Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-00575/USCOURTS-casd-3_17-cv-00575-1/pdf.json

Nature of Suit Code: 450
Nature of Suit: Interstate Commerce
Cause of Action: 15:0045 Federal Trade Commission Act (unfair or deceptive acts)

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UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF CALIFORNIA

FEDERAL TRADE COMMISSION, ) Case No.: 17cv0575 AJB (JMA)

)

Plaintiff, ) ORDER GRANTING JOINT

) MOTION FOR PERMANENT

v. ) INJUNCTION AND OTHER 

) EQUITABLE RELIEF AS TO

AAFE PRODUCTS CORPORATION, et al.) ROBERT KOCH

)

Defendants. ) (Doc. No. 26-2)

)

Plaintiff, the Federal Trade Commission (“FTC” or “Commission”), filed its 

Complaint for Permanent Injunction and Other Equitable Relief (“Complaint”) in 

this matter, pursuant to Section 13(b) of the Federal Trade Commission Act (“FTC 

Act”), 15 U.S.C. § 53(b), and Section 5 of the Restore Online Shoppers’ 

Confidence Act (“ROSCA”), 15 U.S.C. § 8404. The Commission and Defendant 

Koch stipulate to the entry of this Stipulated Order for Permanent Injunction and 

Other Equitable Relief as to Robert Koch (“Order”) to resolve all matters in 

dispute in this action between them, regardless of any other judgment that the 

Commission may obtain in this action.

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THEREFORE, IT IS ORDERED as follows:

FINDINGS

1. This Court has jurisdiction over this matter.

2. The Complaint charges that Defendants participated in deceptive acts 

or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, and Section 4 

of ROSCA, 15 U.S.C. § 8403, in connection with Defendants’ marketing and sale 

of cooking-related, golf, and other products and services through television 

advertising and Defendants’ websites, including websites optimized for mobile.

3. Defendant Robert Koch neither admits nor denies any of the 

allegations in the Complaint, except as specifically stated in this Order. Only for 

purposes of this action, Defendant Robert Koch admits the facts necessary to 

establish jurisdiction.

4. Defendant Robert Koch waives any claim he may have under the 

Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this 

action through the date of this Order, and agrees to bear his own costs and attorney 

fees.

5. Defendant Robert Koch waives all rights to appeal or otherwise 

challenge or contest the validity of this Order.

DEFINITIONS

1. “Billing Information” means any data that enables any person to 

access a customer’s account, such as a credit card, checking, savings, share or 

similar account, utility bill, mortgage loan account, or debit card.

2. “Charge,” “Charged,” or “Charging” means any attempt to collect 

money or other consideration from a consumer, including but not limited to 

causing Billing Information to be submitted for payment, including against the

consumer’s credit card, debit card, bank account, telephone bill, or other account.

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3. “Clear(ly) and conspicuous(ly)” means that a required disclosure is 

difficult to miss (i.e., easily noticeable) and easily understandable by ordinary 

consumers, including in all of the following ways:

a. In any communication that is solely visual or solely audible, the 

disclosure must be made through the same means through which the 

communication is presented. In any communication made through both 

visual and audible means, such as a television advertisement, the disclosure 

must be presented simultaneously in both the visual and audible portions of 

the communication even if the representation requiring the disclosure is 

made in only one means;

b. A visual disclosure, by its size, contrast, location, the length of 

time it appears, and other characteristics, must stand out from any 

accompanying text or other visual elements so that it is easily noticed, read, 

and understood;

c. An audible disclosure, including by telephone or streaming 

video, must be delivered in a volume, speed, and cadence sufficient for 

ordinary consumers to easily hear and understand it;

d. In any communication using an interactive electronic medium, 

such as the Internet or software, the disclosure must be unavoidable; 

e. The disclosure must use diction and syntax understandable to 

ordinary consumers and must appear in each language in which the 

representation that requires the disclosure appears; 

f. The disclosure must comply with these requirements in each 

medium through which it is received, including all electronic devices and 

face-to-face communications; 

g. The disclosure must not be contradicted or mitigated by, or 

inconsistent with, anything else in the communication; and

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h. When the representation or sales practice targets a specific 

audience, such as children, the elderly, or the terminally ill, “ordinary 

consumers” includes reasonable members of that group.

4. “Close Proximity” means immediately adjacent to the triggering 

representation. In the case of advertisements disseminated verbally or through 

audible means, the disclosure shall be made as soon as practicable after the 

triggering representation.

5. “Defendant Koch” means Robert Koch.

6. “Negative Option Feature” means, in an offer or agreement to sell or 

provide any good or service, a provision under which the consumer’s silence or 

failure to take affirmative action to reject a good or service or to cancel the 

agreement is interpreted by the seller or provider as acceptance or continuing 

acceptance of the offer.

7. “Person” or “Persons” includes a natural person, an organization or 

other legal entity, including a corporation, partnership, sole proprietorship, limited 

liability company, association, cooperative, or any other group or combination 

acting as an entity.

8. “Plaintiff” means the Federal Trade Commission.

ORDER

I. PROHIBITION AGAINST MISREPRESENTATIONS

IT IS ORDERED that Defendant Koch, Defendant Koch’s agents, 

employees, attorneys, and all other persons in active concert or participation with 

any of them, who receive actual notice of this Order, whether acting directly or 

indirectly, in connection with promoting or offering for sale any good or service, 

are permanently restrained and enjoined from misrepresenting, or assisting others 

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in misrepresenting, expressly or by implication:

A. Any cost to the consumer to purchase, receive, use, or return the 

initial good or service;

B. That the consumer will not be Charged for any good or service;

C. That a good or service is offered on a “free,” “trial,” “sample,” 

“bonus,” “gift,” “no obligation,” “discounted” basis, or words of similar import, 

denoting or implying the absence of an obligation on the part of the recipient of the 

offer to affirmatively act in order to avoid Charges, including where a Charge will 

be assessed pursuant to the offer unless the consumer takes affirmative steps to 

prevent or stop such a Charge;

D. That the consumer can obtain a good or service for a processing, 

service, shipping, handling, or administrative fee with no further obligation;

E. The purpose(s) for which the consumer’s Billing Information will be 

used;

F. The date by which the consumer will incur any obligation or be 

Charged unless the consumer takes an affirmative action on the Negative Option 

Feature;

G. That a transaction has been authorized by the consumer; and

H. Any other fact material to the consumer concerning any good or 

service, such as any material aspect of the nature or terms of a refund, cancellation, 

exchange, or repurchase policy for the good or service.

Compliance with this Section is separate from, and in addition to, the 

disclosures required by Sections II and III, infra.

II. REQUIRED DISCLOSURES RELATING TO NEGATIVE OPTION 

FEATURES

IT IS FURTHER ORDERED that Defendant Koch, Defendant Koch’s 

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agents, employees, attorneys, and all other persons in active concert or 

participation with any of them, who receive actual notice of this Order, whether 

acting directly or indirectly, in connection with promoting or offering for sale any 

good or service with a Negative Option Feature, are permanently restrained and 

enjoined from:

A. Representing, directly or indirectly, expressly or by implication, that 

any good or service that includes a Negative Option Feature is being offered on a 

free, trial, no obligation, reduced, or discounted basis, without disclosing Clearly 

and Conspicuously, and in Close Proximity to, any such representation:

1. The extent to which the consumer must take affirmative 

action(s) to avoid any Charges: (a) for the offered good or service, (b) of an 

increased amount after the trial or promotional period ends, and (c) on a 

recurring basis;

2. The total cost (or range of costs) the consumer will be Charged 

and, if applicable, the frequency of such Charges unless the consumer timely 

takes steps to prevent or stop such Charges; and

3. The deadline(s) (by date or frequency) by which the consumer 

must affirmatively act in order to stop all recurring Charges.

B. Obtaining Billing Information from a consumer for any transaction 

involving a good or service that includes a Negative Option Feature, without first 

disclosing Clearly and Conspicuously, and in Close Proximity to where a 

consumer provides Billing Information:

1. The extent to which the consumer must take affirmative 

action(s) to avoid any Charges: (a) for the offered good or service, (b) of an 

increased amount after the trial or promotional period ends, and (c) on a 

recurring basis;

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2. The total cost (or range of costs) the consumer will be Charged, 

the date the initial Charge will be submitted for payment, and, if applicable, 

the frequency of such Charges unless the consumer timely takes affirmative 

steps to prevent or stop such Charges;

3. The deadline(s) (by date or frequency) by which the consumer 

must affirmatively act in order to stop all recurring Charges;

4. The name of the seller or provider of the good or service and, if 

the name of the seller or provider will not appear on billing statements, the 

billing descriptor that will appear on such statements;

5. A description of the good or service; 

6. Any Charge or cost for which the consumer is responsible in 

connection with the cancellation of an order or the return of a good; and

7. The simple cancellation mechanism to stop any recurring 

Charges, as required by Section IV.

C. Failing to send the consumer:

1. Immediately after the consumer’s submission of an online 

order, written confirmation of the transaction by email. The email must 

Clearly and Conspicuously disclose all the information required by 

Subsection II.B, and contain a subject line reading “Order Confirmation” 

along with the name of the product or service, and no additional information; 

or

2. Within two (2) days after receipt of a consumer’s order by mail 

or telephone, a written confirmation of the transaction, either by email or 

first class mail. The email or letter must Clearly and Conspicuously disclose 

all the information required by Subsection II.B. The subject line of the 

email must Clearly and Conspicuously state “Order Confirmation” along 

with the name of the product or service, and nothing else. The outside of the 

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envelope must Clearly and Conspicuously state “Order Confirmation” along 

with the name of the product or service, and no additional information other 

than the consumer’s address, the Defendant Koch’s return address, and 

postage.

III. OBTAINING EXPRESS INFORMED CONSENT

IT IS FURTHER ORDERED that Defendant Koch, Defendant Koch’s 

agents, employees, attorneys, and all other persons in active concert or 

participation with any of them, who receive actual notice of this Order, whether 

acting directly or indirectly, in connection with promoting or offering for sale any 

good or service with a Negative Option Feature, are permanently restrained and 

enjoined from using Billing Information to obtain payment from a consumer, 

unless Defendant Koch first obtains the express informed consent of the consumer 

to do so. To obtain express informed consent, Defendant Koch must:

A. For all written offers (including over the Internet or other web-based 

applications or services), obtain consent through a check box, signature, or other 

substantially similar method, which the consumer must affirmatively select or sign 

to accept the Negative Option Feature, and no other portion of the offer. 

Defendant Koch shall disclose Clearly and Conspicuously and in Close Proximity 

to such check box, signature, or substantially similar method of affirmative 

consent, only the following, with no additional information: 

1. The extent to which the consumer must take affirmative 

action(s) to avoid any Charges: (a) for the offered good or service, (b) of an 

increased amount after the trial or promotional period ends, and (c) on a 

recurring basis;

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2. The total cost (or range of costs) the consumer will be Charged 

and, if applicable, the frequency of such Charges unless the consumer timely 

takes affirmative steps to prevent or stop such Charges; and

3. The deadline(s) (by date or frequency) by which the consumer 

must affirmatively act in order to stop all recurring Charges.

B. For all oral offers, prior to obtaining any Billing Information from the 

consumer:

1. Clearly and Conspicuously disclose the information contained 

in Subsection II.B; and

2. Obtain affirmative unambiguous express oral confirmation that 

the consumer: (a) consents to being Charged for any good or service, 

including providing, at a minimum, the last four (4) digits of the consumer’s 

account number to be Charged, (b) understands that the transaction includes 

a Negative Option Feature, and (c) understands the specific affirmative steps 

the consumer must take to prevent or stop further Charges.

For transactions conducted through Telemarketing, Defendant Koch shall 

maintain for three (3) years from the date of each transaction an unedited voice 

recording of the entire transaction, including the prescribed statements set out in 

Subsection III.B. Each recording must be retrievable by date and by the 

consumer’s name, telephone number, or Billing Information, and must be provided 

upon request to the consumer, the consumer’s bank, or any law enforcement entity.

IV. SIMPLE MECHANISM TO CANCEL NEGATIVE OPTION FEATURE

IT IS FURTHER ORDERED that Defendant Koch, Defendant Koch’s 

agents, employees, attorneys, and all other persons in active concert or 

participation with any of them, who receive actual notice of this Order, whether 

acting directly or indirectly, in connection with promoting or offering for sale any 

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good or service with a Negative Option Feature, are permanently restrained and 

enjoined from failing to provide a simple mechanism for a consumer to: (1) avoid 

being Charged, or Charged an increased amount, for the good or service; and (2) 

immediately stop any recurring Charges. Such mechanism must not be difficult, 

costly, confusing, or time consuming, and it must be at least as simple as the 

mechanism the consumer used to initiate the Charge(s). In addition:

A. For consumers who entered into the agreement to purchase a good or 

service including a Negative Option Feature over the Internet or through other 

web-based applications or services, Defendant Koch must provide a mechanism,

accessible over the Internet or through such other web-based application or service 

that consumers can easily use to cancel the product or service and immediately 

stop all further Charges.

B. For consumers who entered into the agreement to purchase a good or 

service including a Negative Option Feature through an oral offer and acceptance, 

Defendant Koch must maintain a telephone number and a postal address that

consumers can easily use to cancel the product or service and immediately stop all 

further Charges. Defendant Koch must assure that all calls to this telephone 

number shall be answered during normal business hours and that mail to the postal 

address is retrieved regularly.

V. PROHIBITION AGAINST BILLING CONSUMERS CURRENTLY

ENROLLED IN SUBSCRIPTION PLANS

IT IS FURTHER ORDERED that Defendant Koch, Defendant Koch’s 

agents, employees, attorneys, and all other persons in active concert or 

participation with any of them, who receive actual notice of this Order, whether 

acting directly or indirectly, with respect to any current customer of any good or 

service with a Negative Option Feature whom Defendant Koch seeks to continue 

to charge after the entry of this Order, are hereby permanently restrained and 

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enjoined from charging any existing customer who was first charged prior to 

March 1, 2016, unless, prior to any future charge, Defendant Koch: 

A. Sends the customer written notice, either by email or first class mail, 

in a form approved by FTC counsel, that includes the Clear and Conspicuous 

disclosure of all the information required by Section II; and 

B. Obtains the customer’s express informed written consent in a manner 

consistent with Section III.

VI. MONETARY JUDGMENT

IT IS FURTHER ORDERED that:

A. Judgment in the amount of SIX HUNDRED THIRTY TWO 

THOUSAND THREE HUNDRED FOUR DOLLARS ($632,304) is entered in 

favor of the Commission against Defendant Koch, as equitable monetary relief.

B. Defendant Koch is ordered to pay to the Commission the Judgment 

set forth above in Section VI.A as follows:

1. Within seven (7) days of entry of this Order, Defendant Koch 

shall wire by electronic fund transfer the sum of ONE HUNDRED FIFTY 

THOUSAND DOLLARS ($150,000) which, as Defendant Koch stipulates, 

his undersigned counsel holds in escrow for no purpose other than payment 

to the FTC. Defendant Koch shall wire these funds to the FTC in 

accordance with instructions previously provided by a representative of the 

Commission;

2. Within one hundred and eighty (180) days of entry of this 

Order, Defendant Koch shall wire by electronic fund transfer the sum of 

ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000) to the FTC 

in accordance with instructions previously provided by a representative of 

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the Commission;

3. Within two hundred and seventy (270) days of entry of this 

Order, Defendant Koch shall wire by electronic fund transfer the sum of 

ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000) to the FTC 

in accordance with instructions previously provided by a representative of 

the Commission;

4. Within three hundred and sixty (360) days of entry of this 

Order, Defendant Koch shall wire by electronic fund transfer the sum of 

ONE HUNDRED EIGHTY TWO THOUSAND THREE HUNDRED 

FOUR DOLLARS ($182,304) to the FTC in accordance with instructions 

previously provided by a representative of the Commission; and

5. Notwithstanding the foregoing, Defendant Koch shall have the 

right to prepay at any time, and without penalty, the remaining balance, or 

any part thereof, due the Commission under this Order. Any such 

prepayment made prior to an installment due date shall be credited as if 

made on the next installment due date, and Defendant Koch shall be relieved 

of making any further payments on the installment due date for any 

prepayments to the extent of such prepayment. Nothing herein shall be 

construed to relieve Defendant Koch of his obligation to make timely 

payment for any installments as they become due which have not otherwise 

fully been paid in advance.

C. To secure the payment obligations under Section VI.B of this order, 

Defendant Koch grants the Commission a security interest in certain property and 

proceeds thereof (“Collateral”), as set forth in the Mortgage and Security 

Agreement (“Mortgage,” attached as Attachment A), which is incorporated by 

reference as if fully set forth verbatim and which grants a security interest in the 

following Collateral: Defendant Koch and his spouse, Angela Koch, hereby grant 

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to the Commission, pursuant to the attached Mortgage, a lien on and security 

interest in real property located at 6440 Aberdeen Lane, Medina, Ohio, 44256. 

Defendant Koch shall submit to the clerk’s office for recording all security

documents used to perfect the Commission’s lien on the property within fourteen 

(14) days after entry of this Order, and shall deliver to the Commission copies of 

such officially recorded documents within seven (7) days after receipt of such 

documents.

D. In the event that Defendant Koch fails to make a required payment 

when due under Section VI.B of the Order, or the Commission is not allowed to

retain any such payment, or if Defendant Koch fails to comply with the terms of 

the Mortgage and such failure is not timely cured:

1. The entire judgment amount, less any amount previously paid, 

shall immediately become due and payable by Defendant Koch. Interest 

computed at the rate prescribed under 28 U.S.C. § 1961, as amended, shall 

immediately begin to accrue on the unpaid balance. Time is of the essence 

for the payments specified in this Section; and

2. Defendant Koch consents to the appointment of a receiver by 

the Court for purpose of taking possession and control of and liquidating the 

Collateral, with the rights and powers, and privileges of an equity receiver. 

The costs and expenses of the receivership, including reasonable 

compensation for the receiver and personnel retained by the receiver, shall 

be paid solely from the proceeds of the Collateral.

E. The Commission’s agreement to this Order is expressly based on the 

material representations that Defendant Koch and Angela Koch have the right and 

authority to enter into the Mortgage, and that such Collateral is not encumbered by 

any lien, assignment, security interest, or other interest not otherwise disclosed in 

the Mortgage.

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1. The Commission’s agreement to this Order is expressly based 

on the material representations by Defendant Koch that the value of his 

equity in the Collateral is at least $723,456.

2. If, upon motion of the Commission, a Court determines that 

Defendant Koch made a material misrepresentation or omitted material 

information concerning ownership or authority to pledge the Collateral, any 

encumbrance of the Collateral, or the value of the Collateral, the entire 

Judgment amount ($632,304), less any amounts previously paid by 

Defendant Koch, shall immediately become due and payable by Defendant 

Koch. Interest computed at the rate prescribed under 28 U.S.C. § 1961, as 

amended, shall immediately begin to accrue on the unpaid balance.

Provided that proceedings instituted under this provision would be in 

addition to, and not in lieu of, any other civil or criminal remedies, as may 

be provided by law, including but not limited to, contempt proceedings or 

any other proceedings that the Commission may initiate to enforce this 

Order.

VII. ADDITIONAL MONETARY PROVISIONS

IT IS FURTHER ORDERED that:

A. Defendant Koch relinquishs dominion and all legal and equitable 

right, title, and interest in all assets transferred pursuant to this Order and may not 

seek the return of any assets.

B. The facts alleged in the Complaint will be taken as true, without 

further proof, in any subsequent civil litigation by or on behalf of the Commission, 

including in a proceeding to enforce its rights to any payment or monetary 

judgment pursuant to this Order, such as a nondischargeability complaint in any 

bankruptcy case.

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C. The facts alleged in the Complaint establish all elements necessary to 

sustain an action by the Commission pursuant to Section 523(a)(2)(A) of the 

Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral 

estoppel effect for such purposes.

D. Defendant Koch acknowledges that his Taxpayer Identification 

Numbers (Social Security Numbers or Employer Identification Numbers), which 

Defendant Koch previously submitted to the Commission, may be used for 

collecting and reporting on any delinquent amount arising out of this Order, in 

accordance with 31 U.S.C. § 7701.

E. All money paid to the Commission pursuant to this Order may be 

deposited into a fund administered by the Commission or its designee to be used 

for equitable relief, including consumer redress and any attendant expenses for the 

administration of any redress fund. If a representative of the Commission decides 

that direct redress to consumers is wholly or partially impracticable or money 

remains after redress is completed, the Commission may apply any remaining 

money for such other equitable relief (including consumer information remedies) 

as it determines to be reasonably related to Defendant Koch’s practices alleged in 

the Complaint. Any money not used for such equitable relief is to be deposited to 

the U.S. Treasury as disgorgement. Defendant Koch has no right to challenge any 

actions the Commission or its representatives may take pursuant to this Subsection.

VIII. CUSTOMER INFORMATION

IT IS FURTHER ORDERED that Defendant Koch, Defendant Koch’s 

agents, employees, attorneys, and all other persons in active concert or 

participation with any of them, who receive actual notice of this Order, are 

permanently restrained and enjoined from directly or indirectly:

A. Failing to provide sufficient customer information to enable the 

Commission to efficiently administer consumer redress. If a representative of the 

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Commission requests in writing any information related to redress, Defendant 

Koch must provide it, in the form prescribed by the Commission, within thirty (30) 

days; and

B. Disclosing, using, or benefitting from customer information, including 

the name, address, telephone number, email address, Social Security number, other 

identifying information, or any data that enables access to a customer’s account 

(including a credit card, bank account, or other financial account), that Defendant 

Koch obtained prior to entry of this Order in connection with the advertising, 

marketing, promoting, offering for sale, or selling of any good or service using a 

Negative Option Feature. Provided, however, that Defendant Koch may use 

customer information for any current customer if Defendant Koch complies with 

Subsection II.C of this Order.

IX. COOPERATION

IT IS FURTHER ORDERED that Defendant Koch must fully cooperate 

with representatives of the Commission in this case and in any investigation related 

to or associated with the transactions or the occurrences that are the subject of the 

Complaint. Defendant Koch must provide truthful and complete information, 

evidence, and testimony. Such Defendant must appear for interviews, discovery, 

hearings, trials, and any other proceedings that a Commission representative may 

reasonably request upon five (5) days written notice, or other reasonable notice, at 

such places and times as a Commission representative may designate, without the 

service of a subpoena.

X. ORDER ACKNOWLEDGMENTS

IT IS FURTHER ORDERED that Defendant Koch obtain 

acknowledgements of receipt of this Order:

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A. Defendant Koch, within seven (7) days of entry of this Order, must 

submit to the Commission an acknowledgement of receipt of this Order sworn 

under penalty of perjury.

B. For five (5) years after entry of this Order, Defendant Koch for any 

business that such Defendant, individually or collectively with any other 

Defendant, is the majority owner or controls directly or indirectly, must deliver a 

copy of this Order to: (1) all principals, officers, directors, and LLC managers and 

members; (2) all employees, agents, and representatives who participate in conduct 

related to the subject matter of this Order; and (3) any business entity resulting 

from any change in structure as set forth in the Section titled Compliance 

Reporting. Delivery must occur within seven (7) days of entry of this Order for 

current personnel. For all others, delivery must occur before they assume their 

responsibilities.

C. From each individual or entity to which Defendant Koch delivered a 

copy of this Order, such Defendant must obtain, within thirty (30) days, a signed 

and dated acknowledgement of receipt of this Order.

XI. COMPLIANCE REPORTING

IT IS FURTHER ORDERED that Defendant Koch make timely 

submissions to the Commission:

A. One (1) year after entry of this Order, Defendant Koch must submit a 

compliance report, sworn under penalty of perjury:

1. Defendant Koch must: (a) identify the primary physical, postal, 

and email address and telephone number, as designated points of contact, 

which representatives of the Commission may use to communicate with 

such Defendant; (b) identify all of his businesses by all of their names, 

telephone numbers, and physical, postal, email, and Internet addresses; (c) 

describe the activities of each business, including the goods and services 

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offered, the means of advertising, marketing, and sales, and the involvement 

of any other Defendant; (d) describe in detail whether and how Defendant 

Koch is in compliance with each Section of this Order; (e) provide a copy of 

each Order Acknowledgment obtained pursuant to this Order, unless 

previously submitted to the Commission; and (f) if a customer covered by 

Section V is charged after the entry of this Order, provide a copy of the 

notice sent to the customer pursuant to Subsection V.A and the customer’s 

written consent to the charge pursuant to Subsection V.B.

2. Additionally, Defendant Koch must: (a) identify all of his 

telephone numbers and all physical, postal, email and Internet addresses, 

including all residences; (b) identify all of his business activities, including 

any business for which such Defendant performs services whether as an 

employee or otherwise and any entity in which such Defendant has any 

ownership interest; and (c) describe in detail such Defendant’s involvement 

in each such business, including title, role, responsibilities, participation, 

authority, control, and any ownership.

B. For ten (10) years after entry of this Order, Defendant Koch must 

submit a compliance notice, sworn under penalty of perjury, within fourteen (14) 

days of any change in the following:

1. Defendant Koch must report any change in: (a) any designated 

point of contact; or (b) the structure of any entity that Defendant has any 

ownership interest in or controls directly or indirectly that may affect 

compliance obligations arising under this Order, including: creation, 

merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate 

that engages in any acts or practices subject to this Order.

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2. Additionally, Defendant Koch must report any change in: 

(a) his name, including aliases or fictitious name, or residence address; or (b) 

his title or role in any business activity, including any business for which he 

performs services whether as an employee or otherwise and any entity in 

which he has any ownership interest, and identify the name, physical 

address, and any Internet address of the business or entity.

C. Defendant Koch must submit to the Commission notice of the filing 

of any bankruptcy petition, insolvency proceeding, or similar proceeding by or 

against such Defendant within fourteen (14) days of its filing.

D. Any submission to the Commission required by this Order to be 

sworn under penalty of perjury must be true and accurate and comply with 28 

U.S.C. § 1746, such as by concluding: “I declare under penalty of perjury under 

the laws of the United States of America that the foregoing is true and correct. 

Executed on: _____” and supplying the date, signatory’s full name, title (if 

applicable), and signature.

E. Unless otherwise directed by a Commission representative in writing, 

all submissions to the Commission pursuant to this Order must be emailed to 

DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to: 

Associate Director for Enforcement, Bureau of Consumer Protection, Federal 

Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The 

subject line must begin: FTC v. AAFE Products Corp., FTC Matter No. X170028.

XII. RECORDKEEPING

IT IS FURTHER ORDERED that Defendant Koch must create certain 

records for ten (10) years after entry of the Order, and retain each such record for 

five (5) years. Specifically, Defendant Koch, for any business that he, individually 

or collectively with any other Defendant, is a majority owner or controls directly or 

indirectly, must create and retain the following records:

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A. Accounting records showing the revenues from all goods or services 

sold;

B. Personnel records showing, for each person providing services, 

whether as an employee or otherwise, that person’s: name, addresses, telephone 

numbers, job title or position, dates of service, and (if applicable) the reason for 

termination;

C. Records of all consumer complaints and refund requests, whether 

received directly or indirectly, such as through a third party, and any response;

D. All records necessary to demonstrate full compliance with each 

provision of this Order, including all submissions to the Commission; and

E. A copy of each unique advertisement or other marketing material.

XIII. COMPLIANCE MONITORING

IT IS FURTHER ORDERED that, for the purpose of monitoring 

Defendant Koch’s compliance with this Order: 

A. Within fourteen (14) days of receipt of a written request from a 

representative of the Commission, Defendant Koch must: submit additional 

compliance reports or other requested information, which must be sworn under 

penalty of perjury; appear for depositions; and produce documents for inspection 

and copying. The Commission is also authorized to obtain discovery, without 

further leave of court, using any of the procedures prescribed by the Federal Rules 

of Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, 

and 69.

B. For matters concerning this Order, the Commission is authorized to 

communicate directly with Defendant Koch. Defendant Koch must permit 

representatives of the Commission to interview any employee or other person 

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affiliated with Defendant Koch who has agreed to such an interview. The person 

interviewed may have counsel present.

C. The Commission may use all other lawful means, including posing, 

through its representatives, as consumers, suppliers, or other individuals or entities, 

to Defendant Koch or any individual or entity affiliated with Defendant Koch, 

without the necessity of identification or prior notice. Nothing in this Order limits 

the Commission’s lawful use of compulsory process, pursuant to Sections 9 and 20 

of the FTC Act, 15 U.S.C. §§ 49, 57b-1.

XIV. RETENTION OF JURISDICTION

IT IS FURTHER ORDERED that this Court retains jurisdiction of this 

matter for purposes of construction, modification, and enforcement of this Order.

IT IS SO ORDERED.

Dated: September 6, 2017

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