IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NEW YORK
FEDERAL TRADE COMMISSION
Plaintiff
v.
1306506 ONTARIO LIMITED, a Canadian Corporation;
T.S.I. SERVICE CORP., a Nevada Corporation;
VINNY BUBIC, individually and as a director and officer of 1306506
Ontario Limited and T.S.I. Service Corp.; and
ERROL ALEXANDER, individually and as a director and officer of 1306506
Ontario Limited and T.S.I. Service Corp.;
Defendants.
Civil Action No.
PLAINTIFF'S PROPOSED ORDER FOR PRELIMINARY INJUNCTION
WITH ASSET FREEZE AND OTHER RELIEF
The Court, having granted the Ex Parte Motion for a Temporary Restraining
Order with other relief, filed by plaintiff, Federal Trade Commission ("FTC")
pursuant to sections 13(b) and 19 of the Federal Trade Commission Act ("FTC
Act"), 15 U.S.C. § 53(b) and 57b; having entered an Order to Show Cause Why a
Preliminary Injunction Should Not Issue; and having considered the submissions of
Plaintiff and being advised in the premises, hereby finds:
1. This Court has jurisdiction over the subject matter of this case and there is good
cause to believe it will have jurisdiction over all parties hereto.
2. There is good cause to believe that Plaintiff will ultimately succeed in
establishing that Defendants 1306506 Ontario Limited; T.S.I. Service Corp.; Vinny Bubic,
individually and as a director and officer of 1306506 Ontario Limited and T.S.I. Service
Corp.; and Errol Alexander, individually and as a director and officer of 1306506 Ontario
Limited and T.S.I. Service Corp.; have engaged in and are likely to engage in the future
in acts and practices that violate Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and
the Telemarketing Sales Rule, 16 C.F.R. Part 310, and that Plaintiff is therefore likely
to prevail on the merits of this action.
3. 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
will occur from the sale, transfer, or other disposition or concealment by Defendants of
their assets or corporate records absent continuation of the asset freeze.
4. Weighing the equities and considering Plaintiff's likelihood of ultimate success, a
Preliminary Injunction with asset freeze and other equitable relief is in the public
interest.
5. Plaintiff is not required to post any security, pursuant to Fed. R. Civ. P. 65(c),
which provides that no security is required of any agency of the United States for
issuance of a restraining order.
ORDER
DEFINITIONS
For purposes of this preliminary injunction order, the following definitions shall
apply:
- 1. "Plaintiff" means the Federal Trade Commission.
- 2. "Defendant" or "Defendants" means 1306506 Ontario Limited; T.S.I.
Service Corp.; Vinny Bubic, individually and as a director and officer of 1306506 Ontario
Limited and T.S.I. Service Corp.; Errol Alexander, individually and as a director and
officer of 1306506 Ontario Limited and T.S.I. Service Corp.; and any subsidiaries,
affiliates and any fictitious business entities or business names created or used by these
entities, including but not limited to TSI, TSI Financial Services, TSI Services, TSI
Security, TeleConsultant Service International/TSI; or any of them.
- 3. "Asset" or "Assets" means any legal or equitable interest in,
right to, or claim to, any real or personal property, including, but not limited to,
"goods," "instruments," "equipment," "fixtures,"
"general intangibles," "inventory," "checks," or
"notes," (as these terms are defined in the Uniform Commercial Code), lines of
credit, and all cash, chattels, leaseholds, contracts, mail or other deliveries, shares of
stock, lists of consumer names, accounts, credits, premises, receivables, funds, and all
cash, wherever located.
- 4. The term "Document" or "Documents" means any materials listed 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 information can be obtained and translated, if necessary, into reasonably
usable form through detection devices. A draft or nonidentical copy is a separate Document
within the meaning of the term.
I.
CEASE AND DESIST
IT IS THEREFORE ORDERED that Defendants, and their officers, agents,
directors, servants, employees, salespersons, independent contractors, attorneys,
corporations, subsidiaries, affiliates, successors, and assigns, and all other persons or
entities in active concert or participation with them, including, but not limited to,
CGSI, COMPAID, American Card Registry, Vacation Link Centres Ltd., Tel-A-Sell Marketing,
Coast to Coast, and NTS, who receive actual notice of this Order by personal service or
otherwise, whether acting directly or through any trust, corporation, subsidiary,
division, or other device, or any of them, in connection with the telemarketing,
advertising, marketing, proposed sale, or sale of any product or service, or the entering
into any contract or any other arrangement relating to the telemarketing, advertising,
marketing, proposed sale or sale of any product or service, are hereby restrained and
enjoined from making, or assisting in the making of, directly or by implication, orally or
in any writing, any false or misleading statement or representation of material fact,
including, but not limited to, any false or misleading representation regarding:
- A. Any affiliation with a consumer's credit card issuer or any other third party;
- B. Consumers' liability for unauthorized use of their credit cards; and
- C. Any amounts due by consumers who have not agreed to purchase any product or service
from Defendants.
II.
MAINTAIN RECORDS
IT IS FURTHER ORDERED that Defendants, and their officers, agents,
directors, servants, employees, salespersons, independent contractors, attorneys,
corporations, subsidiaries, affiliates, successors, and assigns, and all other persons or
entities in active concert or participation with them, including, but not limited to,
CGSI, COMPAID, American Card Registry, Vacation Link Centres Ltd., Tel-A-Sell Marketing,
Coast to Coast, and NTS, who receive actual notice of this Order by personal service or
otherwise, whether acting directly or through any trust, corporation, subsidiary,
division, or other device, or any of them, are hereby restrained and enjoined from:
- A. Failing to create and maintain books, records, accounts, bank statements, current
accountants' reports, general ledgers, general journals, cash receipt ledgers and source
Documents, Documents indicating title to real or personal property, and any other data
which, in reasonable detail, accurately, fairly and completely reflect the incomes,
disbursements, transactions and uses of the Defendants' Assets; and
- B. Destroying, erasing, mutilating, concealing, altering, transferring, or otherwise
disposing of, in any manner, directly or indirectly, any books, records, tapes, disks,
contracts, accounting data, handwritten notes, checks (fronts and backs), correspondence,
forms, advertisements, brochures, manuals, telemarketing scripts, sales presentations,
electronically stored data, banking records, customer lists, customer files, mailing
lists, telemarketer lists, invoices, telephone records, receipt books, postal receipts,
ledgers, payroll records, or other Documents of any kind, including information stored in
computer-maintained form (such as electronic mail), in their possession, custody or
control.
- C. Creating, operating, or exercising any control over any new business entity,
including any partnership, sole proprietorship or corporation, without first providing
Plaintiff with a written statement disclosing: (1) the name of the business entity; (2)
the address and telephone number of the business entity; (3) the names of the business
entity's officers, directors, principals, managers, and employees; and (4) a detailed
description of the business entity's intended activities.
III.
ASSET FREEZE
IT IS FURTHER ORDERED that Defendants, and their officers, agents,
directors, servants, employees, salespersons, independent contractors, attorneys,
corporations, subsidiaries, affiliates, successors, and assigns, and all other persons or
entities in active concert or participation with them, including, but not limited to,
CGSI, COMPAID, American Card Registry, Vacation Link Centres Ltd., Tel-A-Sell Marketing,
Coast to Coast, and NTS, who receive actual notice of this Order by personal service or
otherwise, whether acting directly or through any trust, corporation, subsidiary,
division, or other device, or any of them, are hereby restrained and enjoined until
further order of this Court, from:
- A. Transferring, liquidating, converting, encumbering, pledging, loaning, selling,
concealing, dissipating, disbursing, assigning, spending, withdrawing, granting a lien or
security interest or other interest in, or otherwise disposing of any Assets, or any
interest therein, wherever located, that are (1) owned, controlled or held by, or for the
benefit of, in whole or in part, any Defendant; or (2) in the actual or constructive
possession of any Defendant; including, but not limited to, any Assets held in any account
at any bank or savings and loan institution, or any credit card processing agent, customer
service agent, commercial mail receiving agency, or mail holding or forwarding company, or
any credit union, IRA custodian, money market or mutual fund, storage company, trustee, or
with any broker-dealer, escrow agent, title company, commodity trading company, precious
metal dealer, or other financial institution or depository of any kind, either within or
outside the United States;
- B. Opening or causing to be opened any safe deposit boxes, commercial mail boxes, or
storage facilities titled in the name of any Defendant, or subject to access by any
Defendant or under the control of any Defendant, without providing Plaintiff prior notice
and an opportunity to inspect the contents in order to determine that they contain no
Assets covered by this Section;
- C. Incurring charges or cash advances on any credit card issued in the name, singly or
jointly, of any Defendant;
- D. Notwithstanding the asset freeze provisions of Subsections III.A-C above, Defendants
Vinny Bubic and Errol Alexander may, upon compliance with Section V of this Order and
Section V of the Temporary Restraining Order entered by this Court, pay from his or her
individual personal funds reasonable, usual, ordinary, and necessary living expenses not
to exceed $500, subject to prior written agreement with Plaintiff;
- E. Transferring any funds or other Assets subject to this Order for attorneys' fees or
living expenses, except from accounts or other Assets identified by prior written notice
to Plaintiff and prior approval by the Court. Provided further, that no attorneys' fees or
living expenses, other than those set forth in Subsection D, and only in accordance with
the procedures set forth in Subsection D, shall be paid from funds or other Assets subject
to this Order unless and until the Defendant requesting such funds has completed a sworn
financial statement as required by Section V of this Order and by Section V of the
Temporary Restraining Order entered by this Court, and submitted such statement to the
Court and served such statement upon counsel for Plaintiff.
- F. The Assets affected by this Section shall include both existing Assets and Assets
acquired after the effective date of this Order.
IV.
DUTIES OF THIRD PARTIES
IT IS FURTHER ORDERED that, pending determination of Plaintiff's
request for a permanent injunction, that each of the entities named in Section III.A.
above, maintaining or having custody or control of any account or other Asset of any
Defendant, or that at any time since July 1, 1997, has maintained or had custody of any
such Asset, and which is provided with a copy of this Order, or otherwise has actual or
constructive knowledge of this Order, shall:
- A. Hold and retain within its control and prohibit the withdrawal, removal, assignment,
transfer, pledge, hypothecation, encumbrance, disbursement, dissipation, conversion, sale,
liquidation or other disposal of any of the Assets or other property held by, under its
control, or on behalf of any Defendant in any account maintained in the name of, or for
the benefit or use of, any Defendant, in whole or in part, except in accordance with any
further order of the Court; and
- B. Deny Defendants access to any safe deposit boxes, commercial mail boxes or storage
facilities that are either titled in the name, individually or jointly, of any Defendant,
or otherwise subject to access by any Defendant.
- C. Within four (4) business days of the date of notice of this Order, provide to counsel
- for Plaintiff a statement setting forth:
- 1. The identification of each account or Asset titled in the name, individually or
jointly, of any Defendant, or held on behalf of, or for the benefit or use of, any
Defendant;
- 2. The balance of each such account, or a description and appraisal of the value of such
Asset, as of the close of business on the day on which notice of this Order is received,
and, if the account or other Asset has been closed or removed, the date closed or removed,
the total funds removed in order to close the account, and the name of the person or
entity to whom such account or other Asset was remitted; and
- 3. The identification of any safe deposit box, commercial mail box, or storage facility
that is either titled in the name individually or jointly, of any Defendant, or is
otherwise subject to access or control by any Defendant.
- D. Allow representatives of Plaintiff immediate access to inspect and copy any records
or other Documents pertaining to such account or Asset, including, but not limited to
originals or copies of account applications, account statements, signature cards, checks,
drafts, deposit tickets, transfers to and from the accounts, all other debit and credit
instruments or slips, currency transaction reports, 1099 forms, and safe deposit box logs.
- E. The Assets and accounts affected by this Section shall include both existing Assets
and Assets acquired after the effective date of this Order
.V.
COMPLETE AND FILE FINANCIAL STATEMENT
IT IS FURTHER ORDERED that each Defendant named in the caption of this
Order shall have a continuing duty to provide this Court and serve upon counsel for
Plaintiff with updated financial statements, on the forms served with the Temporary
Restraining Order.
VI.
REPATRIATION OF ASSETS AND DOCUMENTS LOCATED IN FOREIGN
COUNTRIES
IT IS FURTHER ORDERED that Defendants, and their officers, agents,
directors, servants, employees, salespersons, independent contractors, attorneys,
corporations, subsidiaries, affiliates, successors, and assigns, and all other persons or
entities in active concert or participation with them, including, but not limited to,
CGSI, COMPAID, American Card Registry, Vacation Link Centres Ltd., Tel-A-Sell Marketing,
Coast to Coast, and NTS, who receive actual notice of this Order by personal service or
otherwise, whether acting directly or through any trust, corporation, subsidiary,
division, or other device, or any of them, shall:
- A. Within three (3) business days following service of this Order, take such steps as
are necessary to repatriate to the territory of the United States of America all Documents
and Assets that are located outside of such territory and are held by or for Defendants or
are under Defendants' direct or indirect control, jointly, severally, or individually;
- B. Within three (3) business days following service of this Order, provide Plaintiff
with a full accounting of all Documents and Assets that are located outside of the
territory of the United States of America or that have been transferred to the territory
of the United States pursuant to Subsection A above and are held by or for any Defendant
or are under any Defendant's direct or indirect control, jointly, severally, or
individually, including the names and address of any foreign or domestic financial
institution or other entity holding the Assets, along with the account numbers and
balances;
- C. Hold and retain all transferred Documents and Assets and prevent any transfer,
disposition, or dissipation whatsoever of any such Documents or Assets; and
- D. Provide Plaintiff access to Defendants' records and Documents held by financial
institutions or other entities outside the territorial United States, by signing the
Consent to Release of Financial Records attached to the Temporary Restraining Order as
Attachment A.
VII.
DISTRIBUTION OF ORDER BY DEFENDANTS
IT IS FURTHER ORDERED that Defendants shall immediately provide a copy
of this Order to each of their corporations and corporations' employees, subsidiaries,
affiliates, directors, officers, successors, assigns, employees, agents, and independent
contractors. Within twenty-one (21) calendar days following service of this Order by
Plaintiff, Defendants shall file with this Court and serve on Plaintiff, an affidavit
identifying the names, titles, addresses, and telephone numbers of the persons and
entities Defendants have served with a copy of this Order in compliance with this
provision.
VIII.
NOTICE OF THIS ORDER
IT IS FURTHER ORDERED that copies of this Order may be distributed by
first class mail, overnight delivery, facsimile, electronic mail, or personally, by agents
or employees of Plaintiff, upon any credit card processing agent, customer service agent,
commercial mail receiving agency, or mail holding or forwarding company, or any bank,
savings and loan institution, credit union, financial institution, brokerage house, escrow
agent, IRA custodian, money market or mutual fund, title company, commodity trading
company, common carrier, storage company, trustee, or any other person, partnership,
corporation, or legal entity that may be in possession of any Documents, records, Assets,
property, or property right of any Defendant, and any Internet service provider or other
person, partnership, corporation, or legal entity that may be subject to any provision of
this Order.
IX.
CONSUMER REPORTING AGENCIES
IT IS FURTHER ORDERED that, pursuant to Section 604 of the Fair Credit
Reporting Act, 15 U.S.C. § 1681b, any consumer reporting agency may furnish a consumer or
credit report concerning any Defendant to Plaintiff.
X.
JURISDICTION
IT IS FURTHER ORDERED that this Court shall retain jurisdiction of
this matter for all purposes.
Dated: , 2000 United States District Judge
PRESENTED BY:
Dated: ____________________
DEBRA A. VALENTINE
General Counsel
DAVID A. O'TOOLE
PATRICIA POSS
Federal Trade Commission
55 E. Monroe St., Suite 1860
Chicago, IL 60603
(312) 960-5634
(312) 960-5600 (fax)
Attorneys for Plaintiff
FEDERAL TRADE COMMISSION |