COLLOT GUERARD 

JOSHUA DOAN 

MIRY KIM 

(Each appearing pursuant to DUCivR 83-1. l(d)(l)) 

600 Pennsylvania Ave., NW., CC-8528 

Washington, D.C. 20580 

Telephone: (202) 326-3338 

cguerard@ftc.gov · 

jdoan@ftc.gov 

mkim@ftc.gov 

Attorneys for Plaintiff 

FEDERAL TRADE COMMISSION 

THOMAS M. MELTON ( 4999) 

ROBERT G. WING (4445) 

DOUGLAS DEVORE (11170) 

KEVIN MCLEAN (16101) 

Assistant Attorney General 

Utah Attorney General's Office 

160 East 300 South, Fifth Floor 

Salt Lake City, Utah 8411.4 

Telephone: 801-366-0310 

tmelton@agutah.gov 

rwing@agutah.gov 

dedevore@agutah.gov 

kmclean@agutah.gov 

Attorneys for Plaintiff 

RECE V': ' I E9K 

U.S. D'...:i. 

Case: 2: 19-cv-00713 

Assigned To : Kimball, Dale A 

Assign. Date : 9/30/2019 

Description: Sealed v. Sealed 

UTAH DIVISION OF CONSUMER PROTECTION 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF UT AH, CENTRAL DIVISION 

FEDERAL TRADE COMMISSION, and 

UTAH DIVISION OF CONSUMER 

PROTECTION, 

Plaintiffs, 

VS. 

Case Number: 

COMPLAINT FOR PERMANENT 

INJUNCTION AND OTHER 

EQUITABLE RELIEF 
ZURIXX, LLC, a Utah limited liability 

company, 

CARLSON DEVELOPMENT GROUP, 

LLC; a Utah limited liability company, 

CJ SEMINAR HOLDINGS, LLC, a Utah 

limited liability company, 

ZURIXX FINANCIAL, LLC, a Utah 

limited liability company, 

CRISTOPHER A. CANNON, individually 

and as an officer of ZURIXX, LLC, 

JAMES M. CARLSON, individually and as 

an officer of ZURIXX, LLC, and 

JEFFREY D. SPANGLER, individually and 

as an officer of ZURIXX, LLC 

Defendants. 

Plaintiffs, the Federal Trade Commission ("FTC") and the Utah Division of Consumer 

Protection ("Division''), for the Complaint allege: 

1. The FTC brings this action under Sections 13(b) and 19 of the Federal Trade 

Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, and the Consumer Review Fairness 

Act ("CRFA"), 15 U.S.C. § 45b, to obtain temporary, preliminary, and permanent injunctive 

relief, rescission or reformation of contracts, restitution, the refund of monies paid-, disgorgement 

of ill-gotten monies, and other equitable relief for Defendants' acts or practices in violation of 

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the CRFA, 15 U.S.C. § 45b. 

2. The Division brings this action pursuant to the authority granted by Utah Code§§ 

13-2-5(3), 13-11-17, 13-15-6, and 15 U.S.C. § 45b. The Division seeks, among other things, 

temporary, preliminary, and permanent injunctive relief, rescission or reformation of contracts, 

2 
restitution, the refund of monies paid, disgorgement of ill-gotten monies, civil penalties, fines, 

and other equitable relief for Defendants' acts, omissions, or practices in violation of the Utah 

Consumer Sales Practices Act ("UCSPA"), Utah Code § 13-11-1 et seq., and the Business 

Opportunity Disclosure Act ("BODA"), Utah Code§ 13-15-1 et seq. 

JURISDICTION AND VENUE 

3. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, B37(a), 

and 1345. 

4. This Court has supplemental jurisdiction over the Division's claims pursuant to 

28 u.s.c. § 1367. 

5. Venue is proper in this District under 28 U.S.C. § 1391(b) and (c), and 15 U.S.C. 

§ 53(b). 

SUMMARY OF THE CASE 

6. Since at least July 2013 and continuing through the present, Defendants Zurixx, 

LLC, Carlson Development Group, LLC, CJ Seminar Holdings, LLC, and Zurixx Financial, 

LLC (collectively "Zurixx")- led by individual defendants Cristopher Cannon, James Carlson, 

and Jeffrey Spangler - have marketed and sold real estate investment products and services 

("products") that purport to allow consumers to make thousands of dollars in profit using 

Zurixx's system. 

7. · Zurixx's "system" comprises two flipping strategies: "fix and flip" and 

"wholesale flips." A "fix and flip" involves purchasing and renovating a property before selling 

it to an end user. A "wholesale flip" involves acquiring an interest in a property and then 

transferring that interest to a wholesale buyer, who will, in turn, fix and flip the property. 

3 
8. To entice consumers to purchase its products, Zurixx routinely hosts free live 

events that depict celebrities from house flipping and home renovation television programs, who 

indicate that their team of "experts" will teach consumers how to make money by following their 

system of real estate investing. 

9. During the free events, Zurixx repeatedly represents that consumers who sign up 

for its 3-day workshop are likely to earn thousands of dollars in profit, often with little risk, time, 

or effort. Zurixx also represents that consumers who purchase the workshop will receive 100% 

funding for their real estate investments regardless of their credit history. It backs up these 

representations with a money-back guarantee - consumers who do not make "a minimum of 

three times' ' the price of the 3-day workshop within six months will receive their money back. 

10. For example, a Zurixx presenter made the following representations during a 

December 2018 free event in Georgia: 

Not only are [Tarek and Christina El Moussa] going to give you a professional education, 

not only are they going to give you a list of all their lending partners to fund all your 

deals plus to rehab regardless of your credit, not only are they going to give you the cash 

buyers list so you have the buyers, but they are going to guarantee that you or your 

partners closes a deal within three months, you get your money back ... 

11. A Zurixx presenter at a June 2018 free event in California told attendees, "[i]f it 

doesn't work for you, we still give you $2,000 back. This really is a no-lose situation as long as 

you try it." 

12. Zurixx's representations are false or unsubstantiated. Consumers are unlikely to 

earn thousands of dollars in profit from real estate investments by using Zurixx's products. 

Consumers are unlikely to receive 100% funding for real estate deals through Zurixx or its 

partners and affiliates. Moreover, Zurixx's six-month money-back guarantee contains 

4 
substantial limitations that Zurixx fails to disclose adequately until after consumers have paid for 

the 3-day workshop. 

13. Many dissatisfied consumers have requested refunds from Zurixx. When Zurixx 

agrees to refund consumers' money, it routinely provides only a partial refund, which in many 

instances, Zurixx conditions on the consumers signing an agreement barring them from speaking 

with the FTC; state Attorneys General, and other regulators, submitting complaints to the Better 

Business Bureau, or posting negative reviews or complaints about Zurixx and its products. 

14. In perpetrating its scheme, Zurixx has violated the FTC Act, the CRFA, the 

UCSPA, and the BODA. 

PLAINTIFFS 

15. The FTC is an independent agency of the United States Government created by 

statute. 15 U.S.C. §§ 41-58. The FTC enforces Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), 

which prohibits unfair or deceptive acts or practices in or affecting commerce. The FTC also 

enforces the CRFA, 15 U.S.C. § 45b. The CRFA prohibits the offering of provisions in form 

contracts that restrict individual consumers' ability to communicate reviews, performance · 

assessments, and similar analyses about a seller's products, services, or conduct. 

16. The FTC is authorized to initiate federal district court proceedings, by its own 

attorneys, to enjoin violations of the FTC Act and the CRFA and to secure such equitable relief 

as may be appropriate in each case, including rescission or reformation of contracts, restitution, 

the refund of monies paid, and disgorgement of ill-gotten monies. 15 U.S.C. §§ 53(b), 57b, and 

the CRFA, 15 U.S.C. § 45b. 

5 
17. The Division is an agency of the State of Utah created by statute. Utah Code § 13-

2-1(1). The Division administers and enforces the UCSPA, which prohibits deceptive acts and 

practices in connection with consumer transactions. It administers and enforces the BODA, 

which requires sellers of assisted marketing plans to file certain information with the Division 

and to provide disclosures to prospective purchasers. 

18. The Division is authorized to take legal action against persons who violate the 

UCSPAand the BODA to enjoin violations of the acts, seek other equitable relief, and to obtain 

damages, fines, civil penalties, fees, and costs. Utah Code§§ 13-2-5(3); 13-11-l 7(1)(a)-(d); 13- · 

15-6(3). 

DEFENDANTS 

19. Defendant Zurixx, LLC is a Utah limited liability company with its principal 

place of business at 2750 East Cottonwood Parkway, Suite 200, Cottonwood Heights, Utah 

84121. It does business under numerous fictitious names including, but not limited to, Advanced 

Financial Training, Advanced Real Estate Education, Doug Hopkins Real Estate Formula, Fast 

Track Flips, Flip Advantage, Flip It Forward, Flippin' On The Side, Flipping Formula Education, 

Good Flips, High Point Training, LLC, Property Wars, Real Estate Elevated, Rules of 

Renovation, Side Flips, Success Path Education, Two Chicks and Training Tools, and Winning 

the Property War. Zurixx, LLC transacts or has transacted business in this District and 

throughout the United States. At all times material to this Complaint, acting alone or in concert 

· with others, Zurixx, LLC has advertised, marketed, distributed, or sold the real estate investment 

products at issue in this Complaint to consumers throughout the United States. 

6 
20. Defendant Carlson Development Group, LLC ("CDG") is a Utah limited 

liability company with its principal place of business at 2750 East Cottonwood Parkway, Suite 

200, Cottonwood Heights, Utah 84121. CDG is a manager of Zurixx Financial, LLC. CDG 

transacts or has transacted business in this District and throughout the United States. At all times 

material to this E::omplaint, acting alone or in concert with others, CDG, by way of Zurixx 

Financial LLC and through Zurixx, LLC, has advertised, marketed, distributed, or sold the real 

estate investmentproducts at issue in this Complaint to consumers throughout the United States. 

2 L Defendant CJ Seminar Holdings, LLC ("CJ Seminar") is a Utah limited 

liability company with its principal place of business at 2750 East Cottonwood Parkway, Suite 

200, Cottonwood Heights, Utah 84121. CJ Seminar is a member of Zurixx, LLC. CJ Seminar 

transacts or has transacted business in this District and throughout the United States. At all times 

material to this Complaint, acting alone or in concert with others, CJ Seminar, as a member of 

Zurixx, LLC, has advertised, marketed, distributed, or sold the real estate investment products at 

issue in this Complaint to consumers throughout the United States. 

22. Defendant Zurixx Financial, LLC ("Ztirixx Financial") is a Utah limited 

liability company with its principal place of business at 2750 East Cottonwood Parkway, Suite 

200, Cottonwood Heights, Utah 84121. Zurixx Financial also operates out of 12 Dorado Beach . 

East, Dorado, Puerto Rico. Zurixx Financial is a manager of Zurixx, LLC. Zurixx Financial 

transacts or has transacted business in this District and throughout the United States. At all times 

material to this Complaint, acting alone or in concert with others, Zurixx Financial, as a manager 

of Zurixx, LLC, has advertised, marketed, distributed, or sold the real estate investment products 

at issue in this Complaint to consumers throughout the United States. 

7 
23. Defendant Cristopher A. Cannon is an officer of Zurixx, LLC and a manager of 

CJ Seminar. At all times material to this Complaint, acting alone or in concert with others, he 

has formulated, directed, controlled, had the authority to control, or participated in the acts and 

practices set forj:h in this Complaint. Cannon, in connection with the matters alleged herein, 

transacts or has transacted business in this District and throughout the United States. 

24. Defendant James M. Carlson is the chief executive officer of Zurixx, LLC and 

manager of CDG. At all times material to this Complaint, acting alone or in concert with others, 

he has formulated, directed, controlled, had the authority to control, or participated in the acts 

and practices set forth-in this Complaint. Carlson, in connection with the matters alleged herein, 

transacts or has transacted business in this District ·and throughout the United States. 

25. Defendant Jeffrey D. Spangler is an officer of Zurixx, LLC and a manager of CJ 

Seminar. At all times material to this Complaint, acting alone or in concert with others, he has 

formulated; dire~ted, controHed, had the authority to control, or participated in the acts and 

practices set forth in this Complaint. Spangler, in connection with the matters alleged herein, 

transacts or has transacted business in this District and throughout the United States. 

DEFENDANTS ARE A COMMON ENTERPRISE 

26. Defendants Zurixx, LLC, CDG, CJ Seminar, and Zurixx Financial (collectively 

"Corporate Defendants" or "Zurixx") have operated as a. common enterprise while engaging in 

the deceptive acts or practices and other violations of the law alieged herein. Corporate 

Defendants have conducted the business practices described herein through an interrelated and 

interdependent network of companies that have a common business purpose, ownership, officers, 

managers, members, business functions, and office locations. Because Corporate Defendants 

8 
have operated as a common enterprise, each of them is jointly and severally liable for the acts 

and practices alleged herein. Individual Defendants Cristopher A. Cannon, James M. Carlson, 

and Jeffrey D. Spangler have formulated, directed, controlled, or had the authority to control the 

acts or practices of the Corporate Defendants that constitute the common enterprise. 

COMMERCE 

27. At all times material to this Complaint, Defendants have maintained a substantial 

course of trade in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 

15 u.s.c. § 44. 

ZURIXX'S BUSINESS ACTIVITIES 

28. Since at least July 2013, Zurixx has advertised, marketed, distributed, promoted, 

and sold its products to consumers throughout the United States and Canada. 

29. Zurixx has sold its products under numerous brand names including, but not 

limited to: Advanced Financial Training, Advanced Real Estate Education, Doug Hopkins Real 

Estate Formula, Fast Track Flips, Flip Advantage, Flip It Forward, Flippin' On The Side, 

Flipping Formula Education, Good Flips, High Point Training, LLC, Property Wars, Real Estate 

Elevated, Rules of Renovation, Side Flips, Success Path Education, Two Chicks and Training 

Tools, and Winning the Property War. 

30. The advertised "retail" prices for Zurixx's products typically range from $5,995 to 

$73,973; the "discounted" prices typically range from $1,997 to $41,297. 

I 

31. Zurixx claims to have sold its products to more than 70,000 individuals. 

32. Zurixx's products are "assisted marketing plans" as defined by the BODA 

because the products cost $500 or more and are sold for the purpose of enabling consumers to 

9 
start a real estate investing business. Utah Code § 13-15-2(1 ). In addition, Zurixx has 

represented that its real estate investment products will enable the consumer to derive a profit 

that exceeds the price paid for the products. Utah Code§ 13-15-2(1)(a)(iv). 

33. Zurixx is a "seller" as that term is defined by the BODA because Zurixx has sold 

or offered to sell assisted marketing plans. Utah Code § 13-15-2(8). 

. . . 

34. Zurixx has sold assisted marketing plans, but has not filed the required 

information with the Division, including names and addresses of the business, trademarks or 

trade names, the business experience of the company's directors and officers, amounts to be paid 

_ by consumers, a statement of services the seller will perform for the purchaser, a statement of 

representations made to prospective purchasers, a copy of any contracts, numbers of marketing 

plans sold to date; and numbers of cancelled sales. 

35. Zurixx has sold assisted marketing plans to consumers, but has not provided 

consumers with a disclosure statement containing the following warning after any earnings 

representation: 

CAUTION 

No guarantee of earnings or ranges of earnings can be made. The number of purchasers 

who have earned through this business an amount in excess of the amount their initial 

payment is at least_ which represents _ % of the total number of purchasers of this 

business opportunity. 

Utah Code§§ 13~15-4; 13-15-5. 

Zurixx's Free Teaser Event 

36. In an effort to lure consumers into purchasing its products, Zurixx conducts free 

live events throughout the country. 

10 
37. Zurixx markets its free events via direct mailers, the internet, email, radio, social 

media, and newspaper advertisements. 

38. Zurixx has routinely advertised its free events as sponsored by celebrities from 

fix-and-flip and home renovation television programs including, among others, Peter Souhleris 

and Dave Seymour from the A&E show "Flipping Boston," Hilary Farr from the HGTV show 

"Love It or List It," and Tarek and Christina El Moussa from the HGTV show "Flip or Flop." 

3 9. . Zurixx invites consumers to attend the free event to learn how to make thousands 

of dollars in profit by investing in real estate "using other people's money." 

40. In some instances, the free event starts with welcome videos by celebrity 

endorsers who indicate that their team of "experts" will teach consumers how to make money by 

following their system of real estate investing. 

41. In numerous instances at the free event, Zurixx teaches consumers very little, if 

anything, about how to make thousands of dollars in profit by investing in real estate. Instead, 

Zurixx uses the free event to sell its 3-day workshop, which it advertises as retailing for $5,995. 

It routinely uses misrepresentations to convince consumers to pay the "discounted" price of 

$1,997 for the workshop, a price Zurixx represents is available only at the free event. 

Misrepresentations At The Free Event That Consumers Are Likely To Earn 

Thousands Of Dollars In Profit Through Real Estate Investing 

42. To persuade attendees to pay for the 3-day workshop, Zurixx routinely makes 

earnings claims and shares testimonials about or from purportedly successful purchasers of its 

11 
products. For example, Zurixx presenters made the following representations between March 

2018 and July 2019 in California, Florida, Georgia, and Virginia: 

A. " ... our students are making right now in this area anywhere from $60,000 to 

upwards of $150,000 per flip, per transaction they do." 

B. "The average profit margin's about 20 percent [per flip]. So on a $500,000, I 

expect to walk away with ... $100,000 on one check." 

C. The "average profit last year alone on a flip was about $68,000, which, by the 

way, represent a 40 percent - just under a 50 percent ROI. . .Is 50 percent, is 

that a pretty good ROI?" 

D. " ... the average profit margin up here is about 25 percent. So 25 percent of 

$200,000 is $50,000 per flip." 

.E. " ... average fix and flip profit margin in this country per house, do you want 

to know why so many people are loving and doing it, 68,000 dollars, per 

deal." 

F. "As far as expected profits - and these are averages for this area- on average 

with wholesale deals, you can expect to put $3,000 to $15,000 cash in your 

pocket. Now, flipping is where you are going to make your bigger paychecks, 

$20,000, 50--, 100--.... " 

G. " .. . you're making $15,000, $20,000" with a wholesale deal. 

H. ''Now write this down, in this area finder's fee, low end, are going to be 6 

grand, high end 20" for a wholesale deal. 

43 . Zurixx's earnings claims are false and unsubstantiated. Consumers who attend its 

3-day workshop are not likely to earn thousands of dollars in profit through real estate investing. 

Misrepresentations At The Free Event That Consumers Will Receive 

100% Funding For Their Real Estate Investments 

44. Zurixx routinely promises that consumers will have access to lenders that will 

provide 100% funding for consumers' real est::tte deals, including any rehabilitation costs. In 

12 
some instances, Zurixx represents that consumers will obtain 100% funding regardless of their 

credit score or background. 

45. In numerous instances, Zurixx represents to consumers that they will not have to 

use any of their own money for real estate deals because they will be using "other people's 

money". In some instances, Zurixx represents that consumers will incur "no liability" investing 

in real estate. For example,Zurixx presenters made the following representations between 

March 2018 and July 2019 in California, Florida, Georgia, and Virginia: 

A. We have "our own group of private money lenders who will put up 100 

percent of the money to fund your real estate deals, including rehab with no 

regard to your personal income, assets or credit." 

B. "Would you like to know how you can make some immediate profits in real 

estate without using any money, none of your, none of ours, and have no 

liability, yes or no?" 

C. Tarek and Christina's lending partners "will fund 100 percent of the real estate 

you buy, fund 100 percent of the rehab, regardless of your credit or your 

background." 

D. " ... we're going to .give you money to buy and to renovate" the properties. 

E. Trusted lending partners "will fund all of your deals, folks." 

F. "Our lending partners, they don't care about your credit. They don't care 

about your job history. All that they care about is the what? Is the deal. If 

the deal is a good deal, then they will fund it." 

G. The funding sources will help the audience "with no money out of your own 

pocket." 

H. "Okay, then we're going to teach you to implement the right plan, start to 

finish. When that happens, call us up, we get the funding for you, not you. · 

We deal with these 100 percent funding partners every day, not you ... And if 

they won't fund it, we'll get your deal funded, just know that, and we do that, 

not you, all right." · 

13 
46. Zurixx's 100% funding claims are false or unsubstantiated. In numerous 

instances, if not virtually always, consumers who attempt to get 100% funding for potential real 

estate investments are unable to do so . . 

Misrepresentations At The Free Event That Making Thousands of Dollars In Profit From 

Real Estate Investing Requires Little Time And Effort 

4 7. Zurixx routinely represents to consumers that little time and effort are required to 

make thousands of dollars in profit through real estate investing. 

48. For example, Zurixx presenters made the following representations between 

March 2018 and December 2018 in California and Florida: 

A. "A lot of our students are spending anywhere from eight to 10 hours a week 

and getting above average results. Because once you know the recipe, you're 

able to get the results a whole lot faster." 

B. "Flipping ... fig•ure 10 to 20 hours of your time .... " 

C. A single mother who spent "twenty hours of work, [ earned a] $42,000 profit" 

on her "first deal from start to finish." · 

D. "So, in the beginning, to make 40 offers, that would take anywhere from about 

15 to maybe 20 hours over the next 12 months .... " 

E. "Frank" who purchased property for $335,000, sold it for $490,000, for a 

profit of $131,000 and spent "25 hours of [his] time total invested in this 

deal." 

F. " ... it will take anywhere from ten hours' to 40 hours in the next six months to 

make ten offers." 

G. " .. . wholesaling, figure five to ten hours of your time .... " 

49. Zurixx's claims that little time and effort are needed to make thousands of dollars 

in profit by investing in real estate are false and unsubstantiated. Consumers are not likely to 

14 
make thousands of dollars in profit by spending only a few hours a week on their real estate 

investment business. 

Misrepresentations At The Free Event That Consumers Who Attend The 3-Day Workshop 

Will Learn Everything They Need To Know To Make Thousands of Dollars in Profit From 

Real Estate Investing 

50. Zurixx routinely represents that consumers will learn all they need to know at the 

3-day workshop to make thousands of dollars in profit through real estate investing. 

51. . For example, Zurixx made the following representations between March 2018 and 

July 2019 in California, Florida, Georgia, and Virginia: 

A. "By the end of our three-day investment accelerator, graduates will have the 

knowledge, expertise, and training to put together sound, effective loan 

packages that are custom-tailored to appeal to the right lending solutions to fit 

your needs. We will teach you what to do and what not to do to make sure · 

your deals are profitable and attractive to lenders whether you're wholesaling, 

flipping, or acquiring income-producing properties." 

B. "You are going to come out of our three-day training class all set to be making 

ten offers a week on distressed properties .... " 

C. ''Not only are [Tarek and Christina El Moussa] going to give you a 

professional education, not only are they going to give you a list of all their 

lending partners to fund all your deals plus to rehab regardless of your credit, 

not only are they going to give you the cash buyers list so you have the 

buyers, but they are going to guarantee that you or your partners closes a deal 

within three months, you get your money back or you and partner don't do the 

deal in six months, if you want to make five offers and your partner makes · 

five offers, that includes the ten right here." 

D. "Our three day investment accelerator will teach you to leverage cutting-edge 

real estate strategies to generate profits repeatedly and we'll grant you access 

to our network of lenders and private investors who are always looking to lend 

capital on sound real estate deals." 

52. The claim that consumers are likely to learn at the 3-day workshop all they need 

to know to make thousands of dollars in profit from investing in real estate is false or 

15 
unsubstantiated. In fact, at the 3-day workshop, Zurixx itself routinely represents to consumers 

that the workshop is a just a "beginner" course, and in order to make thousands of dollars in 

profit, consumers need to also purchase Zurixx's Diamond, Platinum, or Gold advanced package, 

which it advertises as "retailing" from $35,792 to $73,973, and is available at discounted prices 

from $21,297 to $41,297, but only if purchased at the 3-day workshop. 

Failure To Disclose Material Aspects Of Zurixx's Refund Policy At The Free Event 

53.. Zurixx routinely touts two money-back guarantees to convince consumers to 

purchase the 3-day workshop. Zurixx represents that consumers who successfully complete a . . 

"positive cash flow real estate transaction" within three months, and provide a testimonial to 

Zurixx, will get their workshop purchase price back (the "three-month guarantee"). 

54. Zurixx also represents that consumers who fail to "make a minimum of THREE 

TIMES the amount" of the 3-day workshop within six months will receive 100% of the 

workshop purchase price back (the "six-month guarantee"). 

55. For example, Zurixx presenters made the following representations between 

March 2018 and July 2019 in California, Florida, Georgia, and Virginia: 

A. " ... we know our system works ... And because of the fact that we are 

confident in our system, we're willing to give you not only on~ but two 100 

percent money-back guarantees around your success with this program." 

B. "If it doesn't work for you, we still give you $2,000 back. This really is a nolose situation as long as you try it." · 

C. "Remember, do a deal in 90 days, get your $2,000 back. Don't do a deal in 

six months, still get your $2,000 back." 

D. "You will either close your first profitable real estate deal within the first six 

months after that three-day [workshop] or 100 percent of your tuition will be 

sent back to you." 

16 
E. "So do a deal within three months after the [3-day workshop], give us a 

testimonial, you get your tuition back ... You then have six months. If you 

have not closed at least one profitable real estate deal in six months with our 

help, the company sends you back 100 percent of your tuition anyway." 

F. "If you don't make any money, you're going to get your money back . .. If it 

does not work out for you and your famiLy, as long as you make an effort, 

they're going to give you your money back, okay?". 

G. "If you didn't make at least 6 grand, which is basically a finder's fee, ifwe 

didn't teach you how to find a property and where the buyers are to sell them 

and at least make a little [over] 6 grand, then you get your 2 grand back." 

H. "If this isn't everything you said it was or I said it was, six months, you'll 

know, if we weren't great at teaching you how to do it and it didn't work, 

you'll get your 2 grand back, in writing." 

56. Zurixx's oral representations at the free event about the six-month guarantee are 

false or misleading. Its presenters routinely fail to disclose material conditions that Zurixx 

requires consumers to meet in order to receive a refund of the money that they paid for the 3-day 

workshop. 

57. To be eligible for a refund under Zurixx's six-month guarantee, the consumer 

must make more than 25 offers within the time period, and make 15 offers under the "guidance 

of [Zurixx's] resource line help desk associates" if "in the first ten offers, [the consumer] ha[s] 

not made THREE TIMES [the] purchase price" of the 3-day workshop. 

58. Numerous consumers first receive any information about the conditions described 

in Paragraph 57 after they pay Zurixx for the 3-day workshop. These conditions are written, in 

fine print, in a "Guarantee Certificate," which Zurixx includes in a package of materials it 

provides to consumers who purchased the 3-day workshop. 

17 
59. Zurixx's presenters routinely fail to mention these restrictions in their oral 

presentations, and often provide consumers the package that includes the Guarantee Certificate 

only after the consumers have paid for the 3-day workshop. 

60. In numerous instances, consumers are not able to obtain a refund of the $1 ,997 

they paid for the 3-day workshop because they do not meet the fine print requirements relating to 

the six-month guarantee. 

61 . Zurixx also fails to inform consumers that, as described in Paragraphs 87 through 

91 below, in order to receive a refund of the $1,997 fee for the 3-day workshop, a consumer must 

sign Zurixx's standard form agreement, which prohibits them from filing a complaint about 

Zurixx or its products with regulators, including the FTC and state Attorneys General, or 

communicating with others about Zurixx or their settlement. The form agreement also prohibits 

consumers from posting reviews regarding Zurixx or its products in written publications and on 

the internet. 

The 3-Day Workshop 

62. Zurixx typically conducts the 3-day workshops a week or two after holding the 

free event in a given locale. 

63. Zurixx's_presenters typically ask the audience how many attendees are new or just 

getting started in real estate investing. In numerous instances, consumers attending the 3-day 

workshop do not have experience in real estate investing. 

64. The presenters speak generally about "fix and flipp!ng" and "wholesaling" real 

estate investments. However, they spend much of the three days telling attendees they need to 

18 
purchase one of Zurixx's three "advanced" packages in order to make thousands of dollars in 

profit through real estate investing. 

65. At the workshop and on the receipts, Zurixx represents that the "retaiP' prices for 

its advanced Gold, Platinum, and Diamond packages are $35,972, $45,997, and $73,973, 

respectively. The lea~t expensive is the Gold package, which includes various components such 

as attendance at a Las Vegas Investors Summit, where consumers can purchase purported 

"discounted 'turnkey"' properties, and access to an online resource center. The Platinum 

package, the mid-level package, includes the components in the Gold package and adds the "Fast 

Start Three-Day Bootcamp," at which Zμrixx 's instructors "come to your area and work in a 

small group setting in class and in the field." The Diamond package, the most expensive 

package, includes all of the components from the two less expensive packages and adds a twoday one-on-one mentorship. 

66. Zurixx's presenters and its receipts state that the "discounted" prices, which are 

$21 ,297, $26,297, and $41,297 for the Gold, Platinum, and Diamond packages, are only 

available if purchased at the 3-day workshop. 

67. Zurixx sells its three pricier "advanced" packages and related products, such as 

on-site mentoring or one-on~one telephone coaching, with misrepresentations designed to 

convince consumers they need to purchase one of the three advanced packages or the related 

products in order to make thousands of dollars in profit through real estate investing. 

19 
Misrepresentations At The 3-Day Workshop That Consumers 

Are Likely To Make Thousands Of Dollars In Profit Through Real Estate Investing 

68. Zurixx makes representations about profit in order to sell its Gold, Platinum, and 

Diamond packages. For instance, Zurixx presenters made the following representations between 

April 2018 and July 2019 in Florida, Texas, and Virginia: 

A. "So that's a pretty average flip, $40,000." 

B. "The average rehab makes $66,000 in the U.S." 

C. With flipping, "you make a lot more money, probably about 40 to 100 

[thousand] in your market." 

D. " ... we set goals of $120,000 to $180,000 your first year." 

E. "Most of our rehab deals are 20 to 30 percent. 25 percent of 230,000 in 

Richmond, that's about 60 grand, maybe .55." 

F. " ... allows you to make well over $100,000 in a fraction of the time with even 

still the same set of repairs and things factored in." 

G. If "I'm not making $30,000 on each flip, its not worth my time. Investors 

make far more money than most people do in the workplace." 

H. "That's what most of our students make on their first or second deal. 

Sometimes you can make more than that. So $25,000 to $55,000." 

I. "It doesn't take long to get $2 million when you're flipping houses over the 

years that you're working." 

J. "With wholesaling .. :you make about three to five thousand dollars in profit, 

just pure cash" whereas flipping leads to about "40 to 100 grand .... " 

K. "So somewhere between three to five grand is typical for a wholesale deal." 

L. "$384,126. Now, let's say you make 10 percent of that on your first wholesale 

deal. That's $38,000. How many think that's okay? I. said okay." 

M. "So if you do $100,000-plus deals, you can probably do one deal a month and 

make 10 grand from wholesaling." 

20 
69. In addition, Zurixx typically distributes workbooks to attendees that contain the 

following earnings representations regarding wholesale deals: 

A. "Make $5,000 (Minimum) ... 6 Hours Total" 

B. · "How much is that per hour? ... $833.33 per hour!!! " 

C. "Two Wholesale Deals Per Month is $120,000 Annual Income!" 

70. Zurixx presenters commonly reference consumers who purportedly purchased 

Zurixx's advanced packages and made a profit from fixing and flipping or wholesaling real 

estate properties, or completed numerous deals within a short period. 

71. For example, Zurixx presenters made the following representations between April 

2018 and July 2019 in Florida, Texas, and Virginia: 

A. Brian did 40 flips in his first year. 

B. Izzie made $75 thousand on his first flip in Tulsa. 

C. Courtney and his wife used the credit they raised during the first day of the 

workshop to pay for the advanc.ed education. He was able to make $35,000 

on his first flipping deal after the advanced education and $67,000 after a 

second deal. 

D. "Brittany joined us. She was living in her car at one point...The first year, 

she did four deals, made about 300 grand ~sing other people's money." 

E. "Our students are at least doing 10, 15, 20, 30 deals a month." 

F. "A lot of [our students] net 20 to 30 percent, sometimes 40 percent on their 

rehabs." 

G. "We've had students literally in their first year make upwards of half a million 

dollars. That's not an exaggeration." 

H. "We have students ... making 30 grand a year doing five deals a year. 40, 50, 

60, 70 grand, making hundreds of thousands of dollars .. . . " 

I. "A lot of our students on a deal or two make about 75 grand .... " 

21 
J. "[MF], one of our students, he's a wholesaler in Hagerstown, Maryland, 

Washington, D.C., somewhere here in Virginia ... He does 30 to 50 wholesale . 

deals a month." 

72. Zurixx's earnings claims are false or unsubstantiated. Contrary to its 

representations, consumers who purchase one of the advanced packages are not likely to earn 

thousands of dollars in profit through real estate investing. 

Zurixx: Instructs Consumers At The 3-Day Workshop To Provide Speculative And 

Unsubstantiated Future Income On Credit Applications 

73. Many consumers need to rely on credit to pay for Zurixx's pricey advanced 

packages. 

74. Zurixx routinely instructs consumers to contact credit card issuers during the 

workshops in order to obtain new credit cards or increases in credit limits on existing cards to 

fund real estate deals. It often provides a list of banks it suggests consumers contact. 

75. Zurixx presenters routinely instruct workshop attendees, to represent to credit 

card issuers, income that is significantly higher than the consumer's current income. 

76. Zurixx's presenters routinely tell consumers that it is permissible to state a higher 

income to credit issuers because of the income the consumers will realize from investing in real 

estate. For example, Zurixx presenters made the following statements in April 2018 and 

September 2018 in Texas and Virginia: 

A. "Tell them [(credit card issuers)] how much you are going to make this year as 

a real estate investor, okay? So a good rule of thumb there would be about 

l00K more than you did last year ... We are not lying. We are projecting." 

B. You are "legally able to ... reasonably estimate the next 12 months of income'' 

and "you decide anywhere between $120,000 to $200,000 ... you're reasonable 

estimating your next 12 months of income." · 

22 
77. Zurixx's income projection instructions to consumers, as described in Paragraphs 

74 through 76, constitute another example of its use of false or unsubstantiated earnings claims 

. to persuade consumers to purchase its products. Zurixx has no reasonable basis for the earnings 

projections it instructs consumers to submit to credit issuers. 

78. In numerous instances, Zurixx's presenters tell consumers to use their credit cards 

to purchase the advanced packages. In numerous instances, consumers spend some or all the 

money that they obtain from their increased credit limits to pay for Zurixx's advanced packages. 

Misrepresentations At The 3-Day Workshop That Profitable Real Estate Investing 

Requires Little Time And Effort 

79. Zurixx often reiterates that making thousands of dollars in profit from real estate 

investing takes little time and effort. 

80. For example, Zurixx presenters made the following representations between 

February 2019 and July 2019 in Florida and Virginia: 

A. "Our system is designed to fit into your life because it's been ... changed in 

order to say, okay, start off at five to 10 hours a week ... Because it was 

designed for adults with children and full-time jobs." 

B. "Most of our students are part-time." 

C. "It's easy to find great deals." 

D. "It's easy to find buyers and money." 

E. "Three to five hours a week focused." 

81. The claims that little time and effort are needed to generate thousands of dollars in 

profit from real estate investing are false or unsubstantiated. 

82. Purchasers of Zurixx's products are not likely to make thousands of dollars in 

· profit through real estate investing with little time or effort. 

23 
-/ 

Zurixx's Additional Products 

83. In numerous instances, Zurixx pitches via its telemarketers one-on-one telephone 

coaching or on-site mentoring programs to consumers regardless of whether they have purchased 

one of its products. Zurixx often tells consumers who purchased its products that one-on-one 

coaching and on-site mentoring are necessary to generate a profit of thousands of dollars in real 

estate investing. 

84. Numerous consumers have paid Zurixx thousands of dollars for the additional 

one-on-one coaching or mentoring program. 

85. Contrary to Zurixx's representations, consumers who purchase its one-~n-one 

coaching or the mentoring program are not likely to make thousands of dollars in profit. 

86. In numerous instances, consumers not only fail to earn back the tens of thousands 

of dollars they spent on Zurixx's various products, but also are left to pay off the loans that they 

obtained from retirement programs to pay for Zurixx's products or deal with crushing credit card 

debt. In some instances, consumers have had to file for bankruptcy because of such debt. 

Form Settlement Provisions That Prohibit Consumers From 

Pursuing Or Filing Complaints With Regulators And Other Entities 

87. Some dissatisfied Zurixx consumers seek refunds of the monies they paid to 

Zurixx. In many instances, persistent consumers may succeed in getting a partial refund, but 

often only if they sign Zurixx's standard form agreement, which prohibits them from filing a 

complaint about Zurixx or its products with regulators, including the FTC and state Attorneys 

General, or communicating with others about Zurixx or their settlement. The form agreement 

also prohibits consumers from posting reviews regarding Zurixx or its products in written 

publications and on the internet. 

24 
88. The agreement that Zurixx requires consumers to sign in exchange for a partial or 

full refund commonly includes the following language: 

Customer agrees that it shall not file or pursue any other claim or action pertaining to 

Customer's interactions with [Zurixx brand name], its clients, officers, directors, 

affiliates, members, owners, employees, agents, spouses, partners, heirs, successors and 

· assigns, including but not limited to administrative complaints with the Better Business 

Bureau, civil litigation, internet postings or biogs, magazine, newspaper or other such 

published articles, complaints with any state or federal government agency, including but 

not limited to Attorneys' General or FTC, or credit card/merchant chargeback,/refund 

transactions .... 

89. The agreements contain standardized terms that are or were imposed on 

consumers without a meaningful opportunity for them to negotiate the standardized terms. 

90. Agr~ements executed by Zurixx and consumers that included the language quoted 

in Paragraph 88 have been in effect since December 14, 2017. 

91. Zurixx has taken steps to enforce the agreement provision quoted in Paragraph 88. 

For example, it has sued consumers who have complained to the Better Business Bureau 

regarding its practices or have spoken to other consumers about their settlements. Some 

consumers have been reluctant to speak with regulators, including the FTC and the Division, 

about their experience with Zurixx because of the prohibition in their agreements. 

92. Based on the facts and violations of law alleged in this Complaint, the FTC and 

the Division have reason to believe that Zurixx is violating or is about to violate laws enforced 

by the Commission and the Division. 

VIOLATIONS OF THE FTC ACT 

93. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits "unfair or deceptive acts 

or practices in or affecting commerce." 

25 
94. Misrepresentations or deceptive omissions of material fact constitute deceptive 

acts or practices prohibited by Section 5(a) of the FTC Act. 

95. As set forth below, Defendants have engaged in violations of Section 5(a) of the 

FTC Act in connection with the marketing and sale of their real estate investment products or 

services. 

COUNT I-MISREPRESENTATIONS REGARDING EARNINGS 

(By Plaintiff Federal Trade Commission) 

96. In numerous instances, in connection with the advertising, marketing, promotion, 

offering for sale, or sale of Zurixx's real estate investing products or services, Defendants have 

represented, directly or indirectly, expressly or by implication, that consumers who purchase 

Zurixx's products or services are likely to earn thousands of dollars in profit. 

97. The representations set forth in Paragraph 96 of this Complaint are false or were 

not substantiated at the time the representations were made. 

98. Therefore, Defendants' representations as set forth in Paragraph 96 of this 

Complaint constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 

U.S.C. § 45(a}. 

COUNT II- OTHER MISREPRESENTATIONS REGARDING ZURl:XX'S PRODUCTS 

OR SERVICES 

(By Plaintiff Federal Trade Commission) 

99. In numerous instances, in connection with the advertising, marketing, promotion, 

offering for sale, or sale of Zurixx's real estate investing products or services, Defendants have 

26 
represented, directly or indirectly, expressly or by implication, that by purchasing Zurixx's 

products or services consumers will: 

(a) Receive 100% funding to do real estate deals regardless of their credit; 

(b) Spend little time and effort to make thousands of dollars in profit through 

real estate investing; and/or 

( c) Learn everything they need .to know at the 3-day workshop to make 

thousands of dollars in profit through real estate investing. 

100. The representations set forth in Paragraph 99 are false or were not substantiated at 

the time the representations were made. 

101. Therefore, Defendants' representations as set forth in Paragraph 99 of this 

Complaint constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 

U.S.C. § 45(a). 

COUNT III-FAILURE TO DISCLOSE MATERIAL ASPECTS OF REFUND POLICY 

(By Plaintiff Federal Trade Commission) 

102. In numerous instances, in connection with the advertising, marketing, promotion, 

offering for sale, or sale of Zurixx's real estate investing products or services, Defendants have 

represented, directly or indirectly, expressly or by implication, that Zurix.x will provide refunds 

to consumers who fail to make a minimum of three times the cost of the 3-day workshop within 

six months. 

103. In numerous instances in which Defendants have made the representation set forth 

in Paragraph 102, Zurixx has failed to disclose, or to disclose adequately, to consumers material 

aspects of Zurixx's refund policy, including one or both of the following requirements: 

27 
(a) To obtain a refund of the cost of the 3-day workshop, consumers who fail to 

make a minimum of three times the amount of the workshop must make more 

than 25 offers within the time period and make 15 offers under the "guidance 

of the resource line help desk associates" if, in the first ten offers, the 

consumer has not made three times the purchase price of the workshop; and 

(b) Consumers must sign a form settlement provision that prohibits them from 

filing a complaint, or posting reviews, about Zurixx or its products with 

regulators or other entities in order to obtain even a partial refund. 

104. In light of the representations set forth in Paragraph 102 above, Defendants' 

failure to disclose or to disclose adequately the material information set forth in Paragraph 103 of 

this Complaint constitutes a deceptive act or practice in violation of Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a). 

VIOLATION OF THE CONSUMER REVIEW FAIRNESS ACT 

105. The Consumer Review Fairness Act of 2016 ("CRFA") Pub. L. No. 114-258, 15 

U.S.C. § 45b, was enacted on December 14, 2016. As of March 14, 2017, Section 2(b) of the 

CRF A renders void, and Section 2( c) of the CRF A prohibits the offering of, provisions in form 

contracts that: prohibit or restrict individual consumers' ability to communicate reviews, 

performance assessments, .and similar analyses about a seller's goods, services, or conduct; or 

that impose a penalty or fee against individual consumers who engage in such communications. 

15 U.S.C. §§ 45b(a)(2), 45b(b)(l), and 45b(c). 

106. The CRF A defines a "form contract" as a contract, other than an employeremployee or independent contractor contract, with "standardized terms" - "used by a person in 

28 
the course of selling or leasing the person's goods or services" and "imposed on an individual 

· without a meaningful opportunity for such individual to negotiate the standardized terms." 15 

U.S.C. § 45b(a)(3). 

107. The Commission is authorized to enforce Section 2( c) of the CRF A in the same 

manner, by the same means, and with the same jurisdiction, powers, and duties as though all 

applicable terms and provisions of the FTC Act, 15 U.S.C. §§ 41-58, were incorporated into and 

made a part of the CRFA. 15 U.S.C. § 45b(2)(A). The Commission's enforcement authority 

under the CRFA applies to contracts in effect on or after December 14, 2017. 15 U.S.C. § 

45b(i)(2). 

108. Pursuant to Section 2(d)(l) of the CRFA, 15 U.S.C. § 45b(d)(l), a violation of 

Section 2(c) of the CRFA constitutes a violation of a rule promulgated under Section 18(a)(l)(B) 

of the FTC Act, 15 U.S.C. § 57a(l)(B), and therefore constitutes an unfair or deceptive act or 

practice in or affecting commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

COUNT IV - CRFA VIOLATION 

(By Plaintiff Federal Trade Commission) 

109. In numerous instances, since March 14, 2017, Defendants have offered, in the 

course of selling Zurixx' s real estate investing products or services, form contracts that contain 

provisions that prohibit or restrict the ability of consumers purchasing Zurixx's products or 

services from engaging in reviews, performance assessments, and similar analyses of Zurixx's 

goods, services, or conduct. 

110. Therefore, the acts and practices set forth in Paragraph 109 of this Complaint, 

violate the CRF A. 

29 
VIOLATIONS OF THE UCSPA 

111. The UCSPA prohibits suppliers from committing deceptive and unconscionable 

acts or practices in connection with a consumer transaction, whether the act occurs before, 

during, or after the transaction. Utah Code§§ 13-11-4(1); 13-11-5(1). 

112. Defendants engage in "consumer transaction[s]" by marketing and selling to 

"person[s]" products and services that are primarily for personal, family, or household purposes, 

or for purposes that relate to a business opportunity. Utah Code§§ 13-11-3(2), (5). 

113. Defendants are "suppliers" because they regularly solicit, engage in, or enforce 

consumer transactions, whether or not they deal directly with consumers. Utah Code § 13-11-

3(6). 

114. As set forth below; Defendants have violated the UCSPA by engaging in 

deceptive and unconscionable acts and practices in connection with the marketing and sale of 

their real estate investment related products and services. 

COUNT V - DECEPTIVE ACTS OR PRACTICES (EARNINGS CLAIMS) 

(By Plaintiff Utah Division of Consumer Protection) 

115. In numerous instances in connection with the advertising, marketing, promotion, 

offering for sale, or sale ofZurixx's real estate investment products or services, Defendants have 

represented, directly or indirectly, expressly or by implication, that consumers who purchase 

Zurixx's products or services are likely to earn thousands of dollars in profit. 

116. The representations as set forth in Paragraph 115 are false or were not 

substantiated at the time the representations were made. 

117. Therefore, Defendants' representations as set forth in Paragraph 115 of this 

30 
Complaint constitute a deceptive act or practice in violation of the UCSPA, Utah Code§ 13-11-

4(1). 

COUNT VI - DECEPTIVE ACTS OR PRACTICES (PRODUCTS AND SERVICES 

PROVIDED) 

(By Plaintiff U tab Division of Consumer Protection) 

118. In numerous instances, in connection with the advertising, marketing, promotion, 

offering for sale, or sale of Zurixx's real estate investing products or services, Defendants have 

represented, directly or indirectly, expressly or by implication, that by purchasing Zurixx's 

products or services, consumers will: 

(a) Receive 100% funding to do real estate deals regardless of their credit; 

(b) Spend little time and effort to make thousands of dollars in profit through real 

estate investing; and/or 

( c) Learn everything they need to know at the 3-day workshop to make thousands 

of dollars in profit through real estate investing. 

119. The representations set forth in Paragraph 118 are false or were not substantiated 

at the time the representations were made. 

120. Therefore, Defendants' representations as set forth in Paragraph 118 of this 

Complaint constitute a deceptive act or practice in violation of USCPA § 13-11-4(1). 

COUNT VII - FAILURE TO DISCLOSE MATERIAL ASPECTS OF REFUND POLICY 

(By Plaintiff Utah Division of Consumer Protection) 

121. In numerous instances, in connection with the advertising, marketing, promotion, 

offering for sale, or sale of its real estate investing products or services, Defendants have 

represented, directly or indirectly, expressly or by implication, that it will provide refunds to 

31 
consumers who fail to make a minimum of three times the cost of the 3-day workshop within six 

months. 

122. In numerous instances in which Defendants have made the representations set 

forth in Paragraph 121, Defendants have failed to disclose, orto disclose adequately, to 

consumers material aspects of Zurixx's refund policy, including one or both of the following 

requirements: 

(a) To obtain a refund of the cost of the 3-day workshop, consumers who fail to 

make a minimum of three times the amount of the workshop must make more 

than 25 offers within the time period and make 15 offers under the "guidance 

of the resource line help desk associates" if, in the first ten offers, the 

consumer has not made three times the purchase price of the workshop; and 

(b) Consumers must sign a form settlement provision that prohibits them from 

filing a complaint, or posting reviews, about Zurixx or its products with 

regulators or other entities in order to obtain even a partial refund. · 

123. In light of the representations set forth in Paragraph 121 above, Defendants' 

failure to disclose or to disclose adequately the material information set forth in Paragraph 122 of 

this Complaint constitutes a deceptive act or practice in violation of US CPA § 13-11-4(1 ). 

VIOLATIONS OF THE BODA 

124 . . The BODA requires sellers of "assisted marketing plans" to annually file certain 

information with the Division. Utah Code§ 13-15-4. 

125. The BODA also requires sellers of assisted marketing plans to provide to 

prospective purchasers of the assisted marketing plans written disclosures in a single disclosure 

32 
statement or prospectus at least ten days prior to execution of a purchase agreement or payment 

by the purchaser. Utah Code§§ 13-15-4; 13-15-5. 

126. The BODA defines a "seller" as "a person who sells or offers to sell an assisted 

marketing plan." Utah Code§ 13-15-2(8). 

127. The BODA defines "assisted marketing plans" as "any products, equipment, 

supplies, or services that are sold to the purchaser upon payment of an initial consideration of 

$500 or more for the purpose of enabling the purchaser to start a business," in which the seller 

represents, among other things, that "the seller will provide the purchaser with a guarantee that 

the purchaser will receive income from the assisted marketing plan that exceeds the price paid 

for the assisted marketing plan." Utah Code§ 13-15-2(l)(a)(iv} 

128. As set forth below, Defendants have violated the BODA by failing to file required 

information with the Division, and by failing to provide required disclosures to prospective 

purchasers of Defendants' assisted marketing plans. 

COUNT VIII -FAiLURE TO FILE REQUIRED INFORMATION WITH THE 

DIVISION 

(By Plaintiff Utah Division of Consumer Protection) 

129. In numerous instances, since at least July 2013, Defendants have offered and sold 

assisted marketing plans under a variety of fictitious names. 

130. Since at least July 2013, Defendants have failed to file with the Division the 

information required by Utah Code§ 13-15-4 with respect to any of the assisted marketing plans 

Defendants offered and sold. 

' 131. Therefore, the acts and practices set forth in Paragraphs 129 - 130 violate the 

BODA. 

33 
COUNT IX-FAILURE TO PROVIDE REQUIRED DISCLOSURES TO 

PROSPECTIVE PURCHASERS 

(By Plaintiff Utah Division of Consumer Protection) 

132. In numerous instances, since at least July 2013, Defendants have offered and sold 

assisted marketing plans to consumers. 

133. Since at least July 2013, Defendants have not provided any of the required 

disclosures to prospective purchasers of its assisted marketing plans in a single disclosure 

statement or prospectus at least ten business days prior to the execution of a consumer's 

agreement to purchase one of Defendants' plans, or ten business days prior to payment bythe 

consumer of any consideration in exchange for the assisted marketing plan. Utah Code §§ 13-

15-4; 13-15-5. 

134. Therefore, the acts and practices set forth in Paragraphs 132 - 133 violate the 

BODA. 

CONSUMER INJURY 

135. Consumers have suffered and will continue to suffer substantial injury as a result · 

ofDefendants' violations of the FTC Act, the CRFA, the UCSPA and the BODA. In addition, 

Defendants have been unjustly enriched as a result of their unlawful acts or practices. Absent 

injunctive relief by this Court, Defendants are likely to continue to injure consumers, reap unjust 

enrichment, and harm the public interest. 

COURT'S POWER TO GRANT RELIEF 

136. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to grant 

injunctive and such other relief as the Court may deem appropriate to halt and redress violations 

of any provision of law enforced by the FTC. The Court, in the exercise of its equitable 

34 
jurisdiction, may award ancillary relief, including rescission or reformation of contracts, 

restitution, the refund of monies paid, and the disgorgement of iU-gotten monies, to prevent and 

remedy any violation of any provision of law enforced by the FTC. 

137. Section 19 of the FTC Act, 15 U.S.C. § 57b, authorizes this Court to grant such 

relief as the Court finds necessary to redress injury to consumers resulting from Defendants' 

violations of the CRF A, including the rescission or reformation of contracts, and the refund of 

monies paid, the disgorgement of ill-gotten monies, and prejudgment interest. 

138. The UCSPA authorizes this Court to enter a declaratory judgment that 

Defendants' acts or practices violate the UCSPA, to enjoin, in accordance with the principles of 

equity, any person who has violated, is violating, or is otherwise likely to violate the UCSPA, to 

award damages or relief on behalf of consumers for Defendants' violations of the UCSPA, to 

award a fine against Defendants for violations of the UCSPA in an amount determined by the 

Court, and to award the Division reasonable attorney's fees, court costs, and costs of 

investigation. Utah Code§§ 13-11-17(l)(a)-(d); 13-11-17.5. 

139. The BODA authorizes this Court, in addition to any other relief granted by the 

Court, to grant judgment and injunctive relief in favor of the Division, and to award the Division 

reasonable attorney's fees, costs of court, and investigative fees for Defendants' violations of the 

BODA. Utah Code§ 13-15-6(3). 

PRAYER FOR RELIEF 

Wherefore; Plaintiff FTC, pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C. 

§§ 53(b) and 57b, and Section 2(d) of the CRFA, 15 U.S.C. §§ 45b(d), and Plaintiff Division, 

35 
pursuant to the UC SPA and the BODA, and as authorized by the Court's own equitable powers, 

requestthat the Court: 

A. Award Plaintiffs such preliminary injunctive and ancillary relief as may be 

necessary to avert the likelihood of consumer injury during the pendency of this action and to 

preserve the possibility of effective final relief, including but not limited to, temporary and 

preliminary injunctions against all Defendants and appointment of a monitor over Corporate 

Defendants; 

B. Enter a permanent injunction against ali Defendants to prevent future violations of 

the FTC Act, the CRFA, the UCSPA, and the BODA by Defendants; 

C. Award against Corporate Defendants such relief as the Court finds necessary to 

redress injury to consumers resulting from Corporate Defendants' violations of the FTC Act, the 

CRF A, the UCSPA, and the BODA including but not limited to, rescission or reformation of 

contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies; 

D. Award civil penalties for each violation of the UCSPA and the BODA; and 

E. Award Plaintiffs the cost of bringing this action, as well as such other and 

additional relief as the Court may determine to be just and proper. 

Respectfully submitted, 

ALDEN F. ABBOTT 

General Counsel 

36 
Dated: ~ \1:tc.ro kr 39 

;)__D \9 

Dated: ? 1ft · ~ 7lP\7 

COLLOT GlJE1vr.1'UJ 

JOSHUA DOA 

MIRY KIM 

Federal Trade Commission 

600 Pennsylvania Ave., NW, CC-8528 

Washington, DC 20580 

Telephone: (202) 326-3338 

cguerard@ftc.gov 

jdoan@ftc.gov 

mkim@ftc.gov 

Attorneys for Plaintiff 

FEDERAL TRADE COMMISSION 

THOMAS M. MELTON ( 4999) 

ROBERT G. WING (4445) 

DOUGLAS DEVORE (11170) 

KEVIN MCLEAN (16101) 

Assistant Attorney General 

Utah Attorney General's Office 

160 East 300 South, Fifth Floor 

Salt Lake City, Utah 84114 

Telephone: 801-366-0310 

tmelton@agutah.gov 

rwing@agutah.gov 

dedevore@agutah.gov 

krnclean@agutah.gov 

. Attorneys for Plaintiff 

UTAH DIVISION OF CONSUMER 

PROTECTION 

37