NO. 13-17448

In the United States Court of Appeals

for the Ninth Circuit

FEDERAL TRADE COMMISSION,

Plaintiff-Appellee,

v.

GLEN BURKE,

Defendant-Appellant.

ON APPEAL FROM U.S. DISTRICT COURT

FOR THE DISTRICT OF NEVADA

NO. 2:97-CV-00750-PMP-LRL

HON. PHILLIP M. PRO, U.S. DISTR. J.

ANSWERING BRIEF FOR FEDERAL TRADE COMMISSION

Of Counsel:

JESSICA RICH

Director

SARAH WALDROP

REENAH L. KIM

Attorneys

Bureau of Consumer Protection

December 19, 2014

JONATHAN E. NUECHTERLEIN

General Counsel

JOEL MARCUS

Assistant General Counsel

IMAD D. ABYAD

Attorney

FEDERAL TRADE COMMISSION

600 Pennsylvania Ave., N.W.

Washington, DC 20580

(202) 326-2375

iabyad@ftc.gov
i

TABLE OF CONTENTS

Page

INTRODUCTION......................................................................................1

STATEMENT OF JURISDICTION..........................................................2

THE ISSUES PRESENTED FOR REVIEW ............................................3

STATEMENT OF THE CASE ..................................................................4

A. Nature of the Case; Course of Proceedings; and

Disposition Below....................................................................4

B. Statement of Facts ..................................................................6

1. The Original Action........................................................6

2. Burke’s Telemarketing Operation.................................7

3. Burke’s Direct-Mail Sweepstakes Operation ..............13

4. Burke’s Refusal to Testify on Fifth Amendment 

Grounds ........................................................................23

C. The Proceedings Below .........................................................25

STANDARD OF REVIEW.......................................................................31

SUMMARY OF ARGUMENT.................................................................31

ARGUMENT ...........................................................................................33

I. THE DISTRICT COURT PROPERLY HELD BURKE 

IN CONTEMPT FOR VIOLATIONS OF THE 1998 

INJUNCTION ................................................................................33

A. The District Court’s 1998 Injunction Prohibited 

Burke from Engaging in, or Assisting Others in, 

Any Telemarketing or Deceptive Activities..........................34
ii

Table of Contents (Cont’d) Page

B. Burke’s Telemarketing Activities Violated the 

District Court’s 1998 Injunction ...........................................35

C. Burke’s Deceptive Direct-Mail Sweepstakes 

Scheme Violated the District Court’s 1998 

Injunction ..............................................................................37

II. THE DISTRICT COURT DID NOT ABUSE ITS 

BROAD DISCRETION IN SANCTIONING BURKE 

FOR THE CONSUMER HARM CAUSED BY HIS 

CONTUMACIOUS CONDUCT .....................................................49

CONCLUSION ........................................................................................53

STATEMENT OF RELATED CASES ....................................................53

CERTIFICATE OF COMPLIANCE

CERTIFICATE OF SERVICE
iii

TABLE OF AUTHORITIES

CASES Page

Alaska Fish & Wildlife Fed’n and Outdoor

Council, Inc. v. Dunkle,

829 F.2d 933 (9th Cir. 1987) ..........................................................52

Anderson v. Liberty Lobby, Inc.,

477 U.S. 242 (1986) ........................................................................47

Cliffdale Assocs., Inc., In re,

103 F.T.C. 110 (1984).....................................................................40

FTC v. Affordable Media, LLC,

179 F.3d 1228 (9th Cir. 1999) ...................................... 31, 34, 44, 45

FTC v. Cyberspace.com, LLC,

453 F.3d 1196 (9th Cir. 2006) ............................................ 39, 40, 41

FTC v. EDebitPay, LLC,

695 F.3d 938 (9th Cir. 2012) ........................................ 31, 39, 40, 49

FTC v. Enforma Natural Prods., Inc.,

362 F.3d 1204 (9th Cir. 2004) .................................................. 34, 48

FTC v. Figgie Int’l, Inc.,

994 F.2d 595 (9th Cir. 1993) ..........................................................41

FTC v. Kuykendall,

371 F.3d 745 (10th Cir. 2004) ........................................................50

FTC v. Publ’g Clearing House, Inc.,

104 F.3d 1168 (9th Cir. 1997) .................................................. 44, 48

FTC v. Stefanchik,

559 F.3d 924 (9th Cir. 2009) ..........................................................48
iv

Cases (Cont’d) Page

FTC v. Trudeau,

579 F.3d 754 (7th Cir. 2009) ..........................................................50

Heckler v. Cheney,

470 U.S. 821 (1985) ........................................................................52

Irwin v. Mascott,

370 F.3d 924 (9th Cir. 2004) ..........................................................31

McGregor v. Chierico,

206 F.3d 1378 (11th Cir. 2000) ......................................................50

Nationwide Life Ins. Co. v. Richards,

541 F.3d 903 (9th Cir. 2008) ..........................................................45

Reebok Int’l Ltd. v. McLaughlin,

49 F.3d 1387 (9th Cir. 1995) ............................................................3

SEC v. Hickey,

322 F.3d 1123 (9th Cir. 2003) ........................................................49

Soremekun v. Thrifty Payless, Inc.,

509 F.3d 978 (9th Cir. 2007) ..........................................................48

Spallone v. United States,

493 U.S. 265 (1990) ..........................................................................3

Standard Oil Co. v. FTC,

577 F.2d 653 (9th Cir. 1978) ..........................................................39

Stone v. City & Cnty. of San Francisco,

968 F.2d 850 (9th Cir. 1992) ..........................................................34

Thompson v. Enomoto,

915 F.2d 1383 (9th Cir. 1990) ........................................................34
v

Cases (Cont’d) Page

Trans World Accounts v. FTC,

594 F.2d 212 (9th Cir. 1979) ..........................................................41

United States v. $133,420.00 in U.S. Currency,

672 F.3d 629 (9th Cir. 2012) ..........................................................45

United States v. Bright,

596 F.3d 683 (9th Cir. 2010) ..........................................................31

Statutes & Regulations

15 U.S.C. §§ 41 et. seq...............................................................................4

15 U.S.C. § 45(a)........................................................................................6

15 U.S.C. § 53 ............................................................................................2

15 U.S.C. § 57b ..........................................................................................2

15 U.S.C. § 6102 ........................................................................................2

15 U.S.C. § 6105 ........................................................................................2

28 U.S.C. § 1291 ........................................................................................3

16 C.F.R. Part 310.....................................................................................4

16 C.F.R. § 310.3(a)(2)(vi) .........................................................................4
1

INTRODUCTION

The Federal Trade Commission (FTC or Commission) brought this 

contempt action against appellant Glen Burke (and another contemnor,

which has made no appearance) for violating a 1998 consent decree that 

barred Burke from engaging or assisting others in telemarketing and 

from misrepresenting facts material to consumers’ decisions to buy any 

goods or services. After a hearing and review of the evidence, which the 

court found to be “uncontroverted,” the district court held that Burke 

violated its earlier consent decree. The court sanctioned Burke for

consumer losses totaling millions of dollars.

On appeal, Burke does not challenge the ruling below concerning 

his telemarketing scheme. Nor does he seriously challenge the evidence 

regarding his direct-mail operation. He merely asserts, instead, that his

mailers did not really induce consumers to buy anything, and that he 

personally neither designed nor mailed those solicitations. He also 

faults the district court for not making separate findings about the 

direct-mail scheme. But separate findings were neither necessary nor, 

indeed, appropriate, as there were no genuine issues of material facts 

regarding Burke’s role in the direct-mail operation. Extensive record 
2

evidence—which the court found to be “uncontroverted”—demonstrated 

that Burke played a key role in that scheme by commissioning, 

reviewing, and approving the deceptive solicitations, even if some other 

details and formalities were undertaken by others. In sum, Burke’s 

complaints about the ruling below lack any support, in law or in fact, 

and should therefore be rejected.

STATEMENT OF JURISDICTION

The FTC agrees with appellant’s statement of jurisdiction (Br. at 

2), except as follows:

The district court had jurisdiction in the FTC’s underlying original 

action pursuant to Sections 13 and 19 of the FTC Act, 15 U.S.C. §§ 53, 

57b, and Sections 6102 and 6105 of the Telemarketing and Consumer 

Fraud and Abuse Prevention Act (the Telemarketing Act), 15 U.S.C. 

§§ 6102, 6105. The FTC’s original action resulted in the court’s entry of

a Stipulated Final Order for Permanent Injunction and Settlement of 

Claims for Monetary Relief, dated October 1, 1998 (hereinafter, the 

“1998 Injunction”). EOR_050-066.1

 

1 “EOR” refers to appellant’s Excerpts of Record. “SER” refers to the 

FTC’s Supplemental Excerpts of Record, filed herewith. “D.xxx” refers 

to the District Court Docket’s Document No.
3

The district court had jurisdiction to enter the contempt order 

under review pursuant to its inherent power to enforce compliance with 

its decrees. See, e.g., Spallone v. United States, 493 U.S. 265, 276 (1990); 

Reebok Int’l Ltd. v. McLaughlin, 49 F.3d 1387, 1390 (9th Cir. 1995).

This Court has jurisdiction pursuant to 28 U.S.C. § 1291.

THE ISSUES PRESENTED FOR REVIEW

The 1998 Injunction barred appellant Burke from “engaging in” or 

“assisting others in” any telemarketing activities. It further enjoined 

him from “[m]isrepresenting, in any manner, directly or by implication, 

or failing to disclose, any fact material to a consumer’s decision to 

purchase” any good or service, and from “[a]ssisting others in” any such 

misrepresentation. Burke nevertheless later engaged in those 

prohibited activities. The questions presented are:

1. Whether the district court properly held Burke—who was 

the central figure in deceptive telemarketing and direct-mail 

sweepstakes schemes—in contempt for violating the 1998 Injunction; 

and 

2. Whether the district court properly imposed on Burke a

monetary contempt sanction of $20,174,740.36, where uncontroverted 
4

record evidence showed that appellant’s contumacious activities have 

resulted in consumer loss of at least that amount.

STATEMENT OF THE CASE

A. Nature of the Case; Course of Proceedings; and Disposition 

Below

This is a direct appeal from a district court’s final civil contempt

order, entered against appellant Glen Burke for his violations of the 

district court’s 1998 Injunction.

The Commission brought the original action against Burke and 

others for violations of the FTC Act, 15 U.S.C. §§ 41, et seq., and the

FTC’s “Telemarketing Sales Rule,” 15 C.F.R. Part 310, which 

implements the Telemarketing Act.2 The FTC’s action resulted in the 

stipulated 1998 Injunction against Burke and others, prohibiting them, 

inter alia, from any telemarketing activities and from misrepresenting 

any fact material to a consumer’s decision to purchase any good or 

service. EOR_054-055.

On January 28, 2013, the FTC filed in the district court a motion 

to hold Burke and American Health Associates, LLC (AHA) in contempt

 

2 The Telemarketing Sales Rule prohibits “[m]isrepresenting * * * [a]ny 

material aspect of an investment opportunity.” 16 C.F.R. 

§ 310.3(a)(2)(vi).
5

for violating the 1998 Injunction’s prohibition on telemarketing 

activities. EOR_578-627. On March 1, 2013, the FTC filed a second 

motion for contempt—against only Glen Burke—for violations of the 

1998 Injunction stemming from Burke’s central role in a deceptive 

direct-mail sweepstakes scheme. EOR_096-577.

Following a hearing on the FTC’s two motions, the district court

ruled, on September 27, 2013, that Burke and AHA “have violated and 

are in contempt” of the 1998 Injunction. EOR_049.3 The district court 

ordered that Burke pay $20,174,740.36 in contempt sanctions, 

representing the amount of consumer loss from the two deceptive and 

contumacious schemes, of which amount AHA was found jointly and 

severally liable for $2,785,508.36. Id.

On July 28, 2014, on the FTC’s unopposed motion for clarification, 

the district court reaffirmed its earlier decision and explained further 

its reasons for holding appellant Burke in contempt and for ordering the 

contempt sanctions against him. EOR_001-04.

 

3 AHA made no appearance below, and has not appealed the district 

court’s contempt decision.
6

B. Statement of Facts

1. The Original Action

The FTC brought its original action against Burke and others on 

June 20, 1997, for violations of Section 5(a) of the FTC Act, 15 U.S.C. 

§ 45(a), and the Telemarketing Sales Rule. EOR_602. The FTC’s 

complaint charged that the defendants, including Burke, engaged in a 

deceptive telemarketing scheme to sell consumers investments in 

commercial film production partnerships. EOR_604-05.

Along with other defendants, Burke settled the FTC’s original 

charges by agreeing to the district court’s entry of the 1998 Injunction

against them. EOR_050-066. That injunction provided in relevant parts:

II. THEREFORE, IT IS HEREBY ORDERED that 

defendants and their agents, employees, officers, and 

servants, and all other persons or entities in active concert 

or participation with them who receive actual notice of this 

order by personal service or otherwise, in connection with 

the advertising, promotion, offer for sale, or sale of any item, 

product, good, service, or investment interest of any kind,

* * * are hereby restrained and enjoined from:

* * *

B. Misrepresenting, in any manner, directly or by 

implication, or failing to disclose any fact material to a 

consumer’s decision to purchase any item, product, 

good, service, or investment * * *;
7

C. Assisting others in violating any provision in 

Subsections A and B of this Paragraph;

* * *

III. IT IS FURTHER ORDERED that defendants John 

Iavarone, Glen Burke * * * are hereby permanently 

restrained and enjoined from either (1) engaging in 

telemarketing; or (2) assisting others in telemarketing.

EOR_053-055.4

2. Burke’s Telemarketing Operation

From early 2010 to January 2013, contrary to the 1998 Injunction, 

Burke and AHA engaged in a deceptive telemarketing operation that 

involved luring consumers with promises of valuable prizes—which, in 

fact, were no more than frivolous trinkets—in order to induce the 

consumers to purchase significantly overpriced vitamins.

 

4 Before the FTC’s action, Burke already had been the subject of 

numerous law enforcement proceedings. In 1991, the U.S. Postal 

Inspection Service (USPIS) investigated a telemarketing operation that 

Burke ran in Las Vegas, Nevada, which shut down after USPIS 

executed search warrants. PX3 ¶3. The FTC obtained an order against 

Burke in 1996, when he failed to answer a complaint alleging violations 

of the FTC Act and the FTC’s Franchise Rule arising from a business 

opportunity scam. PX1 ¶30 & Att. T. The following year, the Securities 

and Exchange Commission obtained an order against him for failing to 

disclose to investors that at least five States had commenced law 

enforcement proceedings against his publicly traded telemarketing 

operation. PX1 ¶31 & Att. U.
8

Sworn declarations submitted by consumers evidenced a 

consistent pattern of deception. Working through AHA, Burke’s 

telemarketers called consumers to tell them that they had been 

specially selected to enter a sweepstakes promotion and had “already 

won” one of five valuable prizes: a current-model-year car; a fishing 

boat; jewelry (described as either a diamond-and-sapphire bracelet or a 

gold-and-diamond watch); $3,000 in cash; or a cruise trip that could be 

exchanged for $2,300 in cash if the consumer did not wish to travel. PX6 

¶2 [SER_054]; PX7 ¶2 [SER_056]; PX8 ¶¶2-3 [SER_059]; PX9 ¶¶2-3

[SER_063]; PX10 ¶2 [SER_065]; PX11 ¶2 [SER_069]; PX12 ¶2

SER_072]; PX13 ¶2 [SER_075]; PX14 ¶4 [SER_079]; PX15 ¶2

[SER_082]; PX16 ¶¶2-3 [SER_085]; PX18 ¶¶2-3 [SER_088]; PX19 ¶3

[SER_091]; PX20 ¶¶2-3 [SER_094]; PX21 ¶3 [SER_098]. Consumers 

were told that all they needed to do to claim those prizes was to 

purchase a supply of vitamins costing between $299 and $399. Id.

Burke’s telemarketing script repeatedly assured consumers that 

they were “guaranteed” one of those five prizes:

And, you are ABSOLUTELY GUARANTEED to receive 1 of 

5 awards. CONGRADULATIONS [sic]!!!! Now, I want you to 

know Mr./s ___, that this is NOT A CONTEST, you’re NOT 

COMPETING with anyone. You’ve already been selected and 
9

in about 45 days you will take ownership of 1 of these 5 

awards. So grab a pen and paper and write these down and 

I’ll tell you how to redeem your award, let me know when 

you’re ready * * *.

PX22 Att. F at 2 [EOR_278]. See also, e.g., id. at 3 [EOR_279] (“Now 

[b]ecause this is a Licensed and Bonded promotion, and governed by 

State and Federal Law, we need to show that the top 5 awards are 

going to our customers, so we can use you in our marketing campaign.”); 

id. at 13 [EOR_289] (“We have to give these awards away * * * you are 

absolutely guaranteed to receive one of them”). The script emphasized 

that consumers would come out “far ahead” after making the initial 

$299-$399 vitamins purchase. See, e.g., id. at 6 [EOR_282] (“[Y]ou will 

have a 1 in 5 chance for the car, and even if you got the last one, $2,300 

dollars, * * * you’d be far ahead of the ($399).”).

Burke negotiated to purchase the lists of potential buyers for his 

telemarketers to call. PX22 Att. M at 124-128 [EOR_448-482]; PX31 

Att. C at 4-8. But his telemarketing scripts proved to be an obstacle at 

times—when some list brokers refused to sell him leads because his 

script was facially deceptive. See, e.g., PX31 Att. C at 4-5 (email from 

list owner noting that the script “fails to disclose information about the 

prizes * * * Also it can be classified as an illegal lottery.”).
10

After collecting consumers’ money, Burke and AHA failed to 

deliver the promised prizes.5 Consumers received instead a bracelet or a 

watch of poor quality, made of base metals and broken stones, whose 

retail value was appraised at no more than $60—and which Burke had 

purchased wholesale for $15-$20. PX8 ¶15 [SER_060]; PX13 ¶¶12, 16

[SER_076]; PX14 ¶8 [SER_079]; PX20 ¶¶12, 18 [SER_095]. Those who 

paid even more in the “VIP” rounds (see supra note 5) to receive 

valuable art received instead a print that Burke bought for $50. PX21 

¶¶5, 8 [SER_098]; PX22 Att. B at 34 [EOR_170]. A court-appointed

receiver reported that AHA never sent consumers any of the more 

valuable prizes promised. Receiver’s Second Interim Report and 

Recommendations (D.177) (hereinafter, “Receiver’s Second Report”), at 

9 [SER_119].

 

5 Indeed, Burke often sought to wring more money from consumers who 

bought into his first sales pitch. Burke’s telemarketers called those 

consumers back to claim that they had been entered in a second, “VIP” 

round of the promotion, and had already won an even bigger prize (from 

a list of cars, home theaters, lithographs, gold bars, and cash). This 

time, consumers were quoted a price of $1,000 or more for the vitamins 

they had to purchase first. PX7 ¶¶5, 7 [SER_056]; PX8 ¶¶10 [SER_060], 

12; PX10 ¶¶8-10, 14 [SER_065-66]; PX11 ¶¶7-8 [SER_069]; PX12 ¶5

[SER_072]; PX13 ¶¶7-8 [SER_075]; PX15 ¶7, 9 [SER_082]; PX18 ¶¶11-

12 [SER_088-89]; PX20 ¶¶8-9 [SER_094-95]; PX22 Att. B at 34

[EOR_170]; PX31 Att. A at 1-18, 33-46.
11

Many consumers complained when they realized they had been 

duped. PX31 ¶12, Att. A at 47-86. Those who complained directly to 

AHA had difficulty getting their money back. PX2 ¶¶13-14 [SER_050-

51]; PX7 ¶12 [SER_057]; PX8 ¶¶18, 20, 23 [SER_060-61]; PX10 ¶19

[SER_066]; PX11 ¶¶11, 15 [SER_070]; PX12 ¶8 [SER_072-73]; PX13 

¶18 [SER_076]; PX14 ¶9 [SER_079]; PX16 ¶¶8-11 [SER_085-86]; PX18 

¶21 [SER_089]; PX19 ¶6 [SER_091]; PX20 ¶20 [SER_095-96]; PX21 

¶¶10-11 [SER_098-99]. Consumers’ complaints to credit card companies

resulted in such high chargeback rates for AHA’s merchant accounts

that Burke continually sought new merchant accounts for AHA.6 PX1 

¶29 [SER_006]; PX8 ¶20 [SER_061]; PX11 ¶14 [SER_070]; PX14 ¶12

[SER_080]; PX22 Att. M at 113-116 [EOR_437-440]; PX31 Att. C at 10-

14; see also Receiver’s Second Report, at 8-9 [SER_118-19].

Burke carefully managed AHA’s finances.7 He received daily 

updates from his bookkeeper on AHA’s bank balance and directed her to 

 

6 A “chargeback” occurs when a bank returns money to a credit card 

holder because of a disputed charge. PX5 ¶7. High chargeback levels 

can lead to termination of a merchant’s ability to process credit card 

payments. Id. ¶9.

7 The individual formally named on AHA’s corporate filings and bank 

accounts, Vincent Calise, was no more than a rubber stamp—literally. 
12

move money or make payments as necessary to keep his operation 

running. Receiver’s Preliminary Report and Recommendations Att. A

(D.157) [SER_100-04]; PX22 Att. M at 132-136 [EOR_456-460]; PX27 at 

63:16-65:25 [EOR_561-63]; PX31 Att. C at 33-38. Burke ultimately 

siphoned off AHA’s profits by moving them into his own accounts. PX1 

Att. M at 85-93, 108-109, 115-116, 122-123 [SER_014-028]; PX1 Att. N 

at 98-112 [SER_029-043]; PX1 Att. O at 2-3 [SER_046-47].

Burke’s telemarketing scam resulted in millions of dollars in 

consumer losses. AHA maintained an accounting of its total sales, 

chargebacks, and refunds. Those records show that AHA took in gross 

telemarketing revenue (net of cancellations) of $3,078,614.36, returned 

$111,048 to consumers in refunds, and incurred an additional $182,058 

in credit card chargebacks. Receiver’s Second Report, at 8 [SER_118].

Consumers thus lost a minimum of $2,785,508.36.8

 

AHA’s bookkeeper testified that she kept a stamp of Calise’s signature 

and used it to sign checks and documents. Calise had nothing to do with 

AHA’s operations, but was paid $500 weekly. PX27 at 13:13-16, 56:15-

21, 66:1-19, 74:1-11 [EOR_518, 554, 564, 571]; PX31 ¶13 & Att. B

[SER_274].

8 Other evidence points to an even higher figure. AHA also retained a

database with Salesforce.com to track sales and customer information. 

PX31 ¶10 & Att. A at 1-18. That database shows that AHA made 6,905 

sales totaling $4,808,437.94 from late 2010 through January 2013, with 
13

3. Burke’s Direct-Mail Sweepstakes Operation

From at least 2008 until January 2013, Burke conducted a 

deceptive sweepstakes operation, via direct mail, that also violated the 

1998 Injunction. Despite that injunction’s prohibition on 

misrepresenting or failing to disclose “any fact material to a consumer’s 

decision to purchase any item, product, good, service, or investment,”

Burke falsely informed consumers that they could collect substantial 

amounts of money for a small processing fee. His direct mailers induced

consumers to send $20-$30 in “fees” in order to claim payouts worth 

hundreds of thousands – and, sometimes, millions – of dollars in 

“prizes,” “sweepstakes payments,” or other “unclaimed” or “unawarded” 

funds. See, e.g., PX22 Att. D at 68 [EOR_250] (“Include the $26.59 

Transfer Fee for processing this $532,500.00 Stimulus Rebate Benefit

into your name”); id. at 70 [EOR_252] (“You must mail the form below 

with your processing fee [of “$27.95”] in order to process your 

application * * * Maximum Prize: $458,389.00”); id. at 75 [SER_257]

(“Access to documentation for these additional monies–$7,041,846–

 

1828 of those sales, totaling $1,177,331, cancelled and $2,990 paid in 

refunds, for net sales totaling $3,631,106.94. Receiver’s Second Report,

at 8.
14

requires $20 research and processing fee”); id. at 5-6 [SER_186-87]

(with “payment of $25.00,” “I am prepared to * * * send you a check for 

cash, and upon your timely filing and remittance, the mandatory and 

requisite data for your claim(s) to sponsored sweepstakes awards now 

totaling: $2,036,444.88”).

Burke directed every aspect of the scheme. He commissioned,

reviewed, and approved the sweepstakes mailers, overseeing the 

copywriting and design processes to ensure they had enough appeal—or 

“heat”—to entice consumers. See, e.g., PX22 Att. M at 32-34 [EOR_356-

58] (Burke communicating with new copywriter regarding sweepstakes 

assignments); id. at 35-36 [EOR_359-360] (Burke asking copywriter for 

another version, with “more heat,” of a sweepstakes solicitation mailer, 

noting that he plans to test both versions); id. at 37-42 [EOR_361-66]

(Burke approving—“This is more what we’re looking for * * * ”—the 

conversion of copywriter’s text into sweepstakes mailer design “to 

simulate what a contract looks like”). Burke also directed the mailing of 

his sweepstakes solicitations to consumers, using mailing information 

he obtained from list brokers. PX22 Att. M at 49-53 [EOR_373-77]; 

PX31 Att. C at 40-58, Att. G.
15

Burke’s sweepstakes mailers used a roster of fictitious senders,9

and were designed—using carefully selected fonts, graphics, and 

wording—to convey officialdom and urgency, in order to pressure

consumers into sending Burke their money. See, e.g., PX22 Att. D at 6

[EOR_187] (“Certified Letter” from “Hancock Financial Services”); id. at

14 [EOR_195] (Certificate-like letter from the “Office of the Director, 

Security Services” that “[Consumer] Has Won A Cash Prize! Respond 

Immediately or Risk Forfeiture!”); id. at 20 [EOR_201] (bar-coded letter 

from “Peterson & Associates” concerning “Disclosure of Unclaimed 

Funds”); PX22 Att. M at 37 [EOR_361] (Burke and copywriter 

discussing mailer design “to simulate what a contract looks like”).10

 

9 Burke registered dozens of fictitious firm names (DBAs)—often 

through intermediaries—that drew hundreds of consumer complaints, 

mostly concerning sweepstakes ventures operating in Nevada. PX1 ¶¶5-

9, 10-12, 16 & Atts. A-B, I-L [SER_002-04, 009-010].

10 Other mailers used fonts and layouts similar to those used in tax 

forms, or looked like checks or bond certificates. See, e.g., PX22 Att. D at 

18, 35, 55, 56, 62 [EOR_119, 216, 236, 237, 243]. Sample mailers found 

on Burke’s desk at his Las Vegas offices also included the stamp 

“Official Certification” with a seal for the “Property Auditor,” and a 

purported “Award Voucher-Payments & Transfers” form with an 

“Official Document” watermark printed across it. PX22 Att. B at 2, 5

[EOR_138, 141].
16

Some of Burke’s sweepstakes mailers contained blocks of dense 

text, placed on the back of the mailer, purporting to disclose details of 

the contest that the recipient purportedly had “already won.” E.g., PX22 

Att. D at 65, 69, 71, 74 [EOR_246, 251, 253, 256]. Some of these 

“consumer disclosures” provided the odds of winning the various prizes 

in the sweepstakes, including the payout represented on the front of the 

mailer, conveying the impression of how “lucky” the consumer must 

have been and reinforcing the message that a large payout awaited the 

consumer. Id. at 69, 71 [EOR_251, 253].

Consumers who did not send any money in response to Burke’s 

initial mailers were sometimes sent an additional flier to underscore the 

message that payment of the fee was the only remaining impediment to 

receiving a “life-changing” cash payout. The flier contained a “Winner’s 

Satisfaction Survey” that conveyed the impression that the recipient 

consumer should already have received a large-enough cash prize to, for 

instance, “Buy a new home” or “Buy a new car.” PX22 Att. D at 45

[EOR_226]. The consumer was also provided with a “Trouble Ticket”—

to use in the event that the consumer did not receive his or her “life 

changing” prize—that promised a “Replacement Winner’s 
17

Sweepstakes Check” for a fee of $20.25. Id. at 44 [EOR_225]. See also

PX22 Att. M at 43-48 [EOR_367-372] (Burke communicating with 

copywriter regarding the design and content of the “Winner’s 

Satisfaction Survey / Trouble Ticket” mailer).11

Burke never delivered the huge sums of money that his mailers

promised. One of Burke’s employees testified that consumers often 

received, instead, booklets about how to enter more sweepstakes. PX28 

at 15:21-25, 29:1-7, 88:11-19 [SER_130, 133, 138]. Files at his offices

that were designated for shredding, PX31 ¶¶14, 16, contained 

numerous letters from consumers complaining that they had sent their

money but never received the payouts they were promised. E.g., PX22 

Att. B at 25, 31 [EOR_161, 167]; PX22 Att. D at 3, 4, 7, 8, 14-20, 22-23, 

25-36, 38-39, 42-43, 47-48, 49-51, 52-53, 58-59, 60-61 [EOR_184-85, 188-

89, 195-201, 203-04, 206-217, 219-220, 223-24, 228-234, 239-242]. Burke 

 

11 Burke was especially aggressive to consumers who were lured by his 

initial mailer and sent money in anticipation of a large prize payout. 

Burke directed his list brokers to compile new mailing lists of those 

responsive consumers, PX31 Att. C at 40-52, whom Burke then targeted 

with an avalanche of as many as 40 additional mailers, promising more 

payouts and seeking more money—prompting one of his list brokers to 

retort: “Seems like a lot, but I guess you know what your [sic] doing.”

Id. at 42.
18

arranged for some of these consumers to receive trivial amounts—

typically less than $2—as their “winnings.” See, e.g., PX22 Att. D at 41

[EOR_222] (fulfillment prize of $1.12), 49-51 [EOR_230-32] (fulfillment

prize of $0.79 sent in response to consumer’s demand letter); PX28 at 

29:12-25 [SER_133] (Burke’s employee testifying that $1.12 was a 

typical amount of prize money); PX22 Att. M at 144-45 [EOR_468-69] 

(Burke noting the same).

As with his deceptive telemarketing scheme, Burke sought to 

evade detection by state and federal law enforcement agencies by using 

other individuals, often a Panamanian associate named Errol Seales, as 

“fronts” for him—to be the nominal principals and actors in his 

deceptive direct-mail scheme.12 E.g., PX22 Att. M at 18-22, 56-59, 76-78, 

144 [EOR_342-46, 380-83, 400-02, 468]; PX31 Att. C at 59, 62-69. For 

 

12 To receive the payments that consumers sent in response to his 

mailers, for example, Burke often hired fronts to rent numerous 

mailboxes—which Burke actively managed—in order to keep those 

mailboxes spread across multiple jurisdictions. PX22 Att. M at 60-78

[EOR_384-402]; see id. at 76 [EOR_400] (an associate writing to Burke:

“we don’t want all our eggs in one basket (box) especially when others 

are at the same location * * * just makes it easier to get popped for 

everyone.”). Burke’s fronts opened mailboxes for him in California, New 

Jersey, Pennsylvania, Illinois, Mexico, Panama, the Netherlands, and 

elsewhere. E.g., PX22 Att. D at 19, 69 [EOR_200, 251]; PX22 Att. M at 

20-22, 60-68 [EOR_344-46, 384-392]; PX1 Att. V at 2.
19

example, although Burke’s contact in the Netherlands communicated 

exclusively with Burke about the mailboxes that Burke rented there, 

the contact used only Seales’s name on the invoices. PX22 Att. M at 2-5, 

9-13 [EOR_326-29, 333-37]; PX31 Att. C at 60-62; see id. at 65 (Burke’s 

associate reporting that Seales was asked to “send over his paperwork” 

to open new mailboxes for Burke). Likewise, when an associate was 

complaining to Burke about “trying for months to get a corporation or 

something to be able to open” new mailboxes in New Jersey, she wrote: 

“I have asked many times Errol to open some or use him to open some. * 

* * We need one of those old corps that were from panama so we have 

business paperwork to send in.” PX22 Att. M at 76 [EOR_400]. Burke 

also used Seales’s name on corporate founding documents, id. at 76, 144

[EOR_400, 468], and on Burke’s accounts with Pac Net, the payment 

processor for Burke’s sweepstakes operation, even though Burke 

controlled all disbursements from those accounts. E.g., id. at 6-8

[EOR_330-32]; PX31 Att. C at 66-69, 72; PX30 ¶¶6-7.

One particular incident illustrates Burke’s role as puppeteer of 

the sweepstakes operations. In January 2012, a FedEx package from 

the Netherlands to Burke’s firm (National Print and Mail) that 
20

contained $12,000 in cash broke open in transit, prompting inquiries 

from U.S. Customs and the FBI. Burke and an associate planned to 

conceal Burke’s involvement by having Burke’s “front,” Errol Seales,

claim ownership. PX22 Att. M at 23-28 [EOR_347-52]. In carrying out 

that plan, the associate sought Burke’s review and approval of a draft 

message, which she planned to send to Burke’s contact in the 

Netherlands to seek that contact’s help in shielding Burke’s name from 

discovery by U.S. authorities. The draft message read:

I have become aware of the issue regarding FedEx and 

Errol’s package. While I don’t wish to imply I’m trying to tell 

you what to do, I do believe some caution needs to be taken if 

you have to deal with US authorities. Regardless of who you 

have interaction with on a day to day basis you should be 

very careful if you are asked who the client is and only give 

the information used for billing. Several of the people you 

deal with on a regular basis are consultants only and not 

principals in any of the businesses and I believe they should 

not be brought into the mix (for example, Glen [Burke] is 

only a consultant, Errol is the principal). While not 

anticipating that you will have any contact, having much 

experience in the industry in the States for many years, I 

know an unsatisfactory outcome could affect the consultant’s 

ability to earn a living if they were brought into the picture 

needlessly.

PX22 Att. M at 23 [EOR_347]. Nonetheless, despite his efforts to keep 

his active role hidden, Burke was quick to remind Errol Seales who 

between the two of them was truly in charge, writing to Seales in 2010:
21

Errol I really don’t get what you’re doing * * * you said you 

wanted to get back into fold with all of us and start making 

money again and I don’t have a problem with that but you’re 

not going to run the show * * * I gave you some ideas that 

would be helpful to the group and further the programs 

along but I have seen no results as of yet (sovereign, 

signatures, PO boxes and stuff) * * *.

PX22 Att. M at 57 [EOR_381]. Seales concurred, replying to Burke: “I’m 

the last person on the Totem Pole, so to speak, here in Panama, and no 

way am I trying to take over * * * I do not want to manage anyone, the 

stress is to [sic] much. I want to be just another employee * * *.” Id. at 

56-57 [EOR_380-81].

Burke’s direct-mail sweepstakes operation resulted in millions of 

dollars in consumer loss. Most consumers sent their money via checks 

and money orders made out to the myriad fictitious names that Burke 

used on his mailers. See, e.g., PX22 Att. D at 84-93 [EOR_266-275] 

(consumers’ checks found in Burke’s offices); PX28 at 25:19-27:2, 28:6-

10, 29:1-21 [SER_131-33]. Burke deposited some of these checks and 

money orders into overseas bank accounts, PX22 Att. M at 14-22

[EOR_338-346], but the majority of them were processed through a 

foreign check processor that held the money on Burke’s behalf.

Declaration of Thomas A. Seaman in Support of Preliminary Injunction 
22

(D.167) (hereinafter “Receiver Decl.”) ¶¶4-5 [SER_106-07]; PX28 at 

31:8-21, 32:8-24 [SER_134-35]; PX30 ¶¶3-7 [SER_269-270].13 On 

average, according to estimates by Burke’s own staff, 90 percent of the 

direct-mail sweepstakes proceeds arrived by checks or money orders, 

with the remaining ten percent coming in cash. See PX31 Att. C at 70-

71 (Burke’s associates testing the cash proceeds from one particular 

location, to determine if any of it was stolen by intermediaries, against 

their expectation that “all the boxes averaged almost 10% in cash!”).

Since 2007, Burke’s foreign check processor has credited 

$17,576,927 to Burke’s accounts. PX30 ¶¶9-13 [SER_108]. Given that 

Burke expected his revenue from the direct-mail scheme to average ten

percent in cash, which would not go through his check processor, Burke 

likely received from consumers an additional $1,952,992 (in cash)

 

13 Burke paid for his sweepstakes operation’s expenses by directing the 

check processor to wire money from his accounts to his copywriters, list 

brokers, and fronts. Receiver Decl. ¶5 & Att. A [SER_106-07]; PX22 Att. 

M at 6-8 [EOR_330-32]; PX30 ¶7 [SER_270]. Burke tapped his 

operation’s profits by directing the check processor to wire money in 

large, round increments to his print shop, which in turn issued checks 

for those wired funds to Burke’s own company, Merchant’s Depot.

Receiver Decl. ¶5 & Atts. A, B [SER_106-07].
23

during that period, for a total receipts of $19,529,919.14 The check 

processor reportedly debited Burke’s accounts by $2,140,687—including 

debits from issuing refunds to consumers or because consumer checks 

failed to clear. PX30 ¶¶8-13 [SER_108].15 Thus, Burke’s direct-mail

sweepstakes operation resulted in at least $17,389,232 in consumer 

loss.

4. Burke’s Refusal to Testify on Fifth Amendment 

Grounds

Commission staff sought to depose Burke regarding his role in the 

telemarketing and direct-mail schemes. Instead of testifying, however, 

 

14 These amounts represent conservative estimates of Burke’s proceeds 

from the direct-mail operation. They do not account for the checks and 

money orders deposited directly into overseas bank accounts, thus 

bypassing the operation’s check processor, see, e.g., PX22 Att. M at 14-

22 [EOR_338-346], or for those additional checks’ corresponding tenpercent that consumers would have been expected to send in cash.

15 Burke provided no accounting of refunds to consumers whose 

payments he deposited directly in overseas accounts. Moreover, the 

$2,140,687 debit figure obtained from the check processor’s records 

likely overestimated the amount of money returned to consumers. As 

detailed in the processor’s declaration (PX30) [SER_105-08], the 

processor had records regarding the nature of all debits only from July 

15, 2011, forward. Id. ¶¶5, 8 [SER_106, 108]. For debits processed prior 

to that date, the only available identifiers denote outgoing wire

transfers ordered by Burke. Id. The $2,140,687 figure, therefore, may 

include categories other than returned checks and refunds to consumers

– such as payments to Burke himself. Id.
24

Burke refused to answer any questions about his involvement in these 

schemes, citing his Fifth Amendment privilege against selfincrimination. PX29 [SER_139-268]. In particular, Burke asserted this 

privilege on all subjects relevant to his contempt liability and the 

measure of compensatory relief, including:

• his stipulation to, and the district court’s entry of, the 1998 

Injunction, PX29 at 13:4-14:12 [SER_141-42];

• his control of the telemarketing and direct-mail sweepstakes

operations, id. at 17:1-18:20, 24:17-26:2, 103:13-104:10 [SER_143-

47, 205-06];

• his role in developing the telemarketing scripts and sweepstakes 

mailers, id. at 26:3-29:10, 34:24-42:7, 104:11-117:12, 125:5-128:20

[SER_147-159, 206-223];

• his purchase of leads and mailing lists for both operations, id. at 

42:9-51:19, 130:10-131:11 [SER_159-168, 224-25];

• his purchase of vitamins and prizes on behalf of AHA, id. at 53:19-

58:10, 69:11-79:18 [SER_169-185];
25

• his failure to deliver the prizes promised in his telemarketing and 

direct-mail schemes, id. at 79:19-88:13, 131:13-142:7 [SER_185-

194, 225-236];

• his network of fronts, and efforts to evade detection by law 

enforcement agencies, id. 144:1-163:6 [SER_237-256]; and

• the amount of consumer losses caused by his and AHA’s 

contumacious activities, id. at 88:15-98:23, 164:12-175:4

[SER_194-204, 257-268].

C. The Proceedings Below

On January 28, 2013, the FTC filed in the district court a motion 

to hold Burke and AHA in contempt for violating the 1998 Injunction.

EOR_578-627. The FTC argued (i) that the contempt defendants were 

bound by the 1998 Injunction—Burke as a party to that stipulated 

order, and AHA because it had notice through Burke, its de facto

principal, and was in active concert with Burke, EOR_594-95; (ii) that 

Burke’s and AHA’s telemarketing scheme violated the 1998 Injunction’s

permanent ban on Burke’s engaging or assisting in any telemarketing

activities, and its prohibition on material misrepresentations, 
26

EOR_595-97; and (iii) that Burke’s and AHA’s deceptive telemarketing 

scheme caused consumer losses of, at least, $2,217,280.91. EOR_598.

Along with its motion for contempt, the FTC filed an ex parte

motion for temporary restraining order (TRO), which the district court 

granted on January 28, 2013. The TRO included the ancillary relief of, 

inter alia, an asset freeze, an order for repatriation of foreign assets, the 

appointment of a receiver, immediate access to the contempt 

defendants’ business premises and records, and certain expedited 

discovery. See Ex Parte Temporary Restraining Order with Ancillary 

Relief (D.133), at 1-24.

Evidence acquired under the provisions of the TRO revealed 

Burke’s deceptive direct-mail sweepstakes operations. Thus, on March 

1, 2013, the FTC filed a second motion for contempt against Burke (but 

not AHA) for violation of the 1998 Injunction. EOR_096-577. The FTC 

argued that Burke’s direct-mail sweepstakes scheme violated Section II

of the 1998 Injunction—which prohibits the misrepresentation or nondisclosure of any facts material to a consumer’s purchase of any item, 
27

product, good, service, or investment—and caused consumer loss in the 

millions of dollars. EOR_109-111.16

Following briefing by the FTC and Burke (AHA made no 

appearance below), the district court held a hearing on both contempt

motions on September 5, 2013. EOR_006-045. There, Burke attempted 

to shield his role in the direct-mail sweepstakes scheme by shifting the 

blame to Errol Seales as the alleged principal actor. EOR_017:16-018-

1.17 Nonetheless, Burke admitted, through his counsel, to “obtaining 

bank accounts to be utilized * * * post office boxes and the printer * * *

also provid[ing] some financial * * * acumen or accounting and some 

financial advice for [Seales].” EOR_020:5-20; see also EOR_024:17-20 

(Burke provided “[t]he printer, the accounting of the monies that came 

 

16 Burke’s newly discovered direct-mail activities prompted additional 

discovery which permitted the more detailed calculation of consumer 

loss amount discussed above (supra at 21-23).

17 Against the overwhelming contemporaneous and documentary 

evidence of his key role in the direct-mail operation, see supra at 13-21, 

Burke’s principal evidence was a declaration by Errol Seales that 

disclaimed Burke’s responsibility for the scheme in conclusory and 

unsupported assertions. See EOR_684-86. The declaration did not 

explain the contrary evidence from Burke’s own records that was 

proffered by the FTC. But it confirmed that, at a minimum, Burke 

assisted significantly in the deceptive scheme—by providing consulting, 

financial, and monitoring services. Id.
28

in * * * and setting up the bank accounts and the mailers”). Likewise, 

despite denying being the principal actor in the telemarketing scheme,18

Burke admitted, through his counsel, to providing that operation with 

office space and furniture, equipment, phones, and telemarketing 

scripts. EOR_026:8-027:2.

On September 27, 2013, the district court delivered its ruling on 

the two motions. It held that, “[b]ased upon the Declarations and 

evidence adduced in the various motions and the arguments of counsel 

presented,” Burke and AHA “have violated and are in contempt” of the 

1998 Injunction. EOR_049. Burke appealed from that ruling. EOR_046.

After Burke filed his notice of appeal, the FTC sought to have the 

district court further clarify its reasoning for holding Burke and AHA in 

contempt. Thus, on February 11, 2014, the FTC simultaneously filed a 

motion to stay the proceedings in this Court and a request pursuant to 

Fed. R. Civ. P. 62.1 in the district court for an indicative ruling that the 

 

18 As with his direct-mail operation, and against the contemporaneous 

documentary evidence, see supra at 7-12, Burke sought to shift the 

blame for the telemarketing scheme to others—this time, AHA, which 

did not appear below. But, again, his principal evidence was a 

conclusory and unsupported declaration by his employee, Glenda 

Zimmer. See EOR_655-58.
29

court would clarify its contempt order. This Court stayed the 

proceedings on February 13, 2014. On March 3, 2014, the district court 

issued an order, indicating that, should this Court remand the case, it 

would enter a clarified contempt order. Accordingly, on March 4, 2014, 

the FTC filed in this Court a motion for a limited remand, which this 

Court granted on March 14, 2014, remanding the case to the district 

court for the limited purpose of clarifying its contempt order.

On July 28, 2014, the district court issued its order of clarification. 

EOR_001-04. The district court confirmed that “the Permanent 

Injunction imposed a ban on Defendant Burke from further 

telemarketing, and prohibited him from misrepresenting any material 

facts relating to a consumer’s decision to buy a good or service.” Id. at 

002. The court credited the “uncontroverted affidavits and deposition 

testimony, emails, and other documents” submitted by the FTC. Id. at 

003. It then explained that “the record clearly establishes that Burke’s 

consulting and services were an integral part of continuing 

telemarketing schemes carried out by others in conjunction with

Defendant Burke,” whereby “consumers were subjected to material

misrepresentations to induce them to purchase merchandise with an 
30

expectation that they would receive prizes of considerable value * * *

when in fact they would receive relatively inexpensive prizes as winners 

of a ‘contest’ the consumers had not even entered.” Id.

The district court concluded, more specifically, that Burke “played 

an essential role” in setting up the telemarketing scheme, providing the 

telemarketing rooms and equipment, and “the relatively inexpensive 

bracelets, watches and art prints that were given to consumers in lieu of 

the * * * valuable prizes they had been led to believe by telemarketer

misrepresentations they would receive.” EOR_003. It also noted that 

Burke “provided consulting services to others * * * regarding the 

content of telemarketing scripts and flyers.” Id. The district court also 

concluded that Burke’s refusal to testify at his deposition, by invoking

his Fifth Amendment privilege, “warrants an adverse inference” against 

him, which is supported by the other record evidence, that he was 

actively engaged in the deceptive schemes. Id. Lastly, the district court

confirmed its sanctions awards, finding the supporting record evidence 

“uncontroverted.” Id. at 004.

On August 29, 2014, this Court terminated its limited remand and 

ordered the resumption of appellate briefing.
31

STANDARD OF REVIEW

This Court reviews district court orders of civil contempt, 

including decisions to impose sanctions, for abuse of discretion. See, e.g.,

FTC v. EDebitPay, LLC, 695 F.3d 938, 943 (9th Cir. 2012); FTC v. 

Affordable Media, LLC, 179 F.3d 1228, 1239 (9th Cir. 1999). The 

district court abuses its discretion only if it commits legal error or 

makes clearly erroneous factual findings. EDebitPay, 695 F.3d at 943; 

Affordable Media, 179 F.3d at 1239; see also United States v. Bright, 

596 F.3d 683, 694 (9th Cir. 2010); Irwin v. Mascott, 370 F.3d 924, 931 

(9th Cir. 2004).

SUMMARY OF ARGUMENT

The district court correctly held that appellant Burke’s 

telemarketing and direct-mail sweepstakes schemes violated its 1998 

Injunction, and rightly sanctioned him for the resulting millions of 

dollars in consumer loss.

The 1998 Injunction expressly applied to Burke. It prohibited

Burke from any telemarketing activity—whether deceptive or not—and

from any misrepresentation of facts material to consumers’ decisions to 

buy goods or services. Burke’s deceptive telemarketing and direct-mail 
32

schemes fell squarely within the prohibitive scope of the 1998 

Injunction. (Part I.A).

Burke does not challenge the district court’s contempt ruling as it 

pertains to his telemarketing operation—for which he was a key part of 

the scheme, providing office space, equipment, customer lists, and 

telemarketing scripts, and purchasing the trinkets that were sent to 

consumers in lieu of the cars, boats or jewelry that they were promised. 

(Part I.B).

Overwhelming and uncontroverted record evidence—mostly 

documents from Burke’s own files—demonstrates that he was the 

driving force behind the direct-mail scheme. He recruited, coordinated

with, and directed the copywriters and designers of the deceptive 

mailers; he purchased consumer mailing lists; and he directed the 

worldwide mailboxes and financial network for receiving and processing 

consumer payments.

Burke challenges none of this evidence. Instead, he merely asserts 

that he did not violate the injunction because the mailers did not induce 

consumers to buy anything. But that claim cannot be squared with the 

enormous amount of contrary evidence. Burke also claims that he 
33

personally neither designed nor mailed the solicitations, but the acts he 

undisputedly committed place him in contempt of the 1998 Injunction

whether or not he designed or mailed the flyers. Lastly, Burke argues 

that the district court failed to make separate findings of fact on these 

issues. But no such findings were necessary (or even appropriate), as no 

genuine dispute existed with regard to Burke’s role in the deceptive 

direct-mail operation. (Part I.C).

Burke’s challenge to the amount of the contempt sanction also 

fails. He contests neither the consumer-loss standard that the district 

court used for its monetary sanctions against him, nor the evidence 

underlying the district court’s calculation of that consumer loss. Rather, 

he faults the district court again for not making (the unnecessary) 

separate findings on the issue. The law requires no such thing. (Part II).

ARGUMENT

I. THE DISTRICT COURT PROPERLY HELD BURKE IN 

CONTEMPT FOR VIOLATIONS OF THE 1998 

INJUNCTION

The district court rightly held that Burke had violated its 1998 

Injunction against him. The standard for liability in civil contempt 

cases is well settled in this Court: the movant must show, “by clear and 
34

convincing evidence,” that the alleged contemnors violated “a specific 

and definite order of the court.” Affordable Media, 179 F.3d at 1239 

(quoting Stone v. City & Cnty. of San Francisco, 968 F.2d 850, 856 n.9 

(9th Cir. 1992)); see also FTC v. Enforma Natural Prods., Inc., 362 F.3d 

1204, 1211 (9th Cir. 2004). The overwhelming and largely 

uncontroverted evidence of Burke’s contempt amply satisfies this 

standard.

A. The District Court’s 1998 Injunction Prohibited Burke 

from Engaging in, or Assisting Others in, Any

Telemarketing or Deceptive Activities

“In construing consent decrees like the one at issue here, ‘courts 

use contract principles’.” EDebitPay, 695 F.3d at 943 (quoting 

Thompson v. Enomoto, 915 F.2d 1383, 1388 (9th Cir. 1990)). The 1998 

Injunction unquestionably covers the activities that the FTC challenged 

below. Burke does not contend otherwise.

The 1998 Injunction applies expressly to Burke. He was a 

defendant in the underlying action, and a signatory to the court’s 

consent order. See EOR_601-03 (FTC complaint); id. at 626 (consent 

order’s signature page). See also EOR_053, ¶I.C (1998 Injunction 

defining “defendants” to include “Glen Burke”).
35

The 1998 Injunction also expressly prohibits the activities

challenged in the contempt motions. Section II bars Burke from 

“[m]isrepresenting, in any manner, directly or by implication, or failing 

to disclose any fact material to a consumer’s decision to purchase any 

item, product, good, service, or investment,” and from “[a]ssisting others 

in” carrying out any such misrepresentation. EOR_053-54. Section III, 

in turn, provides that “Glen Burke” is “permanently restrained and 

enjoined from either (1) engaging in telemarketing; or (2) assisting 

others in telemarketing.” EOR_055. Both provisions apply to Burke’s 

deceptive telemarketing scheme, and Section II squarely applies as well 

to the direct-mail sweepstakes scheme. Appellant Burke does not 

challenge this element of his liability for contempt. Br. at 13.

B. Burke’s Telemarketing Activities Violated the District 

Court’s 1998 Injunction

Burke does not appear to challenge the district court’s contempt 

ruling as it relates to his telemarketing activities. See, e.g., Br. at 11 

(“The Commission purports that Mr. Burke violated the injunction 

through two schemes: (1) a telemarketing scheme * * *; and (2) a mail 

fraud/sweepstakes scheme * * *. Mr. Burke appeals and disputes the 

remaining restitution balance related to the purported mail 
36

fraud/sweepstakes scheme”); see also id. at 2-3 (issues presented for 

appeal concern only direct-mail scheme); id. at 12-17 (Burke’s argument 

challenging district court ruling only as to direct-mail scheme).

In any event, Burke’s violations of the telemarketing provisions of 

the 1998 Injunction are incontrovertible. The Injunction’s bar on 

Burke’s telemarketing activities is absolute; it does not exclude even 

non-deceptive telemarketing from its proscription. EOR_055. It also 

extends to “assisting others” in such activity, id., defined to include

providing or arranging for the provision of, inter alia, customer service, 

telemarketing scripts, consumer call lists, and marketing material. 

EOR_053, ¶I.B. As detailed above (supra at 7-12), unchallenged record 

evidence shows that Burke engaged in all of these activities. He 

negotiated the purchase of consumer lists for his telemarketers to call.

PX22 Att. M at 124-128 [EOR_448-452]; PX31 Att. C at 4-8. He 

purchased the cheap bracelets and watches that were sent to consumers 

instead of the high-value prizes they had been promised by his 

telemarketers. PX8 ¶15 [SER_060]; PX13 ¶¶12, 16 [SER_076]; PX14 ¶8

[SER_079]; PX20 ¶¶12, 18 [SER_095]; PX31 Atts. C at 9, D-F. And he 

admitted at the contempt motions hearing that he provided the 
37

telemarketing operators with office space, furniture, equipment, 

phones, and telemarketing scripts. EOR_026:8-027:2.

C. Burke’s Deceptive Direct-Mail Sweepstakes Scheme 

Violated the District Court’s 1998 Injunction

As detailed above (supra at 13-18), the unrebutted record evidence 

shows that appellant Burke’s direct-mail sweepstakes scheme swindled 

unwitting consumers, many of whom were elderly and financially 

desperate, out of millions of dollars. See, e.g., PX22 Att. D at 22-23, 58-

59, 60-61 [EOR_203-04, 239-240, 241-42]. Burke’s mailers told 

consumers that large prize payouts worth hundreds of thousands or 

millions of dollars awaited them, and that consumers could claim those 

prizes with payments of $20-30. See, e.g., PX22 Att. D at 5-6, 10-13, 14-

20, 26-37, 44-45, 62, 63, 64, 68, 70, 72-73, 75, 78-80, 81-83 [EOR_186-87, 

191-93, 195-201, 207-218, 225-26, 243-45, 250, 252, 254-55, 257, 260-

65]. What consumers got, instead, were booklets about more 

sweepstakes, or checks for less than two dollars (for those consumers 

who wrote to Burke to demand their prizes),19 or—even worse—an 

 

19 Numerous consumers complained to Burke that they made their 

payments but never received their prizes. E.g., PX22 Att. B at 25, 31

[EOR_161, 167]; Att. D at 3, 4, 7, 8, 14-20, 22-23, 25-36, 38-39, 42-43, 
38

avalanche of additional deceptive Burke mailers. PX28 at 15:21-25, 

29:1-7, 29:12-25, 88:11-19 [SER_130, 133, 138]; PX22 Att. M at 144-45

[EOR_468-69]; PX31 Att. C at 40-52. Consumers who did not initially 

fall for Burke’s deception were targeted even more aggressively, with a 

flier purporting to survey named consumers about what they did with 

all their “life-changing” cash payout, and offering them—if they had not 

yet received it—a “Replacement Winner’s Sweepstakes Check” for a fee 

of $20.25. PX22 Att. D at 44-45 [EOR_225-26].

Uncontroverted record evidence shows that Burke himself 

commissioned, reviewed, and approved the deceptive sweepstakes

mailers. He routinely communicated with copywriters and artists about 

the content and design of the mailers, see, e.g., PX22 Att. M at 32-34,

35-36, 37-42 [EOR_356-366]; acquired consumer mailing lists from list 

brokers, and directed the mailing of his sweepstakes solicitations to 

those consumers. PX22 Att. M at 49-53 [EOR_373-77]; PX31 Att. C at 

40-58, Att. G. He was, simply, at the heart of every stage of the 

deceptive scheme.

 

47-48, 49-51, 52-53, 58-59, 60-61 [EOR_184-85, 188-89, 195-201, 203-04, 

206-217, 219-220, 223-24, 228-29, 230-31, 233-34, 239-240, 241-42].
39

That evidence proves definitively that Burke violated the 1998 

Injunction forbidding him from engaging in material omissions or 

misrepresentations in the sale of any item, product, good, service, or 

investment. EOR_054, ¶II.B. First, Burke’s mailers misrepresented the 

cash payout amounts awaiting the consumers who sent back the $20-30 

“fees” quoted in those mailers. The mailers failed to properly inform 

those consumers that what they had “already won”—the “already 

approved” and “ready for disbursement” check awaiting their

response—was in fact not the large cash amount printed so 

conspicuously on the front of the mailers, but an insignificant amount of 

money, and often only upon the consumer’s further demand.20 Indeed, 

the message that was conveyed by those initial mailers—that 

 

20 Burke’s attempt to provide, in some of his mailers, a “Consumer 

Disclosure”—in cryptic fine-print statements on the back side of the 

mailers, see, e.g., PX22 Att. D at 69, 71, 74, 79 [EOR_251, 253, 256, 

261]—did nothing to correct the prominent and misleading statements 

on the front of those mailers, and in fact contributed to the misleading 

message that consumers were “lucky,” see supra at 16. See FTC v. 

Cyberspace.com, LLC, 453 F.3d 1196, 1200 (9th Cir. 2006) (small-print 

disclaimers on the reverse side of mailers containing 

misrepresentations do not preclude finding of deception); see also

EDebitPay, 695 F.3d at 944 (small-font disclosures failed to change 

deceptive impression of express misrepresentations); Standard Oil Co. 

v. FTC, 577 F.2d 653, 659 (9th Cir. 1978) (same).
40

consumers were to expect payments worth thousands or millions of 

dollars—was further reinforced by Burke’s follow-up “Winner’s 

Satisfaction Survey / Trouble Ticket” mailers that purported to survey 

consumers about what they had done with all their prize money: “Buy a 

new home?”, “Buy a new car?”, or make another large investment. PX22 

Att. D at 44-45 [EOR_225-26].

These misrepresentations were material to consumers’ decisions

to send their payments to Burke. “A misleading impression created by a 

solicitation is material if it ‘involves information that is important to 

consumers and, hence, likely to affect their choice of, or conduct 

regarding, a product.’” Cyberspace.com, 453 F.3d at 1201 (quoting 

Cliffdale Assocs., Inc., 103 F.T.C. 110, 165 (1984)). Here, the misleading 

statements regarding large payout amounts—which were expressly and 

conspicuously shown on the front of Burke’s mailers—are material as a 

matter of law. They were express misrepresentations about the very 

nature of benefits that consumers expected from Burke’s mailers, and 

thus could be expected to affect the consumers’ decisions to respond to 

those mailers by paying the quoted “fees.” See, e.g., EDebitPay, 695 F.3d 

at 944 (“that the credit line can only be used at a third-party’s online 
41

shop” is a “material attribute” of credit line offer); FTC v. Figgie Int’l, 

Inc., 994 F.2d 595, 603 (9th Cir. 1993) (misrepresentations about 

product’s “effectiveness as a fire safety device” are material because 

consumers were misled “about the single most useful piece of 

information they could have used” to decide whether to purchase the 

product) (internal quotation marks and citation omitted).

Furthermore, the numerous consumer complaints that reached 

Burke’s offices show that the misrepresentations regarding payout 

amounts in Burke’s mailers were the primary factor in the consumers’ 

decisions to send Burke the fees demanded by his mailers. See

Cyberspace.com, 453 F.3d at 1201 (while not required, proof of 

consumers’ actual deception is highly probative that a practice is likely 

to mislead consumers acting reasonably under the circumstances) 

(citing Trans World Accounts v. FTC, 594 F.2d 212, 214 (9th Cir. 1979)).

Burke’s deceptive direct-mail operation therefore falls squarely 

within the prohibitive scope of Paragraph II.B of the 1998 Injunction.

See supra at 6. Accordingly, the district court’s decision to hold Burke in 

contempt for violating its earlier decree was entirely proper.
42

Burke makes two principal arguments to the contrary. Neither

withstands scrutiny. He first argues that the 1998 Injunction forbids 

deception with respect to “a consumer’s decision to purchase any item, 

product, good or service,” but the FTC did not show that he “attempted 

to induce the consumer to purchase anything.” Br. at 13. Thus, he 

claims, he did not violate the injunction.

Burke’s assertion that consumers were not induced to purchase 

anything is patently false. The record amply demonstrates that Burke’s 

mailers were designed to—and did—induce consumers to pay $20-30 in 

return for what consumers were led to believe were guaranteed payouts. 

The payment of money up front in exchange for the promised payout 

plainly constitutes the purchase of an “item, product, good, service, or 

investment.” EOR_054, ¶II.B. Burke himself was well aware of this 

quid pro quo. See, e.g., PX22 Att. M at 46-48 [EOR_370-72] (copywriter 

sending Burke new text for the “Trouble Ticket” mailer that “should cut 

WAY down on no pays”). This link between the payment of fees and 

receiving the cash prizes is evident on the face of these mailers. See, 

e.g., PX22 Att. D at 68 [EOR_250] (“Include the $26.59 Transfer Fee for 

processing this $532,500.00 Stimulus Rebate Benefit into your name”); 
43

id. at 70 [EOR_252] (“You must mail the form below with your 

processing fee [of “$27.95”] in order to process your application * * * 

CONFIRMED WINNER CLAIM * * * Maximum Prize: $458,389.00”); 

see also supra at 13-14. Consumers receiving these mailers were 

expressly instructed to send back their money in order to claim a very 

large cash payout.

Second, Burke argues that the FTC failed to prove that he 

participated in the direct-mail sweepstakes scheme. Br. at 12-15. The 

claim is that Burke did not personally design or mail the deceptive 

solicitations and therefore “was not engaged in the creation or direction” 

of the scheme. Br. at 13. To begin with, the 1998 Injunction prohibited 

Burke not only from engaging in, but also from “[a]ssisting others in,” 

any deceptive scheme. See supra at 7, 34-35. Burke plainly violated that 

latter prohibition. In any event, Burke’s factual argument fails even on 

its own terms because it runs headlong into overwhelming record 

evidence showing that he was in fact the driving force behind the entire 

direct-mail sweepstakes operation. In particular, unchallenged evidence 

showed that Burke was deeply involved at every stage of the scam—by 

recruiting, collaborating with, and supervising the copywriters, 
44

designers, list brokers, and “fronts,” in the selection of mailers’ text and 

design, consumer lists, and mailbox locations for receiving consumer 

checks. He also had the ultimate approval authority on these decisions.

See supra at 13-15, 18-21.

Burke misstates the applicable legal standard for contempt 

liability when he argues that the Commission:

had to make a showing that: (1) Mr. Burke had actual 

knowledge of the material misrepresentations; (2) that Mr. 

Burke was recklessly indifferent to the truth or falsity of the 

misrepresentations; or (3) that Mr. Burke had an awareness 

of a high probability of fraud coupled with an intentional 

avoidance of the truth.

Br. at 14 (citing FTC v. Publ’g Clearing House, Inc., 104 F.3d 1168, 

1171 (9th Cir. 1997)). This is the standard for individual liability under 

the FTC Act. See Publ’g Clearing House, 104 F.3d at 1170 (“the FTC 

brought this action under Sections 5 and 13(b) of the Federal Trade 

Commission Act”). It is not the correct standard for liability in a 

contempt proceeding. See supra at 33-34. Burke’s reliance on Affordable 

Media, 179 F.3d at 1234, fails for the same reason. Indeed, Affordable 

Media directly illustrates the two different standards. First, this Court 

concluded that “the district court did not abuse its discretion in issuing 

[a] preliminary injunction” under the FTC Act. Id. at 1238. Then, in 
45

part III of its opinion, id. at 1238-44, this Court turned to the separate 

issue of defendants’ alleged contempt—and its distinct standard of 

liability, id. at 1239; supra at 33-34—for refusing to comply with the 

terms of the preliminary injunction.

Finally, Burke is wrong that the district court’s contempt orders

lack findings of fact necessary to hold him in contempt for the directmail scheme. Br. at 14-15. The district court’s orders are not lengthy, 

but they did not have to be. That is because the FTC presented 

overwhelming evidence that Burke controlled the direct-mail scheme –

in response to which Burke presented only unsupported conclusory 

declarations. See supra notes 17 and accompanying text. Furthermore, 

Burke refused to respond to deposition questions posed by the FTC, 

relying instead on the Fifth Amendment, which justified an adverse 

inference against him. See, e.g., Nationwide Life Ins. Co. v. Richards, 

541 F.3d 903, 911-12 (9th Cir. 2008) (“When a party asserts the 

privilege against self-incrimination in a civil case, the district court has 

discretion to draw an adverse inference from such assertion”); see also

United States v. $133,420.00 in U.S. Currency, 672 F.3d 629, 640 (9th 
46

Cir. 2012) (defendants cannot use the Fifth Amendment privilege 

against self-incrimination as both a shield and a sword).

Indeed, as discussed above, Burke raises only two factual issues in 

connection with this appeal: whether he induced consumers to purchase 

something, and whether he engaged in the creation or mailing of the 

solicitations. See supra at 42-44. For the reasons described above, 

however, those questions present no genuine factual dispute. Burke 

unquestionably induced consumers through deception to pay for large 

monetary distributions, which as a matter of law constitutes a sale 

prohibited by the injunction against him. The overwhelming evidence 

described above likewise demonstrates that Burke was deeply involved 

in every stage of his scam, whether or not he personally created or 

mailed the flyers.

The record evidence that the FTC proffered on these points, on 

which the district court relied for holding Burke in contempt, consists of 

unchallenged contemporaneous documentary evidence from Burke’s 

own records and his admissions at the contempt hearing. See, e.g.,

supra at 13-23, 27-28. In response, Burke offered only unsupported and 

conclusory evidence that, in fact, supports the FTC’s case against him. 
47

Burke relied principally on a declaration by Errol Seales, who claimed—

without any supporting evidence or explanation for the overwhelming 

contrary evidence in the record—that Burke had no responsibility for 

the scheme. See EOR_684-86. In fact, the Seales declaration evidences 

Burke’s contumacious acts. As discussed above, the 1998 Injunction 

barred Burke from “[a]ssisting others in,” any deceptive scheme. See 

supra at 7, 34-35. Seales’s declaration establishes exactly such 

“assistance,” describing how Burke “did do some consulting” concerning 

the development of the sweepstakes mailers, “utilize[d] his American 

Express card as well as various business accounts to make sure any 

vendors, printers, lead developers, or any other employees in the United 

States would be paid,” and “monitor[ed] the [check processor] accounts.” 

EOR_684, 685. Burke also relied on the deposition testimony of an 

employee, Lindsay Reid, who claimed that she was the one who fulfilled 

the sweepstakes prize awards—by mailing checks to consumers. But 

she also testified that she did that at Burke’s direction. PX28, at 87-88

[SER_137-38].

On that record, there was no genuine issue of fact on which to 

make findings. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-
48

52 (1986) (an issue of fact is “genuine” only if the record as a whole 

would allow a reasonable factfinder to rule for the nonmoving party; a 

“mere scintilla” of evidence is insufficient); FTC v. Stefanchik, 559 F.3d 

924, 929 (9th Cir. 2009) (same). See, e.g., Soremekun v. Thrifty Payless, 

Inc., 509 F.3d 978, 984 (9th Cir. 2007) (“[c]onclusory, speculative 

testimony in affidavits and moving papers is insufficient to raise issues 

of fact.”); Publ’g Clearing House, 104 F.3d at 1171 (“conclusory, selfserving affidavit, lacking detailed facts and any supporting evidence, is 

insufficient to create a genuine issue of material fact”).

Thus, the district court was required to say no more than it did. 

This Court has established that it may affirm a judgment where “a full 

understanding of the question is * * * possible” even “without the aid of 

separate findings,” and “there can be no genuine dispute about the 

omitted findings.” Enforma Natural Prods., 362 F.3d at 1212. The 

factual record here easily permits this Court to meaningfully review the 

ruling below.

In the end, Burke’s argument is no more than an attempt to delay 

redress for the consumers he had swindled, and should, therefore, be 
49

rejected by this Court. The FTC has more than met its burden of 

proving that Burke violated the 1998 Injunction against him.

II. THE DISTRICT COURT DID NOT ABUSE ITS BROAD

DISCRETION IN SANCTIONING BURKE FOR THE 

CONSUMER HARM CAUSED BY HIS CONTUMACIOUS 

CONDUCT

Having concluded that Burke’s deceptive schemes violated its 

1998 Injunction against him, the district court ordered Burke to pay 

“contempt sanctions in the amount of $20,174,740.36.” EOR_049. In its 

subsequent clarification order, the court explained that its 

“compensatory monetary sanction” against Burke was based on “the 

evidence presented by Plaintiff FTC,” concerning the consumer losses

caused by his schemes, which the court found “uncontroverted,” and 

which “warrant[ed] the award” of those sums. EOR_004. That ruling 

was fully supported by the record evidence and well within the court’s 

wide discretion.

“District courts have broad equitable power to order appropriate 

relief in civil contempt proceedings.” EDebitPay, 695 F.3d at 945 

(quoting SEC v. Hickey, 322 F.3d 1123, 1128 (9th Cir. 2003)). More 

specifically, “district courts have broad discretion to use consumer loss 

to calculate sanctions for civil contempt of an FTC consent order.” Id. 
50

(citing FTC v. Trudeau, 579 F.3d 754, 771 (7th Cir. 2009); FTC v. 

Kuykendall, 371 F.3d 745, 764 (10th Cir. 2004) (en banc); McGregor v. 

Chierico, 206 F.3d 1378, 1387-88 (11th Cir. 2000)).

As detailed above, the FTC’s evidence of consumer loss

appropriately used Burke’s own records of consumer payments in 

response to his deceptive telemarketing and direct-mail solicitations to 

calculate—using conservative figures and assumptions—the amounts of 

monetary contempt sanctions that the district court rightly approved

and ordered Burke to pay. See supra at 12, 21-23. Burke offered nothing 

in response below.

On appeal, he does not challenge the monetary sanction of 

$2,785,508.36 that the district court ordered against him and AHA,

jointly and severally. Br. at 16. But he raises two objections to the 

sanctions ruling against him for $20,174,740.36, Br. at 15-17, neither of 

which has merit.

First, derivative of his specious liability argument, Burke 

contends that, because the district court did not set forth separate 

findings of fact concerning his role in the direct-mail scheme, “the 

corresponding monetary sanctions should be reversed.” Br. at 17. As set 
51

forth above, given the uncontroverted evidence establishing the amount 

of consumer loss, no such findings were necessary. See supra at 45-49.

That evidence, the court found, was “uncontroverted.” It consisted 

mostly of documentary evidence from Burke’s own records and a

declaration from his check processor. Burke challenged neither its

authenticity nor its factual basis. Accordingly, there are no genuine 

issues of material facts regarding the calculation of the monetary 

sanctions against Burke, and this Court should uphold the district 

court’s sanctions calculation.

Burke next argues that the monetary sanctions against him are 

somehow improper either because the FTC “did not bring any action 

against any of the other purported players in the mail 

fraud/sweepstakes scheme,” Br. at 15-16, or because the FTC did not 

“initiate[] a new action against all of the purported participants in the 

mail fraud/sweepstakes scheme”—either of which scenario resulting in 

“joint and several liability” for the imposed sanctions, Br. at 17.

That argument is spurious. The FTC’s decision to proceed against 

Burke for contempt, rather than initiating a new case against him and 

other participants in the deceptive schemes, was well within its 
52

prosecutorial discretion. See Heckler v. Cheney, 470 U.S. 821, 831 (1985) 

(a decision not to prosecute or enforce a law is “generally committed to 

an agency’s absolute discretion”); Alaska Fish & Wildlife Fed’n and 

Outdoor Council, Inc. v. Dunkle, 829 F.2d 933, 938 (9th Cir. 1987) 

(same). As long as Burke was in contempt of the 1998 Injunction, the 

FTC could proceed against him for that violation, whether or not others 

may also have been involved in his misdeeds. Burke cites no law to the 

contrary. Indeed, in Burke’s proffered scenario of joint and several 

liability, even bringing an action against him and the others would not 

have reduced the amount of monetary sanctions for which Burke 

himself would be responsible.
53

CONCLUSION

The district court’s orders should be affirmed.

STATEMENT OF RELATED CASES

Pursuant to Circuit Rule 28-2.6, no other cases in this Court are 

deemed related to this appeal.

Respectfully submitted,

Of Counsel:

JESSICA RICH

Director

SARAH WALDROP

REENAH L. KIM

Attorneys

Bureau of Consumer Protection

December 19, 2014

JONATHAN E. NUECHTERLEIN

General Counsel

JOEL MARCUS

Assistant General Counsel

/s/ Imad Abyad

IMAD D. ABYAD

Attorney

FEDERAL TRADE COMMISSION

600 Pennsylvania Ave., N.W.

Washington, DC 20580

(202) 326-2375

iabyad@ftc.gov
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IMAD D. ABYAD

Attorney

FEDERAL TRADE COMMISSION
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Brief for Federal Trade Commission” and “Supplemental Excerpts of 

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/s/ Imad Abyad

IMAD D. ABYAD

Attorney

FEDERAL TRADE COMMISSION