, without the 7 necessity of identification or prior notice. Nothing in this Order limits the 8 Commission’s lawful use of compulsory process, pursuant to Sections 9 and 20 of 9 the FTC Act, 15 U.S.C. §§ 49, 57b-1. 10 D. 11 consumer reporting agency must furnish consumer reports concerning Defendants 12 Mazen Radwan, Rima Radwan, Labiba Velzquez, or Dean Robbins, pursuant to 13 Section 604(1) of the Fair Credit Reporting Act, 15, U.S.C. § 1681(b)(a)(1). The Commission may use all other lawful means, including posing, through Upon written request from a representative of the Commission, any 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -22- 1 2 XV. 3 RETENTION OF JURISDICTION 4 IT IS FURTHER ORDERED that this Court retains jurisdiction of this 5 matter for purposes of construction, modification, and enforcement of this Order. 6 7 The Court expressly declines to stay this Amended Final Judgment. The 8 date for performance of any obligation under this Amended Final Judgment shall 9 be determined as of the date of the Amended Final Judgment. 10 IT IS SO ORDERED: 11 12 DATED: July 24, 2020 13 14 15 ________________________________________ JAMES V. SELNA UNITED STATES DISTRICT JUDGE 16 17 18 19 20 21 22 23 24 25 26 27 28 -23-
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