It's all about the order

“If a tree falls in a forest and no one’s around to hear it, does it make a sound?”  Law enforcers often ask themselves a similar question:  “If a lawsuit reaches final judgment without concrete protections in place for the future, does it have any impact?”  That explains the FTC’s keen interest in remedies with the teeth necessary to do the job.  Simply put, when it comes to consumer protection, it’s all about the order.

That principle was illustrated recently by a comprehensive Final Judgment entered by a U.S. District Judge in an FTC case in Missouri.  According to the agency’s complaint against Lance Murkin and Real Wealth, Inc., the defendants conned thousands of people nationwide by deceptively marketing publications claiming to offer the inside scoop on pocketing big bucks by working from home or applying for government grants.  Filed as part of Operation Bottom Dollar, a multi-agency crackdown on bogus money-making schemes, the FTC’s case challenged numerous promises, including that buyers could “rake in up to $1,500+ per week or more in solid cash” by learning “secrets” about the “$700 billion banking industry bailout.”

The Judge’s detailed 23-page order offers insights into the importance of effective financial and injunctive remedies.  Given that the defendants conceded they took in $10 million from their operation, that’s the amount the FTC argued the defendants owed.  The defendants pushed for a lower figure, but the Court wasn’t persuaded:

“Plaintiff seeks monetary relief in the amount of $10,400,397.10, the amount Defendants admit they received in gross revenues from sales of their work-at-home products and grant-related products in the form of booklets and pamphlets, and grant location services, to thousands of consumers throughout the United States. [citations omitted]  Defendants’ efforts to qualify their admission with self-serving affidavits that have no admissible evidence in support thereof are unavailing.”

The defendants also opposed the FTC’s request for a ban, arguing their behavior didn’t justify a remedy like that.  The Court rejected the defendants’ rationale, ruling that the factual record supported the imposition of a lifetime ban:

“Although Defendants stipulate to the entry of a Permanent Injunction, they argue that such Injunction should not include a ban against the sale or marketing of any work-at-home or grant-related product or service because their past conduct does not warrant the prohibition. Their argument is without merit. Defendants do not dispute the material facts that Plaintiff set forth to demonstrate the need for broad injunctive relief, including customer complaints and refunds, previous investigations concerning Defendants’ deceptive business practices, Defendants’ knowledge that their business practices were deceptive, and Murkin’s recent attempt to continue such business practices with the start of a ‘networking marketing’ business.”

The final order holds the defendants liable to the tune of $10,400,397.10 — their gross revenues.  In addition to other tough injunctive provisions, the order bans them from “advertising, marketing, promoting, offering for sale, or selling” any work-at-home opportunity or grant-related product or service or assisting anyone else involved in those businesses.

 

 

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