United States District Court, W.D. North Carolina, Charlotte Division
STIPULATED PRELIMINARY INJUNCTION AS TO DEFENDANTS
OMAR HUSSAIN AND CEDAR ROSE HOLDINGS AND DEVELOPMENT,
INC.
GRAHAM
C. MULLEN, UNITED STATES DISTRICT JUDGE
Plaintiff
Federal Trade Commission (“FTC”), commenced this
civil action on February 4, 2019, 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.
§ 1692l(a). On February 4, 2019, on motion by
the FTC, the Court entered an ex parte temporary
restraining order (“TRO”) with asset freeze,
appointment of receiver, and other equitable relief against
Defendants Global Asset Financial Services Group, LLC,
Regional Asset Maintenance, LLC, 10D Holdings, Inc., Trans
America Consumer Solutions, LLC, Midwestern Alliance, LLC,
LLI Business Innovations, LLC, TACS I, LLC, TACS II, LLC,
TACS III, LLC, Cedar Rose Holdings & Development, Inc.,
Ankh Ali, Aziza Ali, Kenneth Moody, David Carr, Jeremy
Scinta, and Omar Hussain. (ECF No. 5.) Now, the FTC, the
Receiver, and Defendants Omar Hussain and Cedar Rose Holdings
and Development, Inc., (“Stipulating
Defendants”), by and through their undersigned counsel,
have stipulated and agreed to the entry of a preliminary
injunction (“Order”).
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. The FTC asserts that the Court has jurisdiction over the
subject matter of this case, there is good cause to believe
it will have jurisdiction over Defendants 4. The FTC asserts
that 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' alleged 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. The FTC asserts that 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
For the
purpose of this Order, the following definitions shall apply:
A.
“Asset” means any legal or
equitable interest in, right to, or claim to, any property,
wherever located and by whomever held.
B.
“Consumer” means any person.
C.
“Corporate Defendant(s)” means
Defendants Global Asset Financial Services Group, LLC,
Regional Asset Maintenance, LLC, 10D Holdings, Inc., Trans
America Consumer Solutions, LLC, Midwestern Alliance, LLC,
LLI Business Innovations, LLC, TACS I, LLC, TACS II, LLC,
TACS III, LLC, Cedar Rose Holdings & Development, Inc.,
and each of their subsidiaries, affiliates, successors, and
assigns.
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.
“Debt Portfolio” means
spreadsheets, databases, tables, lists, or any other
compilation of information describing debts or purported
debts.
F.
“Defendant(s)” means the
Corporate Defendants and the Individual Defendants,
individually, collectively, or in any combination.
G.
“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, FTP Logs, Server
Access Logs, 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.
H.
“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.
I.
“Individual Defendant(s)” means
Ankh Ali, Aziza Ali, Kenneth Moody, David Carr, Jeremy
Scinta, and Omar Hussain, individually, collectively, or in
any combination.
J.
“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 K.
“Receiver” means the temporary
receiver appointed in Section XI of this Order and any deputy
receivers that shall be named by the temporary receiver.
L.
“Receivership Entities” means
the Corporate Defendants as well as any other entity that has
conducted any business related to Defendants' debt
collection or debt brokering, including receipt of Assets
derived from any activity that is the subject of the
Complaint in this matter, and that the Receiver determines is
controlled or owned by any Defendant.
M.
“Stipulating Defendants” means
Omar Hussain and Cedar Rose Holdings and Development, Inc.
and its successors and assigns, individually, collectively,
or in any combination, and each of them by whatever names
each might be known.
ORDER
I.
PROHIBITED REPRESENTATIONS
IT
IS THEREFORE ORDERED that Stipulating Defendants,
Stipulating Defendants' officers, agents, employees, and
attorneys, and all other persons in active concert or
participation with them, who receive actual notice of this
Order by personal service or otherwise, whether acting
directly or indirectly, in connection with the advertising,
marketing, promoting, or offering for sale of any goods or
services, are hereby restrained and enjoined from:
A.
Misrepresenting or assisting others in misrepresenting,
expressly or by implication, any material fact, including,
but not limited to:
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, criminal prosecution, imprisonment, or
in seizure, garnishment, or attachment of a consumer's
property or wages;
4. that consumers have committed a fraud or a criminal act;
5. 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;
6. that any Defendant will serve, or arrange for a third
party to serve, documents on a consumer;
7. that any Defendant or any other person is an attorney or
affiliated or associated with an attorney;
8. that any Defendant or any other person is a law firm; or
9. 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;
I.
Marketing, distributing, or selling Debt Portfolios that list
loans that the lenders have not, in fact, made to the
consumers identified in such portfolios, or Debts that
Defendants do not have the right to collect;
J.
Providing others with the means and instrumentalities to
misrepresent, or assist others in misrepresenting, directly
or indirectly, expressly or by implication, that consumers
owe debts or that a debt collector has obtained the rights to
collect from a consumer; and
K.
Engaging in any conduct that violates the FDCPA, 15 U.S.C.
§§ 1692-1692p.
II.
PROHIBITION ON RELEASE OF CUSTOMER INFORMATION
IT
IS FURTHER ORDERED that 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, whether acting
directly or indirectly, are hereby restrained and enjoined
from:
A. 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
B. 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.
C. Provided, however, that Stipulating Defendants may
disclose such identifying information to a law enforcement
agency, to their attorneys as required for their defense, 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.
III.
ACCOUNTING FOR DEBT PORTFOLIOS AND CHAINS OF TITLE
IT
IS FURTHER ORDERED that Stipulating Defendants,
within ten (10) business days of entry of this ...