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Case 8:09-cv-00936-DOC-RNB 

1
 

ALAN PHELPS
 

2	 Trial Attorney ’

_O_f_fic_e of Consumer_Litigation 3	 U.S. Dep.artment of Justice

PO Box 3 86
 

4 .Washington, DC 20044-0386
 ~Telephone: 202-307-6154

Facslmile: 202-514-8742
 

~lan,phe.!ps@usdoj :gov
 6
 

II-IOMAS P. O’BRIEN  ̄
 

7	 United States Attorney

LEE WEIDMAN 

8.	 Chief., Civil Division

~ARY PLESSMAN 

9	 Assistant United States Attorney


Chie_f., Civil Fraud Section


Calif6mia State Bar No,. 101233

Room 7516, Federal Building 11	 300 N, Los Angeles St.

Los Angeles, C-A 90012 12	 telephone: 213,894-2474

Facmmile: 213:894-2380 

13	 E-mail: ~arv.olessman(&usdoi. ~ov

Attomey~ f6rPlaintiff - - ­ 14 

Document 3 Filed 10/05/2009 Page 1 of 13 

~E_D. SOUTHERN DMSION’ -­

RK U.S. DISTRICTCOURr 

IFORNIA 

DEPUTY 

IN T~ UNITED STATES DISTRICT COURT 

FOR THE CENTRAL DISTRICT OF CALIFORNIA 

SOUTHERN DMSION 

17 

UNITED STATES OF AMERICA~ 

18 

Plaintiff, 

19 

METROPOLITAN HOME 

21 MORTGAGE, INC.,

a corporation, 

22 also d/b/a WHOLESALE HOME

LENDERS, 

23	 Defendant. 

24 

SA CV09-0936-DOC(RNBx) 

Civil Action No. 

STIPULATED FINAL JUDGMENT AND ORDER FOR CIVIL 

PENALTIES, ~E!t~CIAN gNT INffUNCTION AND OTHER EQUITABLE RELIEF 

~Pl~.~fiff, Ne United States of America, acting upon notification and 

the Attorney General by the Federal Trade Commission ("FTC" or 

.at - Metropolitan 

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Case 8:09-cv-00936-DOC-RNB Document 3 Filed 10/05/2009 Page 2 of 1 

1 "Commission"), is concurrently filing its Complaint herein, which alleges that
 

2 Defendant Metropolitan Home Mortgage, Inc., also doing business as Wholesale
 

3 Home Lenders has engaged in violations of the Fair Credit Reporting Act
 

("FCRA"), 15 U.S.C. §8 1681-168 Ix. Defendant has agreed to entry of this 

Stipuaated Final Judgment and Order for Civil Penalties, Permanent Injunction, and 

6 Other Equitable Relief ("Order") to resolve all matters in dispute in this action
 

7 without trial or adjudication of any issue of law or fact herein and without
 

8 Defendant admitting the truth of, or liability for, any of the matters alleged in the
 

9 Complaint. Defendant has waived service of the Summons and Complaint.
 

THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND 11 

DECREED as follows: 

12 

FINDINGS 

1.	 This Court has jurisdiction over the subject matter of t~ case and 

over Defendant. 

2.	 Venue in this district is proper under 28 U.S.C. 88 1391(b) - (c), 28 16 

U.S.C. 8 1395(a), and 15 U.S.C. 8 53(b). I7 

3. The Complaint states a clam upon which relief may be granted 18 

against Defendant under sections 5(a), 13(b), and 16(a) of the Federal

19 

Trade Commission Act, 15. U.S.C. 88 45(a), 53(b), and 56(a); 

sections 615 and 621 of the Fair Credit Reporting Act, 15 U.S.C. 88 

21 

1681m and 1681s; and the Prescreen Opt-Out Notice Rule, 16 C.F.R.

22 

Part 642, promulgated pursuant to section 615 (d)(2) Of the FCRA, 15

23 

U.S.C. 8 168Ira(d)(2). 24 

4.	 This agreement is for settlement purposes only and does not constitute 

an admission by Defendant that the law has been violated as alleged 

26 

or that any of the facts alleged, other than the jurisdictional facts, are 

28 Stipulated Judgment - Metropolitan Page 2 of 12 
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: Case 8:09-cv-00936-DOC-RNB Document 3 Filed 10/05/2009 Page 3 of 1 

1 true. This agreement constitutes the final resolution of all the 

2 allegations and claims in the complaint. 

3 5. Defendant waives: 

4 a. all rights to seek appellate review or otherwise challenge or 

contest the validity of this Order; 

6 b. any claim Def~dant may have against .the Commission, its 

7 employees, representatives~ or agents that relate to the matter 

8 stated herein; and 

9 c. all claims under the Equal Access to Justice Act, 28 U.S.C. § 

2412, as amended by Pub. L. 104-121, 110 Star. 847, 863-64 

11 (1996); and (d) any rights to attorneys’ fees that may arise 

12 under said provision of law. 

13 6. Entry of this Order is in the public interest. 

14 7. For the propose of this Order: 

a. "Defendant" means Metropolitan Home Mortgage, Inc. 

("Metropolitan"), also doing business as Wholesale Home 

17 Lenders ("Wholesale"), and its successors and assigns. 

18 b. The definitions set forth in the FCRA, 15 U.S.C. §§ 1681a, et 

19 seq, and the Ptescreen Opt-Out Notice Rule, 16 C.F.R. Part 

642, shall apply. 

21 ORDER 

22 I. CIVIL PENALTY 

23 IT IS ORDERED that Defendant shall pay to Plaintiff, pursuant to section 

24 621(a) of the FCRA, 15 U.S.C. § 168Is(a), a civil penalty in the amount of Twenty 

Thousand Dollars ($20,000) as follows: 

26 

27 

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Case 8:09=cv-00936-DOC-RNB Document 3 Filed 10/05/2009 Page 4 of 1 

A.	 Defendant shall make this payment within ten (10) business days of the date 

of entry of this Order by electronic f-and transfer or cashier’s check in 

accordance with instructions provided by the. Office of Consumer Litigation, 

Civil Division, U.S. Department of Justice, Washington, D.C. 20530, for 

appropriate disposition. 

B.	 In.the event of any default in payment, which default continues for ten (10) 

days beyond the due date of payment, the entire unpaid penalty, together 

with interest, as computed pursuant to 28 U.S.C. § 1961, from the date of 

default to the date of payment, shall immediately become due and payable; 

C.	 This judgment represents a civil penalty owed to the United States 

Govermnent and is not compensation for actual pecuniary loss, and, 

therefore, it is not subject to discharge under the Bankruptcy Code pursuant 

to 11 U.S.C. § 523(a)(7). 

D.	 Proceedings initiated under this Part to collect any unpaid civil penal .~ are. in 

addition to, and not in lieu of, any other civil or criminal penalties that may 

be provided by law, including any other proceedings Plaintiff may initiate to 

enforce this Order. 

E.	 Defendant relinquishes all dominion, control, and rifle to the funds paid to 

the fullest extent permitted by law. Defendant shall mal~e no claim to or 

demand return of the funds, directly or indirectly, through counsel or 

otherwise. 

II. PROHIBITED BUSINESS ACTMTIES 

IT IS FURTHER ORDERED that Defendant, and its officers, agents, 

servants, employees, and all persons or entities in active concert or participation 

with any of them, who receive actual notice of this Order by personal service or 

otherwise, whether acting directly or through any business entity, corporation, 

Stipulated Judgment - Metropolitan Page 4 of 12 
Case 8:09-cv-00936-DOC-RNB Document 3 Filed 10/05/2009 Page 5 of 1 

1 subsidiary, division, affiliate, or other device, in connection with the making of any 

2 "firm offer of credit or insurance" as that term is defined in section 603(1) of the 

3 FCRA, 15 U.S.C. § 1681a(1), are hereby permanently restrained and enjoined from 

4 failing to comply with the Prescreen Opt-Out Notice Rule, 16 C.F.R. Part 642, 

5 which establishes the format, type size, and manner of the notices to consumers 

6 requJ.re.d pursuant to section 6!5(d) of the FCRA, 15 U.S.C~ § 168Ira(d), informing 

7 consumers of their, right to opt out of having their consumer report information 

8 used to send them unsolicited offers of credit or insurmace. 

9 III. COMPLIANCE MONITORING 

10 IT IS FURTHER ORDERED that, for the purpose of monitoring and 

11 investigating compliance with any provision of this Order: 

12 A. Within ten (10) days of receipt of wriRen notice from a representative of the 

13 Commission, Defendant shall submit additional written reports, which are 

14 true and accurate and sworn to under penalty of perjury; produce documents 

15 for inspection and copying; appear for deposition; and/or provide entry 

16 during normal business hours to any business location in Defendant’s 

17 possession or direct or indirect control to inspect the business operation; 

18 B. In addition, the Commission is authorized to use all other lawful means, 

19 including but not limited to, obtaining discovery from any person, without 

20 further leave of court, using the procedures prescribed by Fed. R. Cir. P. 30, 

21 31, 33, 34, 36, 45 and 69; and 

22 C. Defendant shall permit representatives of the Commission to interview any 

23 employer, consultant, independent contractor, representative, agent, or 

24 employee who has agreed to such an interview, relating in any way to any 

 ̄ 25 conduct subject to this Order. The person interviewed may have counsel 

26 present. 

27 

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Case 8:09-cv-00936-DOC-RNB Document 3 Filed 10/05/2009 Page 6 of 1 

1 Provided however, that nothing in this Order shall limit the Commission’s 

2 lawful use of compulsory process, pursuant to sections 9 and 20 of the FTC Act, 15 

3 U.S.C. §§ 49 and 57b-1, to obtain any documentary material, tangible things, 

4 testimony, or information relevant to any unfair or deceptive acts or practices in or 

affecting commerce (within the meaning of 15 U.S.C. § 45(a)(1)) or to any 

6 violation of the FCRA. 

7 IV. COMPLIANCE REPORTING 

8 IT IS FURTI~R ORDERED that, in order that compliance with the 

9 provisions of this Order may be monitored: 

A. For a period of five (5) years from the date of entry of this Order, Defendant 

1! shall notify the Commission of any change in structure or any business 

12 entity that Defendant directly or indirectly controls, or has an ownership 

13 interest in, that may affect compliance obligations arising under this Order, 

14 including but not limited to: incorporation or other organization; a 

dissolution, assignment, sale, merger, or other action; the creation or 

16 dissolution of a subsidiary, parent~ or affiliate that engages in any acts or 

17 practices subject to this Order; or a change in the business name or address, 

at least thirty (30) days prior to such change, provided that, with. respect to 

19 any proposed change in the business entity about which Defendant learns 

less than thirty (30) days prior to the date such action is to take place, such 

21 Defendant shall notify the Commission as soon as practicable after obtaining 

22 such lmowledge. 

23 B. One hundred eighty (180) days after thedate of entry of this Order and 

24 annually thereafter for a period of five (5) years, Defendant shall provide a 

written report to the FTC, which is true and accurate and sworn to under 

26 penalty of perjury, setting forth in detail the manner and form in which they 

27 

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Case 8:09-cv-00936-DOC-RNB Document 3 Filed 10/05/2009 Page 7 of I 

have complied and are complying with this Order. This ’report shall include, 

but not be limited to: 

1. A copy of each acknowledgment of receipt of this Order, obtained 

pursuant to the Section titled "Distribution of Order;" and 

2.	 Any other changes required to be reported under Subsection A of this 

section. 

Defendant shall notify the Commission of the filing of a banh’uptcy 

petition by such Defendant within fifteen (15) days of filing. 

For the purposes of this Order, Defendant sha~, unless otherwise directed 

by the Commission’s authorized representatives, send by overnight courier 

all reports and notifications required by this Order to the Commission, to 

the following address: 

Associate Director for Enforcement 

Federal Trade Commission 

600 Pennsylvania Avenue, N.W., Room NJ-2122

Washinzt6n, DC 20580 . RE: FTC v. Wholesale Home Mortgage 

Provided, that, in lieu of ovemight courier, Defendant may send such reporfs 

or notifications by f~st-class mail, but only if Defendant contemporaneously 

sends an electronic version of such report or notification to the Commission 

at: DEBrief@ftc.gov. 

E.	 For purposes of compliance reporting and monitoring required by this 

Order, the Commission is authorized to communicate directly with 

Defendant. 

V. RECORD KEEPING PROVISIONS 

IT IS FURTI~R ORDERED that, for a period of eight (8) years from the 

date of entry of this Order, Defendant and its agents, employees, officers, 

corporations, and those persons in active concert or participation with them who 2"/
 

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receive actual notice of this Order by personal service or otherwise, are hereby 

restrained and enjoined from failing to create and retain the following records: 

A.	 A copy of each separate and materially distinct written prescreened 

solicitation sent to consumers and any related promotional materials sent to 

consumers, 

B.	 Written Wocedure.s to ensure that consumers who have opted out of 

receiving prescreened solicitations will not receive prescreened solicitations, 

and 

(2.	 All records and documents necessary to demonstrate full compliance with 

each provision of this Order, including but not limited to, copies of 

acknowledgments of receipt of this Order required by the Sections titled 

"Distribution of Order" and "Acknowledgement of Receipt of Order" and all 

reports submitted to the FTC pursuant to the Section rifled "Compliance 

Reporting." 

VI. DISTRIBUTION OF ORDER 

IT IS FURTHER ORDERED that, for a period Of five (5) years from the 

date of selMce of this Order, Defendant shall deliver copies of this Order as 

directed below: 

A.	 Defendant must deliver a copy of this Order to (1) all of its principals, 

officers, directors, and managers; (2) all of its employees, agents, and 

representatives who engage in conduct related to the subject matter of this 

Order; and (3) any business entity resulting from any change in structure set 

forth in Subsection A of the Section tiffed "Compliance Reporting." For 

current personnel, delivery shall be within five (5) days of service of this 

Order upon Defendant. For new personnel, delivery shall occur prior to 

them assuming their responsibilities. For any business entity resulting from 

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Case 8:09-cv-.00936-DOC-RNB Document 3 Filed 10/05/2009 Page 9 of 1 3 

1 any change in structure set forth in Subsection A oft.he Section titled 

.2 "Compliance Reporting," delivery shall be at least ten (10) days prior to the 

3­ change in structure. 

4 B. Defendant must secure a signed and dated statement acknowledging receipt 

5 of the Order, within thirty (30) days of delivery, fi:om al! persons receiving a 

6 copy of the Order pursuant to this Section. 

7 VII. ACI~IOWLEDGIVIENT OF RECEIPT OFORDER 

8 IT IS FURTHER ORDERED that Defendant, within five (5) business days 

9 of receipt of this Order as entered by the Court, must submit to the Commission a 

IO truthful sworn statement acknowledging receipt of this Order. 

11 VIII. RETENTION OF JURISDICTION 

12 IT IS FURTHER ORDERED that this Court shall retain jurisdiction 

13 of this matter for purposes of construction, modification, .and enforcement of ttiis 

14 Order. 

15 IX. COSTS AND ATTORNEYS’ FEES 

16 IT IS FURTHER ORDERED that each party shall bear its own costs 

17 and attorneys’ fees incurred ha connection with this action. 

18 IT IS SO ORDERED: 

19 

20’ Dated this .~. ’. d, ay,. of_____(~gt, 2009 

21 

22 

23 UNITED STATES DISTRICT JUDGE 

24 

Tk.e parties, by their respective counsel, hereby consent to the terms and 25 

conditions of the Stipulated Order as set forth above and consent to the entry 

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thereof. 

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FOR THE PLAINTIFF 

UNITED STATES OF AMERICA: 

TONY WEST 

Assistant Attorney General

Civil Division 

United States .Department of Justice 

THOMAS P. O’BRIEN United States Attorney

Central District of CaIifomia 

LEE WEIDMAN 

Assistant United States Attorney

Chief, Civil Division 

t}a~’Ntaut United States Attorney

Chie_f, .Civil Frauds Section

Calif6mia State Bar No. 101233
 

Room 7516,. Federal Building

300 North Los Angeles Street


Los Angeles, California 90012


Telephone: {213) 894-2474
 

Facsimile: (213) 894-2380


E-mail: gary.plessman@usdoj, gov 

EUGEN~ M. THIROLF 

Director 

Office of Consumer Litigation 

KENNETH L. JOST 

De0uty Director

Office of Consumer Litigation 

of Cofisumer Litgafion of Justice 

PO 

Wash~gton, D.C. 20044


Telephone: 202-307-6154

Facsimile: 202-514-8742 

E-mail: a!an.phelps@usdoj.gov 

Stipulated Judgment - Metropolitan Page 10 of 12
 
 

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FOR THE FEDERAL TRADE COMMISSION
 

SSICA RICH 

Acting AssOciate Director.

Division of Privacy and Identity Protection 

’13. KUEHN ’ 

Assistant Director 

Division of Privacy and Identity Protection 

KATHERINE ARMSTRONG_...fl 

Attorney

Division of Privacy and Identity Protection.

Federal Trade CoKm~ission 

S1 

uite NJ-3158
 New Jerspy Avenue, NW

Washin~on, D.C. 20001
 

Tel: (2D2) 326-2252


Fax: (202) 326-3768..... 

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Case 8:09-cv-00936-DOC-RNB , Document 3 Filed 10/05/2009 Page 12 of 13 

M~trop01itan I-Iom~ Mortgage, Inc. 

Kider PC 

1300
 

Washington, D.C
 

Tel: (202) 628 2000
 

l~ax: (202) 628 2011
 

Stipulated Judgment - Metropolitan Pan,eel ~..of.L2 
Case 8:09-cv-00936-DOC-RNB Document 3 Filed 10/05/2009 Page 13 of 13
 

REASONS FOR SETTLEMENT
 

This statement accompanies the f’mal order executed by defendant 

Metropolitan Home Mortgage, Inc., doing business as Wholesale Home Lenders. 

The final order enjoins Metropolitan Home Mortgage, Inc. from violating the Fair 

Credit Reporting Act’s ("FCRA") Prescreen Opt-Out Notice Rule ("Prescreen 

Rule"). The final order also requires that entry of a judgment in the amount of 

$20,000 as a civil penalty be entered.against defendant for violations Of the FCRA ­

and the Prescreen Rule. 

Pursuant to Section 5(m)(3) of the Federal Trade Commission Act ("FTC 

Act"), as amended, 15 U.S.C. § 45(m)(3), the Commission hereby sets forth its 

reasons for settlement by entry of a Stipulated Final Judgment and Order for Civil 

Penalties, Permanent Injunction, and Other Equitable Relief ("final order"). 

On the basis of the allegations contained in the complaint, and the statutory 

factors in the FCRA and the FTC Act, the Commission believes that the civil 

penalty judgment of $20,000 constitutes an appropriate amount on which to base 

the settlement, and that the provisions enjoini~, g defendant from violating 

Prescreen Rule should ensure defendant’s future compliance with the law. With 

entry of the final order, the time and e~pense of litigation will be avoided. 

For the foregoing reasons, the Commission believes that the settlement by 

entry of the attached final order is justified and well within the public interest. 

15