case 3:06-cv- vpc document 82 filed 10/03/2007€¦ · case 3:06-cv-00578-hdm-vpc document 82 filed...

Case 3:06-cv-00578-HDM-VPC Document 82 Filed 10/03/2007 of 24

UNTED STATES DISTRICT COURT . DISTRICT OF NEVADA

Federal Trade Commssion

Plaiti 3:06-CV-00578-HDM-VPC

ORDER ERG Ventues, LLC, et aI.

Defendats.

, "


STIPULATED FINAL ORDER FOR PERMNT INJUCTION MONETARY JUGMENT AS TO DEFENDANTS ERG VENTURS, LLC,

ELLIOTT S. CAMRON. ROBERT A. DAVIDSON. II. AN GARY E. HIL or the "Commssion ), fied its

complaint agait defendants ERG Ventues, ILC and d//a ERG Ventues, LLC2, Media

5 Motor, Joysticksavers.com, and Privateinublic.com; Ellott S. Cameron, individually and d//a

6 ERG Ventues ILC2 Media Motor, Joysticksavers.com, and Privateinublic.com; Robert A.

Plainti the Federal Trade Commssion FTC"

Davidson, II individualy and d//a ERG Ventues , ILC2 , Media Motor, J oysticksavers.com,

and Privateinublic.com; Garr E. Hill individually and d//a ERG Ventues , LLC2, Media

9 Motor, Joysticksavers.com, and Privateinublic.com; and Timothy P. Taylor, individualy and

10 d//a Team Taylor Made for injUnctive and other equitable relief in ths matter pursuant to

Sections 5 and 13(b) of the Federal Trade Commssion Act ("FTC Act"), 15 US.C. 9 45(a),

12 53(b), on October 31 , 2006. . The Cour ordered an ex parte Temporar Restraing Order

13 November 1 , 2006, and a Preliar Injunction was entered on November 29, 2006. The

14 Commission and defendants ERG Ventues, LLC, Ellott S. Cameron, Robert A. Davidson, il

15 and Gar E. Hill, hereby stipulate to the entr of, and request the CoUr to enter, ths Stipulated

16 Final Order for Permanent Injunction and Monetar Judgment as to defendants ERG Ventues

17 LLC, Ellott S. Cameron, Robert A. Davidson, il, and Gan E. Hi ("Order ), to resolve all

18 matters of dispute between them in ths action.

IT IS THEREFORE STIPULATED, AGREED, AN ORDERED as follows:

Ths Cour has jursdiction over the subject matter of ths case, and it has

jurisllction of all pares hereto pursuant to 15 US.C. 99 45(a), 53(b), and 28

C. 99 1331 , 1337(a) and 1345;

Venue is proper as to all partes in the Distrct of Nevada pursuant to 15 U.

C. 99 1391(b) and (c); 9 53(b) and 28 U.

. The activities alleged in the amended complaint are in or affectig "commerce" as

that term is defied in Section 4 of the FTC Act, 15 U.S.C. 9 44;

The facts that the FTC has stated in its amended complait, if tre, would state a

claim upon which relief may be granted under Sections 5(a) and 13(b) of the FTC

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Act, 15 U.S.C. g~ 45(a) and 53(b);

ERG Ventues, LLC, Elliott S. Cameron, Robert A. Davidson, II and GarrE.

Hi have entered into ths Order freely and without coercion, and they

acknowledge that they haye read the provisions of ths Order and are prepared

abide hy them;

The undersigned, individually and by and though their counsel, as applicable

have agreed that the entr of ths Order resolves all matters of dispute between

them arsing from the amended complaint in this action, up to the date of entr of

. this Order. Ths Order, however, shall have no preclusive effect as to any action

brought by any other state or federal law enforcement agency;

ERG Ventues, LLC, Ellott S. Cameron, Robert A. Davidson, IT and Gar

Hi waive al rights to seek appellate review or otherse challenge or contest the

validity of ths Order and waive and release any clain they may have against the

Commssion, its employees, representatives, or agents;

ERG Ventues, LLC, Ellott S. Cameron, Robert A. Davidson, n, and Gar

Hi agree that ths Order does not entitle them to seek or to obtai attorneys ' fees

as a prevailig par under the Equal Access to Justice Act, 28 US.C. 92412, as

amended by Pub. L. 104-121 , 110 Stat. 847 , 863-64 (1996), and they fuher

waive any rights to attorneys ' fees that may arise under said provision oflaw;

Ths Order is remedial in natue and no porton of any payments paid herein shall

be deemed or constred as payment of a fie, damages, penalty, or puntive

assessment; and

10. Entr of this Order is in the public interest.

ORDER

DEFINTIONS

For the pUIpose of this Order, the following defitions shall apply:

Defendants" means, individually, collectively or in any combination: ERG Ventues

LLC d//a ERG Ventues , LLC2, Giant Ventues, LLC, Media Motor, IMGiant

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Joysticksavers.com, PrivateInublic.com, Megalocast.com, and Popuppers.com; Ellott S.

Cameron d//a ERG Ventues, LLC2, Giant Ventues, LLC, Media Motor, IMGiant

Joysticks avers. com, PrivateInublic.com, Megalocast.com, and Popuppers.com

individually and as an offcer of ERG Ventues, LLC and Giant Ventues, LLC; Robert

A. Davidson, II d//a ERG Ventues, LLC2, Giant Ventues, LLC, Media Motor

IMGiant, Joysticksavers.com, PrivateInublic.com, Megalocast.com, and

Popuppers.com, individually and as an offcer of ERG Ventues, LLC and Giant

Ventues, LLC; and Garr E. Hil d//a ERG Ventues ILC2 Giant Ventues, ILC

Media Motor, IMGiant, Joysticksavers.com, PrivateInublic.com, Megalocast.com, and

Popuppers.com, individually and as an offcer of ERG Ventues, LLC and Giant

Ventues, LLC; as well as their successors and assign/3.

Individual Defendant(s)" means Ellott S. Cameron d//a ERG Ventues, LLC2, Giant

Ventues, LLC, Media Motor, IMGiant, Joysticksavers.com, PrivateInublic.com

Megalocast.com, and Popuppers.com; RobertA. Davidson, n d//a ERG Ventues

LLC2, Giant Ventues, LLC, Media Motor, IMGiant, Joysticks avers. com,

PrivateInublic.com, Megalocast.com, and Popuppers.com; and Gar E. Hi d//a ERG

Ventues, LLC2, Giant Ventues, LLC , Media Motor, IMGiant, Joysticksavers.com,

PrivateInublic.com, Megalocast.com, and Popuppers.com.

Corporate Defendant(s)" mean ERG Ventues, LLC d//a ERG Ventues, LLC2

Giant Ventues, LLC, Media Motor, IMGiant, Joysticksavers.com, PrivateInublic.

Megalocast.com, and Popuppers.com, as well as their successors and assigns.

Assets" means any legal or equitable interest in, right to , or clai to, any real, personal

or intellectual propert of any of the Corporate Defendants or Individual Defendants, or

held for the benefit of any Corporate Defendants or Individual Defendants, wherever

located, includig, but not lited to, chattel, goods, instruents, equipment, fixtues

general intangibles, effects, leaseholds, contracts, mail or other deliveries, shares of stock

inventory, checks, notes, accounts, credits, receivables (as those terms are defied in the

Uniform Commercial Code), cash, and trsts, includig but not limted to any other trt - 4


held for the benefit of any Corporate Defendant or Individual Defendant, or any of the

Individual Defendants ' mior children , or spouses. .

Document" is synonymous in meang and equal in scope to the usage of the term in

the Federal Rules of Civil Procedure 34(a), and includes wrting, drawigs, graphs

chars, Internet sites, Web pages, Web sites, electronically-stored inormation, includig

e-mail and instant messages, photographs , audio and video 'recordigs, contracts

accounting data, advertisements (includig, but not lited to , advertsements placed on

the World Wide Web), FTP Logs, Server Access Logs, USENET N ewsgroup postings

Web pages , books, wrtten or prited records, handwritten notes, telephone logs,

telephone scripts, receipt books, ledgers, personal and business canceled checks and

11' check registers, bank statements, appointment books, computer records, and other data

stored in any medium from which inormation can be obtained and translated. A draft or

non-identical copy is a separate document withi the meang of the term.

Affate Program(s)" mean an arangement under which any of the Defendants payor

offer to pay another ("the afliate ) to maret, adverise, distibute, download or install

softare or other goods or services on behalf of any of the Defendants, with the afliate

. 17 being paid based on performance measures, such as the number of softare installations

or downoads.

Softare" means any fie, program, application, content, code or set of instrctions that

controls, diects, orassists In the operation of a computer and/or intrcts a computer as

to what tasks to perform.

CONDUCT PROHIITIONS

IT IS THEREFORE ORDERED that the Defendants, as well as their offcers, agents

servants, employees and those persons in active concert or paricipation with them who receive

actual notice of ths Order by personal service or otherwise, are permanently restraied and

enjoined from, prior to instalg any Softare diectly or indirectly on consumers ' computers:

1) failig to clearly and conspicuously disclose the name and fuction of all such Softare (the

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, .


Requied Disclosure ); and 2) failg to provide, imediately after the Required Disclosure is

made, a clearly and conspicuously disclosed option to prevent the installation of all such

Softare, which, when exercised by the consumer, prevents the installation of all such Softare.

ll.

IT IS FURTHER ORDERED that the Defendants , as well as their offcers, agents

servants, employees and those persons in active concert or parcipation with them who receive

actual notice of ths Order by personal service or otherwise, are permanently restraied and

enjoined from, diectly or indiectly, publishig, dissemiatig, distrbutig, intallg, or

downoading any Softare that interferes with a consumer s computer use, includig but not

lited to Softare that:

tracks consumers ' Internet activity or collects other personal inormation;

changes consumers ' preferred Internet homepage settgs; inerts a new adversing toolbar onto consumers ' Internet browsers;

generates numerous "pop up" advertsements on consumers ' computer screens

even when consumers ' Internet browsers are closed;

adds advertising icons to the computer s desktop;

tampers with, disables, or otherwise alters the performance of other programs

includig anti-spyware and anti-vis programs;

alters Internet browser securty settgs , includig the list of safe or trsted

websites; or

installs other adversing Softare on consumers ' computers.

ID.

IT IS FURTHR ORDERED that, in connection with distrbutig or advertising,

promotig, marketing, offerig for sale or license, or sellg or licensing, any product or service

the Defendants, as well as their offcers, agents, servants, employees and those persons in active

concert or parcipation with them who receive actual notice of ths Order by personal servce or

otherwse, are permanently restrained and enjoined from makg, or assisting others in malcig,

diectly or indirectly, expressly or by implication, any material false or misleading representation.

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MONETARY JUGMENT

IV.

IT IS FUTHR ORDERED that:

Judgment in the.amount of $3 596 757 (three millon, five hundred niety-six

thousand, seven hundred fift-seven dollars) is hereby enteredjointly and

severally agaist the Defendants.

Ths judgment shall be suspended, except as follows:

With five (5) days afer the date of entr of ths Order, Defendants shall:

1) pay $82 000 (eighty-two thousand dollarg) from the frozen accounts

listed in Attachment A to the United States Internal Revenue Servce

IR"), as provided in sub-paragraph 3 below; and 2) pay the remaing

balance of all accoUnts listed in Attachment A (approxiately $208 000)

to the Commssion py wire transfer in accord with diections provided by

the Commssion.

Defendat Gar E. Hill agrees to assign all right, title and interest in his

share of the Wilam A. Hi and Haret A. Hill Famly Trust ("

Famiy Trust") to the Commssion, as follows:

Except as provided in sub-section iii below, Defendant Hi hereby

diects the Trustee of the Hil Famy Trust ("Hill Trustee ) to pay

directly to the Commssion all distributions, payments or assets to

which Defendant Hi is entitled under the Hi Family Trust by

utilizing the wire instrctions to be provided by the Commssion to

the Hill Trustee, or by such other method as prescribed by the

Commssion;

11. Should the Hi Trustee fail to pay Defendant Hil' s share of the

Hill Famly Trust to the Commssion in a timely maner

Defendant Hill shall, at his own expense, commence and prosecute

a suit against the Hi Trustee in the appropriate court to compel

7


the Hin Trustee to pay Defendat Hill' s share of the Hill Famly

Trust to the Commssion;

ll. If Defendant Hi complies with sub-subsections i and ii above

the Commssion shall not object to Defendant Hi rece vig and

retaing items that the Hi Trustee has determed to be of lited intrsic value or marketabilty, provided that such items appear on

the Willam A. & HaIet A. Hill Famiy Trust Personal Propert

Inventory dated December 31 , 2005. This language shall not

requie or otherw e impact the Hill Trustee s discretion, as

provided in the Trut, to detere whether Defendant Hill is

entitled to any or all of these items.

Withi five (5) days afer the date of entr of this Order, the IDdividual

Defendants shall pay the followig totals to the IRS from the frozen

accounts listed in ,Attachment A in order to wholly or parally satisfy

15. their 2006 federal tax liabilty:

Ellott S. Cameron: $29 712 (twenty-nie thousand, seven

17. hundred and twelve dollar)

Robert A. Davidson: $32 054 (th-two thousand, fi-four

dollars)

GaE. Hill: $20;234 (twenty thousand, two hundred and thty

four dollas)

With fieen (15) days of the tax payments, each Individual Defendant

shall provide wrtten proof to the Commssion of the payments, includig

copies of cancelled checks and as-fied copies of their 2006 federal tax

retus. Any portion of the Defendants ' federal tax liability not satisfied

by the payments made pursuant to ths sub-paragraph shall be the sole

responsibilty of the Defendants, and shall not be paid from fuds due

the Commssion pursuant to sub-paragrphs B(I) and B(2) of ths

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Paragraph. In the event the 2006 federal tax liabilty of any of the

Defendants is less than the totals set fort in ths sub-paragraph, the

Defendants shall pay the difference to the Commssion.

Defendants agree that they wil not, whether acting directly or though

any corporation, parership, subsidiar, division, trade name, device, or

other entity, submit to any federal or state tax authority any retu

amended retu, or other offcial document that takes a deduction for, or

seeks a tax refud or other favorable tax treatment for, any payments by

. one or more of the Defendants pursuant to Paragraph IV of ths Order.

Defendants futher agre they wi not seek a credit or refud of any kid for federal taxes or penalties paid for tax year 2006. However, if the

Defendants otherwse obtai a credit or refud of any federal taxes or

penalties paid for tax year 2006 the Defendants shall promptly pay the

Commssion the amount of such credit or refud, together with any

interest the Defendants have eared in connection with any such credit or

refud.

All fuds paid to the FTC pursuant to the Order shall be deposited into an

account admstered by the CoITssion or its agent to be used for equitable

relief, includig but not lited to consumer redress, and any attendant expenses

for the admstration of such equitable relief. In the event that diect redress to

consers is wholly or partialy impracticable or fuds remai after redress is

completed, the Commssion may apply any remaig fuds for such other

equitable relief (includig consumer inormation remedies) as it determes to

reasonably related to the Defendants ' practices alleged in the amended

complait. Any fuds not used for such equtable relief shall be deposited to the

United States Treasur as disgorgement. The Defendants shall have no right to

chalenge the Commssion s choice of remedies under ths Paragraph. The

Defendants shall have no right to contest tJe maner of distrbution chosen by

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the Commssion.

The Defendants reliquish all domion, control and title to the fuds paid

into the account established pursuant to this Order. The Defendants shall make

no claim to or demand for the retu of fuds, directly or indiectly, though

counselor otherwse; and in the event of banptcy of any such defendant, the

Defendants acknowledge that the fuds are not par of the debtor s estate, nor

does the estate have any claim or interest therein.

e Commssion s agreement to ths Order is expressly premised upon the

trthlness, accuacy and completeness of the Defendants' sworn fiancial

statements and supportg documents submitted to the Commssion, as well as all

subsequent addenda thereto, all of which the Defendants stipulate are trthl

accurate, and complete. The Defendants and the Commsion stipulate that these

fiancial disclosures provide the basis for the assets listed in Attachment A to

this Order and include material inormation upon which the Commssion relied in

15: gotiatig and agreeing to ths Order. The Defendants and the Comms ion

stipulate that the Commssion has relied on the trthess, accuracy, and

completeness of these fiancial disclosures in agreeing to the terms of ths Order

and that the Commssion would not have entered into ths Order but for the

trthlness, accuracy, and completeness of these fiancial disclosures.

, upon motion by the Commssion, ths Cour fids that the Defendants

have failed to disclose any material asset or materially misstated the value of any

asset in the fiancial statement or related documents described above, or have

made any other material misstatement or omission in the fiancial statements or

related documents described above, then ths Order shall be reopened and

suspension of the judgment shall be lifted for the purose of requig payment

monetar relief in the amount of the judgment set fort in sub-paragraph A of ths

Paragraph, less the sum of any amounts paid to the Commssi"on pursuant to

sub-paragraph B of ths Paragraph. Provided, however that in all other respects

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ths Order shall remai in full force and effect, uness otherwise ordered by the

Cour.

Upon such reinstatement of the monetar judgement, the Cour shall make an

express determation that the monetar judgment shall be imediately due and

payable. The Commssion shall be entitled to interest on the judgment, computed

from the day of entr of this Order, at the rate prescribed by 18 US.C. g 1961 , as

amended. The Commssion shall be perittd to execute on the judgment

imediately after the suspension is lifted and engage in discovery in aid of

execution.

The Defendants agree that the facts as aleged in :the amended complaint fied in

ths action shall be taken as tre for the purose of a nondischargeability

complaint in any banptcy proceedig.

Proceedigs instituted imder ths Paragraph ar in addition to, and not in lieu of

any other civil or criminal remedies that may be provided by law, includig any

other proceedigs the Commssion may intiate to enforce ths Order.

LIFTING OF ASSET FREZE

IT IS FUTHER ORDERED that the fteeze against the assets of the Defendants

19 pursuant to Paragraph il otthe Preliar Injunction Order entered by ths Cour on November

29, 2006 ("Preliar Injunction ), shal be lied for the sole purose of tranferrg fuds

pursuant to Paragraph IV of ths Order, and shall be dissolved upon tranfer of all such fuds.

COMPLIACE MOMTORIG

VI.

IT IS FURTHER ORDE D that, for puroses of monitorig and investigatig

compliance with any provision of this Order

With ten (10) days of receipt of wrtten notice from a representative of the

Commssion, Ellott S. Cameron, Robert A. Davidson, n, Gar E. Hi and ERG

Ventues, LLC, each shall submit additional wrtten reports, sworn to under

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penalty of perjur; produce documents for inspection and copyig; appear for

deposition; and/or provide entr during normal business hour to any business

location in such defendant' s possession or diect or indiect control to inspect the

" business operation;

In addition, the Co:ission is authorized to monitor compliance with ths Order

by all other lawfu mean, including but not lited to the following:

obtaing discovery from any person, without fuer leave of cour, using

the procedures prescribed by Fed. R. Civ. P. 30 , and 45"

posing as consumers and suppliers to Defendants, Defendants ' employees

or any other entity managed or controlled in whole or in part by Elliott S.

Cameron, Robert A. Davidson, II GaIT E. Hill or ERG Ventues, LLC

without the necessity of identifcation or prior notice; and

Defendants shall permt representatives of the Commssion to intervew any

employer, consultant, independent contractor, representative, agent, or employee

who has agieed to such an intervew, relatig in any way to any conduct subject to

ths Order. The person interviewed may have coUnel present.

that nothig in ths Order shall lit the Commssion s lawfl use of

compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. 9949, 57b- , to

19 obtai any docume:Qtar material, tangible things, testiony, or inormation relevant to unair or

deceptive acts or practices in or affecting commerce (with the meang of 15

Provided, however,

C.

45 (a)(I)).

MONITORIG BY DEFENDANTS

VI.

IT IS FURTHR ORDERED that, for a period of eight (8) years from the date of entr

25 'of this Order, the Individual and Corporate Defendants, and their offcers , agents , diectors

employees, salespersons, independent contractors, subsidiares , affliates, successors , assign,

and al other persons in active concert or parcipation with any of them who receive actual notice

of this Order by personal service or otherwse, in connection with the advertsing, promotion

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marke ing, offerg for sale, sale, or provision of any goods or services on or though the Interet

t4e Wodd Wide Web , or any web page or web site, are hereby permanently restr ined and

. enjoined from failig to:

Obtai contact inormation from any partcipant in any Afliate Program. In the

. case pf a natual person, Defendants shall 0 btair the parcipant' fit and last

name, physical address, countr, telephone number, and e-mail address. In the

case of other business entities, Defendants shall obtain the fist and last name

physical address, countr, telephone number, and e-mail address for the natual

. person who owns , manages, or controls the paricipant.

Prior to any such prospective partcipant' s acceptance into any Afliate Progrm,

(1) provide each such person a copy of ths Order; (2) obtai from each such

person a signed and dated statement acknowledgig receipt of this Order and

expressly agreeing to comply with ths Order; and (3) clearly and promiently

disclose that engaging in acts or practices prohibited by this Order wil result

15 . immediate termation of the affliate and forfeitue of al monies received or

owed;

Establish, implement, and maintain an Internet-based mechanism, includig, but

not lited to, e-mail that enables: (1) consumers to report complaints to

Defendants regardig the practices of any affliate program parcipant; (2)

Defendats to associate, correctly, each such complait with the affliate that is

the subject of the complaint; and (3) Defendants to receive and respond to such

complaints, whether received diectly or indirectly, in a tiely maner.

Defendants shall clearly and promiently disclose the existence of such reporting

mechansm on their websites;

Promptly and completely investigate any complaits received through Paragraph

VI(C) or any other source to determe whether any such participant is engagig

in acts or practices prohibited by ths Order; and

Termate, imediately, any paricipant in any Afliate Program that Defendants

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reasonably conclude has engaged in or is engagig in acts or practices prohibited

by ths Order and cease payments to any such person.

vided, however, that ths Paragraph does not authorize or requie Defendants to take

. any action that violates any federal, state, or local law.

COMPLIACE REPORTING BY DEFENDANTS

VI. IT IS FURTHER ORDERED that, in order that compliance with the provisio:p of this

Order may be monitored:

For a period of five (5) years from the date of entr of ths Order

Ellott S. Cameron, Robert A. Davidson, II and Gan . Hi, shall noti the Commssion o the followig:

Any changes in residence, mailig addresses, and telephone

numbers of any Individual Defendant with ten (10) days of the date of such change;

Any changes in employment status (includig self-employment), of

any Individual Defendat and any change in the ownership of the

Individual Defendant in any business entity, with ten (10) days of

the date of such change. Such notice shal include the name and

address of each business that the Individual Defendant is affliated

with, employed by, creates or forms, or performs services for; a

statement of the natue of the business; and a statement of the

Individual Defendant' s duties and responsibilties in connection

with the business or employment; and

il. Any changes in the Individual Defendant' s name or use of any

aliases or fictitious names; and

Defendants ERG Ventues , ILC, Ellott S. Cameron, Robert A. Davidson, II and

Gar E. Hill shall noti the Commssion of any changes in corporate strctue of

ERG Ventues, LLC or any business entity that an Individual Defendat directly

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, or indiectly controls, or has an ownership interest in, that may affect compliance,

obligations arsing under ths Order, includig but not lited to a dissolution

assignent, sale, merger, or other action that would result in the emergence ofa

successor entity; the creation or dissolution of a subsidiar, parent, or afliate that

engages in any acts or practices subj ect to ths Order; the fig of banptcy petition; or a change in the corporate nae. or address, at least thi (30) days

prior to such change provided that, with respect to any proposed change in the

corporation about which the defendant(s) leam less than thty (30) days prior to

the date such action is to take place, defendant(s) shall notifY the Commssion as

soon as is practicable after obtaig such knowledge.

One hundred eighty (180) days after the date of entr of ths Order, defendants

ERG Ventues, LLC, Ellott S. Cameron, Robert A. Davidson, II and Gar Hi each shall provide a wrtten report to the FTC, sworn to under penalty of

perjur, setting fort in detai the maner and form in which they have complied

and are complyig with ths Order. This report shal include, but not be lited to:

For each Individual Defendat:

The then-curent residence address, mailg addresses, and

telephone numbers ofthe Individual Defendat;

The then-curent employment an business addresses and

telephone numbers of the Individual Defendant, a description of

the business activities of each such employer or business, and the

title and responsibilties of the Individual Defendant for each such

employer or business; and

Any other changes required to be reported under sub-paragraph A

of ths Paragraph.

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For all the Defendants:

A copy of each acknowledgment of receipt of ths Order obta

by each defendant pursuant to Paragraphs vn, X and XI of this

Order; and

Any other changes requied to be reported under sub-paragraph A

of ths Paragraph.

With ten (10) days of a request by the Commssion, each of the Defendants shall

complete, sign, date and submit to the IRS , along with the requisite IRS fee, IRS

, Form 4506 diectig that certfied copies of the Defendant' s federal tax retus and any amep.ded retus for tax years 2006 and 2007 be sent to the Commssion

at the address in sub-paragraph E.

For the puroses of ths Order, Defendants shall, uness otherwise directed by the

Commssion s authoried representatives, mail all wrtten notications to the

Commssion to:

Associate Director, Division of Enforcement Federal Trade Commssion 600 Pennylvana Avenue, NW Washigton, DC 20580 Re: FTC v. ERG Ventues. LLC. eta!. Civil Action No. 3:06-00578

For puroses of the compliance reportg and monitorig requied by ths Order

the Commssion is authorized to communcate diectly with the Defendants.

RECORD KEEPING PROVISIONS

IX.

22- IT IS FURTHER ORDERED that, for a period of eight (8) years from the date of entr

of ths Order, defendats ERG Ventues ILC Ellott S. Cameron, Robert A. Davidson, II and

Garr E. Hi, for any business that such defendant diectly or indiectly controls, or in which

such defendant has a majority ownership interest, which is diectly or indiectly engaged in the

business of advertsing, promotig, marketig, offerig for sale or license, or sellg or licensing

any product or service via the Interet, and their agents, ernployees, offcers, corporations

successors, and assigns , and those persons in active concert or paricipation with them who

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receive actual notice of ths Order by personal servce or otherwise, are hereby restraied and

enjoined from faig to create and retai the following records:

. Accountig records that reflect the cost of goods or services sold, revenues

generated, and the disbursement of such revenues;

Personnel records accurately reflecting: the name, address, and telephone number

of each person employed in any capacity by such business, includig as an

independent contractor; that person s job title or position; the date upon which the

. person commenced work; and the date and reason for the person s tennation, if

applicable;

Customer files contaig the names, address , phone numbers , dollar amounts

paid, quantity of items or servces purchased, and description of items or services

purchased, to the extent such inormation is obtained in the ordiar course of

business;

Records reflectig contact inormation and a detaied payment history for all

persons and entities engaged in the marketig, distrbutig, or intallg of

Softare at the diection of, or for the benefit of, the Defendats.

Complaits and refud requests (whether received diectly, indiectly or though

arythid par) and any responses to those complaints or requests;

Copies of all advertsements or other marketing materials, includig but not

lited to web sites, instant messages, e-mail messages, Internet "pop up

advertsements, and Internet baner advertisements; and

All records and documents necessar to demonstrate fu compliance with each

provision of ths Order, includig but not lited to , copies of acknowledgments

of receipt of ths Order equied by Paragraphs vn, X, and XI and all reports

submitted to the FTC pursuant to Paragraphs vm and IX of ths Order.

- 17


DISTRIUTION OF ORDER BY DEFENDANTS

IT IS FUTHER ORDERED that, for a period of five (5) years from the date of entr

of ths Order, the Defendants shall deliver copies of the Order as diected below:

Corporate Defendants: Defendant ERG Ventues, LLC must deliver a copy of

ths Order to all of its pricipals, offcers, diectors, and managers as well as its

employees, agents, affliates, sub-affliates, and representatives who engage in

conduct related to the subject matter of ths Order. For curent personnel, delivery

shall be with five (5) days of service of ths Order upon such defendants. For

new personnel, delivery shall occu prior to the new personnel assug their

responsibilities.

. B. Individual Defendant as Control Person: For any business that defendat Ellott

S. Cameron, Robert A. Davidson, n, or Gar E. Hill directly or indiectly control

or in which such Individual Defendat has a majority ownership interest, the

Individual Defendant must deliver a copy of ths Order to all pricipals, offcers

diectors, and managers of that business. The Individual Defendat must also

deliver copies of ths Order to all employees, agents, affliates, sub-affliates, and

representatives of that business who engage in conduct related to the subj ect

matter of this Order. For curent personnel, delivery shall be made with five (5) days ' of serice of ths Order upon such defendants. For new personnel, delivery

shall occu prior to the new personnel assumg their responsibilities.

Individual Defendant as Employee or Non-Control Person: For any business

which an Individual Defendant is not a controllg person of the business but

otherwise engages in conduct that is related to the subject matter of ths Order, the

Individual Defendant must deliver a copy of this Order to all pricipals and

managers of such business before engagig in such conduct.

Defendants ERG Ventues , LLC, Ellott S. Cameron, Robert A. Davidson, II and

Gar E. Hi must secure a signed and dated statement aclmowledgig receipt of

- 18

..


the Order, withi th (30) days of delivery, from all persons receivig a copy of

the Order pursuant to this Paragraph.

ACKNOWLEDGMENT OF RECEIPT OF ORDER BY DEFENDANTS

XI.

IT IS FURTHR ORDERED that each of the Defendants, within five (5) business days

of receipt of this Order as entered by the Cour, must submit to the Commssion a trthl sworn

statement acknowledging receipt of ths Order.

RETENTION OF JUSDICTION

XI. IT IS FURTHR ORDERED that this Cour shall retain jurisdiction of this matter for

puroses of constrction, modification, and enforcement of this Order.

SeptemberSO ORDERED, this day of , 2007, at Reno

14 Nevada.

The Honorable Howard D. McKibben United States District JudgeDistrct of Nevada, Reno

Stipulated and agreed to by:

Dated: r ('7/07o" Defendat

Dated: Robert A. Davidson, II Defendant

Dated:Gar E. Hil, Defendant

- 19

.'


the Order, within thirt (30) days of delivery, from all persons receiving a copy of



XI.

IT IS FURTHER ORDERED that each of the Defendants, within five (5) business days

of receipt of this Order as entered by the Court, must submit to the Commission a truthful swam

statement acknowledging receipt of this Order.

RETENTION OF JURISDICTION

XII.

IT IS FURTHER ORDERED that this Cour shall retain jurisdiction of this matter for

purposes of constrction, modification, and enforcement of this Order.

SO ORDERED, this day of , 2007 , at Reno

Nevada.

The Honorable Howard D. McKibben United States District Judge District of Nevada, Reno


Dated:

Dated: (/ild/u/

Dated: Garry E. Hil, Defendant

- 19


the Order, within thirt (30) days of delivery, from all persons receiving a copy of



XI.

IT IS FURmER ORDERED that each of the Defendants, within five (5) business days

of receipt of this Order as entered by the Cour, must submit to the Commission a trthful sworn

statement acknowledging receipt of this Order.

RETENTION OF JURISDICTION

XII.

IT IS FURmER ORDERED that this Cour shall retain jursdiction of this matter for

puroses of constrction, modification, and enforcement of this Order.

SO ORDERED, this day of , 2007 , at Reno

14 Nevada.

The Honorable Howard D. McKibben United States District JudgeDistrct of Nevada, Reno


Dated:20 Elliott S. Cameron, Defendant

Dated: Robert A. Davidson, II, Defendant

Dated: (iJ /rt7'1

- 19


Dated:

Dated: Dennis Kennedy Leah Martin Kimberly McGhee Bailey Merrll Attorneys for Defendants ERG Ventues , LLC Robert A. Davidson, II, and Gar E. Hil 8691 W. Sahara Ave. , Suite 200 Las Vegas, NY 89117-8820

10 (702) 562-8820

Dated: Ethan Arenson

13 Colleen B. Robbins Attorneys for Plaintiff

14 Federal Trade Commission 600 Pennsylvania Avenue, NW

, DC 2058015 Washington(202) 326-2204; (202) 326-2548


Dated:. as CE

ERG Ventures, LLC, Defendant ar4 '

5 , '-Dated; Cf

I/oe: IS. cnne y /0 7 Leah Martin Kimberly McGhee Bailey Mcail Attorneys for Defendants ERG Ven.tures, LLC,Robert A. Davidso II, and Garr E. Hil

9 8691, W. Sahara Ave., Suite 200 Las Vegas, NV 89117-8820

10 (702) 562-8820

1/'J7/Dated:t an enson 13 Colleen:8- Robbins

Attorneys for Plaintiff14 Federal Trade Commssion

600 Pennsylvania A venue, NW15 Washington, DC 20580

(202) 326 2204; (202) 326-2548

Case 3:06-cv-00578-HDM-VPC Document 82 Filed 10/03/2007 . of 24

ATTACHMNT A

Defendants ' Bank Accounts Frozen Pursuant To The Asset Freeze

Bank Name/Source

Bancorp South.

Bancorp South

Bancorp South

Bancorp South

Fidelity Investments

Regions Banc

Regions Banc

Chase

Pacifc Premier Ban Wells Fargo Ban

Wells Fargo Ban

Pentagon Federal Credit Union

SCE Federal Credit Union

US Ban NA

Account Description

Checkig

Savings

Windows Media Solutions Checkig

Certficate of Deposit

Roth

Regions Free Checkig

Regions Free Checkig

Commercial Checkig

Checkig Account

Checkig Account

Savings Account

Regular Share Account

Power Checkig

Checkig Account

N anie of Account Holder Robert Davidson, II

Robert Davidson, II

Robert Davidson, n

Robert DavidSon, n

. Robert Davidson, n

Robert Davidson, II

Robert Davidson, n

ERG Ventues, LLC

Gar Hill Gar Hill

Garr

Gar Hi

Ellott Cameron

Ellott Cameron

case 3:06-cv- vpc document 82 filed 10/03/2007€¦ · case 3:06-cv-00578-hdm-vpc document 82 filed...

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