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Federal Trade Commission v. Lombardo, Daniels & Moss, LLC

United States District Court, W.D. North Carolina, Charlotte Division

September 1, 2017

FEDERAL TRADE COMMISSION, Plaintiff,
v.
LOMBARDO, DANIELS & MOSS, LLC, Defendants.

          STIPULATED PRELIMINARY INJUNCTION AS TO DEFENDANTS LOMBARDO, DANIELS & MOSS, LLC AND CHARLES MONTGOMERY

          ROBERT J. CONRAD, JR. UNITED STATES DISTRICT JUDGE.

         Plaintiff, Federal Trade Commission ("FTC"), commenced this civil action on August 21, 2017, pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), and Section 814(a) of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692/(a). On motion by the FTC, on August 24, 2017, this Court entered an ex parte temporary restraining order ("TRO") with asset freeze, appointment of receiver, and other equitable relief against Defendants Lombardo, Daniels & Moss, LLC, Dion Barron, and Charles R. Montgomery, III. Now, the FTC, the Receiver, and Defendants Lombardo, Daniels & Moss, LLC and Charles Montgomery ("Stipulating Defendants"), by and through their undersigned counsel, have stipulated and agreed to the entry of a preliminary injunction ("Order"). A proposed order is attached hereto.

         FINDINGS OF FACT

         By stipulation of the parties, the Court finds that:

         1. The FTC and Stipulating Defendants have stipulated and agreed to the entry of this preliminary injunction order without any admission of wrongdoing or violation of law, and without a finding by the Court of law or fact other than stated below.

         2. The Stipulating Defendants waive all rights to seek judicial review or otherwise challenge or contest the validity of this Order.

         3. This Court has jurisdiction over the subject matter of this case, there is good cause to believe it will have jurisdiction over Defendants 4. Venue in the Western District of North Carolina is proper under 28 U.S.C. § 1391(b) and (c) and 15 U.S.C. § 53(b).

         5. The FTC asserts that there is good cause to believe that the Stipulating Defendants have engaged and are likely to continue to engage in acts or practices that violate Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the FDCPA, 15 U.S.C. §§ 1692 - 1692p, and that the FTC is therefore likely to prevail on the merits of this action.

         6. The FTC asserts that there is good cause to believe that immediate and irreparable harm will result from the Stipulating Defendants' ongoing violations of Section 5(a) of the FTC Act and the FDCPA unless the Stipulating Defendants are immediately restrained and enjoined by Order of this Court.

         7. 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 in the form of monetary restitution and/or disgorgement of ill-gotten gains will occur from the transfer, dissipation, or concealment by the Stipulating Defendants of their assets or business records unless the Stipulating Defendants are immediately restrained and enjoined by Order of this Court.

         8. The FTC asserts that good cause exists for continuing the asset freeze over the Stipulating Defendants' assets and for continuing the receivership over the Receivership Entities.

         9. This order is in the public interest.

         10. No security is required of any agency of the United States for issuance of a preliminary injunction, Fed.R.Civ.P. 65(c).

         DEFINITIONS

         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. "Consumer" means any person.

         C. "Corporate Defendant" means Lombardo, Daniels & Moss, LLC and its successors, assigns, affiliates, or subsidiaries, and each of them by whatever names each might be known.

         D. "Debt" means any obligation or alleged obligation to pay money arising out of a transaction, whether or not such obligation has been reduced to judgment.

         E. "Defendants" means the Individual Defendants and the Corporate Defendant, individually, collectively, or in any combination, and each of them by whatever names each might be known.

         F. "Document" is synonymous in meaning and equal in scope to the usage of the term in Federal Rule of Civil Procedure 34(a), and includes writings, drawings, graphs, charts, photographs, audio and video, recordings, computer records, and other data compilations from which the information can be obtained and translated, if necessary, through detection devices into reasonably usable form. A draft or non-identical copy is a separate document within the meaning of the term.

         G. "Financial Institution" means any bank, savings and loan institution, credit union, or any financial depository of any kind, including, but not limited to, any brokerage house, trustee, broker-dealer, escrow agent, title company, commodity trading company, or precious metal dealer.

         H. "Individual Defendants" means Dion Barron and Charles R. Montgomery, III.

         I. "Person" means a natural person, an organization or other legal entity, including a corporation, partnership, sole proprietorship, limited liability company, association, cooperative, or any other group or combination acting as an entity.

         J. "Receivership Entities" means the Corporate Defendant, as well as any other business related to the Defendants' debt collection business and which the Receiver has reason to believe is owned or controlled in whole or in part by any of the Stipulating Defendants, including but not limited to Montgomery Financial Solutions, LLC, Montgomery, Hunter & Associates, Lombardo, Daniels & Moss, Lombardo Group, B&B Asset Management Group, or any other debt collection business operated by Defendant Charles Montgomery.

         K. "Stipulating Defendants" means the Corporate Defendant and Charles R. Montgomery, III, individually, collectively, or in any combination, and each of them by whatever names each might be known L. The terms "and" and "or" shall be construed conjunctively or disjunctively as necessary to make the applicable phrase or sentence inclusive rather than exclusive.

         ORDER

         PROHIBITED REPRESENTATIONS

         I. IT IS THEREFORE ORDERED that in connection with the collection or the attempted collection of any debt, the Stipulating Defendants and their successors, assigns, officers, agents, employees, and attorneys, and those persons or entities in active concert or participation with any of them who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, are hereby restrained and enjoined from:

         A. Misrepresenting, or assisting others who are misrepresenting, expressly or by implication, orally or in writing, any of the following:

1. that any consumer is delinquent on a payday loan or other debt that any Defendant or any other person has authority to collect;
2. that any consumer has a legal obligation to pay any Defendant or any other person;
3. that non-payment of a purported debt will result in a consumer's arrest, or in seizure, garnishment, or attachment of a consumer's property or wages;
4. that any Defendant or any other person has taken, intends to take, or has authority to take formal legal action against a consumer who fails to pay any debt;
5. that any Defendant or any other person is an attorney or affiliated or associated with an attorney;
6. that any Defendant or any other person is a law firm; or
7. the character, amount, or legal status of a debt;
B. Communicating with third parties for purposes other than acquiring location information about a consumer, without having obtained directly the prior consent of the consumer or the express permission of a court of competent jurisdiction, and when not reasonably necessary to effectuate a postjudgment judicial remedy;
C. Placing telephone calls without meaningfully disclosing the caller's identity;
D. Failing to disclose or disclose adequately (1) in the initial communication with a consumer that any Defendant or any other person is a debt collector attempting to collect a debt and that any information obtained will be used for that purpose, or (2) in subsequent communications with consumers that any Defendant or any other person is a debt collector;
E. Threatening to take action that is not lawful or that any Defendant or any other person does not intend to take;
F. Using any false representation or deceptive means to collect or attempt to collect a debt, or to obtain information concerning a consumer;
G. Using a business, company, or organization name other than the true name of Defendants' business, company, or organization;
H. Failing to provide consumers, within five days after the initial communication with a consumer, a written notice containing: (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by Defendants; (4) a statement that if the consumer notifies Defendants in writing within the thirty-day period that the debt, or any portion thereof, is disputed, Defendants will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by Defendants; and (5) a statement that, upon the consumer's written request within the thirty-day period, Defendants will provide the consumer with the name and address of the original creditor, if different from the current creditor; and
I. Engaging in any other conduct that violates the FDCPA, 15 U.S.C. §§ 1692- 1692p.

         PROHIBITION ON RELEASE OF CONSUMER INFORMATION

         II. IT IS FURTHER ORDERED that, except as required by a law enforcement agency, law, regulation or court order, the Stipulating 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 by personal service or otherwise, are restrained and enjoined from disclosing, using, or benefitting from consumer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a consumer's account (including a credit card, bank account, or other financial account), of any person which any Defendant obtained prior to entry of this Order in connection with any debt collection service. Provided, however, that the Stipulating 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 in the manner required by the Federal Rules of Civil Procedure and by any protective order in the case.

         ASSET FREEZE

         III. IT IS FURTHER ORDERED that:

         A. Except as set forth in Section III.B of this Order, the Stipulating Defendants are hereby restrained and ...


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