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Federal Trade Commission v. AWS, LLC

United States District Court, D. Nevada

April 18, 2018

FEDERAL TRADE COMMISSION, Plaintiff,
v.
AWS, LLC, a Nevada limited liability company; ADAMS CONSULTING, LLC, a California limited liability company; FBA DISTRIBUTORS, LLC, a Massachusetts limited liability company; FBA STORES, LLC, a Nevada limited liability company; GLOBAL MARKETING SERVICES L.L.C, a Nevada limited liability company; INFO PROS, LLC, a Nevada limited liability company; INFO SOLUTIONS, LLC, a Nevada limited liability company; ONLINE AUCTION LEARNING CENTER, INC., a Massachusetts corporation; ONLINE AUCTION LEARNING CENTER, INC, a Nevada corporation; CHRISTOPHER V. BOWSER; ADAM S. BOWSER; JODY MARSHALL; and JEFFERY A. GOMEZ, Defendants.

          Roberto Anguizola, Miry Kim, Gregory J. Evans, Attorneys for Plaintiff FEDERAL TRADE COMMISSION.

          James C. Bastian, Jr., Shulman Hodges & Bastian LLP Attorney for defendants Adams Consulting, LLC, Global Marketing Services L.L.C, and Jeffery A. Gomez.

          STIPULATED TEMPORARY RESTRAINING ORDER AS TO DEFENDANTS ADAMS CONSULTING, LLC, GLOBAL MARKETING SERVICES L.L.C., AND JEFFERY A. GOMEZ

         THIS MATTER comes before the Court upon the stipulation of plaintiff Federal Trade Commission ("FTC") and stipulating defendants, Adams Consulting, LLC, Global Marketing Services L.L, C, and Jeffery A. Gomez (collectively "Gomez Defendants"), for the entry of a Temporary Restraining Order against the Gomez Defendants.

         WHEREAS, the FTC filed its Complaint for Permanent Injunction and Other Equitable Relief [ECF No. 1] pursuant to Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, and the Business Opportunity Rule, 16 C.F.R. Part 437 and moved, pursuant to Fed.R.Civ.P. 65(b), for an ex parte temporary restraining order and preliminary injunction against defendants AWS, LLC, FBA Distributors, LLC, FBA Stores, LLC, Info Pros, LLC, Online Auction Learning Center, Inc. (Mass. Corp.), Online Auction Learning Center, Inc. (Nev. Corp.), Christopher F. Bowser, Adam S. Bowser, and Jody Marshall (collectively "Original Defendants") on March 12, 2018 [ECF Nos. 3 & 4].

         WHEREAS, at 1:30 p.m. on March 14, 2018, the Court entered a temporary restraining order with an asset freeze, appointment of a temporary receiver, and other equitable relief ("TRO") against Original Defendants [ECF No, 29]. The TRO was originally set to expire on March 27, 2018 and the Court scheduled an evidentiary hearing on the FTC's motion for a preliminary injunction for March 27, 2018.

         WHEREAS, the duration of the TRO was extended by stipulation and consent of the Original Defendants until the Court issues a ruling on the FTC's request for a preliminary injunction, or further order of the Court [ECF Nos. 37 & 49] and the evidentiary hearing on the FTC's motion for preliminary injunction was re-set for May 3, 2018, at 11:00 a.m. at the United States Courthouse, 333 S. Las Vegas Blvd., Las Vegas, NV 89101 in Courtroom 6A [ECF No. 49].

         WHEREAS, the FTC filed an Amended Complaint on April 10, 2018 adding new defendants Adams Consulting, LLC, Global Marketing Services L.L.C., Info Solutions, LLC, and Jeffery A. Gomez.

         WHEREAS, the FTC and the Gomez Defendants, each of which is represented by counsel for purposes of this stipulation, HEREBY STIPULATE TO THE FOLLOWING;

         FINDINGS

         A. This Court has jurisdiction over the subject matter of this case, and there is good cause to believe that il will have jurisdiction of all parties hereto and that venue in this district is proper.

         B. The Amended Complaint charges the Gomez Defendants participated in deceptive acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, and multiple sections of the Business Opportunity Rule, 16 C.F.R. Part 437.

         C. Gomez Defendants acknowledge receipt and accept service of the Complaint [ECF No. 1], TRO [ECF No. 29], Amended Complaint [ECF No. 50], and summonses for each of them [ECF No. 55] through counsel and waive formal service of a summons in this action. Gomez Defendants waive any objections to the absence of a summons or of service in this case.

         D. Defendants neither admit nor deny any of the allegations in the Amended Complaint, except as specifically stated in this Order.

         E. The FTC gave sufficient notice to Gomez Defendants in accordance with Fed.R.Civ.P. 65(a).

         F. The FTC asserts that there is good cause to believe that immediate and irreparable harm will result unless this Order is entered. The Gomez Defendants dispute this assertion, but for purposes of preservation of judicial and financial resources, and to facilitate potential resolution of the claims asserted in the Amended Complaint, they are willing to stipulate to the provisions set forth in this Order.

         G. The FTC asserts that there is good cause to believe that immediate and irreparable damage to the Court's ability to grant effective final relief for consumers will occur unless this Order is entered. The Gomez Defendants dispute this assertion, but for purposes of preservation of judicial and financial resources, and to facilitate potential resolution of the claims asserted in the Amended Complaint, they are willing to stipulate to the provisions set forth in this Order.

         H. The FTC asserts that good cause exists for appointing a temporary receiver over defendants Adams Consulting, LLC and Global Marketing Services L.L.C. (collectively "Gomez Corporate Defendants"), freezing Gomez Corporate Defendants' assets, and permitting the FTC and receiver to take expedited discovery. The Gomez Corporate Defendants dispute this assertion, but for purposes of preservation of judicial and financial resources, and to facilitate potential resolution of the claims asserted in the Amended Complaint, they are willing to stipulate to the provisions set forth in this Order.

         I, The FTC asserts that the after weighing the equities and considering the FTC's likelihood of ultimate success on the merits, a temporary restraining order with an asset freeze, appointment of a temporary receiver, and other equitable relief is in the public interest. The Gomez Defendants dispute this assertion, but for purposes of preservation of judicial and financial resources, and to facilitate potential resolution of the claims asserted in the Amended Complaint, they are willing to stipulate to the provisions set forth in this Order.

         J. This Court has authority to issue this Order pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and § 57b; Federal Rule of Civil Procedure 65; and the All Writs Act, 28 U.S.C. § 1651.

         K. No security is required of any agency of the United States for issuance of a temporary restraining order. Fed.R.Civ.P. 65(c).

         DEFINITIONS

         For the purpose of this Order, the following definitions shall apply:

         A. "Asset" means property of all kinds, including any legal or equitable interest in, right to, or claim to, any tangible or intangible property, and any real or personal property, wherever located and by whomever held.

         B. "Defendants" means AWS, LLC, Adams Consulting, LLC, FBA Distributors, LLC, FBA Stores, LLC, Global Marketing Services L.L.C., Info Pros, LLC, Info Solutions, LLC, Online Auction Learning Center, Inc. (Mass. Corp.), Online Auction Learning Center, Inc. (Nev. Corp.), Christopher F. Bowser, Adam S. Bowser, Jody L, Marshall, and Jeffery A. Gomez a/k/a Jeff Gomez, Jeff Adams or Jeff Adam, individually, collectively, or in any combination.

         C. "Document" is synonymous in meaning and equal in scope to the usage of "document" and "electronically stored information" in Federal Rule of Civil Procedure 34(a), Fed.R.Civ.P. 34(a), and includes writings, drawings, graphs, charts, photographs, sound and video recordings, images, internet sites, web pages, websites, electronic correspondence, including e-mail and instant messages, contracts, accounting data, advertisements (including advertisements placed on the World Wide Web), FTP Logs, Server Access Logs, USENET Newsgroup postings, books, written or printed records, handwritten notes, telephone logs, telephone scripts, receipt books, ledgers, personal and business canceled checks and check registers, bank statements, appointment books, computer records, customer or sales databases, and any other electronically stored information, including Documents located on remote servers or cloud computing systems, and other data or data compilations from which information can be obtained directly or, if necessary, after translation into a reasonably usable form. A draft or non-identical copy is a separate document within the meaning of the term.

         D. "Earnings Claim" means any oral, written, or visual representation to a consumer, prospective purchaser or investor that conveys, expressly or by implication, a specific level or range of actual or potential sales, or gross or net income or profits. Earnings claims include, but are not limited to any: (1) chart, table, or mathematical calculation that demonstrates possible results based upon a combination of variable; and (2) statements from which a consumer, prospective purchaser or investor can reasonably infer that he or she will earn a minimum level of income (e.g., "earn enough to buy a Porsche, " "earn a six-figure income, " or "earn your investment back within one year").

         E. "Electronic Data Host" means any person or entity in the business of storing, hosting, or otherwise maintaining electronically stored information. This includes, but is not limited to, any entity hosting a website or server, and any entity providing "cloud based" electronic storage.

         F. "Gomez Corporate Defendants" means Adams Consulting, LLC and Global Marketing Services L.L.C., and each of their subsidiaries, affiliates, successors, and assigns.

         G. "Gomez Defendants" means each Gomez Corporate Defendant and Jeffery A. Gomez a/k/a Jeff Gomez, Jeff Adams or Jeff Adam, individually, collectively, or in any combination, H. "Person" means a natural person, organization, or legal entity, including a corporation, partnership, proprietorship, association, cooperative, government or governmental subdivision or agency, or any other group or combination acting as an entity.

         I. "Receiver" means Robb Evans and Associates LLC, the temporary receiver appointed pursuant to the TRO against the Original Defendants [ECF No. 29] and appointed as the temporary receiver over the Gomez Receivership Entities in Section XII of this Order, and any deputy receivers that shall be named by Robb Evans and Associates LLC.

         J. "Gomez Receivership Entities" means the Gomez Corporate Defendants as well as any other entity that the Receiver determines is controlled or owned by any Defendant and (1) conducted any business related to Defendants' advertising, marketing, distributing, promoting, or selling of business opportunities, (2) commingled or pooled Assets with any Defendant, or (3) otherwise participated in the transfer of Assets stemming from the advertising, marketing, distributing, promoting, or selling of business opportunities. Upon determining that a nonparty entity is a Receivership Entity, the Receiver shall promptly notify the entity as well as the parties, and shall inform the entity that it can challenge the Receiver' determination by filing a motion with the Court. Provided, however, that the Receiver may delay providing such notice for up to 48 hours if the Receiver determines that notice to the entity or the parties before the Receiver establishes control over the entity may result in the destruction of records, dissipation of Assets, or any other obstruction of the Receiver's control of the entity.

         ORDER

         I. PROHIBITED BUSINESS ACTIVITIES AS TO GOMEZ DEFENDANTS

         IT IS THEREFORE ORDERED that Gomez Defendants, Gomez Defendants' officers, agents, employees, and attorneys, and all other Persons in active concert or participation with them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with promoting or offering for sale any good or service, are temporarily restrained and enjoined from:

         A. Making any earnings claim, unless the earnings claim is non-misleading, and, at the time such claim is made, Gomez Defendants: (1) have a reasonable basis for their claim; (2) have in their possession written materials that substantiate the claim; and (3) make the written substantiation available upon request to the consumer, potential purchaser or investor, the Receiver, and to the Commission;

         B. Misrepresenting or assisting others in misrepresenting, expressly or by implication any other fact material to consumers concerning any product or service, such as the total costs; any material restrictions, limitations, or conditions; or any material aspect of its performance, efficacy, nature, or central characteristics; or

         C. From violating the Business Opportunity Rule, 16 C.F.R. Part 437, a copy of which is attached as Attachment A.

         II. PROHIBITION ON RELEASE OF CUSTOMER INFORMATION

         IT IS FURTHER ORDERED that Gomez Defendants, Gomez Defendants' officers, agents, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, are hereby temporarily restrained and enjoined from:

         D. Selling, renting, leasing, transferring, or otherwise disclosing, the name, address, birth date, telephone number, email address, credit card number, bank account number, Social Security number, or other financial or identifying information of any person that any Defendant obtained in connection with any activity that pertains to the subject matter of this Order; and

         E. Benefitting from or using the name, address, birth date, telephone number, email address, credit card number, bank account number, Social Security number, or other financial or identifying information of any person that any Defendant obtained in connection with any activity that pertains to the subject matter of this Order. Provided, however, that Gomez Defendants may disclose such identifying information to a law enforcement agency, as required by any law, regulation, or court order, or in any filings, pleadings or discovery in this action, provided the Gomez Defendants comp]y with any protective order in the case.

         III. ASSET FREEZE AS TO GOMEZ CORPORATE DEFENDANTS

         IT IS FURTHER ORDERED that Gomez Corporate Defendants and their officers, agents, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, are hereby temporarily restrained and enjoined from:

         A. Transferring, liquidating, converting, encumbering, pledging, loaning, selling, concealing, dissipating, disbursing, assigning, relinquishing, spending, withdrawing, granting a lien or security interest or other interest in, or otherwise disposing of any Assets, wherever located, including outside the United States, that arc:

1. owned or controlled, directly or indirectly, by any Gomez Corporate Defendant;
2. held, in part or in whole, for the benefit of any Gomez Corporate Defendant;
3. in the actual or constructive possession of any Gomez Corporate Defendant; or
4. owned or controlled by, in the actual or constructive possession of, or otherwise held for the benefit of, any corporation, partnership, asset protection trust, or other entity that is directly or indirectly owned, managed or controlled by any Gomez Corporate Defendant, including any Assets held by, for, or subject to access by, any Gomez Corporate Defendant at any bank or savings and loan institution, or with any broker-dealer, escrow agent, title company, insurance company, commodity trading company, precious metal dealer, payment processor, credit card processor, acquiring bank, merchant bank, independent sales organization, third party processor, payment gateway, or other financial institution or depository of any kind.

         B. Opening or causing to he opened any safe deposit boxes, commercial mail boxes, or storage facilities titled in the name of any Gomez Corporate Defendant or subject to access by any Gomez Corporate Defendant, except as necessary to comply with written requests from the Receiver acting pursuant to its authority under this Order;

         C. Incurring liens or other encumbrances on real property, personal property, or other Assets held, controlled, or subject to access by, or held for the benefit of, any Gomez Corporate Defendant or any corporation, partnership, or other entity directly or indirectly owned, managed, or controlled by any Gomez Corporate Defendant;

         D. Incurring charges or cash advances on any credit or bank card issued in the name, individually or jointly, of any Gomez Corporate Defendant; or

         E. Cashing any checks or depositing any money orders or cash received from consumers, clients, or customers ...


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