[Proposed] STIPULATED ORDER 

FOR PERMANENT INJUNCTION 

AND MONETARY JUDGMENT AS 

TO DEFENDANTS CAREY G. 

HOWE, ANNA C. HOWE, 

SHUNMIN HSU, RUDDY 

PALACIOS, AND OLIVER 

POMAZI 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 1 of 46 Page ID

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STEPHEN T. FAIRCHILD 

WA Bar No. 41214; sfairchild@ftc.gov 

RICHARD MCKEWEN 

WA Bar No. 45041; rmckewen@ftc.gov 

FEDERAL TRADE COMMISSION 

915 Second Avenue, Suite 2896 

Seattle, WA 98174 

Tel.: (206) 220-6350; Fax: (206) 220-6366 

ROBERT J. QUIGLEY, Local Counsel 

CA Bar No. 302879; rquigley@ftc.gov 

FEDERAL TRADE COMMISSION 

10990 Wilshire Boulevard, Suite 400 

Los Angeles, CA 90024 

Tel.: (310) 824-4300; Fax: (310) 824-4380 

Attorneys for Plaintiff 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

FEDERAL TRADE COMMISSION, 

 Plaintiff, 

 v. 

AMERICAN FINANCIAL SUPPORT 

SERVICES INC., et al., 

 Defendants. 

Civ. No. 8:19-cv-02109-JVS (ADSx) 
 

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

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

 3 a permanent injunction and other equitable relief in this matter, pursuant to 

 4 Sections 13(b) and 19 of the Federal Trade Commission Act (“FTC Act”), 15 

U.S.C. §§ 53(b), 57b. The Commission and Defendants Carey G. Howe, Anna C. 

 6 Howe, Shunmin Hsu, Ruddy Palacios, and Oliver Pomazi (each a “Stipulating 

 7 Defendant,” and collectively, “Stipulating Defendants”) stipulate to the entry of 

 8 this Stipulated Order for Permanent Injunction and Monetary Judgment as to 

 9 Defendants Carey G. Howe, Anna C. Howe, Shunmin Hsu, Ruddy Palacios, and 

Oliver Pomazi (“Order”) to resolve all matters in dispute in this action between 

 11 them. 

 12 THEREFORE, IT IS ORDERED as follows: 

 13 FINDINGS 

 14 1. This Court has jurisdiction over this matter. 

2. The Complaint charges that Defendants participated in deceptive acts or 

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

 17 Telemarketing Sales Rule, 16 C.F.R. pt. 310, in the marketing and sale of student 

 18 loan debt relief services. 

 19 3. Stipulating Defendants neither admit nor deny any of the allegations in the 

Complaint, except as specifically stated in this Order. Only for purposes of this 

 21 action, Stipulating Defendants admit the facts necessary to establish jurisdiction. 

 22 4. Stipulating Defendants waive and release any claim that they may have 

 23 under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the 

 24 prosecution of this action through the date of this Order, and agree to bear their 

own costs and attorney fees. Furthermore, Stipulating Defendants waive and 

 26 release any claims that they may have against the Commission, the Receiver, and 

 27 their agents that relate to this action. 

 28 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 1
 

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 1 5. Stipulating Defendants and the Commission waive all rights to appeal or 

 2 otherwise challenge or contest the validity of this Order. 

 3 DEFINITIONS 

 4 For the purpose of this Order, the following definitions apply: 

A. “Assisting Others” includes: 

 6 1. performing customer service functions, including receiving or 

 7 responding to consumer complaints; 

 8 2. formulating or providing, or arranging for the formulation or 

 9 provision of, any advertising or marketing material, including any telephone 

sales script, direct mail solicitation, or the design, text, or use of images of 

 11 any Internet website, email, or other electronic communication; 

 12 3. formulating or providing, or arranging for the formulation or 

 13 provision of, any marketing support material or service, including web or 

 14 Internet Protocol addresses or domain name registration for any Internet 

websites, affiliate marketing services, or media placement services; 

 16 4. providing names of, or assisting in the generation of, potential 

 17 customers; or 

 18 5. performing marketing, billing, or payment services of any kind. 

 19 B. “Debt Relief Product or Service” means: 

1. With respect to any mortgage, loan, debt, or obligation between a 

 21 Person and one or more creditors or debt collectors of (a) secured loans or 

 22 (b) unsecured student loans, any Product or Service represented, expressly or 

 23 by implication, to: 

 24 a. stop, prevent, or postpone any mortgage or deed of foreclosure 

sale for a Person’s dwelling, any other sale of collateral, any 

 26 repossession of a Person’s dwelling or other collateral, or otherwise 

 27 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 2
 

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 1 save a Person’s dwelling or other collateral from foreclosure or 

repossession; 

b. negotiate, obtain, or arrange a modification, or renegotiate, 

settle, or in any way alter any terms of the mortgage, loan, debt, or 

obligation, including a reduction in the amount of interest, principal 

balance, monthly payments, or fees owed by a Person to a creditor or 

debt collector of secured loans or unsecured student loans; 

c. obtain any forbearance or modification in the timing of 

payments from any secured, or unsecured student loan, holder or 

servicer of any mortgage, loan, debt, or obligation; 

d. negotiate, obtain, or arrange any extension of the period of time 

within which a Person may (i) cure his or her default on the mortgage, 

loan, debt, or obligation, (ii) reinstate his or her mortgage, loan, debt, 

or obligation, (iii) redeem a dwelling or other collateral, or (iv) 

exercise any right to reinstate the mortgage, loan, debt, or obligation 

or redeem a dwelling or other collateral; 

e. obtain any waiver of an acceleration clause or balloon payment 

contained in any promissory note or contract secured by any dwelling 

or other collateral; or 

f. negotiate, obtain, or arrange (i) a short sale of a dwelling or 

other collateral, (ii) a deed-in-lieu of foreclosure, or (iii) any other 

disposition of a mortgage, loan, debt, or obligation other than a sale to 

a third party that is not the secured, or unsecured student loan, holder. 

The foregoing shall include any manner of claimed assistance, including 

auditing or examining a Person’s application for the mortgage, loan, debt, or 

obligation. 

// 

// 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 3
 

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 1 2. With respect to any loan, debt, or obligation between a Person and one 

 2 or more creditors or debt collectors of unsecured student loans, any Product 

 3 or Service represented, expressly or by implication, to: 

 4 a. repay one or more unsecured student loans, debts, or 

obligations; or 

 6 b. combine unsecured student loans, debts, or obligations into one 

 7 or more new loans, debts, or obligations. 

 8 C. “Person” means any individual, group, unincorporated association, limited 

 9 or general partnership, corporation, or other business entity. 

D. “Product or Service” means any good or service, including any plan or 

 11 program. 

 12 E. “Stipulating Defendants” means Carey G. Howe, Anna C. Howe, Shunmin 

 13 “Mike” Hsu, Ruddy Palacios a/k/a Ruddy Barahona, and Oliver Pomazi, and any 

 14 other names by which they might be known, individually, collectively, or in any 

combination. 

 16 ORDER 

 17 I. BAN ON DEBT RELIEF PRODUCTS AND SERVICES 

 18 IT IS ORDERED that Stipulating Defendants are permanently restrained and 

 19 enjoined, whether acting directly or through an intermediary, from advertising, 

marketing, promoting, offering for sale, or selling, or Assisting Others in the 

 21 advertising, marketing, promoting, offering for sale, or selling, of any Debt Relief 

 22 Product or Service. 

 23 II. PROHIBITION AGAINST MISREPRESENTATIONS 

 24 IT IS FURTHER ORDERED that Stipulating Defendants, Stipulating 

Defendants’ officers, agents, employees, and attorneys, and all other Persons in 

 26 active concert or participation with any of them, who receive actual notice of this 

 27 Order, whether acting directly or indirectly, in connection with the advertising, 

 28 marketing, promoting, offering for sale, or selling of any Product or Service, are 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 4
 

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 1 permanently restrained and enjoined from misrepresenting, or Assisting Others in 

 2 misrepresenting, expressly or by implication: 

 3 A. any material aspect of the nature or terms of any refund, cancellation, 

 4 exchange, or repurchase policy, including the likelihood of a consumer obtaining a 

full or partial refund, or the circumstances in which a full or partial refund will be 

 6 granted to the consumer; 

 7 B. that any Person is affiliated with, endorsed or approved by, or otherwise 

 8 connected to any other Person; government entity; public, non-profit, or other non-

 9 commercial program; or any other program; 

C. the nature, expertise, position, or job title of any Person who provides any 

 11 Product or Service; 

 12 D. that any Person providing a testimonial has purchased, received, or used the 

 13 Product or Service; 

 14 E. that the experience represented in a testimonial of the product, service, plan, 

or program represents the Person’s actual experience resulting from the use of the 

 16 product, service, plan, or program under the circumstances depicted in the 

 17 advertisement; or 

 18 F. any other fact material to consumers concerning any Product or Service, 

 19 such as: the total costs; any material restrictions, limitations, or conditions; or any 

material aspect of its performance, efficacy, nature, or central characteristics. 

 21 III. PROHIBITION AGAINST UNSUBSTANTIATED CLAIMS 

 22 IT IS FURTHER ORDERED that Stipulating Defendants, Stipulating 

 23 Defendants’ officers, agents, employees, and attorneys, and all other Persons in 

 24 active concert or participation with any of them, who receive actual notice of this 

Order, whether acting directly or indirectly, in connection with the promoting or 

 26 offering for sale of any Product or Service, are permanently restrained and 

 27 enjoined from making any representation or Assisting Others in making any 

 28 representation, expressly or by implication, about the benefits, performance, or 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 5
 

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 1 efficacy of any Product or Service, unless the representation is non-misleading, 

 2 including that, at the time such representation is made, they possess and rely upon 

 3 competent and reliable evidence that is sufficient in quality and quantity based on 

 4 standards generally accepted in the relevant fields, when considered in light of the 

entire body of relevant and reliable evidence, to substantiate that the representation 

 6 is true. 

 7 IV. INJUNCTION RELATING TO TELEMARKETING 

 8 IT IS FURTHER ORDERED that Stipulating Defendants, Stipulating 

 9 Defendants’ officers, agents, and employees, and all other Persons in active 

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

 11 whether acting directly or indirectly, in connection with telemarketing, advertising, 

 12 marketing, promoting, offering for sale, or selling of any Product or Service, are 

 13 hereby permanently restrained and enjoined from: 

 14 A. Misrepresenting, directly or by implication, in the sale of goods or services 

any material aspect of the performance, efficacy, nature, or central characteristics 

 16 of goods or services that are the subject of a sales offer; and 

 17 B. Violating the FTC’s Telemarketing Sales Rule, 16 C.F.R. pt. 310, a copy of 

 18 which is attached as Attachment A. 

 19 V. MONETARY JUDGMENT AND PARTIAL SUSPENSION 

IT IS FURTHER ORDERED that: 

 21 A. Judgment in the amount of Forty-Three Million Three Hundred Thirty-

 22 Seven Thousand Two Hundred Ninety-Two Dollars and Eighty-Three Cents 

 23 ($43,337,292.83) is entered in favor of the Commission against Stipulating 

 24 Defendants, jointly and severally, as equitable monetary relief. 

B. In partial satisfaction of the judgment imposed by Subsection A, the 

 26 Stipulating Defendants are each ordered to pay to the Commission the following 

 27 amounts: 

 28 Carey G. Howe and Anna C. Howe: $133,496.42 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 6
 

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 1 Shunmin Hsu: $43,252.16 

 2 Ruddy Palacios: $260,582.00 

 3 Oliver Pomazi: $54,505.00 

 4 which, as Stipulating Defendants stipulate, their undersigned counsel will hold in 

escrow for no purpose other than payment to the Commission. In addition, 

 6 Stipulating Defendants shall cause to be paid to the Commission all funds held in 

 7 their counsel’s client trust account pursuant to the Court’s order of January 27, 

 8 2020 (Doc. 116). Such payments must be made within seven (7) days of entry of 

 9 this Order by electronic fund transfer in accordance with instructions provided by a 

representative of the Commission. Upon such payments and, if applicable, all 

 11 additional payments, asset transfers, and delivery of proof of deeds of trust 

 12 pursuant to Subsection C below, the remainder of the judgment is suspended, 

 13 subject to the Subsections below. 

 14 C. In addition to making the payments required by Subsection B, the following 

Stipulating Defendants shall make an additional deferred payment in the amounts 

 16 listed below. To secure the deferred payments, the Stipulating Defendants hereby 

 17 grant the FTC a lien and security interest in the real property indicated: 

 18  Carey G. Howe and Anna C. Howe: $80,302.00 (8282 Valencia 

 19 Drive, Huntington Beach, California 92647) 

 Shunmin Hsu: $237,840.76 (12602 Barrett Lane, North Tustin, 

 21 California 92705) 

 22  Ruddy Palacios: $24,958.29 (1912 Alcor Street, Lomita, California 

 23 90717) 

 24 Within thirty (30) days of entry of this Order, each of these Stipulating Defendants 

shall either record and deliver to the FTC a deed of trust in the real property in the 

 26 amount indicated, or pay the FTC the full amount of the deferred payment. Any 

 27 Stipulating Defendant who records and delivers to the FTC a deed of trust must 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 7
 

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 1 pay the FTC the full amount of the deferred payment no later than one-hundred 

 2 eighty (180) days following entry of this Order. 

 3 Each Stipulating Defendant represents and acknowledges that, as to that 

 4 Stipulating Defendant’s above-listed property, the FTC is relying on the material 

representations that the Stipulating Defendant is the sole owner of the property or 

 6 is otherwise empowered to obtain a voluntary lien and deed of trust thereon; title to 

 7 the property is marketable; and the property is not encumbered by any other lien, 

 8 mortgage, deed of trust, assignment, pledge, security interest, or other interest not 

 9 identified in the Financial Attestations listed in Subsection D below. Stipulating 

Defendants shall maintain in good working order, keep in the same condition, 

 11 cause existing insurance coverage for the property to remain in force, and take no 

 12 action to diminish the value of the property, including any structures, fixtures, and 

 13 appurtenances thereto, as of the date Stipulating Defendants executed their 

 14 Financial Attestations listing the value of such property. Stipulating Defendants 

shall be responsible for paying all fees, costs, or other expenses related to 

 16 recording the voluntary lien and deed of trust described above. 

 17 Within ten (10) days of the full payment of a Stipulating Defendant’s 

 18 payment obligation under this Subsection C, the FTC will execute and deliver to 

 19 such Stipulating Defendant a fully executed conveyance releasing the FTC’s lien 

and security interest in the subject property, which upon the Stipulating 

 21 Defendant’s receipt may be immediately perfected by recordation. 

 22 D. In the event that any Stipulating Defendant fails to make a required payment 

 23 when due under Subsection B or C, the entire judgment amount, less any amount 

 24 previously paid, shall immediately become due and payable by that Stipulating 

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

 26 amended, shall immediately begin to accrue on the unpaid balance. Time is of the 

 27 essence for the payments specified in this Section. 

 28 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 8
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 1 E. The Commission’s agreement to the suspension of part of the judgment is 

 2 expressly premised upon the truthfulness, accuracy, and completeness of 

 3 Defendants’ sworn financial statements and related documents (collectively, 

 4 “Financial Attestations”) submitted to the Commission or attached to this Order, 

namely: 

 6 1. the Financial Statement of Individual Defendant Carey G. Howe 

 7 signed on November 16, 2019; 

 8 2. the Addendum to Carey G. Howe’s Individual Financial Disclosure 

 9 Form signed on February 14, 2020, including the additional items; 

3. the Second Addendum to Carey G. Howe’s Individual Financial 

 11 Disclosure Form signed on March 19, 2020, including the attachments; 

 12 4. the Third Addendum to Cary G. Howe’s Individual Financial 

 13 Disclosure Form signed on July 1, 2020; 

 14 5. the Declaration of Carey G. Howe executed on July 24, 2020; 

6. the Declaration of Anna C. Howe executed on July 21, 2020; 

 16 7. the Financial Statement of Individual Defendant Shunmin Hsu signed 

 17 on November 17, 2019, including the attachments; 

 18 8. the Addendum to Shunmin Hsu’s Financial Disclosure Form signed 

 19 on February 12, 2020, including the additional items; 

9. the Second Addendum to Shunmin Hsu’s Financial Disclosure Form 

 21 signed on July 2, 2020; 

 22 10. the Declaration of Shunmin Hsu executed on July 23, 2020; 

 23 11. the Financial Statement of Individual Defendant Ruddy Palacios 

 24 signed on November 18, 2019, including the attachments; 

12. the Addendum to Ruddy Palacios’s Financial Disclosure Form signed 

 26 on February 13, 2020, including the additional items; 

 27 13. the Second Addendum to Ruddy Palacios’s Financial Disclosure form 

 28 signed on June 30, 2020; 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 9
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 1 14. the Payoff Statement for Ruddy Palacios dated June 11, 2020; 

 2 15. the Declaration of Ruddy Palacios executed on July 24, 2020; 

 3 16. the Financial Statement of Individual Defendant Oliver Pomazi signed 

 4 on November 15, 2019; 

17. the Addendum to Oliver Pomazi’s Financial Disclosure Form signed 

 6 on February 12, 2020, including the additional items; and 

 7 18. the Second Addendum to Oliver Pomazi’s Financial Disclosure Form 

 8 signed on July 2, 2020. 

 9 F. The suspension of the judgment will be lifted as to any Stipulating 

Defendant if, upon motion by the Commission, the Court finds that Stipulating 

 11 Defendant failed to disclose any material asset, materially misstated the value of 

 12 any asset, or made any other material misstatement or omission in the Financial 

 13 Attestations identified above. 

 14 G. If the suspension of the judgment is lifted, the judgment becomes 

immediately due as to that Stipulating Defendant in the amount specified in 

 16 Subsection A above (which the parties stipulate only for purposes of this Section 

 17 represents the consumer injury alleged in the Complaint), less any payment 

 18 previously made pursuant to this Section, plus interest computed from the date of 

 19 entry of this Order. 

VI. ADDITIONAL MONETARY PROVISIONS 

 21 IT IS FURTHER ORDERED that: 

 22 A. Stipulating Defendants relinquish dominion and all legal and equitable right, 

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

 24 the return of any assets. 

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

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

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

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 10 
 

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

 2 bankruptcy case. 

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

 4 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 

 6 for such purposes. 

 7 D. Stipulating Defendants acknowledge that their Taxpayer Identification 

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

 9 Stipulating Defendants previously submitted to the Commission, may be used for 

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

 11 accordance with 31 U.S.C. § 7701. 

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

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

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

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

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

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

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

 19 as it determines to be reasonably related to Defendants’ practices alleged in the 

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

 21 U.S. Treasury as disgorgement. Stipulating Defendants have no right to challenge 

 22 any actions the Commission or its representatives may take pursuant to this 

 23 Subsection. 

 24 F. The asset freeze imposed by the preliminary injunction order entered on 

December 17, 2019 (Doc. 79), is modified to permit the payments identified in 

 26 Section V.B–C. The asset freeze shall otherwise remain in full force and effect 

 27 until the completion of all such payments, after which the asset freeze shall be 

 28 dissolved as to the Stipulating Defendants. 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 11 
 

 

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 1 G. Upon completion of all payments identified in Section V.B–C, the Court’s 

 2 order of January 27, 2020, is dissolved.

 3 VII. CUSTOMER INFORMATION 

 4 IT IS FURTHER ORDERED that Stipulating Defendants, their officers, 

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

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

 7 acting directly or indirectly, in connection with the advertising, marketing, 

 8 promoting, offering for sale, or selling of any Product or Service, are permanently 

 9 restrained and enjoined from directly or indirectly: 

A. failing to provide sufficient customer information to enable the Commission 

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

 12 requests in writing any information related to redress, Stipulating Defendants must 

 13 provide it, in the form prescribed by the Commission, within 14 days; 

 14 B. disclosing, using, or benefitting from customer information, including the 

name, address, telephone number, email address, social security number, other 

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

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

 18 Defendant obtained prior to entry of this Order in connection with the sale and 

 19 marketing of student loan debt relief services; and 

C. failing to destroy such customer information in all forms in their possession, 

 21 custody, or control within 30 days after receipt of written direction to do so from a 

 22 representative of the Commission. 

 23 Provided, however, that customer information need not be disposed of, and 

 24 may be disclosed, to the extent requested by a government agency or required by 

law, regulation, or court order. 

 26 // 

 27 // 

 28 // 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 12 
 

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 1 VIII. COOPERATION 

 2 IT IS FURTHER ORDERED that Stipulating Defendants must fully 

 3 cooperate with representatives of the Commission and the Receiver in this case and 

 4 in any investigation related to or associated with the transactions or the 

occurrences that are the subject of the Complaint. Stipulating Defendants must 

 6 provide truthful and complete information, evidence, and testimony. Stipulating 

 7 Defendants must appear and cause their employees, representatives, or agents to 

 8 appear for interviews, discovery, hearings, trials, and any other proceedings that a 

 9 Commission or Receiver’s representative may reasonably request upon five (5) 

days written notice, or other reasonable notice, at such places and times as a 

 11 Commission or Receiver’s representative may designate, without the service of a 

 12 subpoena. 

 13 IX. ORDER ACKNOWLEDGMENTS 

 14 IT IS FURTHER ORDERED that Stipulating Defendants obtain 

acknowledgments of receipt of this Order: 

 16 A. Each Stipulating Defendant, within 7 days of entry of this Order, must 

 17 submit to the Commission an acknowledgment of receipt of this Order sworn 

 18 under penalty of perjury, in the form attached to this Order. 

 19 B. For 15 years after entry of this Order, each Stipulating Defendant for any 

business that such Stipulating Defendant, individually or collectively with any 

 21 other Defendants, is the majority owner or controls directly or indirectly, must 

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

 23 managers and members; (2) all employees having managerial responsibilities for 

 24 the conduct specified in Section IV and all agents and representatives who 

participate in the conduct specified in Section IV; (3) any payment processor or 

 26 lead broker or generator used by the business; and (4) any business entity resulting 

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

 28 Reporting. Delivery must occur within 7 days of entry of this Order for current 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 13 
 

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

 2 responsibilities. 

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

 4 copy of this Order, that Stipulating Defendant must obtain and deliver to the 

Commission, within 30 days, a signed and dated acknowledgment of receipt of this 

 6 Order, in the form attached to this Order. 

 7 X. COMPLIANCE REPORTING 

 8 IT IS FURTHER ORDERED that Stipulating Defendants make timely 

 9 submissions to the Commission: 

A. One year after entry of this Order, each Stipulating Defendant must submit a 

 11 compliance report, sworn under penalty of perjury. In the compliance report, each 

 12 Individual Defendant must: 

 13 1. identify all telephone numbers and all physical, postal, email and 

 14 Internet addresses, including all residences, as designated points of contact, 

which representatives of the Commission may use to communicate with 

 16 Stipulating Defendant; 

 17 2. identify all business activities, including any business for which such 

 18 Stipulating Defendant performs services whether as an employee or 

 19 otherwise and any entity in which such Stipulating Defendant has any 

ownership interest, including the names, telephone numbers, and physical, 

 21 postal, email, and Internet addresses of all such businesses; 

 22 3. describe in detail the activities of each business, including the goods 

 23 and services offered, the means of advertising, marketing, and sales, and the 

 24 involvement of any other Defendant (which Stipulating Defendants must 

describe if they know or should know due to their own involvement) 

 26 3. describe in detail such Stipulating Defendant’s involvement in each 

 27 such business, including title, role, responsibilities, participation, authority, 

 28 control, and any ownership; 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 14 
 

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 1 4. describe in detail whether and how that Stipulating Defendant is in 

 2 compliance with each Section of this Order; and 

 3 5. provide a copy of each Order Acknowledgment obtained pursuant to 

 4 this Order, unless previously submitted to the Commission. 

B. For 15 years after entry of this Order, each Stipulating Defendant must 

 6 submit a compliance notice, sworn under penalty of perjury, within 14 days of any 

 7 change in the following: 

 8 1. Each Stipulating Defendant must report any change in: (a) any 

 9 designated point of contact; or (b) the structure of any entity that Stipulating 

Defendant has any ownership interest in or controls directly or indirectly that 

 11 may affect compliance obligations arising under this Order, including: 

 12 creation, merger, sale, or dissolution of the entity or any subsidiary, parent, 

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

 14 2. Additionally, each Stipulating Defendant must report any change in: 

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

 16 title or role in any business activity, including any business for which such 

 17 Stipulating Defendant performs services whether as an employee or 

 18 otherwise and any entity in which such Stipulating Defendant has any 

 19 ownership interest, and identify the name, physical address, and any Internet 

address of the business or entity. 

 21 C. Each Stipulating Defendant must submit to the Commission notice of the 

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

 23 or against such Stipulating Defendant within 14 days of its filing. 

 24 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, 

 26 such as by concluding: “I declare under penalty of perjury under the laws of the 

 27 United States of America that the foregoing is true and correct. Executed on: 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 15 
 

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 1 _____” and supplying the date, signatory’s full name, title (if applicable), and 

 2 signature. 

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

 4 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: 

 6 Associate Director for Enforcement, Bureau of Consumer Protection, Federal 

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

 8 subject line must begin: FTC v. American Financial Support Services Inc., et al., 

 9 X200005. 

XI. RECORDKEEPING 

 11 IT IS FURTHER ORDERED that Stipulating Defendants must create certain 

 12 records for 15 years after entry of the Order, and retain each such record for 5 

 13 years. Specifically, each Stipulating Defendant for any business that such 

 14 Stipulating Defendant, individually or collectively with any other Defendants, is a 

majority owner of or controls directly or indirectly, must create and retain the 

 16 following records: 

 17 A. accounting records showing the revenues from all goods or services sold; 

 18 B. personnel records showing, for each person providing services, whether as 

 19 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; 

 21 C. records of all consumer complaints and refund requests, whether received 

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

 23 D. all records necessary to demonstrate full compliance with each provision of 

 24 this Order, including all submissions to the Commission; and 

E. a listing of all payment processors and lead brokers or generators used in the 

 26 conduct of the business. 

 27 // 

 28 // 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 16 
 

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Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 18 of 46 Page ID

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 1 XII. COMPLIANCE MONITORING 

IT IS FURTHER ORDERED that, for the purpose of monitoring Stipulating 

Defendants’ compliance with this Order, including the Financial Attestations upon 

which part of the judgment was suspended and any failure to transfer any assets as 

required by this Order: 

A. Within 14 days of receipt of a written request from a representative of the 

Commission, each Stipulating Defendant 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 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 each Stipulating Defendant. Such Stipulating 

Defendant must permit representatives of the Commission to interview any 

employee or other person affiliated with any Stipulating Defendant 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 

Stipulating Defendants or any individual or entity affiliated with Stipulating 

Defendants, 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. 

D. Upon written request from a representative of the Commission, any 

consumer reporting agency must furnish consumer reports concerning Stipulating 

Defendants, pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. 

§ 1681b(a)(1). 

// 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 17 
 

 

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 1 XIII. DISPOSITION OF APPEALS 

 2 IT IS FURTHER ORDERED that, within three (3) business days after entry 

 3 of this Order, Stipulating Defendants shall move to dismiss, with prejudice and 

 4 without seeking attorney’s fees and costs, their appeals in the Ninth Circuit Court 

of Appeals arising from this Court’s entry of a Preliminary Injunction, Ninth 

 6 Circuit Case Nos. 20-55091 and 20-55092. 

 7 XIV. RETENTION OF JURISDICTION 

 8 IT IS FURTHER ORDERED that this Court retains jurisdiction of this 

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

 11 SO ORDERED this day of , 2020. 

 12 

 13 

 14 _______________________________ 

HON. JAMES V. SELNA 

UNITED STATES DISTRICT JUDGE 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AS TO 

DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, RUDDY PALACIOS, 

AND OLIVER POMAZI – 18 
 

 

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UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

FEDERAL TRADE COMMISSION, 

Civ. No. 8:19-cv-02109-JVS (ADSx) 

 Plaintiff, 

ACKNOWLEDGEMENT BY 

 v. AFFIDAVIT OF RECEIPT OF 

ORDER BY DEFENDANT 

AMERICAN FINANCIAL SUPPORT 

SERVICES INC., et al., 

 Defendants. 

1. My name is ___________________________. I am a U.S. citizen over the 

age of eighteen, and I have personal knowledge of the facts set forth in this 

Acknowledgement. 

2. I was a Defendant in Federal Trade Commission v. American Financial 

Support Services Inc., et al., which is the court case listed near the top of this page. 

3. On ___________________, 2020, I received a copy of the Stipulated Order 

for Permanent Injunction and Monetary Judgment as to Defendants Carey G. 

Howe, Anna C. Howe, Shunmin Hsu, Ruddy Palacios, and Oliver Pomazi, which 

was signed by the Honorable James V. Selna and entered by the Court on 

_____________, 2020. 

I declare under penalty of perjury under the laws of the United States of America 

that the foregoing is true and correct. 

 Executed on _________________, 2020, at __________________. 
 

 

 

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 _________________________ 

 [Defendant] 

State of ______________, City of ____________ 

Subscribed and sworn to before me 

this ____ day of _______, 20__. 

 ______________________ 

 Notary Public 

My commission expires: 

 ______________________ 
 

 

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UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

FEDERAL TRADE COMMISSION, 

Civ. No. 8:19-cv-02109-JVS (ADSx) 

 Plaintiff, 

ACKNOWLEDGEMENT BY 

 v. DECLARATION OF RECEIPT OF 

ORDER BY A NON-PARTY 

AMERICAN FINANCIAL SUPPORT 

SERVICES INC., et al., 

 Defendants. 

1. I, __________________________________, received a copy of the 

Stipulated Order for Permanent Injunction and Monetary Judgment as to 

Defendants Carey G. Howe, Anna C. Howe, Shunmin Hsu, Ruddy Palacios, and 

Oliver Pomazi in the case of Federal Trade Commission v. American Financial 

Support Services Inc., et al., on _______________________, 20___. 

2. I was not a Defendant in that court case. My title or relationship with 

Defendant(s) ________________________________________ is: 

__________________________________________________________________. 

3. I declare under penalty of perjury under the laws of the United States of 

America that the foregoing is true and correct. 

Executed on _________________, 20___, at _______________________ [place]. 

Signed:

 _________________________ 
 

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ATTACHMENT A 
ELECTRONIC CODE OF FEDERAL REGULATIONS 

e-CFR data is current as of July 16, 2020 

Title 16 - Chapter I - Subchapter C - Part 310 

Title 16: Commercial Practices 

PART 310-TELEMARKETING SALES RULE 16 CFR PART 310 

Contents 

§310.1 Scope of regulations in this part. 

§310.2 Definitions. 

§310.3 Deceptive telemarketing acts or practices. 

§310.4 Abusive telemarketing acts or practices. 

§310.5 Recordkeeping requirements. 

§310.6 Exemptions. 

§310.7 Actions by states and private persons. 

§310.8 Fee for access to the National Do Not Call Registry. 

§310.9 Severability. 

AUTHORITY: 15 U.S.C. 6101-6108. 

SOURCE: 75 FR48516, Aug. 10, 2010, unless otherwise noted. 

§310.1 Scope of regulations in this part. 

This part implements the Telemarketing and Consumer Fraud and Abuse 

Prevention Act, 15 U.S.C. 6101-6108, as amended. 

§310.2 Definitions. 

(a) Acquirer means a business organization, financial institution, or an agent of 

a business organization or financial institution that has authority from an 

organization that operates or licenses a credit card system to authorize merchants 

to accept, transmit, or process payment by credit card through the credit card 

system for money, goods or services, or anything else of value. 

(b) Attorney General means the chief legal officer of a state. 

Attachment A - page 1

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 24 of 46 Page ID

 #:4107 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 2

(c) Billing information means any data that enables any person to access a 

customer's or donor's account, such as a credit card, checking, savings, share or 

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

(d) Caller identification service means a service that allows a telephone 

subscriber to have the telephone number, and, where available, name of the calling 

party transmitted contemporaneously with the telephone call, and displayed on a 

device in or connected to the subscriber's telephone. 

(e) Cardholder means a person to whom a credit card is issued or who is 

authorized to use a credit card on behalf of or in addition to the person to whom the 

credit card is issued. 

(f) Cash-to-cash money transfer means the electronic (as defined in section 106 

(2) of the Electronic Signatures in Global and National Commerce Act (15 U.S.C. 

7006(2)) transfer of the value of cash received from one person to another person in 

a different location that is sent by a money transfer provider and received in the form 

of cash. For purposes of this definition, money transfer provider means any person 

or financial institution that provides cash-to-cash money transfers for a person in the 

normal course of its business, whether or not the person holds an account with such 

person or financial institution. The term cash-to-cash money transfer includes a 

remittance transfer, as defined in section 919(g)(2) of the Electronic Fund Transfer 

Act ("EFTA"), 15 U.S.C. 1693a, that is a cash-to-cash transaction; however it does 

not include any transaction that is: 

(1) An electronic fund transfer as defined in section 903 of the EFTA; 

(2) Covered by Regulation E, 12 CFR 1005.20, pertaining to gift cards; or 

(3) Subject to the Truth in Lending Act, 15 U.S.C. 1601 et seq. 

(g) Cash reload mechanism is a device, authorization code, personal 

identification number, or other security measure that makes it possible for a person 

to convert cash into an electronic (as defined in section 106(2) of the Electronic 

Signatures in Global and National Commerce Act (15 U.S.C. 7006(2)) form that can 

be used to add funds to a general-use prepaid card, as defined in Regulation E, 12 

CFR 1005.2, or an account with a payment intermediary. For purposes of this 

definition, a cash reload mechanism is not itself a general-use prepaid debit card or 

a swipe reload process or similar method in which funds are added directly onto a 

person's own general-use prepaid card or account with a payment intermediary. 

(h) Charitable contribution means any donation or gift of money or any other 

thing of value. 

(i) Commission means the Federal Trade Commission. 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 25 of 46 Page ID

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 3

G) Credit means the right granted by a creditor to a debtor to defer payment of 

debt or to incur debt and defer its payment. 

(k) Credit card means any card, plate, coupon book, or other credit device 

existing for the purpose of obtaining money, property, labor, or services on credit. 

(I) Credit card sales draft means any record or evidence of a credit card 

transaction. 

(m) Credit card system means any method or procedure used to process credit 

card transactions involving credit cards issued or licensed by the operator of that 

system. 

(n) Customer means any person who is or may be required to pay for goods or 

services offered through telemarketing. 

(o) Debt relief service means any program or service represented, directly or by 

implication, to renegotiate, settle, or in any way alter the terms of payment or other 

terms of the debt between a person and one or more unsecured creditors or debt 

collectors, including, but not limited to, a reduction in the balance, interest rate, or 

fees owed by a person to an unsecured creditor or debt collector. 

(p) Donor means any person solicited to make a charitable contribution. 

(q) Established business relationship means a relationship between a seller and 

a consumer based on: 

(1) the consumer's purchase, rental, or lease of the seller's goods or services or 

a financial transaction between the consumer and seller, within the eighteen (18) 

months immediately preceding the date of a telemarketing call; or 

(2) the consumer's inquiry or application regarding a product or service offered 

by the seller, within the three (3) months immediately preceding the date of a 

telemarketing call. 

(r) Free-to-pay conversion means, in an offer or agreement to sell or provide 

any goods or services, a provision under which a customer receives a product or 

service for free for an initial period and will incur an obligation to pay for the product 

or service if he or she does not take affirmative action to cancel before the end of 

that period. 

(s) Investment opportunity means anything, tangible or intangible, that is 

offered, offered for sale, sold, or traded based wholly or in part on representations, 

either express or implied, about past, present, or future income, profit, or 

appreciation. 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 26 of 46 Page ID

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 4

(t) Material means likely to affect a person's choice of, or conduct regarding, 

goods or services or a charitable contribution. 

(u) Merchant means a person who is authorized under a written contract with an 

acquirer to honor or accept credit cards, or to transmit or process for payment credit 

card payments, for the purchase of goods or services or a charitable contribution. 

(v) Merchant agreement means a written contract between a merchant and an 

acquirer to honor or accept credit cards, or to transmit or process for payment credit 

card payments, for the purchase of goods or services or a charitable contribution. 

(w) Negative option feature means, in an offer or agreement to sell or provide 

any goods or services, a provision under which the customer's silence or failure to 

take an affirmative action to reject goods or services or to cancel the agreement is 

interpreted by the seller as acceptance of the offer. 

(x) Outbound telephone call means a telephone call initiated by a telemarketer 

to induce the purchase of goods or services or to solicit a charitable contribution. 

(y) Person means any individual, group, unincorporated association, limited or 

general partnership, corporation, or other business entity. 

(z) Preacquired account information means any information that enables a 

seller or telemarketer to cause a charge to be placed against a customer's or 

donor's account without obtaining the account number directly from the customer or 

donor during the telemarketing transaction pursuant to which the account will be 

charged. 

(aa) Prize means anything offered, or purportedly offered, and given, or 

purportedly given, to a person by chance. For purposes of this definition, chance 

exists if a person is guaranteed to receive an item and, at the time of the offer or 

purported offer, the telemarketer does not identify the specific item that the person 

will receive. 

(bb) Prize promotion means: 

(1) A sweepstakes or other game of chance; or 

(2) An oral or written express or implied representation that a person has won, 

has been selected to receive, or may be eligible to receive a prize or purported 

prize. 

(cc) Remotely created payment order means any payment instruction or order 

drawn on a person's account that is created by the payee or the payee's agent and 

deposited into or cleared through the check clearing system. The term includes, 

without limitation, a "remotely created check," as defined in Regulation CC, 

Availability of Funds and Collection of Checks, 12 CFR 229.2(fff), but does not 

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Attachment A - page 5

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 28 of 46 Page ID

 #:4111 

include a payment order cleared through an Automated Clearinghouse (ACH) 

Network or subject to the Truth in Lending Act, 15 U.S.C. 1601 et seq., and 

Regulation Z, 12 CFR part 1026. 

(dd) Seller means any person who, in connection with a telemarketing 

transaction, provides, offers to provide, or arranges for others to provide goods or 

services to the customer in exchange for consideration. 

(ee) State means any state of the United States, the District of Columbia, 

Puerto Rico, the Northern Mariana Islands, and any territory or possession of the 

United States. 

(ff) Telemarketer means any person who, in connection with telemarketing, 

initiates or receives telephone calls to or from a customer or donor. 

(gg) Telemarketing means a plan, program, or campaign which is conducted to 

induce the purchase of goods or services or a charitable contribution, by use of one 

or more telephones and which involves more than one interstate telephone call. The 

term does not include the solicitation of sales through the mailing of a catalog which: 

contains a written description or illustration of the goods or services offered for sale; 

includes the business address of the seller; includes multiple pages of written 

material or illustrations; and has been issued not less frequently than once a year, 

when the person making the solicitation does not solicit customers by telephone but 

only receives calls initiated by customers in response to the catalog and during 

those calls takes orders only without further solicitation. For purposes of the 

previous sentence, the term "further solicitation" does not include providing the 

customer with information about, or attempting to sell, any other item included in the 

same catalog which prompted the customer's call or in a substantially similar 

catalog. 

(hh) Upselling means soliciting the purchase of goods or services following an 

initial transaction during a single telephone call. The upsell is a separate 

telemarketing transaction, not a continuation of the initial transaction. An "external 

upsell" is a solicitation made by or on behalf of a seller different from the seller in the 

initial transaction, regardless of whether the initial transaction and the subsequent 

solicitation are made by the same telemarketer. An "internal upsell" is a solicitation 

made by or on behalf of the same seller as in the initial transaction, regardless of 

whether the initial transaction and subsequent solicitation are made by the same 

telemarketer. 

[75 FR 48516, Aug. 10, 2010, as amended at 80 FR 77557, Dec. 14, 2015] 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 6

§310.3 Deceptive telemarketing acts or practices. 

(a) Prohibited deceptive telemarketing acts or practices. It is a deceptive 

telemarketing act or practice and a violation of this Rule for any seller or 

telemarketer to engage in the following conduct: 

(1) Before a customer consents to pay659 for goods or services offered, failing to 

disclose truthfully, in a clear and conspicuous manner, the following material 

information: 

659 When a seller or telemarketer uses, or directs a customer to use, a courier to transport 

payment, the seller or telemarketer must make the disclosures required by §310.3(a)(1) before 

sending a courier to pick up payment or authorization for payment, or directing a customer to have a 

courier pick up payment or authorization for payment. In the case of debt relief services, the seller 

or telemarketer must make the disclosures required by §310.3(a)(1) before the consumer enrolls in 

an offered program. 

(i) The total costs to purchase, receive, or use, and the quantity of, any goods 

or services that are the subject of the sales offer;660 

66° For offers of consumer credit products subject to the Truth in Lending Act, 15 U.S.C. 1601 

et seq., and Regulation Z, 12 CFR 226, compliance with the disclosure requirements under the 

Truth in Lending Act and Regulation Z shall constitute compliance with §310.3(a)(1)(i) of this Rule. 

(ii) All material restrictions, limitations, or conditions to purchase, receive, or use 

the goods or services that are the subject of the sales offer; 

(iii) If the seller has a policy of not making refunds, cancellations, exchanges, or 

repurchases, a statement informing the customer that this is the seller's policy; or, if 

the seller or telemarketer makes a representation about a refund, cancellation, 

exchange, or repurchase policy, a statement of all material terms and conditions of 

such policy; 

(iv) In any prize promotion, the odds of being able to receive the prize, and, if 

the odds are not calculable in advance, the factors used in calculating the odds; that 

no purchase or payment is required to win a prize or to participate in a prize 

promotion and that any purchase or payment will not increase the person's chances 

of winning; and the no-purchase/no-payment method of participating in the prize 

promotion with either instructions on how to participate or an address or local or tollfree telephone number to which customers may write or call for information on how 

to participate; 

(v) All material costs or conditions to receive or redeem a prize that is the 

subject of the prize promotion; 

(vi) In the sale of any goods or services represented to protect, insure, or 

otherwise limit a customer's liability in the event of unauthorized use of the 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 29 of 46 Page ID

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 7

customer's credit card, the limits on a cardholder's liability for unauthorized use of a 

credit card pursuant to 15 U.S.C. 1643; 

(vii) If the offer includes a negative option feature, all material terms and 

conditions of the negative option feature, including, but not limited to, the fact that 

the customer's account will be charged unless the customer takes an affirmative 

action to avoid the charge(s), the date(s) the charge(s) will be submitted for 

payment, and the specific steps the customer must take to avoid the charge(s); and 

(viii) In the sale of any debt relief service: 

(A) the amount of time necessary to achieve the represented results, and to the 

extent that the service may include a settlement offer to any of the customer's 

creditors or debt collectors, the time by which the debt relief service provider will 

make a bona fide settlement offer to each of them; 

(8) to the extent that the service may include a settlement offer to any of the 

customer's creditors or debt collectors, the amount of money or the percentage of 

each outstanding debt that the customer must accumulate before the debt relief 

service provider will make a bona fide settlement offer to each of them; 

(C) to the extent that any aspect of the debt relief service relies upon or results 

in the customer's failure to make timely payments to creditors or debt collectors, that 

the use of the debt relief service will likely adversely affect the customer's 

creditworthiness, may result in the customer being subject to collections or sued by 

creditors or debt collectors, and may increase the amount of money the customer 

owes due to the accrual of fees and interest; and 

(D) to the extent that the debt relief service requests or requires the customer to 

place funds in an account at an insured financial institution, that the customer owns 

the funds held in the account, the customer may withdraw from the debt relief 

service at any time without penalty, and, if the customer withdraws, the customer 

must receive all funds in the account, other than funds earned by the debt relief 

service in compliance with §310.4(a)(5)(i)(A) through (C). 

(2) Misrepresenting, directly or by implication, in the sale of goods or services 

any of the following material information: 

(i) The total costs to purchase, receive, or use, and the quantity of, any goods 

or services that are the subject of a sales offer; 

(ii) Any material restriction, limitation, or condition to purchase, receive, or use 

goods or services that are the subject of a sales offer; 

(iii) Any material aspect of the performance, efficacy, nature, or central 

characteristics of goods or services that are the subject of a sales offer; 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 30 of 46 Page ID

 #:4113 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 8

(iv) Any material aspect of the nature or terms of the seller's refund, 

cancellation, exchange, or repurchase policies; 

(v) Any material aspect of a prize promotion including, but not limited to, the 

odds of being able to receive a prize, the nature or value of a prize, or that a 

purchase or payment is required to win a prize or to participate in a prize promotion; 

(vi) Any material aspect of an investment opportunity including, but not limited 

to, risk, liquidity, earnings potential, or profitability; 

(vii) A seller's or telemarketer's affiliation with, or endorsement or sponsorship 

by, any person or government entity; 

(viii) That any customer needs offered goods or services to provide protections 

a customer already has pursuant to 15 U.S.C. 1643; 

(ix) Any material aspect of a negative option feature including, but not limited to, 

the fact that the customer's account will be charged unless the customer takes an 

affirmative action to avoid the charge(s), the date(s) the charge(s) will be submitted 

for payment, and the specific steps the customer must take to avoid the charge(s); 

or 

(x) Any material aspect of any debt relief service, including, but not limited to, 

the amount of money or the percentage of the debt amount that a customer may 

save by using such service; the amount of time necessary to achieve the 

represented results; the amount of money or the percentage of each outstanding 

debt that the customer must accumulate before the provider of the debt relief service 

will initiate attempts with the customer's creditors or debt collectors or make a bona 

fide offer to negotiate, settle, or modify the terms of the customer's debt; the effect of 

the service on a customer's creditworthiness; the effect of the service on collection 

efforts of the customer's creditors or debt collectors; the percentage or number of 

customers who attain the represented results; and whether a debt relief service is 

offered or provided by a non-profit entity. 

(3) Causing billing information to be submitted for payment, or collecting or 

attempting to collect payment for goods or services or a charitable contribution, 

directly or indirectly, without the customer's or donor's express verifiable 

authorization, except when the method of payment used is a credit card subject to 

protections of the Truth in Lending Act and Regulation Z,661 or a debit card subject 

to the protections of the Electronic Fund Transfer Act and Regulation E.662 Such 

authorization shall be deemed verifiable if any of the following means is employed: 

661 Truth in Lending Act, 15 U.S.C. 1601 et seq., and Regulation Z, 12 CFR part 226. 

662 Electronic Fund Transfer Act, 15 U.S.C. 1693 et seq., and Regulation E, 12 CFR part 205. 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 31 of 46 Page ID

 #:4114 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 9

(i) Express written authorization by the customer or donor, which includes the 

customer's or donor's signature;663 

663 For purposes of this Rule, the term "signature" shall include an electronic or digital form of 

signature, to the extent that such form of signature is recognized as a valid signature under 

applicable federal law or state contract law. 

(ii) Express oral authorization which is audio-recorded and made available upon 

request to the customer or donor, and the customer's or donor's bank or other billing 

entity, and which evidences clearly both the customer's or donor's authorization of 

payment for the goods or services or charitable contribution that are the subject of 

the telemarketing transaction and the customer's or donor's receipt of all of the 

following information: 

(A) An accurate description, clearly and conspicuously stated, of the goods or 

services or charitable contribution for which payment authorization is sought; 

(B) The number of debits, charges, or payments (if more than one); 

(C) The date(s) the debit(s), charge(s), or payment(s) will be submitted for 

payment; 

(D) The amount(s) of the debit(s), charge(s), or payment(s); 

(E) The customer's or donor's name; 

(F) The customer's or donor's billing information, identified with sufficient 

specificity such that the customer or donor understands what account will be used to 

collect payment for the goods or services or charitable contribution that are the 

subject of the telemarketing transaction; 

(G) A telephone number for customer or donor inquiry that is answered during 

normal business hours; and 

(H) The date of the customer's or donor's oral authorization; or 

(iii) Written confirmation of the transaction, identified in a clear and conspicuous 

manner as such on the outside of the envelope, sent to the customer or donor via 

first class mail prior to the submission for payment of the customer's or donor's 

billing information, and that includes all of the information contained in §§310.3(a)(3) 

(ii)(A)-(G) and a clear and conspicuous statement of the procedures by which the 

customer or donor can obtain a refund from the seller or telemarketer or charitable 

organization in the event the confirmation is inaccurate; provided, however, that this 

means of authorization shall not be deemed verifiable in instances in which goods or 

services are offered in a transaction involving a free-to-pay conversion and 

preacquired account information. 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 32 of 46 Page ID

 #:4115 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 10

(4) Making a false or misleading statement to induce any person to pay for 

goods or services or to induce a charitable contribution. 

(b) Assisting and facilitating. It is a deceptive telemarketing act or practice and a 

violation of this Rule for a person to provide substantial assistance or support to any 

seller or telemarketer when that person knows or consciously avoids knowing that 

the seller or telemarketer is engaged in any act or practice that violates §§310.3(a), 

(c) or (d), or §310.4 of this Rule. 

(c) Credit card laundering. Except as expressly permitted by the applicable 

credit card system, it is a deceptive telemarketing act or practice and a violation of 

this Rule for: 

(1) A merchant to present to or deposit into, or cause another to present to or 

deposit into, the credit card system for payment, a credit card sales draft generated 

by a telemarketing transaction that is not the result of a telemarketing credit card 

transaction between the cardholder and the merchant; 

(2) Any person to employ, solicit, or otherwise cause a merchant, or an 

employee, representative, or agent of the merchant, to present to or deposit into the 

credit card system for payment, a credit card sales draft generated by a 

telemarketing transaction that is not the result of a telemarketing credit card 

transaction between the cardholder and the merchant; or 

(3) Any person to obtain access to the credit card system through the use of a 

business relationship or an affiliation with a merchant, when such access is not 

authorized by the merchant agreement or the applicable credit card system. 

(d) Prohibited deceptive acts or practices in the solicitation of charitable 

contributions. It is a fraudulent charitable solicitation, a deceptive telemarketing act 

or practice, and a violation of this Rule for any telemarketer soliciting charitable 

contributions to misrepresent, directly or by implication, any of the following material 

information: 

(1) The nature, purpose, or mission of any entity on behalf of which a charitable 

contribution is being requested; 

(2) That any charitable contribution is tax deductible in whole or in part; 

(3) The purpose for which any charitable contribution will be used; 

(4) The percentage or amount of any charitable contribution that will go to a 

charitable organization or to any particular charitable program; 

(5) Any material aspect of a prize promotion including, but not limited to: the 

odds of being able to receive a prize; the nature or value of a prize; or that a 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 33 of 46 Page ID

 #:4116 
charitable contribution is required to win a prize or to participate in a prize 

promotion; or 

(6) A charitable organization's or telemarketer's affiliation with, or endorsement 

or sponsorship by, any person or government entity. 

[75 FR 48516, Aug. 10, 2010, as amended at 80 FR 77558, Dec. 14, 2015) 

§310.4 Abusive telemarketing acts or practices. 

(a) Abusive conduct generally. It is an abusive telemarketing act or practice and 

a violation of this Rule for any seller or telemarketer to engage in the following 

conduct: 

(1) Threats, intimidation, or the use of profane or obscene language; 

(2) Requesting or receiving payment of any fee or consideration for goods or 

services represented to remove derogatory information from, or improve, a person's 

credit history, credit record, or credit rating until: 

(i) The time frame in which the seller has represented all of the goods or 

services will be provided to that person has expired; and 

(ii) The seller has provided the person with documentation in the form of a 

consumer report from a consumer reporting agency demonstrating that the 

promised results have been achieved, such report having been issued more than six 

months after the results were achieved. Nothing in this Rule should be construed to 

affect the requirement in the Fair Credit Reporting Act, 15 U.S.C. 1681, that a 

consumer report may only be obtained for a specified permissible purpose; 

(3) Requesting or receiving payment of any fee or consideration from a person 

for goods or services represented to recover or otherwise assist in the return of 

money or any other item of value paid for by, or promised to, that person in a 

previous transaction, until seven (7) business days after such money or other item is 

delivered to that person. This provision shall not apply to goods or services provided 

to a person by a licensed attorney; 

(4) Requesting or receiving payment of any fee or consideration in advance of 

obtaining a loan or other extension of credit when the seller or telemarketer has 

guaranteed or represented a high likelihood of success in obtaining or arranging a 

loan or other extension of credit for a person; 

(5)(i) Requesting or receiving payment of any fee or consideration for any debt 

relief service until and unless: 

Attachment A - page 11

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 34 of 46 Page ID

 #:4117 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 12

(A) The seller or telemarketer has renegotiated, settled, reduced, or otherwise 

altered the terms of at least one debt pursuant to a settlement agreement, debt 

management plan, or other such valid contractual agreement executed by the 

customer; 

(B) The customer has made at least one payment pursuant to that settlement 

agreement, debt management plan, or other valid contractual agreement between 

the customer and the creditor or debt collector; and 

(C) To the extent that debts enrolled in a service are renegotiated, settled, 

reduced, or otherwise altered individually, the fee or consideration either: 

( 1) Bears the same proportional relationship to the total fee for renegotiating, 

settling, reducing, or altering the terms of the entire debt balance as the individual 

debt amount bears to the entire debt amount. The individual debt amount and the 

entire debt amount are those owed at the time the debt was enrolled in the service; 

or 

(2) Is a percentage of the amount saved as a result of the renegotiation, 

settlement, reduction, or alteration. The percentage charged cannot change from 

one individual debt to another. The amount saved is the difference between the 

amount owed at the time the debt was enrolled in the service and the amount 

actually paid to satisfy the debt. 

(ii) Nothing in §310.4(a)(5)(i) prohibits requesting or requiring the customer to 

place funds in an account to be used for the debt relief provider's fees and for 

payments to creditors or debt collectors in connection with the renegotiation, 

settlement, reduction, or other alteration of the terms of payment or other terms of a 

debt, provided that: 

(A) The funds are held in an account at an insured financial institution; 

(B) The customer owns the funds held in the account and is paid accrued 

interest on the account, if any; 

(C) The entity administering the account is not owned or controlled by, or in any 

way affiliated with, the debt relief service; 

(D) The entity administering the account does not give or accept any money or 

other compensation in exchange for referrals of business involving the debt relief 

service; and 

(E) The customer may withdraw from the debt relief service at any time without 

penalty, and must receive all funds in the account, other than funds earned by the 

debt relief service in compliance with §310.4(a)(5)(i)(A) through (C), within seven (7) 

business days of the customer's request. 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 35 of 46 Page ID

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 13

(6) Disclosing or receiving, for consideration, unencrypted consumer account 

numbers for use in telemarketing; provided, however, that this paragraph shall not 

apply to the disclosure or receipt of a customer's or donor's billing information to 

process a payment for goods or services or a charitable contribution pursuant to a 

transaction; 

(7) Causing billing information to be submitted for payment, directly or indirectly, 

without the express informed consent of the customer or donor. In any telemarketing 

transaction, the seller or telemarketer must obtain the express informed consent of 

the customer or donor to be charged for the goods or services or charitable 

contribution and to be charged using the identified account. In any telemarketing 

transaction involving preacquired account information, the requirements in 

paragraphs (a)(?)(i) through (ii) of this section must be met to evidence express 

informed consent. 

(i) In any telemarketing transaction involving preacquired account information 

and a free-to-pay conversion feature, the seller or telemarketer must: 

(A) Obtain from the customer, at a minimum, the last four (4) digits of the 

account number to be charged; 

(B) Obtain from the customer his or her express agreement to be charged for 

the goods or services and to be charged using the account number pursuant to 

paragraph (a)(?)(i)(A) of this section; and, 

(C) Make and maintain an audio recording of the entire telemarketing 

transaction. 

(ii) In any other telemarketing transaction involving preacquired account 

information not described in paragraph (a)(7)(i) of this section, the seller or 

telemarketer must: 

(A) At a minimum, identify the account to be charged with sufficient specificity 

for the customer or donor to understand what account will be charged; and 

(B) Obtain from the customer or donor his or her express agreement to be 

charged for the goods or services and to be charged using the account number 

identified pursuant to paragraph (a)(7)(ii)(A) of this section; 

(8) Failing to transmit or cause to be transmitted the telephone number, and, 

when made available by the telemarketer's carrier, the name of the telemarketer, to 

any caller identification service in use by a recipient of a telemarketing call; provided 

that it shall not be a violation to substitute (for the name and phone number used in, 

or billed for, making the call) the name of the seller or charitable organization on 

behalf of which a telemarketing call is placed, and the seller's or charitable 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 36 of 46 Page ID

 #:4119 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 14

organization's customer or donor service telephone number, which is answered 

during regular business hours; 

(9) Creating or causing to be created, directly or indirectly, a remotely created 

payment order as payment for goods or services offered or sold through 

telemarketing or as a charitable contribution solicited or sought through 

telemarketing; or 

(10) Accepting from a customer or donor, directly or indirectly, a cash-to-cash 

money transfer or cash reload mechanism as payment for goods or services offered 

or sold through telemarketing or as a charitable contribution solicited or sought 

through telemarketing. 

(b) Pattern of calls. ( 1) It is an abusive telemarketing act or practice and a 

violation of this Rule for a telemarketer to engage in, or for a seller to cause a 

telemarketer to engage in, the following conduct: 

(i) Causing any telephone to ring, or engaging any person in telephone 

conversation, repeatedly or continuously with intent to annoy, abuse, or harass any 

person at the called number; 

(ii) Denying or interfering in any way, directly or indirectly, with a person's right 

to be placed on any registry of names and/or telephone numbers of persons who do 

not wish to receive outbound telephone calls established to comply with paragraph 

(b)(1 )(iii)(A) of this section, including, but not limited to, harassing any person who 

makes such a request; hanging up on that person; failing to honor the request; 

requiring the person to listen to a sales pitch before accepting the request; 

assessing a charge or fee for honoring the request; requiring a person to call a 

different number to submit the request; and requiring the person to identify the seller 

making the call or on whose behalf the call is made; 

(iii) Initiating any outbound telephone call to a person when: 

(A) That person previously has stated that he or she does not wish to receive 

an outbound telephone call made by or on behalf of the seller whose goods or 

services are being offered or made on behalf of the charitable organization for which 

a charitable contribution is being solicited; or 

(8) That person's telephone number is on the "do-not-call" registry, maintained 

by the Commission, of persons who do not wish to receive outbound telephone calls 

to induce the purchase of goods or services unless the seller or telemarketer: 

( 1) Can demonstrate that the seller has obtained the express agreement, in 

writing, of such person to place calls to that person. Such written agreement shall 

clearly evidence such person's authorization that calls made by or on behalf of a 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 37 of 46 Page ID

 #:4120 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 15

specific party may be placed to that person, and shall include the telephone number 

to which the calls may be placed and the signature664 of that person; or 

664For purposes of this Rule, the term "signature" shall include an electronic or digital form of 

signature, to the extent that such form of signature is recognized as a valid signature under 

applicable federal law or state contract law. 

(2) Can demonstrate that the seller has an established business relationship 

with such person, and that person has not stated that he or she does not wish to 

receive outbound telephone calls under paragraph (b)(1 )(iii)(A) of this section; or 

(iv) Abandoning any outbound telephone call. An outbound telephone call is 

"abandoned" under this section if a person answers it and the telemarketer does not 

connect the call to a sales representative within two (2) seconds of the person's 

completed greeting. 

(v) Initiating any outbound telephone call that delivers a prerecorded message, 

other than a prerecorded message permitted for compliance with the call 

abandonment safe harbor in §310.4(b)(4)(iii), unless: 

(A) In any such call to induce the purchase of any good or service, the seller 

has obtained from the recipient of the call an express agreement, in writing, that: 

(i) The seller obtained only after a clear and conspicuous disclosure that the 

purpose of the agreement is to authorize the seller to place prerecorded calls to 

such person; 

(ii) The seller obtained without requiring, directly or indirectly, that the 

agreement be executed as a condition of purchasing any good or service; 

(iii) Evidences the willingness of the recipient of the call to receive calls that 

deliver prerecorded messages by or on behalf of a specific seller; and 

(iv) Includes such person's telephone number and signature;665 and 

665 For purposes of this Rule, the term "signature" shall include an electronic or digital form of 

signature, to the extent that such form of signature is recognized as a valid signature under 

applicable federal law or state contract law. 

(B) In any such call to induce the purchase of any good or service, or to induce 

a charitable contribution from a member of, or previous donor to, a non-profit 

charitable organization on whose behalf the call is made, the seller or telemarketer: 

(i) Allows the telephone to ring for at least fifteen (15) seconds or four (4) rings 

before disconnecting an unanswered call; and 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 38 of 46 Page ID

 #:4121 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 16

(ii) Within two (2) seconds after the completed greeting of the person called, 

plays a prerecorded message that promptly provides the disclosures required by 

§310.4(d) or (e), followed immediately by a disclosure of one or both of the 

following: 

(A) In the case of a call that could be answered in person by a consumer, that 

the person called can use an automated interactive voice and/or keypress-activated 

opt-out mechanism to assert a Do Not Call request pursuant to §310.4(b)(1)(iii)(A) at 

any time during the message. The mechanism must: 

(1) Automatically add the number called to the seller's entity-specific Do Not 

Call list; 

(2) Once invoked, immediately disconnect the call; and 

(3) Be available for use at any time during the message; and 

(B) In the case of a call that could be answered by an answering machine or 

voicemail service, that the person called can use a toll-free telephone number to 

assert a Do Not Call request pursuant to §310.4(b )( 1 )(iii)(A). The number provided 

must connect directly to an automated interactive voice or keypress-activated optout mechanism that: 

(1) Automatically adds the number called to the seller's entity-specific Do Not 

Call list; 

(2) Immediately thereafter disconnects the call; and 

(3) Is accessible at any time throughout the duration of the telemarketing 

campaign; and 

(iii) Complies with all other requirements of this part and other applicable federal 

and state laws. 

(C) Any call that complies with all applicable requirements of this paragraph (v) 

shall not be deemed to violate §310.4(b)(1)(iv) of this part. 

(D) This paragraph (v) shall not apply to any outbound telephone call that 

delivers a prerecorded healthcare message made by, or on behalf of, a covered 

entity or its business associate, as those terms are defined in the HIPM Privacy 

Rule, 45 CFR 160.103. 

(2) It is an abusive telemarketing act or practice and a violation of this Rule for 

any person to sell, rent, lease, purchase, or use any list established to comply with 

§310.4(b)(1 )(iii)(A), or maintained by the Commission pursuant to §310.4(b)(1 )(iii) 

(B), for any purpose except compliance with the provisions of this Rule or otherwise 

to prevent telephone calls to telephone numbers on such lists. 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 39 of 46 Page ID

 #:4122 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 17

(3) A seller or telemarketer will not be liable for violating §310.4(b)(1 )(ii) and (iii) 

if it can demonstrate that, as part of the seller's or telemarketer's routine business 

practice: 

(i) It has established and implemented written procedures to comply with §310.4 

(b )(1 )(ii) and (iii); 

(ii) It has trained its personnel, and any entity assisting in its compliance, in the 

procedures established pursuant to §310.4(b)(3)(i); 

(iii) The seller, or a telemarketer or another person acting on behalf of the seller 

or charitable organization, has maintained and recorded a list of telephone numbers 

the seller or charitable organization may not contact, in compliance with §310.4(b) 

(1 )(iii)(A); 

(iv) The seller or a telemarketer uses a process to prevent telemarketing to any 

telephone number on any list established pursuant to §310.4(b)(3)(iii) or 310.4(b)(1) 

(iii)(B), employing a version of the "do-not-call" registry obtained from the 

Commission no more than thirty-one (31) days prior to the date any call is made, 

and maintains records documenting this process; 

(v) The seller or a telemarketer or another person acting on behalf of the seller 

or charitable organization, monitors and enforces compliance with the procedures 

established pursuant to §310.4(b )(3)(i); and 

(vi) Any subsequent call otherwise violating paragraph (b )(1 )(ii) or (iii) of this 

section is the result of error and not of failure to obtain any information necessary to 

comply with a request pursuant to paragraph (b)(1 )(iii)(A) of this section not to 

receive further calls by or on behalf of a seller or charitable organization. 

(4) A seller or telemarketer will not be liable for violating §310.4(b)(1 )(iv) if: 

(i) The seller or telemarketer employs technology that ensures abandonment of 

no more than three (3) percent of all calls answered by a person, measured over the 

duration of a single calling campaign, if less than 30 days, or separately over each 

successive 30-day period or portion thereof that the campaign continues. 

(ii) The seller or telemarketer, for each telemarketing call placed, allows the 

telephone to ring for at least fifteen ( 15) seconds or four ( 4) rings before 

disconnecting an unanswered call; 

(iii) Whenever a sales representative is not available to speak with the person 

answering the call within two (2) seconds after the person's completed greeting, the 

seller or telemarketer promptly plays a recorded message that states the name and 

telephone number of the seller on whose behalf the call was placed666; and 

Case 8:19-cv-02109-JVS-ADS Document 144-1 Filed 09/09/20 Page 40 of 46 Page ID

 #:4123 
STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 

Attachment A - page 18

666 This provision does not affect any seller's or telemarketer's obligation to comply with 

relevant state and federal laws, including but not limited to the TCPA, 47 U.S.C. 227, and 47 CFR 

part 64.1200. 

(iv) The seller or telemarketer, in accordance with §310.5(b )-(d), retains records 

establishing compliance with §310.4(b)(4)(i)-(iii). 

(c) Calling time restrictions. Without the prior consent of a person, it is an 

abusive telemarketing act or practice and a violation of this Rule for a telemarketer 

to engage in outbound telephone calls to a person's residence at any time other 

than between 8:00 a.m. and 9:00 p.m. local time at the called person's location. 

(d) Required oral disclosures in the sale of goods or services. It is an abusive 

telemarketing act or practice and a violation of this Rule for a telemarketer in an 

outbound telephone call or internal or external upsell to induce the purchase of 

goods or services to fail to disclose truthfully, promptly, and in a clear and 

conspicuous manner to the person receiving the call, the following information: 

(1) The identity of the seller; 

(2) That the purpose of the call is to sell goods or services; 

(3) The nature of the goods or services; and 

(4) That no purchase or payment is necessary to be able to win a prize or 

participate in a prize promotion if a prize promotion is offered and that any purchase 

or payment will not increase the person's chances of winning. This disclosure must 

be made before or in conjunction with the description of the prize to the person 

called. If requested by that person, the telemarketer must disclose the nopurchase/no-payment entry method for the prize promotion; provided, however, that, 

in any internal upsell for the sale of goods or services, the seller or telemarketer 

must provide the disclosures listed in this section only to the extent that the 

information in the upsell differs from the disclosures provided in the initial 

telemarketing transaction. 

( e) Required oral disclosures in charitable solicitations. It is an abusive 

telemarketing act or practice and a violation of this Rule for a telemarketer, in an 

outbound telephone call to induce a charitable contribution, to fail to disclose 

truthfully, promptly, and in a clear and conspicuous manner to the person receiving 

the call, the following information: 

(1) The identity of the charitable organization on behalf of which the request is 

being made; and 

(2) That the purpose of the call is to solicit a charitable contribution. 

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[75 FR 48516, Aug. 10, 2010, as amended at 76 FR 58716, Sept. 22, 2011 ; 80 FR 77559, 

Dec. 14, 2015] 

§310.5 Recordkeeping requirements. 

(a) Any seller or telemarketer shall keep, for a period of 24 months from the 

date the record is produced, the following records relating to its telemarketing 

activities: 

(1) All substantially different advertising, brochures, telemarketing scripts, and 

promotional materials; 

(2) The name and last known address of each prize recipient and the prize 

awarded for prizes that are represented, directly or by implication, to have a value of 

$25.00 or more; 

(3) The name and last known address of each customer, the goods or services 

purchased, the date such goods or services were shipped or provided, and the 

amount paid by the customer for the goods or services;667 

667 For offers of consumer credit products subject to the Truth in Lending Act, 15 U.S.C. 1601 

et seq., and Regulation Z, 12 CFR 226, compliance with the recordkeeping requirements under the 

Truth in Lending Act, and Regulation Z, shall constitute compliance with §310.5(a)(3) of this Rule. 

(4) The name, any fictitious name used, the last known home address and 

telephone number, and the job title(s) for all current and former employees directly 

involved in telephone sales or solicitations; provided, however, that if the seller or 

telemarketer permits fictitious names to be used by employees, each fictitious name 

must be traceable to only one specific employee; and 

(5) All verifiable authorizations or records of express informed consent or 

express agreement required to be provided or received under this Rule. 

(b) A seller or telemarketer may keep the records required by §310.5(a) in any 

form, and in the same manner, format, or place as they keep such records in the 

ordinary course of business. Failure to keep all records required by §310.5(a) shall 

be a violation of this Rule. 

(c) The seller and the telemarketer calling on behalf of the seller may, by written 

agreement, allocate responsibility between themselves for the recordkeeping 

required by this Section. When a seller and telemarketer have entered into such an 

agreement, the terms of that agreement shall govern, and the seller or telemarketer, 

as the case may be, need not keep records that duplicate those of the other. If the 

agreement is unclear as to who must maintain any required record(s), or if no such 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 
agreement exists, the seller shall be responsible for complying with §§310.5(a)(1 ) 

-(3) and (5); the telemarketer shall be responsible for complying with §310.5(a)(4 ). 

(d) In the event of any dissolution or termination of the seller's or telemarketer's 

business, the principal of that seller or telemarketer shall maintain all records as 

required under this section. In the event of any sale, assignment, or other change in 

ownership of the seller's or telemarketer's business, the successor business shall 

maintain all records required under this section. 

§310.6 Exemptions. 

(a) Solicitations to induce charitable contributions via outbound telephone calls 

are not covered by §310.4(b)(1 )(iii)(B) of this Rule. 

(b) The following acts or practices are exempt from this Rule: 

(1) The sale of pay-per-call services subject to the Commission's Rule entitled 

"Trade Regulation Rule Pursuant to the Telephone Disclosure and Dispute 

Resolution Act of 1992," 16 CFR part 308, provided, however, that this exemption 

does not apply to the requirements of §§310.4(a)(1), (a)(7), (b), and (c); 

(2) The sale of franchises subject to the Commission's Rule entitled "Disclosure 

Requirements and Prohibitions Concerning Franchising," ("Franchise Rule") 16 CFR 

part 436, and the sale of business opportunities subject to the Commission's Rule 

entitled "Disclosure Requirements and Prohibitions Concerning Business 

Opportunities," ("Business Opportunity Rule") 16 CFR part 437, provided, however, 

that this exemption does not apply to the requirements of §§310.4(a)(1 ), (a)(7), (b), 

and (c); 

(3) Telephone calls in which the sale of goods or services or charitable 

solicitation is not completed, and payment or authorization of payment is not 

required, until after a face-to-face sales or donation presentation by the seller or 

charitable organization, provided, however, that this exemption does not apply to the 

requirements of §§310.4(a)(1), (a)(7), (b), and (c); 

(4) Telephone calls initiated by a customer or donor that are not the result of 

any solicitation by a seller, charitable organization, or telemarketer, provided, 

however, that this exemption does not apply to any instances of upselling included 

in such telephone calls; 

(5) Telephone calls initiated by a customer or donor in response to an 

advertisement through any medium, other than direct mail solicitation, provided, 

however, that this exemption does not apply to: 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 
(i) Calls initiated by a customer or donor in response to an advertisement 

relating to investment opportunities, debt relief services, business opportunities 

other than business arrangements covered by the Franchise Rule or Business 

Opportunity Rule, or advertisements involving offers for goods or services described 

in §310.3(a)(1 )(vi) or §310.4(a)(2) through (4 ); 

(ii) The requirements of §310.4(a)(9) or (10); or 

(iii) Any instances of upselling included in such telephone calls; 

(6) Telephone calls initiated by a customer or donor in response to a direct mail 

solicitation, including solicitations via the U.S. Postal Service, facsimile transmission, 

electronic mail, and other similar methods of delivery in which a solicitation is 

directed to specific address(es) or person(s), that clearly, conspicuously, and 

truthfully discloses all material information listed in §310.3(a)(1 ), for any goods or 

services offered in the direct mail solicitation, and that contains no material 

misrepresentation regarding any item contained in §310.3(d) for any requested 

charitable contribution; provided, however, that this exemption does not apply to: 

(i) Calls initiated by a customer in response to a direct mail solicitation relating 

to prize promotions, investment opportunities, debt relief services, business 

opportunities other than business arrangements covered by the Franchise Rule or 

Business Opportunity Rule, or goods or services described in §310.3(a)(1)(vi) or 

§310.4(a)(2) through (4); 

(ii) The requirements of §310.4(a)(9) or (10); or 

(iii) Any instances of upselling included in such telephone calls; and 

(7) Telephone calls between a telemarketer and any business to induce the 

purchase of goods or services or a charitable contribution by the business, except 

calls to induce the retail sale of nondurable office or cleaning supplies; provided, 

however, that §§310.4(b )(1 )(iii)(B) and 310.5 shall not apply to sellers or 

telemarketers of nondurable office or cleaning supplies. 

[75 FR 48516, Aug. 10, 2010, as amended at 80 FR 77559, Dec. 14, 2015) 

§310.7 Actions by states and private persons. 

(a) Any attorney general or other officer of a state authorized by the state to 

bring an action under the Telemarketing and Consumer Fraud and Abuse 

Prevention Act, and any private person who brings an action under that Act, shall 

serve written notice of its action on the Commission, if feasible, prior to its initiating 

an action under this Rule. The notice shall be sent to the Office of the Director, 

Bureau of Consumer Protection, Federal Trade Commission, Washington, DC 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 
20580, and shall include a copy of the state's or private person's complaint and any 

other pleadings to be filed with the court. If prior notice is not feasible, the state or 

private person shall serve the Commission with the required notice immediately 

upon instituting its action. 

(b) Nothing contained in this Section shall prohibit any attorney general or other 

authorized state official from proceeding in state court on the basis of an alleged 

violation of any civil or criminal statute of such state. 

§310.8 Fee for access to the National Do Not Call Registry. 

(a) It is a violation of this Rule for any seller to initiate, or cause any 

telemarketer to initiate, an outbound telephone call to any person whose telephone 

number is within a given area code unless such seller, either directly or through 

another person, first has paid the annual fee, required by §310.B{c), for access to 

telephone numbers within that area code that are included in the National Do Not 

Call Registry maintained by the Commission under §310.4{b){1 ){iii){B); provided, 

however, that such payment is not necessary if the seller initiates, or causes a 

telemarketer to initiate, calls solely to persons pursuant to §§310.4{b){1 ){iii){B){i) or 

(ii), and the seller does not access the National Do Not Call Registry for any other 

purpose. 

(b) It is a violation of this Rule for any telemarketer, on behalf of any seller, to 

initiate an outbound telephone call to any person whose telephone number is within 

a given area code unless that seller, either directly or through another person, first 

has paid the annual fee, required by §310.B{c), for access to the telephone numbers 

within that area code that are included in the National Do Not Call Registry; 

provided, however, that such payment is not necessary if the seller initiates, or 

causes a telemarketer to initiate, calls solely to persons pursuant to §§310.4{b )(1) 

{iii){B){i) or {ii), and the seller does not access the National Do Not Call Registry for 

any other purpose. 

{c) The annual fee, which must be paid by any person prior to obtaining access 

to the National Do Not Call Registry, is $65 for each area code of data accessed, up 

to a maximum of $17,765; provided, however, that there shall be no charge to any 

person for accessing the first five area codes of data, and provided further, that 

there shall be no charge to any person engaging in or causing others to engage in 

outbound telephone calls to consumers and who is accessing area codes of data in 

the National Do Not Call Registry if the person is permitted to access, but is not 

required to access, the National Do Not Call Registry under this Rule, 4 7 CFR 

64.1200, or any other Federal regulation or law. No person may participate in any 

arrangement to share the cost of accessing the National Do Not Call Registry, 

including any arrangement with any telemarketer or service provider to divide the 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI 
costs to access the registry among various clients of that telemarketer or service 

provider. 

{d) Each person who pays, either directly or through another person, the annual 

fee set forth in paragraph (c) of this section, each person excepted under paragraph 

(c) from paying the annual fee, and each person excepted from paying an annual 

fee under §310.4{b)(1)(iii)(B), will be provided a unique account number that will 

allow that person to access the registry data for the selected area codes at any time 

for the twelve month period beginning on the first day of the month in which the 

person paid the fee ("the annual period"). To obtain access to additional area codes 

of data during the first six months of the annual period, each person required to pay 

the fee under paragraph (c) of this section must first pay $65 for each additional 

area code of data not initially selected. To obtain access to additional area codes of 

data during the second six months of the annual period, each person required to pay 

the fee under paragraph (c) of this section must first pay $32 for each additional 

area code of data not initially selected. The payment of the additional fee will permit 

the person to access the additional area codes of data for the remainder of the 

annual period. 

(e) Access to the National Do Not Call Registry is limited to telemarketers, 

sellers, others engaged in or causing others to engage in telephone calls to 

consumers, service providers acting on behalf of such persons, and any government 

agency that has law enforcement authority. Prior to accessing the National Do Not 

Call Registry, a person must provide the identifying information required by the 

operator of the registry to collect the fee, and must certify, under penalty of law, that 

the person is accessing the registry solely to comply with the provisions of this Rule 

or to otherwise prevent telephone calls to telephone numbers on the registry. If the 

person is accessing the registry on behalf of sellers, that person also must identify 

each of the sellers on whose behalf it is accessing the registry, must provide each 

seller's unique account number for access to the national registry, and must certify, 

under penalty of law, that the sellers will be using the information gathered from the 

registry solely to comply with the provisions of this Rule or otherwise to prevent 

telephone calls to telephone numbers on the registry. 

[75 FR 48516, Aug. 10, 2010; 75 FR 51934, Aug. 24, 2010, as amended at 77 FR 51697, 

Aug. 27, 2012; 78 FR 53643, Aug. 30, 2013; 79 FR 51478, Aug. 29, 2014; 80 FR 77560, 

Dec. 14, 2016; 81 FR 59845, Aug. 31, 2016; 82 FR 39534, Aug. 21, 2017; 83 FR 46640, 

Sept. 14, 2018; 84 FR 44687, Aug. 27, 2019] 

§310.9 Severability. 

The provisions of this Rule are separate and severable from one another. If any 

provision is stayed or determined to be invalid, it is the Commission's intention that 

the remaining provisions shall continue in effect. 

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STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT 

AS TO DEFENDANTS CAREY G. HOWE, ANNA C. HOWE, SHUNMIN HSU, 

RUDDY PALACIOS, AND OLIVER POMAZI