by ED JOHNSON — Plaintiff and. Defendants Rosa Esquer and Jose Mario Esquer subsequently settled Count Two of the. First Amended Complaint. A hearing on plaintiff’s summary
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12 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIAWESTERN DIVISIONFEDERAL TRADE COMMISSION, Plaintiff, v.DINAMICA FINANCIERA LLC, a California limited liability company; SOLUCIONES DINAMICAS, INC., a California corporation;OFICINAS LEGALES DE ERIC-DOUGLAS JOHNSON, INC., a California corporation; ERIC DOUGLAS JOHNSON, an individual; VALENTIN BENITEZ, an individual; JOSE MARIO ESQUER, an individual; andROSA ESQUER an individual, Defendants.Case No. CV 09-03554 MMM (PJWx)JUDGMENT FOR PLAINTIFFCase 2:09-cv-03554-MMM -PJW Document 111 Filed 08/19/10 Page 1 of 17 Page ID #:4539
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12 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 282Plaintiff Federal Trade Commission (fiFTCfl or fiCommissionfl) moved for summary judgment on both counts in its Firs t Amended Complaint. Plaintiff and Defendants Rosa Esquer and Jose Mario Esque r subsequently settled Count Two of the First Amended Complaint. A hearing on plaintiff™s summary judgment motion addressing Count One, the remaining claim in the First Amended Complaint, took place on August 16, 2010. Having considered the moving papers, arguments of counsel, and all other matters presented, the c ourt granted the motion on August 19, 2010. IT IS HEREBY ORDERED THAT: Judgment is hereby entered in favor of the FTC against Dinamica Financiera LLC, Valentin Benitez and Jose Mario Esquer, jointly and severally, in the amount of $3,746,555.70. Judgment is hereby entered in favor of the FTC against Soluciones Dinamicas, Inc., Valentin Benitez and Jose Mario Esque r, jointly and severally, in the amount of $1,365,211.90. Judgment is hereby entered in favor of the FTC against Oficinas Legales de Eric- Douglas Johnson, Inc., Valentin Benitez and Eric Douglas Johnson, jointly and severally, in the amount of $394,493.26. These sums shall become immediately due and payable upon entry of this judgment. These suns shall bear post-judgm ent interest at the rate of .25 percent.All funds paid pursuant to this j udgment shall be deposited into a fund administered by the FTC or its agent to be used for equitable relief, including, but not limited to, consumer redress a nd any attendant expenses fo r the administration of such equitable relief. In the event that direct redress to consumers is wholly or partially impracticable or funds remain after redr ess is completed, th e FTC may apply anyremaining funds to other equ itable relief (including consumer information remedies) as it determines to be reasonably related to defendants™ practices alleged in the First Amended Complaint. Defenda nts shall have no right to challenge the FTC™s choice of remedies under this Subsection. The FTC, in its sole discretion, may use a designated Case 2:09-cv-03554-MMM -PJW Document 111 Filed 08/19/10 Page 2 of 17 Page ID #:4540
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12 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 283agent to administer consumer redress. Th is judgment for equitable monetary relief is solely remedial in nature and is not a fi ne, penalty, punitive assessment, or forfeiture. In accordance with 31 U.S.C. § 7701, defe ndants are hereby required, unless they have already done so, to furnish to the FTC their respective taxpayer identificationnumber (Social Security number or employe r identification number), which shall be used for purposes of collecting and reporti ng any amount that ma y be owing by any of the defendants.Defendants relinquish all dominion, control, and title to the funds paid to the fullest extent permitted by law. Defendants sh all make no claim to or demand for return of the funds, directly or indirectly, through counsel or otherwise.The court further grants permanent in junctive relief against defendants on thefollowing terms: DEFINITIONSFor purposes of this Judgment, the following definitions shall apply: 1.fi Assisting othersfl includes, but is not limited to, providing any of the following goods or services to another pe rson: (A) performing customer service functions, including, but not limited to, receiving or responding to consumer complaints; (B) formulating or providing, or arranging for the formulation or provision of, any telephone sales script or any other marketing mate rial, including but not limited to, the text of any Internet website, email, or other electronic communication; (C) providing names of, or assisting in the generation of, potential customers; (D) performing marketing services of any ki nd; or (E) acting or serving as an owner, officer, director, manager, or principal of any entity. 2.fi Creditfl means the right granted by a credito r to a debtor to defer payment of debt or to incur debt and defer its payment. 3. fi Debt relief good or service fl means any good, service, plan, or program, including debt management plans, debt se ttlement, debt negotiation, and for-profit credit counseling, represented, expressly or by implication, to renegotiate, settle, or in Case 2:09-cv-03554-MMM -PJW Document 111 Filed 08/19/10 Page 3 of 17 Page ID #:4541
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12 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 284any way alter the terms of payment or other terms of the debt between a consumer and one or more unsecured creditors, servicers, or debt collectors, including but not limited to, a reduction in the balance, interest rate, or fees owed by a consumer to an unsecured creditor, servicer, or debt collector.4.fi Defendantsfl means all of the Individual Defendants and Corporate Defendants, individually, collectively, or in any combination. fi Corporate Defendantsflmeans Dinamica Financiera LLC, Soluciones Dinamicas, Inc., and Oficinas Legales de Eric-Douglas Johnson. fi Individual Defendants fl means Valentin Benitez, Jose Mario Esquer, and Eric Douglas Johnson. 5.fi Financial related good or service fl means any good, service, plan, or program that is represented, expressly or by implication, to (A) provide any consumer, arrange for any consumer to receive, or assist any cons umer in receiving, credit, debit, or stored value cards; (B) improve, or arrange to improve, any consumer™s credit record, credit history, or credit rating; (C) provide advice or assistance to any consumer with regard to any activity or service the purpose of which is to improve a consumer™s credit record, credit history, or credit rating; (D) provide any consumer, arrange for any consumer to receive, or assist any consumer in receiving, a loan or other extension ofcredit; (E) provide any consumer , arrange for any consumer to receive, or assist any consumer in receiving, debt relief goods or services; (F) provide any consumer, arrange for any consumer to receive, or assist any consumer in receiving any service represented, expressly or by implication, to renegotiate, settle, or in any way alter theterms of payment or other terms of the debt between a consumer and one or more secured creditors, servicers, or debt collectors. 6.fi Federal homeowner relief or financial stability program fl means any program (including its sponsoring agencies , telephone numbers, a nd Internet websites) operated or endorsed by the United States gove rnment to provide relief to homeowners or stabilize the economy, including but not limited to (A) the Making Home Affordable Program; (B) the Financial Stability Plan; (C) the Troubled Asset Relief Program and Case 2:09-cv-03554-MMM -PJW Document 111 Filed 08/19/10 Page 4 of 17 Page ID #:4542
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12 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 285any other program sponsored or operated by the United States Department of the Treasury; (D) the HOPE for Homeowners program, any program operated or created pursuant to the Helping Families Save Their Homes Act, and any other program sponsored or operated by th e Federal Housing Administration; or (E) any program sponsored or operated by the United Stat es Department of Housing and Urban Development (fiHUDfl), the HOPE NOW Allia nce, the Homeownership Preservation Foundation, or any other HUD-approved housing counseling agency.7.fiFor-profit fl means any activity organized to carry on business for the profit of the entity engaging in the activity or that of its members. 8. fiMaterial factfl means any fact that is likely to affect a person™s choice of, or conduct regarding, goods or services.9.fi Mortgage loan modification or foreclosure relief service fl means anygood, service, plan, or program that is repres ented, expressly or by implication, to assist a consumer in any manner to (A) stop, prev ent, or postpone any home mortgage or deed of trust foreclosure sale; (B) obtain or a rrange a modification of any term of a home loan, deed of trust, or mortgage; (C) obtain any forbearance from any mortgage loan holder or servicer; (D) exercise any right of reinstatement of any mortgage loan; (E) obtain, arrange, or attemp t to obtain or arrange any ex tension of the period within which the owner of property sold at foreclosur e may cure his or her default or reinstate his or her obligation; (F) obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a deed of trust or mortgage on a residence in foreclosure or contained in that deed of tr ust; (G) obtain a loan or advance of funds that is connected to the consumer™s home ow nership; (H) avoid or ameliorate the impairment of the consumer™s credit record, credit history, or credit rating that is connected to the consumer™s home ownershi p; (I) save the consum er™s residence from foreclosure; (J) assist the consumer in obtaining proceeds from the foreclosure sale of the consumer™s residence; (K) obtain or a rrange a pre-foreclosur e sale, short sale, ordeed-in-lieu of foreclosure; (L) obtain or arrange a refinancing, recapitalization, or Case 2:09-cv-03554-MMM -PJW Document 111 Filed 08/19/10 Page 5 of 17 Page ID #:4543
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12 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 286reinstatement of a home loan, deed of trus t, or mortgage; (M) audit or examine a consumer™s mortgage or home loan applica tion; or (N) obtain, arrange, or attempt to obtain or arrange any extensi on of the period within which the renter of property sold at foreclosure may continue to occupy the property. The foregoing shall include any manner of claimed assistance, including, but not limited to, debt, credit, budget, or financial counseling; receiving money for the purpose of distributing it to creditors; contacting creditors or servicers on behalf of the consumer; and giving advice of any kind with respect to filing for bankruptcy.10.fi Personfl means a natural person, organi zation, or other legal entity, including a corporation, partnership, proprie torship, association, cooperative, or any other group or combination acting as an entity. 11.fi Servicerfl means any beneficiary, mortgag ee, trustee, loan servicer, loan holder, or other entity that performs loan or credit account administration or processing services and/or its authorized agents. 12.The words fi andfl and fiorfl shall be understood to have both conjunctive and disjunctive meanings. I.BAN ON MORTGAGE LOAN MODIFICATION AND FORECLOSURE RELIEF SERVICESIT IS ORDERED that Defendants, whether acting directly or through any other person, is permanently restrained and enjoined from A.Advertising, marketing, promoting, offering for sale, or selling any mortgage loan modification or foreclosure relief service; and B.Assisting others engaged in advertisi ng, marketing, promoting, offering for sale, or selling any mortgage loan modi fication or foreclosure relief service.Case 2:09-cv-03554-MMM -PJW Document 111 Filed 08/19/10 Page 6 of 17 Page ID #:4544
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12 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 288f.that the credit does not have a prepayment penalty or that no prepayment penalty and/or other fees or costs will be incurred if the consumer subsequently refinances; and g.that the interest rate(s) or a nnual percentage rate(s) are fixed rather than adjustable or adjustable rather than fixed;2.That any person can improve any consumer™s credit record, credithistory, or credit rating by permanently removing negative information from the consumer™s credit record, credit history, or credit rating, even where such information is accurate and not obsolete; 3.Any person™s ability to improve or otherwise affect a consumer™s credit record, credit history, or credit rating or ability to obtain credit;4.Any aspect of any debt relie f good or service, including but not limited to, the amount of savings a consumer will receive from purchasing, using, or enrolling in such debt relief good or service; the amount of time before which a consumer will receive settlement of the consumer™s debts; or the reduction or cessation of collection calls; and5.That a consumer will receive legal representation; B.Advertising or assisting others in a dvertising credit terms other than those terms that actually are or will be arra nged or offered by a creditor or lender.III.PROHIBITED REPRESENTATIONS RELATING TO ANY GOODS OR SERVICESIT IS FURTHER ORDERED that Defendants and their successors, assigns, officers, agents, servants, employees, and attorneys, and those persons or entities in Case 2:09-cv-03554-MMM -PJW Document 111 Filed 08/19/10 Page 8 of 17 Page ID #:4546
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12 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 289active concert or participation with any of them who receive actual notice of this Judgment by personal service, facsimile tran smission, email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, marketing, promotion, offeri ng for sale or sale of any good, service, plan, or program are hereby permanently restrained and enjoined from misrepresenting or assisting others in misrep resenting, expressly or by implication, any material fact, including but not limited to: A.Any material aspect of the nature or terms of any refund, cancellation, exchange, or repurchase policy, including, but not limited to, the likelihood of a consumer obtaining a full or partial refund, or the circumstances in which a full or partial refund will be granted to the consumer; B.That any person is affiliated with, endorsed or approved by, or otherwise connected to any other person, government entity, any federal homeowner relief or financial stability program, or any other program; C.The total costs to purchase, receive , or use, and the quantity of, the goodor service;D.Any material restriction, limitation, or condition to purchase, receive, or use the good or service; andE.Any material aspect of the performan ce, efficacy, nature, or characteristics of the good or service.IV.PROHIBITION ON ENFORCEMENT OF CONTRACTSIT IS FURTHER ORDERED that Defendant and their successors, assigns, officers, agents, servants, employees, and attorneys, and those persons or entities in active concert or participation with any of them who receive actual notice of this Judgment by personal service or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, are hereby permanently restrained and enjoined from demanding paym ent on or enforcing or attempting to enforce any Case 2:09-cv-03554-MMM -PJW Document 111 Filed 08/19/10 Page 9 of 17 Page ID #:4547
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12 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2810contract or agreement with any consumer, in conjunction with the sale of any mortgage loan modification or foreclosure relief serv ice, entered into by any Defendant prior to the effective date of this Judgment. V.PROHIBITION ON SALE OF CUSTOMER INFORMATIONIT IS FURTHER ORDERED that Defendants and their successors, assigns, officers, agents, servants, employees, and attorneys, and those persons or entities in active concert or participation with any of them who receive actual notice of this Judgment by personal service or otherwise, whether acting directly or through any corporation, subsidiary, division, or othe r device, are permanently restrained and enjoined from: A.disclosing, using, or benefitting fro m customer information, including the name, address, telephone number, email a ddress, social security number, other identifying information, or any data th at enables access to a customer™s account (including a credit card, bank account, or othe r financial account), of any person which any Defendant obtained prior to entry of this Judgment in connection with the advertising, marketing, promotion, offeri ng for sale or sale of any mortgage loan modification or foreclosure relief service ; andB.failing to dispose of such customer information in all forms in their possession, custody, or control within thirty (30) days after entry of this Judgment. Disposal shall be by means that protect against unauthorized access to the customer information, such as by burning or shreddi ng any papers, and by erasing or destroying any electronic media, to ensure that the cu stomer information cannot practicably be read or reconstructed. Provided, however, that customer information need not be disposed of, and may be disclosed, to the extent requested by a government agency or required by a law, regulation, or court order.Case 2:09-cv-03554-MMM -PJW Document 111 Filed 08/19/10 Page 10 of 17 Page ID #:4548
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12 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2811VICOMPLIANCE MONITORINGIT IS FURTHER ORDERED that, for the purpose of monitoring and investigating compliance with any provision of this Judgment: A. Within ten (10) days of receipt of written notice from a representative ofthe Commission, Defendants each shall submit additional written reports, which are true and accurate and sworn to unde r penalty of perjury; produce documents for inspection and copying; appear for deposition; and pr ovide entry during normal business hours to any business location in each Defendant™s po ssession or direct or indirect control to inspect the business operation;B. In addition, the Commission is authorized to use all other lawful means, including but not limited to: 1.obtaining discovery from any person, w ithout further leave of court, using the procedures prescribed by Fed. R. Civ. P. 30, 31, 33, 34, 36, 45 and 69; 2.having its representatives pose as c onsumers and suppliers to Defendants, their employees, or any other entity ma naged or controlled in whole or in part by any Defendant, without the n ecessity of identification or prior notice; andC. Defendants each shall permit representatives of the Commission to interview any employer, consu ltant, independent contractor, representative, agent, or employee who has agreed to such an inte rview, relating in a ny way to any conduct subject to this Judgment. The person interviewed may have counsel present. Provided however, that nothing in this Judgment shall limit the Commission™s lawful use of compulsory process, pursuant to S ections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1, to obtain any documentary material, tangible things, testimony, or information relevant to unfair or deceptive acts or practices in or affecting commerce(within the meaning of 15 U.S.C. § 45(a)(1)). Case 2:09-cv-03554-MMM -PJW Document 111 Filed 08/19/10 Page 11 of 17 Page ID #:4549
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