1 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT 

DISTRICT OF NEVADA 

FEDERAL TRADE COMMISSION, 

 Plaintiff, 

 v. 

DAYTON FAMILY PRODUCTIONS, INC., 

et al. 

 Defendants. 

Case No. 2:97-CV-00750-PMP (LRL)

 PRELIMINARY INJUNCTION 

Plaintiff Federal Trade Commission (“FTC” or “Commission”) filed this contempt action 

on January 28, 2013, and upon motion by the FTC, this Court issued an ex parte temporary 

restraining order (“TRO”) with asset freeze, appointment of a Receiver, and other equitable 

relief. 

This Court has considered the FTC’s January 28, 2013 Motions for Contempt and for a 

Temporary Restraining Order and Preliminary Injunction; memoranda, declarations, and exhibits 

submitted in support thereof; the reports and recommendations of the Temporary Receiver; 

Contempt Defendant Glen Burke’s Limited Opposition to Motion for Preliminary Injunction; the 

FTC’s Reply and memoranda, declarations, and exhibits submitted in support thereof; and any 

evidence introduced at a hearing on March 1, 2013, and finds as follows: 

1. This Court has jurisdiction over this matter for all purposes and as provided in 

Section XV (Retention of Jurisdiction) of the Stipulated Final Order for Permanent Injunction 

entered on October 1, 1998 (“Permanent Injunction”). 

2. There is good cause to believe Contempt Defendants Glen E. Burke (“Burke”) 

and American Health Associates, LLC (“AHA”) have actual notice of the Permanent Injunction 

and the ability to comply with the Permanent Injunction. 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 1 of 20 
2 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3. There is good cause to believe Contempt Defendants have violated the Permanent 

Injunction, and a substantial likelihood the FTC will prevail on the merits of this action. Section 

III of the Permanent Injunction bans Burke from telemarketing, and Section II.B prohibits the 

making of misrepresentations in connection with the promotion or sale of goods or services. 

There is good cause to believe that AHA, acting under Burke’s control and at his direction, 

telemarketed vitamins to consumers across the United States by claiming that consumers were 

specially selected to win a valuable prize in a promotional contest if they purchased Contempt 

Defendants’ vitamins. There is good cause to believe these claims were false and that AHA sent 

consumers only inexpensive costume jewelry or artwork as their prizes. There is therefore a 

substantial likelihood that the FTC will prevail in showing that Contempt Defendants violated 

Sections III and II.B of the Permanent Injunction. 

4. The Court has considered the FTC’s likelihood of ultimate success and weighed 

the equities, and finds that a preliminary injunction providing for continuation of the asset freeze, 

appointment of a receiver, preservation of business records, financial disclosures, and other 

equitable relief is in the public interest. 

5. Federal Rule of Civil Procedure 65(c) does not require security of the United 

States or an officer or agency thereof. 

I. DEFINITIONS 

For the purposes of this Preliminary Injunction, the following definitions apply: 

1. “Assets” means any legal or equitable interest in, right to, or claim to, any and all 

real and personal property, including but not limited to chattel, goods, instruments, equipment, 

fixtures, general intangibles, effects, leaseholds, inventory, checks, notes, accounts, credits, 

receivables, shares of stock, contracts, and all cash and currency, or any interest therein, 

wherever located. 

2. “Contempt Defendants” means Glen E. Burke and American Health Associates, 

LLC. 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 2 of 20 
3 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3. “Document” is synonymous in meaning and equal in scope to the terms 

“document” and “electronically stored information,” as described and used in Federal Rule of 

Civil Procedure 34(a)(1)(A). 

4. “Receivership Defendants” means American Health Associates, LLC; Merchant’s 

Depot, LLC; EV Holdings Limited Partnership; Warrior Racing, LLC; Advanced Nutrition 

Systems, LLC; Age Less Health Products, LLC; Compliance Filings LLC, d/b/a Corporate 

Records Compliance; Children’s Hope for the Future, Inc.; Panama Total Marketing Corp.; 

Payment Resources; PR Holdings; Media Opportunity Advisor; Natural Health Alliance; and 

affiliates of any of the foregoing, as well as subsidiaries, divisions, successors, and assigns, and 

includes fictitious names under which any of them does business, and any entities engaged with 

them in a common enterprise. 

5. “Receiver” means Thomas Seaman of Thomas Seaman Company, the receiver 

appointed by the Court in Section VII of the TRO issued on January 28, 2012. The term 

“Receiver” also includes any deputy receivers or agents as may be named by the Receiver. 

II. ASSET FREEZE 

IT IS THEREFORE ORDERED that Contempt Defendants are hereby restrained and 

enjoined from directly or indirectly: 

A. Transferring, liquidating, converting, encumbering, pledging, loaning, selling, 

concealing, dissipating, disbursing, assigning, spending, withdrawing, granting a lien or security 

interest or other interest in, or otherwise disposing of any Assets, or any interest therein, 

wherever located, including outside the United States, that are: 

1. owned or controlled, directly or indirectly, by any Contempt Defendant(s), 

in whole or in part, or held, in whole or in part, for the benefit of any Contempt Defendant(s); 

2. in the actual or constructive possession of any Contempt Defendant(s); 

3. owned, controlled by, or in the actual or constructive possession of any 

corporation, partnership, or other entity directly or indirectly owned, managed, or controlled by, 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 3 of 20 
4 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

or under common control with any Contempt Defendant(s), including, but not limited to, any 

Assets of Glen E. Burke or American Health Associates, LLC, or any other entity acting under a 

fictitious name owned by or controlled by any Contempt Defendant(s), and any Assets held by, 

for, or under the name of any Contempt Defendant(s) at any bank or savings and loan institution, 

or with any broker-dealer, escrow agent, title company, commodity trading company, payment 

processing company, precious metal dealer, or other financial institution or depository of any 

kind; 

B. Opening or causing to be opened any safe deposit boxes titled in the name of any 

Contempt Defendant(s), or subject to access by any Contempt Defendant(s); 

C. Incurring charges or cash advances on any credit card, debit card, or checking 

card issued in the name, singly or jointly, of any Contempt Defendant(s); 

D. Obtaining a personal or secured loan; 

E. Incurring liens or encumbrances on real property, personal property or other 

Assets in the name, singly or jointly, of any Contempt Defendant(s); and 

F. Cashing any checks or depositing any money orders or cash received from 

consumers, clients, or customers of any Contempt Defendant(s). 

The Assets affected by this Section shall include: (1) all Assets of Contempt Defendants 

as of January 30, 2013; and (2) for Assets obtained after January 30, 2013, those Assets of 

Contempt Defendants that are derived, directly or indirectly, from the Contempt Defendants’ 

activities as described in the Commission’s Motion for Contempt, including the activities of any 

Receivership Defendant. This Section does not prohibit transfers to the Receiver, as specifically 

required in Section X (Delivery of Receivership Property), nor does it prohibit the repatriation of 

foreign Assets, as specifically required in Section V (Repatriation of Foreign Assets) of this 

Order. 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 4 of 20 
5 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

III. FINANCIAL REPORTS AND ACCOUNTING 

IT IS FURTHER ORDERED that each Contempt Defendant shall: 

A. Unless already provided pursuant to the TRO entered on January 28, 2013, 

immediately prepare and serve on counsel for the FTC and the Receiver completed financial 

statements fully disclosing the Contempt Defendant’s finances and those of all corporations, 

limited liability companies, partnerships, trusts or other entities that each Contempt Defendant 

owns, controls, or is associated with in any capacity, jointly or individually, on the forms 

attached to this Order as Attachments A and B, or in electronic format provided by the FTC, 

accurate as of the date of service of this Order upon Contempt Defendants; 

B. Unless already provided pursuant to the TRO entered on January 28, 2013, 

immediately prepare and serve on counsel for the FTC and the Receiver copies of signed and 

completed federal and state income tax forms, including all schedules and attachments for the 

three most recent filing years; 

C. Unless already provided pursuant to the TRO entered on January 28, 2013, 

immediately provide access to records and documents held by financial institutions outside the 

territory of the United States, by signing the Consent to Release of Financial Records attached to 

this Order as Attachment C; and 

D. Provide copies of such other financial statements as the Receiver or the FTC may 

request in order to monitor Contempt Defendants’ compliance with the provisions of this Order. 

IV. RETENTION OF ASSETS AND RECORDS BY FINANCIAL INSTITUTIONS 

AND THIRD PARTIES 

IT IS FURTHER ORDERED that any financial or brokerage institution or depository, 

escrow agent, title company, commodity trading company, payment processing company, trust, 

entity, or person that: (1) holds, controls, or maintains custody of any account or Asset owned or 

controlled by any Contempt Defendant(s); (2) holds, controls, or maintains custody of any Asset 

associated with credit or debit card charges, electronic fund transfers, or remotely created checks 

made by, or on behalf of, any Contempt Defendant(s) or any other entity owned or controlled by 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 5 of 20 
6 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

any Contempt Defendant(s); or (3) has held, controlled, or maintained any account or Asset of, 

or on behalf of, any Contempt Defendant(s) at any time since January 1, 2011, shall: 

A. Hold and retain within its control and prohibit Contempt Defendants or any other 

person or entity with control over such Assets from withdrawing, removing, assigning, 

transferring, pledging, encumbering, disbursing, dissipating, converting, selling, gifting, or 

otherwise disposing of any such Assets, funds, or other property, except: 

1. As directed by further order of the Court; or 

2. As directed in writing by the Receiver (regarding Assets held in the name 

or for the benefit of a Receivership Defendant); 

B. Deny the Contempt Defendants access to any safe deposit box titled in the name 

of any Contempt Defendant(s), individually or jointly, or subject to access by any Contempt 

Defendant(s), whether directly or indirectly. 

C. Unless already provided pursuant to the TRO entered January 28, 2013, 

immediately provide counsel for the FTC and the Receiver a certified statement setting forth: 

1. The identification number of each such account or Asset titled: (1) in the 

name, individually or jointly, of any Contempt Defendant(s); (2) held on behalf of, or for the 

benefit of, any Contempt Defendant(s); (3) owned or controlled by any Contempt Defendant(s); 

or (4) otherwise subject to access by any Contempt Defendant(s), directly or indirectly; 

2. The balance of each such account, or a description of the nature and value 

of such Asset, as of the close of business on the day on which this Order is served, and, if the 

account or other Asset has been closed or removed, the date closed or removed, the total funds 

removed in order to close the account, and the name of the person or entity to whom such 

account or other Asset was remitted; 

3. The identification of any safe deposit box that is either titled in the name 

of any Contempt Defendant(s), or is otherwise subject to access by any Contempt Defendant(s); 

and 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 6 of 20 
7 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4. If an account, safe deposit box, or other Asset has been closed or removed, 

the date closed or removed, the balance of any account or value of any Asset on such date, and 

the manner in which such account or Asset was closed or removed; 

D. Provide counsel for the FTC and the Receiver, within three (3) business days after 

being served with a request, copies of all documents pertaining to such account or Asset, 

including but not limited to originals or copies of account applications, account statements, 

signature cards, checks, drafts, deposit tickets, transfers to and from the accounts, all other debit 

and credit instruments or slips, currency transaction reports, 1099 forms, and safe deposit box 

logs; provided that such institution or custodian may charge a reasonable fee; and 

E. Cooperate with all reasonable requests of the Receiver relating to this Order’s 

implementation. 

V. REPATRIATION OF FOREIGN ASSETS 

IT IS FURTHER ORDERED that, to the extent not already completed pursuant to the 

TRO entered on January 28, 2013, each Contempt Defendant shall immediately: 

A. Provide counsel for the FTC and the Receiver with a full accounting of all funds 

and Assets outside of the territory of the United States which are held: (1) by Contempt 

Defendant(s); (2) for the benefit of any Contempt Defendant(s); or (3) under direct or indirect 

control, individually or jointly, of any Contempt Defendant(s), as required by the forms included 

in Attachments A and B; 

B. Transfer to the territory of the United States all such funds and Assets in foreign 

countries; and 

C. Hold and retain all repatriated funds and Assets, and prevent any disposition, 

transfer, or dissipation whatsoever of any such Assets or funds, except as required by this Order. 

VI. NON-INTERFERENCE WITH REPATRIATION 

IT IS FURTHER ORDERED that Contempt Defendants, and each of their successors, 

assigns, members, officers, agents, servants, employees, and attorneys, and those persons in 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 7 of 20 
8 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

active concert or participation with them who receive actual notice of this Order by personal 

service or otherwise, whether acting directly or through any entity, corporation, subsidiary, 

division, affiliate or other device, are hereby temporarily restrained and enjoined from taking any 

action, directly or indirectly, that may result in the encumbrance or dissipation of foreign Assets, 

or in the hindrance of the repatriation required by Section V of this Order, including but not 

limited to: 

A. Sending any statement, letter, fax, e-mail, or wire transmission, telephoning or 

engaging in any other act, directly or indirectly, that results in a determination by a foreign 

trustee or other entity that a “duress” event has occurred under the terms of a foreign trust 

agreement, until such time that all Assets have been fully repatriated pursuant to Section V of 

this Order; and 

B. Notifying any trustee, protector, or other agent of any foreign trust or other related 

entities of either the existence of this Order, or of the fact that repatriation is required pursuant to 

a Court Order, until such time that all Assets have been fully repatriated pursuant to Section V of 

this Order. 

VII. RECEIVER 

IT IS FURTHER ORDERED that Thomas Seaman of Thomas Seaman Company is 

appointed Receiver for the Receivership Defendants, with the full power of an equity Receiver. 

The Receiver shall be the agent of this Court and solely the agent of this Court in acting as 

Receiver under this Order. The Receiver shall be accountable directly to this Court. The 

Receiver shall comply with all local rules and laws governing federal equity receivers. 

VIII. COOPERATION WITH THE RECEIVER 

IT IS FURTHER ORDERED that Contempt Defendants shall fully cooperate with and 

assist the Receiver. Contempt Defendants’ cooperation and assistance shall include, but not be 

limited to, providing any information to the Receiver that the Receiver deems necessary to 

exercise the authority and discharge the responsibilities of the Receiver under this Order; 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 8 of 20 
9 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

providing any login and password required to access any computer or electronic files or 

information in or on any medium; and advising all persons who owe money to the Receivership 

Defendants that all debts should be paid directly to the Receiver. Contempt Defendants are 

hereby restrained and enjoined from directly or indirectly: 

A. Transacting any of the business of the Receivership Defendants; 

B. Excusing debts owed to the Receivership Defendants; 

C. Destroying, secreting, defacing, transferring, or otherwise altering or disposing of 

any documents of the Receivership Defendants; 

D. Transferring, receiving, altering, selling, encumbering, pledging, assigning, 

liquidating, or otherwise disposing of any Assets owned, controlled, or in the possession or 

custody of, or in which an interest is held or claimed by, the Receivership Defendants, or the 

Receiver; 

E. Failing to notify the Receiver of any Asset, including accounts, of any 

Receivership Defendant held in any name other than the name of the Receivership Defendant, or 

by any person or entity other than the Receivership Defendant, or failing to provide any 

assistance or information requested by the Receiver in connection with obtaining possession, 

custody, or control of such Assets; or 

F. Doing any act or thing whatsoever to interfere with the Receiver’s taking and 

keeping custody, control, possession, or managing of the Assets or documents subject to this 

receivership; or to harass or interfere with the Receiver in any way; or to interfere in any manner 

with the exclusive jurisdiction of this Court over the Assets or documents of the Receivership 

Defendants; or to refuse to cooperate with the Receiver or the Receiver’s duly authorized agents 

in the exercise of their duties or authority under any Order of this Court. 

This Section does not prohibit transfers to the Receiver, as specifically required in 

Section X (Delivery of Receivership Property), nor does it prohibit the repatriation of foreign 

assets, as specifically required in Section V (Repatriation of Foreign Assets) of this Order. 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 9 of 20 
10 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

IX. DUTIES AND AUTHORITY OF RECEIVER 

IT IS FURTHER ORDERED that the Receiver is directed and authorized to 

accomplish the following: 

A. Assume full control of the Receivership Defendants by removing, as the Receiver 

deems necessary or advisable, any director, officer, independent contractor, employee, attorney, 

or agent of any Receivership Defendant from control of, management of, or participation in, the 

affairs of the Receivership Defendant. 

B. Take exclusive custody, control, and possession of all Assets and Documents of, 

or in the possession, custody, or under the control of, any Receivership Defendant, wherever 

situated. The Receiver shall have full power to divert mail and to sue for, collect, receive, take 

possession of, hold, and manage all Assets and documents of the Receivership Defendants and 

other persons or entities whose interests are now held by or under the direction, possession, 

custody, or control of any Receivership Defendant. 

C. Take all steps necessary to secure the business premises of the Receivership 

Defendants, which may include, but are not limited to, taking the following steps as the Receiver 

deems necessary or advisable: (1) serving and filing this Order; (2) completing a written 

inventory of all receivership Assets; (3) obtaining pertinent information from all employees and 

other agents of the Receivership Defendants, including, but not limited to, the name, home 

address, Social Security number, job description, method of compensation, and all accrued and 

unpaid commissions and compensation of each such employee or agent; (4) video-recording all 

portions of the location; (5) changing the locks and disconnecting any computer networks or 

other means of access to electronically stored information or other documents maintained at that 

location; or (6) requiring any persons present on the premises at the time this Order is served to 

leave the premises, to provide the Receiver with proof of identification, and/or to demonstrate to 

the satisfaction of the Receiver that such persons are not removing from the premises documents 

or Assets of the Receivership Defendants. Such authority shall include, but not be limited to, the 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 10 of 20 
11 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

authority to order any owner, director, or officer of the Receivership Defendants to leave the 

business premises. 

D. Conserve, hold, and manage all receivership Assets, and perform all acts 

necessary or advisable to preserve the value of those Assets, in order to prevent any irreparable 

loss, damage, or injury to consumers, including, but not limited to, obtaining an accounting of 

the Assets and preventing the transfer, withdrawal, or misapplication of Assets. 

E. Enter into contracts and purchase insurance as advisable or necessary. 

F. Prevent the inequitable distribution of Assets and determine, adjust, and protect 

the interests of consumers and creditors who have transacted business with the Receivership 

Defendants. 

G. Manage and administer the business of the Receivership Defendants until further 

order of this Court by performing all incidental acts that the Receiver deems to be advisable or 

necessary, which includes retaining, hiring, or dismissing any employees, independent 

contractors, or agents. 

H. Choose, engage, and employ attorneys, accountants, appraisers, investigators, and 

other independent contractors and technical specialists, as the Receiver deems advisable or 

necessary in the performance of duties and responsibilities. 

I. Make payments and disbursements from the receivership estate that are necessary 

or advisable for carrying out the directions of, or exercising the authority granted by, this Order. 

The Receiver shall apply to the Court for prior approval of any payment of any debt or obligation 

incurred by the Receivership Defendants prior to the date of entry of this Order, except payments 

that the Receiver deems necessary or advisable to secure Assets of the Receivership Defendants, 

such as rental payments. 

J. Collect any money due or owing to the Receivership Defendants. 

K. Institute, compromise, adjust, appear in, intervene in, or become party to such 

actions or proceedings in state, federal or foreign courts that the Receiver deems necessary and 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 11 of 20 
12 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

advisable to preserve or recover the Assets of the Receivership Defendants or to carry out the 

Receiver’s mandate under this Order. 

L. Defend, compromise, adjust, or otherwise dispose of any or all actions or 

proceedings instituted against the Receivership Defendants or the Receiver that the Receiver 

deems necessary and advisable to preserve the Assets of the Receivership Defendants or to carry 

out the Receiver’s mandate under this Order. 

M. Continue and conduct the businesses of the Receivership Defendants in such 

manner, to such extent, and for such duration as the Receiver may in good faith deem to be 

necessary or appropriate to operate the businesses profitably, using the Assets of the receivership 

estate, and lawfully, if at all. 

N. Take depositions and issue subpoenas to obtain documents and records pertaining 

to the receivership and compliance with this Order. Subpoenas may be served by agents or 

attorneys of the Receiver and by agents of any process server retained by the Receiver. 

O. Open one or more bank accounts as designated depositories for funds of the 

Receivership Defendants. The Receiver shall deposit all funds of the Receivership Defendants in 

such a designated account and shall make all payments and disbursements from the receivership 

estate from such an account. 

P. Maintain accurate records of all receipts and expenditures made by the Receiver. 

X. DELIVERY OF RECEIVERSHIP PROPERTY 

IT IS FURTHER ORDERED that immediately, to the extent not already completed 

pursuant to the TRO entered January 28, 2013, the Contempt Defendants and the Receivership 

Defendants shall forthwith or within such time as permitted by the Receiver in writing, deliver to 

the Receiver possession and custody of: 

A. All funds, Assets, and property of the Receivership Defendants, whether situated 

within or outside the territory of the United States, that are: (1) held by any Receivership 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 12 of 20 
13 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Defendant, (2) held for the benefit of any Receivership Defendant, or (3) under the direct or 

indirect control, individually or jointly, of any Receivership Defendant; 

B. All documents of the Receivership Defendants, including but not limited to all 

books and records of Assets, including funds and property, all financial and accounting records, 

balance sheets, income statements, bank records (including monthly statements, canceled checks, 

records of wire transfers, records of ACH transactions, and check registers), corporate minutes, 

contracts, customer and consumer lists, title documents, and electronic records; 

C. All funds and other Assets belonging to members of the public now held by the 

Receivership Defendants; 

D. All keys, computer and other passwords, entry codes, combinations to locks 

required to open or gain access to any of the property or effects, and all monies in any bank 

deposited to the credit of any Receivership Defendant, wherever situated; and 

E. Information identifying the accounts, employees, properties, or other Assets or 

obligations of the Receivership Defendants. 

XI. TRANSFER OF FUNDS TO THE RECEIVER BY FINANCIAL INSTITUTIONS 

AND OTHER THIRD PARTIES 

IT IS FURTHER ORDERED that any financial or brokerage institution or depository, 

escrow agent, title company, commodity trading company, payment processing company, or 

trust shall cooperate with all reasonable requests of counsel for the FTC and the Receiver 

relating to implementation of this Order, including transferring funds at the Receiver’s direction 

and producing records related to the Assets and sales of the Receivership Defendants. 

XII. RECEIVER’S REPORTS 

IT IS FURTHER ORDERED that the Receiver shall report to this Court within 60 days 

of entry of this Order, and as ordered by the Court thereafter, regarding: (1) the steps taken by 

the Receiver to implement the terms of this Order; (2) the value of all liquidated and unliquidated 

Assets of the Receivership Defendants; (3) the sum of all liabilities of the Receivership 

Defendants; (4) the steps the Receiver intends to take in the future to: (a) prevent any diminution 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 13 of 20 
14 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

in the value of Assets of the Receivership Defendants; (b) pursue receivership Assets from third 

parties; and (c) adjust the liabilities of the Receivership Defendants, if appropriate; and (5) any 

other matters which the Receiver believes should be brought to the Court’s attention. Provided, 

however, if any of the required information would hinder the Receiver’s ability to pursue 

receivership Assets, the portions of the Receiver’s report containing such information may be 

filed under seal and not served on the parties. 

XIII. COMPENSATION OF THE RECEIVER 

IT IS FURTHER ORDERED that the Receiver, and all persons or entities retained or 

hired by the Receiver as authorized under this Order, shall be entitled to reasonable 

compensation for the performance of duties undertaken pursuant to this Order and for the cost of 

actual out-of-pocket expenses incurred by them from the Assets now held by or in the possession 

or control of, or which may be received by, the Receivership Defendants. The Receiver shall file 

with the Court and serve on the parties a request for the payment of reasonable compensation at 

the time of the filing of any report required by Section XII. The Receiver shall not increase the 

fees or rates used as the bases for such fee applications without prior approval of the Court. 

XIV. ACCESS TO BUSINESS PREMISES AND RECORDS 

IT IS FURTHER ORDERED that the Receiver shall allow the FTC and Contempt 

Defendants, and their respective representatives, reasonable access to the premises of the 

Receivership Defendants. The purpose of this access shall be to inspect, inventory, and copy any 

documents and other property owned by, or in the possession of, the Receivership Defendants, 

provided that those documents and property are not removed from the premises without the 

permission of the Receiver. The Receiver shall have the discretion to determine the time, 

manner, and reasonable conditions of such access. 

If any documents, computers, or electronic data storage devices containing information 

related to the business practices or finances of the Receivership Defendants are at a location 

other than those listed in the TRO, including but not limited to the personal residence(s) of the 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 14 of 20 
15 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Contempt Defendants, then, to the extent not already produced pursuant to the TRO, Contempt 

Defendants shall immediately produce to the Receiver all such documents, computers, or 

electronic data storage devices. In order to prevent the destruction of electronic data, any 

computers or electronic data storage devices containing such information shall be powered down 

(turned off) in the normal course for the operating systems used on such devices and shall not be 

used until produced for copying and inspection, along with any codes needed for access. 

To the extent not already produced pursuant to the TRO, the Receivership Defendants 

shall immediately produce to the Receiver a list of all agents, employees, officers, servants and 

those persons in active concert and participation with them, who have been associated or done 

business with the Receivership Defendants. 

XV. PRESERVATION OF RECORDS 

IT IS FURTHER ORDERED that Contempt Defendants, and each of their successors, 

assigns, members, officers, agents, servants, employees, and attorneys, and those persons in 

active concert or participation with them who receive actual notice of this Order by personal 

service or otherwise, whether acting directly or through any entity, corporation, subsidiary, 

division, affiliate, or other device, are hereby restrained and enjoined from destroying, erasing, 

mutilating, concealing, altering, transferring, or otherwise disposing of, in any manner, directly 

or indirectly, any documents that relate to the business practices or finances of any Contempt 

Defendant, including, but not limited to, any contracts, accounting data, correspondence, 

advertisements, computer tapes, disks or other computerized records, customer lists, books, 

written or printed records, handwritten notes, recordings, telephone logs, telephone scripts, 

receipt books, ledgers, personal and business canceled checks and check registers, bank 

statements, appointment books, copies of federal, state, or local business or personal income or 

property tax returns. 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 15 of 20 
16 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

XVI. PROHIBITION ON USE OF CUSTOMER INFORMATION 

IT IS FURTHER ORDERED that Contempt Defendants, and officers, agents, directors, 

servants, employees, salespersons, and attorneys of Contempt Defendants, as well as all other 

persons or entities in active concert or participation with them, who receive actual notice of this 

Order by personal service or otherwise, whether acting directly or through any trust, corporation, 

subsidiary, division, or other device, or any of them, are hereby restrained and enjoined from 

using, benefitting from, selling, renting, leasing, transferring, or otherwise disclosing the name, 

address, telephone number, email address, Social Security number, credit card number, debit 

card number, bank account number, any financial account number, or any data that enables 

access to a customer’s account, or other identifying information of any person which any 

Contempt Defendant obtained prior to entry of this Order in connection with the marketing or 

sale of any good or service, including those who were contacted or are on a list to be contacted 

by any of the Defendants; provided that Contempt Defendants may disclose such identifying 

information to a law enforcement agency or as required by any law, regulation, or court order. 

XVII. CREDIT REPORTS 

IT IS FURTHER ORDERED that the FTC may obtain credit reports concerning any of 

the Contempt Defendants pursuant to Section 604(a)(1) of the Fair Credit Reporting Act, 15 

U.S.C. § 1681b(a)(1), and that, upon written request, any credit reporting agency from which 

such reports are requested shall provide them to the FTC. 

XVIII. RECORDKEEPING/BUSINESS OPERATIONS 

IT IS FURTHER ORDERED that Contempt Defendants are hereby restrained and 

enjoined from: 

A. Failing to create and maintain documents that, in reasonable detail, accurately, 

fairly, and completely reflect their incomes, disbursements, transactions, and use of money; 

B. Creating, operating, or exercising any control over any business entity, including 

any partnership, limited partnership, joint venture, sole proprietorship, limited liability company 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 16 of 20 
17 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

or corporation, without first providing the Commission with a written statement disclosing: (1) 

the name of the business entity; (2) the address and telephone number of the business entity; (3) 

the names of the business entity’s officers, directors, principals, managers, and employees; and 

(4) a detailed description of the business entity’s intended activities; and 

C. Affiliating with, becoming employed by, or performing any work for any business 

that is not a named Contempt Defendant in this action without first providing the Commission 

with a written statement disclosing: (1) the name of the business; (2) the address and telephone 

number of the business; and (3) a detailed description of the nature of the business or 

employment and the nature of the Contempt Defendant’s duties and responsibilities in 

connection with that business or employment. 

XIX. BANKRUPTCY PETITIONS 

IT IS FURTHER ORDERED that, in light of the appointment of the Receiver, the 

Receivership Defendants are hereby prohibited from filing petitions for relief under the United 

States Bankruptcy Code, 11 U.S.C. § 101 et seq., without prior permission from this Court. 

XX. STAY OF ACTIONS 

IT IS FURTHER ORDERED that: 

A. Except by leave of this Court, during the pendency of the Receivership ordered 

herein, the Receivership Defendants and all customers, principals, investors, creditors, 

stockholders, lessors, and other persons seeking to establish or enforce any claim, right, or 

interest against or on behalf of the Receivership Defendant, and all others acting for or on behalf 

of such persons, including attorneys, trustees, agents, sheriffs, constables, marshals, and other 

officers and their deputies, and their respective attorneys, servants, agents, and employees be and 

are hereby stayed from: 

1. Commencing, prosecuting, continuing, entering, or enforcing any suit or 

proceeding, except that such actions may be filed to toll any applicable statute of limitations; 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 17 of 20 
18 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2. Accelerating the due date of any obligation or claimed obligation; filing or 

enforcing any lien; taking or attempting to take possession, custody, or control of any Asset; 

attempting to foreclose, forfeit, alter, or terminate any interest in any Asset, whether such acts 

are part of a judicial proceeding, are acts of self-help, or otherwise; 

3. Executing, issuing, serving, or causing the execution, issuance or service 

of, any legal process, including, but not limited to, attachments, garnishments, subpoenas, writs 

of replevin, writs of execution, or any other form of process, whether specified in this Order or 

not; or 

4. Doing any act or thing whatsoever to interfere with the Receiver’s taking 

custody, control, possession, or management of the Assets or Documents subject to this 

receivership; or to harass or interfere with the Receiver in any way; or to interfere in any manner 

with the exclusive jurisdiction of this Court over the Assets or Documents of the Receivership 

Defendants. 

B. This Section does not stay: 

1. The commencement or continuation of a criminal action or proceeding; 

2. The commencement or continuation of an action or proceeding by a 

governmental unit to enforce such governmental unit’s police or regulatory power; 

3. The enforcement of a judgment, other than a money judgment, obtained in 

an action or proceeding by a governmental unit to enforce such governmental unit’s police or 

regulatory power; or 

4. The issuance to the Receivership Defendants of a notice of tax deficiency. 

XXI. SERVICE OF ORDER 

IT IS FURTHER ORDERED that copies of this Order may be served by any means, 

including facsimile transmission or email, by employees or agents of the FTC or the Receiver, 

upon any financial institution or other entity or person that may have possession, custody, or 

control of any documents or Assets of Contempt Defendants, or that may otherwise be subject to 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 18 of 20 
19 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

any provision of this Order. Service upon any branch or office of any financial institution shall 

effect service upon the entire financial institution. 

XXII. ACKNOWLEDGMENT OF RECEIPT OF ORDER BY DEFENDANTS 

IT IS FURTHER ORDERED that each Contempt Defendant, within three (3) business 

days of receipt of this Order, must submit to counsel for the FTC a truthful sworn statement 

acknowledging receipt of this Order. 

XXIII. PROOF OF DISTRIBUTION OF ORDER BY DEFENDANTS 

IT IS FURTHER ORDERED that Contempt Defendants shall immediately provide a 

copy of this Order to their agents, servants, employees, consultants, and any affiliated businesses, 

and other persons and entities subject in any part to their direct or indirect control. Within five 

(5) business days of receipt of this Order, Contempt Defendants must submit to counsel for the 

FTC a truthful sworn statement identifying those persons and entities to whom this Order has 

been distributed. 

XXIV. CORRESPONDENCE 

IT IS FURTHER ORDERED that, for the purposes of this Order, all correspondence 

and service of pleadings on the FTC shall be addressed to: 

 Sarah Waldrop 

 Reenah Kim 

 600 Pennsylvania Avenue, NW 

 Mailstop M-8102B 

 Washington, DC 20580 

 Telephone: (202) 326-3444, -2272 

 Fax: (202) 326-2558 

 Email: swaldrop@ftc.gov, rkim1@ftc.gov 

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 19 of 20 
20 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

XXV. RETENTION OF JURISDICTION 

IT IS FURTHER ORDERED that the Court shall continue to retain jurisdiction of this 

matter for all purposes. 

 SO ORDERED this _ . 

 

 

 __________________________________________ 

 PHILIP M. PRO 

 United States District Court for the 

 District of Nevada 

 

5th day of March, 2013

Case 2:97-cv-00750-PMP-VCF Document 173 Filed 03/05/13 Page 20 of 20