Source: https://www.ftc.gov/sites/default/files/documents/cases/1999/05/inetsjud.htm
Timestamp: 2018-01-16 09:34:25
Document Index: 350880300

Matched Legal Cases: ['§ 53', '§ 45', '§ 1331', '§ 53', '§ 1391', '§ 53', '§ 41', '§ 45', '§ 53', '§ 44', '§ 45', '§ 53', '§ 523', 'art 436', '§ 49', '§ 45']

Stanley R. Goldberg ("Goldberg") - Proposed final
LINDA M. STOCK (Bar No. 143774)
JOHN D. JACOBS (Bar No. 134154)
(310) 824-4343, 824-4316, 824-4360
Fax:(310) 824-4380
INETINTL.COM, INC., a.k.a. Inet International; CRAIG A. LAWSON, a.k.a. Bob Bryan; ERIK R. ARNESEN; and STANLEY R. GOLDBERG, a.k.a. Geoff Stevens; Defendants.
Civ. No. 98-2140 CAS (CWx)
(Proposed) FINAL JUDGMENT AND ORDER
AND MONETARY JUDGMENT
AS TO DEFENDANT STANLEY R. GOLDBERG
Plaintiff Federal Trade Commission ("Commission"), having moved for summary judgment against defendant Stanley R. Goldberg on March 29, 1999, Hon. Christina A. Snyder presiding, and the evidence presented having been fully considered, the issues having been duly heard, and the Court having granted the motion pursuant to Federal Rule of Civil Procedure 56(c),
1. This is an action under Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, to obtain permanent injunctive relief, rescission or reformation of contracts, restitution, disgorgement, and other equitable relief for defendants' violations of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), in connection with defendants' sale of Internet-related investment opportunities.
2. This Court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 1331, 1337(a) and 1345 and 15 U.S.C. §§ 53(b) and 57b.
3. Venue in the United States District Court for the Central District of California, Western Division, is proper under 28 U.S.C. §§ 1391(b) and (c) and 15 U.S.C. § 53(b).
4. Plaintiff Federal Trade Commission is an independent agency of the United States Government created by statute, 15 U.S.C. §§ 41 et seq., charged, inter alia, with enforcement of 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 Commission is authorized to initiate federal district court proceedings to enjoin violations of the FTC Act in order to secure such equitable relief as is appropriate in each case and to obtain consumer redress. 15 U.S.C. §§ 53(b) and 57b.
5. The acts and practices of defendants as set forth in the Complaint in this action are in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
6. Defendant Stanley R. Goldberg ("Goldberg") was Division Marketing Director and a sales representative for defendant Inetintl.Com, Inc., also known as "Inet International" or "Inet." Acting alone or in concert with others, he formulated, directed, controlled, or participated in the acts and practices of Inetintl.Com, Inc.
7. Defendant Goldberg has misrepresented material facts in violation of Section 5(a) of the FTC Act.
8. In the course of advertising, promoting, marketing, offering for sale, or selling Inetintl.Com, Inc. business ventures, Defendant Goldberg has represented, expressly or by implication, that purchasers of the business ventures could reasonably expect to achieve specific levels of earnings.
9. In the course of advertising, promoting, marketing, offering for sale, or selling Inetintl.Com, Inc. business ventures, Defendant Goldberg has represented, expressly or by implication, that certain company-selected references had purchased the defendants' business ventures and would provide reliable descriptions of the references' experiences with the defendants' business ventures.
10. Defendant Goldberg's representations set forth in Paragraphs 8 and 9 are false and misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
11. Consumers have in fact been injured in the amount of at least $478,088 (four hundred seventy-eight thousand, eighty-eight dollars) as a direct result of defendant Goldberg's violations of Section 5(a) of the FTC Act.
12. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to issue injunctive and other relief against violations of the FTC Act and, in the exercise of its equitable jurisdiction, to award redress and restitution to remedy the injury to consumers, order disgorgement of profits resulting from defendants' unlawful acts or practices, and issue other ancillary equitable relief.
13. There are no genuine issues of material fact as to the elements of the Commission's case, and the Commission is therefore entitled to judgment as a matter of law against Defendant Goldberg pursuant to Federal Rule of Civil Procedure 56(c).
14. The Commission is entitled to a Permanent Injunction as follows:
a. Preventing Goldberg from participating in the sale of franchises, business ventures, and investment opportunities.
b. Preventing Goldberg from falsely representing the experiences of references or purported purchasers of any product or service; falsely representing the value, characteristics, or nature of any product or service; falsely representing or failing to disclose any fact material to a person's decision to purchase any product or service; or otherwise violating Section 5 of the FTC Act.
c. Ordering such ancillary relief as is necessary to assist the Commission and the Court in monitoring Goldberg's compliance with the permanent injunction.
15. The Commission is entitled to judgment against defendant Goldberg in the amount of $478,088 (four hundred seventy-eight thousand eighty-eight dollars) for restitution and redress to consumers.
16. A discharge in bankruptcy does not discharge an individual debtor from any debt for money, property, or services to the extent obtained by false pretenses, a false representation, or actual fraud. 11 U.S.C. § 523(a)(2)(A). The monetary judgment herein reflects money obtained by Defendant Goldberg through false pretense, a false representation, and/or actual fraud.
17. This Judgment and Order shall be construed as remedial in nature and shall not be construed as the payment of a fine, penalty, punitive assessment, or forfeiture.
18. This action and the relief awarded herein are in addition to, and not in lieu of, other remedies as may be provided by law, including both civil and criminal remedies.
19. Entry of this Judgment and Order is in the public interest.
A. "Defendant" means Stanley R. Goldberg and his officers, agents, servants, employees, attorneys, affiliates or subsidiaries, successors or assigns, and all persons or entities directly or indirectly under his control or under common control with him, and all other persons or entities in active concert or participation with him who receive actual notice of this Judgment and Order by personal service or otherwise.
B. "Investment Opportunity" means any interest, product or service, including any partnership, interest in any partnership, stock or other beneficial interest, tangible or intangible, that is offered for sale, traded or sold to consumers based, wholly or in part, on material representations, express or implied, that the interest, product or service may generate financial return or appreciate in value.
C. "Franchise" means any commercial relationship as defined in the Franchise Rule, 16 C.F.R. Part 436.2 (a).
D. "Business Venture" means any written or oral business arrangement, however denominated, whether or not covered by the Franchise Rule, which consists of the payment of any consideration for the right or means to offer, sell, or distribute goods or services (whether or not identified by a trademark, service mark, trade name, advertising, or other commercial symbol).
IT IS THEREFORE ORDERED that Defendant Goldberg is hereby permanently enjoined and restrained from engaging or participating in the advertising, promotion, marketing, offering for sale, sale, or distribution of any business venture, franchise, or investment opportunity, whether directly, in concert with others, or through any business entity or other device.
II. ADDITIONAL PROHIBITED BUSINESS ACTIVITIES
IT IS FURTHER ORDERED that Defendant Goldberg is hereby restrained and enjoined from:
A. Falsely representing, expressly or by implication, the experiences of references or purported previous purchasers of any product or service;
B. Falsely representing, expressly or by implication, the value, characteristics, or nature of any product or service;
C. Falsely representing, expressly or by implication, or failing to disclose, any fact material to a person's decision to
purchase any product or service; and
D. Violating in any manner Section 5(a) of the FTC Act.
III. CUSTOMER LISTS
IT IS FURTHER ORDERED that Defendant Goldberg is hereby restrained and enjoined from using or providing or arranging for the provision to any person (other than a federal, state or local law enforcement agency or pursuant to a court order) of any mailing or telephone list of customers of Inetintl.Com, Inc., or any of its affiliates or subsidiaries, or any other list containing identifying information relating to any customer of Inetintl.Com, Inc. or any of its affiliates or subsidiaries, including but not limited to a customer's name, address, telephone number, Social Security number, bank account number or credit card number, or names of a customer's employees. For purposes of this Paragraph, the term "customer" shall include any person or entity who contacted or was contacted by Inetintl.Com, Inc., or by any of its affiliates or subsidiaries, whether prior to or after the effective date of this Judgment and Order.
IV. ASSISTING AND FACILITATING
IT IS FURTHER ORDERED that Defendant Goldberg is hereby restrained and enjoined from transferring or in any other way providing to any person (other than a federal, state, or local law enforcement agency or pursuant to a court order), directly or indirectly, any books, records, tapes, disks, accounting data, manuals, electronically stored data, banking records, invoices, telephone records, ledgers, payroll records, or other documents of any kind, including information stored in computer-maintained form, in his possession, custody or control, or any trade secrets or knowledge, whether recorded or otherwise, that are in any way related to Inetintl.Com, Inc. or any of its affiliates or subsidiaries.
V. MONETARY REDRESS
A. Judgment in the amount of $478,088 (four hundred seventy-eight thousand eighty-eight dollars) is hereby entered in favor of the Commission against Defendant Goldberg, for equitable monetary relief, including but not limited to, consumer redress, restitution and/or disgorgement and for paying any attendant expenses of administering any redress fund. After payment of monetary redress by all defendants, the Commission or Permanent Receiver shall, if practical, propose a plan to the Court to conduct a claims procedure which will (1) enable consumers who purchased defendants' business ventures to make claims against those funds, and (2) provide for a means of distributing the funds recovered to the consumers who have approved claims. If the Commission, in its sole discretion, determines that redress is wholly or partially impractical, any funds not so used shall be deposited in the United States Treasury. The Commission in its sole discretion may use a designated agent to administer consumer redress. No funds paid pursuant to this Judgment and Order shall be returned to Defendant Goldberg.
IT IS FURTHER ORDERED that the funds held in Defendant Goldberg's frozen account(s) at financial institutions, including but not limited to Bank of America, pursuant to the asset freeze ordered by this Court in the Temporary Restraining Order and Preliminary Injunction, shall be transferred to the Federal Trade Commission or its duly authorized agent (as directed by Commission counsel) in partial satisfaction of this monetary judgment. Funds in the account(s) shall not be used for any other purpose. Upon transfer of such funds, the asset freeze shall be lifted as to Defendant Goldberg.
VII. COMPLIANCE REPORTING BY DEFENDANT
IT IS FURTHER ORDERED that, in order that compliance with the provisions of this Judgment and Order may be monitored:
A. For a period of ten (10) years from the date of entry of this Judgment and Order, Defendant Goldberg shall notify the Commission of the following:
(1) Any changes in defendant's residence, mailing address, and telephone numbers, within ten (10) days of the date of such change;
(3) Any proposed change in the structure of any business entity owned or controlled by defendant Goldberg, such as creation, incorporation, dissolution, assignment, sale, merger, creation or dissolution of subsidiaries, proposed filing of a bankruptcy petition, or change in the corporate name or address, or any other change that may affect compliance obligations arising out of this Judgment and Order, thirty (30) days prior to the effective date of any proposed change; provided, however, that with respect to any proposed change in the corporation about which defendant learns less than thirty (30) days prior to the date such action is to take place, defendant shall notify the Commission as soon as is practicable after learning of such proposed change;
B. One hundred-eighty (180) days after the date of entry of this Judgment and Order, defendant Goldberg shall provide a written report to the Commission, sworn to under penalty of perjury, setting forth in detail the manner and form in which the defendant has complied and is complying with this Judgment and Order. This report shall include but not be limited to:
(1) Defendant's then current residence address and telephone number;
(2) Defendant's then current employment, business addresses and telephone numbers, a description of the business activities of each such employer, and defendant's title and responsibilities for each employer; and
(3) A statement describing the manner in which defendant has complied and is complying with the provisions of this Judgment and Order;
C. Upon written request by a representative of the Commission, defendant Goldberg shall submit additional written reports (under oath, if requested) and produce documents on fifteen (15) days' notice with respect to any conduct subject to this Judgment and Order;
D. For a period of ten (10) years from the date of entry of this Judgment and Order, or until such time as the monetary judgment referred to in Paragraph V is satisfied, whichever comes first, Defendant Goldberg shall supply the Commission with a semi-annual report setting forth his total income and expenses during the six months preceding the report. Any expenses and income greater than $1,000 shall be specifically itemized. These reports shall be submitted on June 30 and December 31 of each reporting year;
E. For a period of ten (10) years from the date of entry of this Judgment and Order, or until such time as the monetary judgment referred to in Paragraph V is satisfied, whichever comes first, Defendant Goldberg shall supply the Commission with copies of all state and federal income tax returns he files, including all attachments, schedules, and supplements. Such returns shall be submitted to the Commission within 30 days of the date they are filed;
F. For purposes of this Judgment and Order, defendant Goldberg shall, unless otherwise directed by the Commission's authorized representatives, mail all written notifications to the Commission to: Regional Director, Los Angeles Regional Office, Federal Trade Commission, 10877 Wilshire Blvd., Ste. 700, Los Angeles, CA 90024;
G. For purposes of this Paragraph, "employment" includes the performance of services as an employee, consultant, or independent contractor; and "employers" include any individual or entity for whom Defendant Goldberg performs services as an employee, consultant, or independent contractor; and
H. For purposes of the compliance reporting required by this Paragraph, the Commission is authorized to communicate directly with Defendant Goldberg.
VIII. COMMISSION'S AUTHORITY TO MONITOR COMPLIANCE
IT IS FURTHER ORDERED that the Commission is authorized to monitor Defendant Goldberg's compliance with this Judgment and Order by all lawful means, including but not limited to the following:
A. The Commission is authorized, without further leave of court, to obtain discovery from any person in the manner provided by Chapter V of the Federal Rules of Civil Procedure, Fed. R. Civ. P. 26-37, including the use of compulsory process pursuant to Fed. R. Civ. P. 45, for the purpose of monitoring and investigating Defendant Goldberg's compliance with any provision of this Judgment;
B. The Commission is authorized to use representatives posing as consumers and investors to defendant Goldberg, defendant's employees, or any other entity managed or controlled in whole or in part by Defendant Goldberg, without the necessity of identification or prior notice; and
C. Nothing in this Judgment and 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 investigate whether Defendant Goldberg has violated any provision of this Judgment and Order or Section 5 of the FTC Act, 15 U.S.C. § 45.
IX. INDEPENDENCE OF OBLIGATIONS
IT IS FURTHER ORDERED that the expiration of any requirements imposed by this Judgment and Order shall not affect any other obligation arising thereunder.
X. ACKNOWLEDGMENT OF RECEIPT OF JUDGMENT AND ORDER BY DEFENDANT
IT IS FURTHER ORDERED that, within (5) business days after receipt by Defendant Goldberg of this Judgment and Order as entered by the Court, defendant Goldberg shall submit to the Commission a truthful sworn statement, in the form of Attachment A, that shall acknowledge receipt of this Judgment and Order.
XI. PERMANENT RECEIVER
IT IS FURTHER ORDERED that the permanent receivership ordered by this Court in the Preliminary Injunction entered on April 3, 1998, shall continue until further order of this Court.
XIII. ENTRY OF JUDGMENT
IT IS FURTHER ORDERED that, as there is no just reason for delay of entry of this judgment, the Clerk shall immediately enter this Final Judgment and Order for Permanent Injunction as to Stanley R. Goldberg.
SO ORDERED, this ____ day of ______________, 1999.
INETINTL.COM, INC., et al., Defendants.
STANLEY R. GOLDBERG
Stanley R. Goldberg, being duly sworn, hereby states and affirms as follows:
1. My name is Stanley R. Goldberg. My current residence address is _______________________________________________________.
I am a citizen of the United States and am over the age of eighteen. I have personal knowledge of the facts set forth in this Affidavit.
2. I am a defendant in FTC v. Inetintl.Com, Inc., et al., CV 98-2140 CAS (CWx)(C.D. Cal.).
3. On ____________________, 1999, I received a copy of the this Judgment and Order for Permanent Injunction and Monetary Relief with Respect to Defendant Stanley R. Goldberg, which was signed by the Honorable Christina A. Snyder and entered by the Court on _____________________ , 1999.
I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. Executed on this date of ________________________, 1999, at ______________________, California.
State of ____________________, City of ______________________ Subscribed and sworn to before me
this _____day of ___________, 1999.