United States of America v. Kern et al, No. 2:2018cv00283 - Document 34 (D. Nev. 2018)

Court Description: ORDER Granting 28 Stipulation Consent Decree and Final Judgment as to Defendant Andrea Burrow. 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. 34 CHAD A. READLER Acting Assistant Attorney General ETHAN P. DAVIS Deputy Assistant Attorney General GUSTAV W. EYLER Acting Director, Consumer Protection Branch JILL P. FURMAN Deputy Director JACQUELINE BLAESI-FREED Trial Attorney 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 Attorney 14 TROY K. FLAKE Assistant United States Attorney 501 Las Vegas Blvd. South, Suite 1100 Las Vegas, Nevada 89101 15 Attorneys for the United States 13 16 17 UNITED STATES DISTRICT COURT 18 DISTRICT OF NEVADA 19 20 UNITED STATES OF AMERICA, Plaintiff, 21 22 23 24 v. PATRICIA KERN, et al., Defendants. ) ) Civil Case No: 2:18-cv-000283-JAD-PAL ) ) ) STIPULATED CONSENT DECREE ) AND FINAL JUDGMENT ) ) [ECF No. 28] ) ) 25 26 27 28 Plaintiff, the United States of America, brought this action against Patricia Kern; Advanced Allocation System, Inc.; Distribution Reporting Center, Inc.; Global Data Funding, 1 Dockets.Justia.com 1 Inc.; Marketing Image Direct, Inc.; Montgomery Marketing, Inc. LLC.; North American 2 Disbursement Agency, Inc.; Pacific Allocation Systems, Inc.; Special Money Managers, Inc.; All 3 American Awards, Inc.; Golden Products Service, Inc.; Edgar Del Rio; NSD Products, Inc.; Sean 4 O’Connor; Epifanio Castro; New Generation Graphics, Inc.; Andrea Burrow; Stephen Fennell; 5 and Neptune Data Services, Inc., by filing a complaint pursuant to the Fraud Injunction Statute, 6 18 U.S.C. § 1345. This Court granted the Plaintiff’s ex parte application for a temporary 7 restraining order on February 20, 2018, finding that (1) it could likely succeed in proving 8 defendants are violating or are about to violate 18 U.S.C. §§ 1341 and 1349 by executing a 9 scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent 10 representations with the intent to defraud using the U.S. Mail; (2) the equities weigh in favor of 11 an injunction; and (3) an injunction is in the public’s interest. Finding good cause to do so, on 12 March 2, 2018, the Court extended the temporary restraining order until April 24, 2018. 13 Plaintiff and defendant Andrea Burrow (hereinafter the “Settling Defendant”) stipulate to 14 entry of this Consent Decree and Final Judgment (“Consent Decree”) to resolve all matters in 15 dispute in this action between them. 16 IT IS HEREBY ADJUDGED, ORDERED, AND DECREED as follows: FINDINGS 17 18 1. This Court has jurisdiction over this matter and the parties. 19 2. The Complaint charges defendants violated, are violating, or are about to 20 violate 18 U.S.C. §§ 1341 and 1349 by executing schemes and artifices to defraud or for 21 obtaining money or property my means of false or fraudulent representations with the intent to 22 defraud, and, in so doing, use the United States Mail. 23 3. Settling Defendant neither admits nor denies any allegations in the Complaint, 24 except as specifically stated in this Order, and wishes to settle this action without further 25 litigation, including adjudication of any issue of fact or law. The parties agree that this 26 Stipulated Consent Decree, and its contents, are inadmissible in any future proceeding, civil or 27 criminal, that arises from the allegations in Plaintiff’s complaint, save for any action under 28 2 1 federal law for violation of this Consent Decree. Only for purposes of this action, Settling 2 Defendant admits the facts necessary to establish jurisdiction. 3 4 4. Plaintiff and Settling Defendant stipulate and agree that entry of this Order shall constitute a full, complete, and final settlement of this action. DEFINITIONS 5 6 1. “Caging Services” refers to opening mail; entering or inputting data about such 7 mail into a database or forwarding such data; handling, forwarding, or depositing payments 8 received in such mail, including currency, bank checks, certified checks, money orders, or credit 9 card charge authorizations; or handling or forwarding any such mail; 10 11 12 13 2. “Covered Materials” refers 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 won, will win, or will receive cash, awards, or prizes; 14 b. that represent, directly or indirectly, expressly or impliedly that the recipient will 15 receive delivery of cash, awards, or other prizes in return for payment of a fee; 16 c. that offer for sale information regarding sweepstakes or lotteries; 17 d. that represent, directly or indirectly, expressly or impliedly, that the recipient of 18 the solicitation was specifically selected to receive the mailing based on a reason 19 other than the fact that the recipient’s name appears on a mailing list; 20 e. that offer for a fee the following items or services: 21 i. Wealth-Building Programs, meaning instructions, reports, or programs 22 which provide purportedly guaranteed results or methods for making 23 money or an item purportedly guaranteed to provide the user with luck or 24 wealth; 25 ii. Psychics, meaning persons (actual or fictitious) that are presented in 26 mailed solicitations or other solicitations to consumers as having psychic, 27 clairvoyant, or other such similar special abilities; or 28 f. that contain any other false or misleading representations. 3 1 3. “Customer List(s)” refers to any compilation including personal information— 2 such as the name, address, telephone number, email address, social security number, other 3 identifying information, or data that enables access to a person’s account (including a credit 4 card, bank account, or other financial account—that was compiled in whole or in part from 5 individuals who have responded to any Covered Materials. 6 4. “Fee” refers to a payment of any kind, including but not limited to: processing 7 fees, service fees, expediting fees, purchase fees, nominal fees, symbolic payments, gifts and 8 gratuities. 9 5. “Payment Processing Services” refers to handling credit card transactions, debit 10 card transactions, Automated Clearing House (ACH) transactions, check transactions, money 11 orders, travelers check transactions, or cash transactions. PROHIBITED ACTIVITIES 12 13 I. Pursuant to 18 U.S.C. § 1345 and the inherent power of this Court, Settling 14 Defendant, her agents, officers, employees, and successors and all other persons and entities 15 in active concert or participation with her stipulate to being permanently enjoined from: 16 A. committing mail fraud as defined by 18 U.S.C. §§ 1341 and 1349; 17 B. using the United States mail, or causing others to use the United States mail, to distribute any Covered Materials; 18 19 C. through the United States mail; 20 21 printing, or causing others to print, any Covered Materials that will be distributed D. receiving, handling, opening, or forwarding any correspondence transmitted 22 through the United States mail that responds, by sending payment or otherwise, to 23 any Covered Materials; 24 E. brokering or licensing any Customer Lists; 25 26 27 disclosing, using, benefitting from, selling, offering for sale, leasing, renting, F. disclosing, using, benefitting from, selling, offering for sale, leasing, renting, brokering or licensing any lists compiled from or consisting in whole or in part of 28 4 1 United States residents where such lists will be used to address any Covered 2 Materials; 3 G. compiling Customer Lists; 4 H. performing, or causing others to perform, Caging Services on correspondence transmitted through the United States mail in response to any Covered Materials; 5 6 I. payments received from U.S. residents in response to any Covered Materials; or 7 8 J. acting as a consultant (whether paid or unpaid) for any person engaged in any of the conduct described in Subparagraph I(A)-(I), above. 9 RETENTION OF CUSTOMER LISTS AND COVERED MATERIALS 10 11 performing, or causing others to perform, Payment Processing Services for II. Within seven (7) days of entry of this Consent Decree, the Settling Defendant is 12 ordered to provide to Settling Defendant’s legal counsel all copies of (1) any Customer Lists and 13 (2) any Covered Materials that are currently in her possession, custody or control. Settling 14 Defendant shall also provide a copy of such Customer Lists and Covered Materials to counsel of 15 record for the United States in this matter and shall not retain in her possession or control any 16 copies of such Customer Lists or Covered Materials. Within seven (7) days of entry of this 17 Consent Decree, Settling Defendant shall also direct any third parties that are in custody of 18 Settling Defendant’s Customer Lists and Covered Materials, excluding Settling Defendant’s 19 legal counsel, to provide all copies of such materials to counsel of record for the United States in 20 this matter and not to retain any copies of such materials in the third party’s possession, custody 21 or control, provided however that these third parties may also provide a copy of such Customer 22 Lists and Covered Materials to their own retained counsel. Within fourteen (14) days of entry of 23 this Consent Decree, Settling Defendant shall provide counsel of record for the United States a 24 certification in the form attached here as Exhibit A, sworn under penalty of perjury before a local 25 notary, detailing what materials, if any, were provided to Settling Defendant’s legal counsel and 26 to counsel of record for the United States in this matter, and certifying that Settling Defendant no 27 longer has in her possession any such materials. 28 5 NOTICE TO THIRD PARTIES 1 2 III. Within five (5) days of entry of this Consent Decree, Settling Defendant shall 3 provide copies of this Consent Decree to all direct mailers, graphic designers/artists, list brokers, 4 printer/distributors, mailing houses, caging services, and/or payment processors with which she 5 reasonably has determined she has done business since January 1, 2016 with respect to any 6 Covered Materials distributed through the United States mail. Within seven (7) days of entry of 7 this Consent Decree, Settling Defendant shall provide proof of such notice to the Court and the 8 United States, including the name and addresses of the entities and/or individuals to whom the 9 notice was sent, how the notice was sent, when the notice was sent, and a copy of the notice. OWNERSHIP OF MAIL 10 11 IV. Settling Defendant disclaims any ownership interest in mail responsive to any 12 Covered Materials. The United States Postal Inspection Service is authorized to open any and all 13 United States Mail that was detained pursuant to any order of this Court and any mail responsive 14 to Covered Materials in its possession, custody, or control. Prior to opening any mail personally 15 addressed to Settling Defendant, the United States will provide counsel for Settling Defendant 16 with the exterior of the mailing and the parties will determine whether the piece of mail relates to 17 Covered Materials. The United States Postal Inspection Service shall return any currency, bearer 18 instruments (including but not limited to money orders and travelers checks), and any personal 19 effects that can be positively identified with its sender contained in any mail opened pursuant to 20 this paragraph. This return shall include a letter notifying the sender of the disposition of this 21 matter, attached here as Exhibit B. The United States Postal Inspection Service is authorized to 22 destroy any and all remaining detained mail (including but not limited to envelopes, order forms, 23 correspondence, personal checks, and payment card information (PCI)). ORDER ACKNOWLEDGEMENT 24 25 V. Within five (5) days after entry of this Consent Decree, the Settling Defendant is 26 ordered to submit to the United States’ counsel of record in this action a written 27 acknowledgement of this Consent Decree sworn under penalty of perjury. 28 6 SIGNATORIES, INTEGRATION, MODIFICATION, & WAIVER 1 2 VI. The undersigned parties and counsel each represent that he, she or it is fully 3 authorized to enter into the terms and conditions of this Consent Decree and to execute and 4 legally bind to this document the party which he, she, or it represents. 5 VII. This Consent Decree constitutes the final, complete, and exclusive agreement and 6 understanding among the Parties with respect to the settlement embodied in the Consent Decree 7 and supersedes all prior agreements and understandings, whether oral or written, concerning the 8 settlement embodied herein (other than deliverables that are subsequently submitted and 9 approved pursuant to this Decree). The parties acknowledge that there are no representations, 10 agreements, or understandings relating to the settlement other than those expressly contained in 11 this Consent Decree. This Consent Decree may be signed by the parties and counsel in 12 counterparts, each of which constitutes an original and all of which constitute one of the same 13 Consent Decree. Signatures delivered by facsimile transmission, or as .pdf attachments to 14 emails, shall constitute acceptable, binding signatures for purposes of this Consent Decree. 15 16 17 VIII. The Consent Decree shall not be modified except in writing by Plaintiff and the Settling Defendant and approved by the Court. IX. Settling Defendant agrees: (1) to waive all rights to appeal or otherwise challenge 18 or contest the validity of this Consent Decree; (2) to waive, release, and remit any and all claims, 19 either directly or indirectly against the United States and its agencies, employees, representatives 20 and agents, including but not limited to the Department of Justice, the United States Postal 21 Inspection Service, and their employees, with respect to this action. Plaintiff and the Settling Defendant agree to bear their own costs and attorneys’ 22 X. 23 fees in this action. FINALITY AND RETENTION OF JURISDICTION 24 25 XI. This Court retains jurisdiction of this action for the purposes of enforcing or 26 modifying this Consent Decree and for the purpose of granting such additional relief as may be 27 necessary or appropriate. 28 7 1 2 XII. This Consent Decree shall constitute a final judgment and order in this action as to Settling Defendant. 3 IT IS SO ORDERED 4 5 6 U.S. District Judge Jennifer A. Dorsey 7 8 9 DATED: 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 April 18, 2018 IT IS HEREBY AGREED: 2 THE UNITED STATES OF AMERICA 3 DAYLE ELIESON United States Attorney 4 TROY K. FLAKE Assistant United States Attorney 501 Las Vegas Blvd. South, Suite I 100 Las Vegas, Nevada 89101 5 6 7 CHAD A. READLER Acting Assistant Attorney General Civil Division 8 9 ETHAN P. DAVIS Deputy Assistant Attorney General 10 II GUSTAV W. EYLER Acting Director Consumer Protection Branch 12 13 JILL P. FURMAN Deputy Director 14 15 16 17 Dated: 1/ 1o IY 18 19 20 21 22 23 24 25 26 27 28 9 1 DEFENDANT 2 3 4 0ff Datede/S I 5 6 Dated: ---1- CANE M. POME Sklr Williams PLL 410 S. mprt Blv . Ste 350 Las Vegas, NV 891 8 9 Atonesfor Andre Burrow 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 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