Source: https://www.quackwatch.org/01QuackeryRelatedTopics/DSH/barefootftc.html
Timestamp: 2019-04-24 04:53:00+00:00

Document:
DEONNA ENTERPRISES, INC. AND KARBO ENTERPRISES, INC.
Plaintiff, the Federal Trade Commission ("Commission") has filed a Complaint for Permanent Injunction and Other Equitable Relief ("Complaint") against Robert Barefoot, Deonna Enterprises, Inc., and Karbo Enterprises, Inc. (collectively, "Defendants"), pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), alleging deceptive acts or practices and false advertisements in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52.
1. This Court has jurisdiction over the subject matter of this case, and jurisdiction over all parties. Venue in the Northern District of Illinois is proper.
2. The Complaint states a claim upon which relief can be granted, and the Commission has the authority to seek the relief which is stipulated to in this Order.
3. The acts and practices of Defendants were and are in or affecting commerce, as defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
4. Defendants waive all rights to seek judicial review or otherwise challenge or contest the validity of this Order. Defendants also waive any claim that they may have held under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action to the date of this Order.
5. Each party shall bear its own costs and attorneys' fees.
6. Entry of this Order is in the public interest.
7. Pursuant to Federal Rule of Civil Procedure 65(d), the provisions of this Order are binding upon Defendants, and their officers, agents, servants, employees and all other persons or entities in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise.
A. "Assets" means any legal or equitable interest in, right to, or claim to, any real or personal property, including, without limitation, chattels, goods, instruments, equipment, fixtures, general intangibles, leaseholds, mail or other deliveries, inventory, checks, notes, accounts, credits, contracts, receivables, shares of stock, and all cash, wherever located.
B. "Assisting others" means knowingly providing any of the following services to any person or entity: (a) performing customer service functions for any person or entity, including, but not limited to, receiving or responding to consumer complaints; (b) formulating or providing, or arranging for the formulation or provision of, any telephone sales script or any other advertising or marketing material for any person or entity; or (c) performing advertising or marketing services of any kind for any person or entity.
C. "Commerce" means as defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
D. "Competent and reliable scientific evidence" means tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the professions to yield accurate and reliable results.
E. "Continuity Program" shall mean any plan, arrangement, or system pursuant to which a consumer receives periodic shipments of products without prior notification by the seller before each shipment or service period, regardless of any trial or approval period allowing the consumer to return or be reimbursed for the product.
F. "Covered product or service" means any dietary supplement, food, drug, cosmetic, device, or service.
(1) Robert Barefoot ("Barefoot") individually and in his capacity as an officer of Deonna Enterprises, Inc., and Karbo Enterprises, Inc..
H. "Endorsement" means as defined in 16 C.F.R. § 255.0(b). I. "Food," "drug," "cosmetic," and "device" mean as defined in Section 15 of the FTC Act, 15 U.S.C. § 55.
J. "FTC" or "Commission" means the Federal Trade Commission.
K. "Target product" means Coral Calcium Supreme capsules or any substantially similar calcium supplement.
M. The terms "and" and "or" in this Order shall be construed conjunctively or disjunctively as necessary, to make the applicable sentence or phrase inclusive rather than exclusive.
N. The term "including" in this Order means "including without limitation."
F. scientific research published in the Journal of the American Medical Association (JAMA), the New England Journal of Medicine, and other reputable medical journals prove that calcium supplements are able to reverse and/or cure any or all forms of cancer in the human body.
IT IS FURTHER ORDERED that Defendants, directly or through any corporation, partnership, subsidiary, division, trade name, or other entity, and their officers, agents, servants, employees, and all persons and entities in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any dietary supplement, in or affecting commerce, are hereby permanently restrained and enjoined from misrepresenting, in any manner, expressly or by implication, including through the use of endorsements, that such dietary supplement can prevent, treat, or cure any disease.
IT IS FURTHER ORDERED that Defendants, directly or through any corporation, partnership, subsidiary, division, trade name, or other entity, and their officers, agents, servants, employees, and all persons and entities in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any covered product or service, in or affecting commerce, are hereby permanently restrained and enjoined from making any representation, in any manner, expressly or by implication, including through the use of endorsements, about the health benefits, performance, or efficacy of any covered product or service unless the representation is true, non-misleading, and, at the time the representation is made, Defendants possess and rely upon competent and reliable scientific evidence that substantiates the representation.
IT IS FURTHER ORDERED that Defendants, directly or through any corporation, partnership, subsidiary, division, trade name, or other entity, and their officers, agents, servants, employees, and all persons and entities in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any covered product or service, in or affecting commerce, are hereby permanently restrained and enjoined from misrepresenting, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test or study.
B. Nothing in this Order shall prohibit Defendants from making any representation for any product that is specifically permitted in the labeling for such product by regulations promulgated by the Food and Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990.
C. Nothing in this order shall constitute a waiver of the Defendants' right to engage in speech protected by the First Amendment to the Constitution of the United States.
IT IS FURTHER ORDERED that Defendants, within five (5) days of the date of service of this Order, shall recall from any person, partnership, corporation or other entity that is offering for sale, selling or distributing to consumers any target product, all packaging, package inserts, and labeling for such target products containing, expressly or by implication, any of the representations set forth in Paragraph I above, provided, however, that in lieu of a recall, Defendants may immediately repackage and relabel all offending packages and labels of such target product in such a manner as to ensure that no representations prohibited by this Order are disseminated.
A Defendants shall hereby assign to the Commission, without any encumbrances, all rights and claims to money or other assets due to the Defendants as of the date of entry of this Order, and the right to pursue any chose in action to recover any such money or assets due, under the terms of the agreement entered into on May 17th, 2002 between Trustar Global Media Ltd. and Robert R. Barefoot, including any addendums to such agreement, and under the terms of any other agreement between any of the Defendants and Trustar Global Media Ltd., Shop America (USA), LLC, Shop America, PLC, Shop America Marketing Group, LLC, Shop America (Australasia), Ltd., Trucom LLC, K.T. Corporation, LLC, Kevin Trudeau, or any entity owned by or held directly or indirectly for the benefit of Kevin Trudeau.
B. Within five (5) days of receipt of any money or other assets paid to any of the Defendants, directly or indirectly, or paid to any other third party on behalf of the Defendants, after the date of entry of this Order pursuant to the terms of the agreement entered into on May 17th, 2002 between Trustar Global Media Ltd. and Robert R. Barefoot, including any addendums to such agreement, and under the terms of any other agreement between any of the Defendants and Trustar Global Media Ltd., Shop America (USA), LLC, Shop America, PLC, Shop America Marketing Group, LLC, Shop America (Australasia) Ltd., Trucom LLC, K.T. Corporation Ltd., Kevin Trudeau, or any entity owned by or held directly or indirectly for the benefit of Kevin Trudeau, Defendants shall: (1) notify the Commission in writing of such money or assets; and (2) pay, transfer, or assign such money or assets to the Commission.
C. Any payments pursuant to this Part shall be made by certified check or other guaranteed funds payable to and delivered to the Commission, or by wire transfer in accord with the instructions provided by the Commission.
D. All assets and funds paid to, assigned to, or collected by the Commission pursuant to this Order shall be deposited into a fund administered by the Commission or its agent to be used for equitable relief, including but not limited to consumer redress, and any attendant expenses for the administration of such equitable relief.
E. In the event that direct redress to consumers is wholly or partially impracticable or funds remain after redress is completed, the Commission may apply any remaining funds for such other equitable relief (including consumer information remedies) as it determines to be reasonably related to Defendants' practices alleged in the Complaint. Any funds not used for such equitable relief shall be deposited to the United States Treasury as disgorgement. Defendants shall have no right to challenge the Commission's choice of remedies under this Paragraph. Defendants shall have no right to contest the manner of distribution chosen by the Commission. No portion of any payments or assets assigned under the judgment herein shall be deemed a payment of any fine, penalty, or punitive assessment.
F. Defendants relinquish all dominion, control, and title to the assets and funds paid to, assigned to, or collected by the Commission, for use according to the terms of this Order. Defendants shall make no claim to or demand for the return of the assets or funds, directly or indirectly, through counsel or otherwise; and in the event of bankruptcy of any defendant, Defendants acknowledge that the assets and funds are not part of the debtor's estate, nor does the estate have any claim or interest therein.
G. In accordance with 31 U.S.C. § 7701, Defendants are hereby required, unless they have done so already, to furnish to the Commission their respective taxpayer identifying numbers (social security numbers or employer identification numbers) which shall be used for the purposes of collecting and reporting on any delinquent amount arising out of Defendants' relationship with the government.
IT IS FURTHER ORDERED that, within five (5) days after the date of entry of this Order, Defendant Barefoot, individually and on behalf of Defendants Deonna and Karbo, in the form shown in Exhibit A, shall execute and submit to the Commission a truthful sworn statement that shall acknowledge receipt of this Order, and shall reaffirm as to the truth, accuracy and completeness of financial information previously submitted to the Commission. The Commission's agreement to this Order is expressly premised on the truthfulness, accuracy, and completeness of Defendants' financial condition as represented in the deposition of Defendant Barefoot on September 8, 2003, reports prepared by Certified Public Accountants, and financial statement(s) previously submitted to the Commission, including, but not limited to, the Financial Statement of Individual Defendant Robert R. Barefoot and attachments (Bates Number RB001 to RB036), the Corporate Financial Statements of Karbo Enterprises, Inc. and Deonna Enterprises, Inc. and attachments (K001 to K020 and D001 to D053), the Financial Condition of Robert R. Barefoot, and Karen L. Barefoot July 31, 2003; Karbo Enterprises, Inc. Financial Statements July 31, 2003 and May 28, 2003; Deonna Enterprises, Inc., Financial Statements July 31, 2003 and December 31, 2003, and the Statements of Monthly Income and Line-Item Expenses Exceeding $5,000 July 2003 for Robert R. Barefoot and Karen L. Barefoot, Karbo Enterprises, Inc, and Deonna Enterprises, Inc and additional financial statements provided by Defendants' counsel on October 14, 2003. If, upon motion by the Commission, the Court finds that a defendant's financial statement(s) failed to disclose any material asset, materially misrepresented the value of any asset, or made any other material misrepresentation or omission, the Court shall enter judgement for consumer redress against Defendants, jointly and severally, in favor of the Commission, in the amount of three million dollars ($3,000,000), which the Defendants stipulate is the amount of their unjust enrichment generated from the Coral Calcium Supreme infomercial; provided, however, that in all other respects this Order shall remain in full force and effect unless otherwise ordered by the Court; and, provided further, that proceedings instituted under this provision would be in addition to, and not in lieu of, any other civil or criminal remedies as may be provided by law, including any other proceedings that the Commission may initiate to enforce this Order. For purposes of this Paragraph VIII, Defendants waive any right to contest any of the allegations in the Complaint.
IT IS FURTHER ORDERED that Defendants must, in connection with this action or any subsequent investigations related to or associated with the transactions or the occurrences that are the subject of the Commission's Complaint, cooperate in good faith with the Commission's reasonable requests for documents and testimony. Defendants or their representatives shall appear at such places and times as the Commission shall reasonably request for interviews, conferences, pretrial discovery, review of documents, and for such other matters, after written notice to Defendants and their counsel of record. Defendants or their representatives will make themselves available for trial consistent with the Federal Rules of Civil Procedure. Defendants also shall produce such documents and information in a manner as may be reasonably requested by the Commission, after written notice to Defendants and to their counsel of record.
C. Maintain for a period of three (3) years after creation, and upon reasonable notice make available to representatives of the Commission, the original signed and dated acknowledgments of the receipt of copies of this Order, as required in Subsections (A) and (B) of this Paragraph X.
A. Send, within twenty (20) days of entry of this Order, by first class mail, postage prepaid and return receipt requested, an exact copy of the notice attached hereto as Exhibit B, showing the date of mailing, to each distributor or reseller who purchased the target products between September 1, 2002 and the date of entry of this Order. This mailing shall not include any other document or enclosures.
B. Notify, immediately, each distributor or reseller that Defendants will stop doing business with that distributor or reseller if it continues to use any advertisement or promotional material that contains any representation prohibited by this Order, in the event Defendants become aware that the distributor or reseller is using or disseminating any such advertisement or promotional material subsequent to receipt of Exhibit B.
C. Terminate any distributor or reseller within ten (10) days after it becomes aware that the distributor or reseller has continued to use any advertisement or promotional material that contains any representation prohibited by this Order after receipt of the notice required by subparagraph B of this Part.
(2) posing as consumers and suppliers to Defendants, Defendants' employees, or any other entity managed or controlled in whole or in part by any defendant, without the necessity of identification or prior notice; Provided that nothing in this Order shall limit the Commission's lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1, to obtain any documentary material, tangible things, testimony, or information relevant to unfair or deceptive acts or practices in or affecting commerce (within the meaning of 15 U.S.C. § 45(a)(1)).
C. Defendants shall permit representatives of the Commission to interview any employer, consultant, independent contractor, representative, agent, or employee who has agreed to such an interview, relating in any way to any conduct subject to this Order. The person interviewed may have counsel present.
A. Defendant Barefoot, within ten (10) business days of service of this Order, shall notify the Commission in writing of (1) his residence address and mailing address; (2) his home telephone number; (3) the name, address, and telephone number of his employer; (4) if applicable, the names of his supervisors; (5) a description of his employer's activities; and (6) a description of his duties and responsibilities.
(c) Any changes in defendant Barefoot's name or use of any aliases or fictitious names.
(2) Defendants Deonna and Karbo shall notify the Commission of any changes in corporate structure that may affect compliance obligations arising under this Order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of a bankruptcy petition; or a change in the corporate name or address, at least thirty (30) days prior to such change, provided that, with respect to any proposed change in the corporation about which defendant Deonna or Karbo learns less than thirty (30) days prior to the date such action is to take place, that defendant shall notify the Commission as soon as is practicable after obtaining such knowledge.
C. Sixty (60) days after the date of service of this Order, Defendants each shall provide a written report to the Commission, sworn to under penalty of perjury, setting forth in detail the manner and form in which they have complied and are complying with this Order. This report shall include, but not be limited to any changes required to be reported pursuant to subparagraph (B) above; and a copy of each acknowledgment of receipt of this Order obtained by each of the Defendants pursuant to Paragraph X of this Order.
D. For purposes of the compliance reporting required by this Paragraph, the Commission is authorized to communicate directly with Defendants.
G. Records accurately reflecting the name, address, and telephone number of each manufacturer or laboratory engaged in the development or creation of any testing obtained for the purpose of advertising, marketing, promoting, offering for sale, distributing, or selling any covered product or service.
IT IS FURTHER ORDERED that this Order resolves only claims against Defendants Barefoot, Karbo, and Deonna as alleged in the Complaint. This Order does not preclude the Commission from initiating further action or seeking any remedy against any other persons or entities, including without limitation persons or entities who may be subject to portions of this Order by virtue of actions taken in concert or participation with Defendants Barefoot, Karbo, and Deonna, and persons or entities in any type of indemnification or contractual relationship with Defendants Barefoot, Karbo, and Deonna.
IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order.
IT IS SO ORDERED, this ___ day of ____________, 2003.
This page was posted on January 25, 2004.

References: § 53
 § 44
 § 2412
 § 44
 § 255
 § 55
 § 7701
 § 45