Case 6:20-cv-02200-PGB-DCI Document 1 Filed 12/03/20 Page 1 of 19 PageID 1
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`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF FLORIDA
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`6:20-cv-2200
`Case No. ____________
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`COMPLAINT FOR PERMANENT
`INJUNCTION AND OTHER
`EQUITABLE RELIEF
`
`FEDERAL TRADE COMMISSION,
`
`Plaintiff,
`
`v.
`
`ALCAZAR NETWORKS INC., a
`corporation, and
`
`GAVIN GRABIAS, individually and as an
`officer and owner of ALCAZAR
`NETWORKS INC.,
`
`Defendants.
`
`Plaintiff, the Federal Trade Commission (“FTC” or “the Commission”), for its Complaint
`
`alleges:
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`1.
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`Plaintiff brings this action under Sections 13(b) and 19 of the FTC Act, 15 U.S.C.
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`§§ 53(b) and 57b, and Section 6 of the Telemarketing and Consumer Fraud and Abuse
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`Prevention Act (“Telemarketing Act”), 15 U.S.C. § 6105, to obtain a permanent injunction,
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`rescission or reformation of contracts, damages, disgorgement of ill-gotten monies, restitution,
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`the refund of monies paid, and other equitable relief for Defendants’ acts or practices in violation
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`of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the FTC’s Telemarketing Sales Rule
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`(“TSR” or “Rule”), as amended, 16 C.F.R. Part 310.
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`SUMMARY OF ALLEGATIONS
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`2.
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`As set forth in detail below, Defendants Alcazar Networks Inc. and Gavin Grabias
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`assisted and facilitated violations of the TSR by continuing to provide services to their customers
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`even after knowing or consciously avoiding knowing their customers were using Alcazar’s
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`
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`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF FLORIDA
`
`6:20-cv-2200
`Case No. ____________
`
`COMPLAINT FOR PERMANENT
`INJUNCTION AND OTHER
`EQUITABLE RELIEF
`
`FEDERAL TRADE COMMISSION,
`
`Plaintiff,
`
`v.
`
`ALCAZAR NETWORKS INC., a
`corporation, and
`
`GAVIN GRABIAS, individually and as an
`officer and owner of ALCAZAR
`NETWORKS INC.,
`
`Defendants.
`
`Plaintiff, the Federal Trade Commission (“FTC” or “the Commission”), for its Complaint
`
`alleges:
`
`1.
`
`Plaintiff brings this action under Sections 13(b) and 19 of the FTC Act, 15 U.S.C.
`
`§§ 53(b) and 57b, and Section 6 of the Telemarketing and Consumer Fraud and Abuse
`
`Prevention Act (“Telemarketing Act”), 15 U.S.C. § 6105, to obtain a permanent injunction,
`
`rescission or reformation of contracts, damages, disgorgement of ill-gotten monies, restitution,
`
`the refund of monies paid, and other equitable relief for Defendants’ acts or practices in violation
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`of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the FTC’s Telemarketing Sales Rule
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`(“TSR” or “Rule”), as amended, 16 C.F.R. Part 310.
`
`SUMMARY OF ALLEGATIONS
`
`2.
`
`As set forth in detail below, Defendants Alcazar Networks Inc. and Gavin Grabias
`
`assisted and facilitated violations of the TSR by continuing to provide services to their customers
`
`even after knowing or consciously avoiding knowing their customers were using Alcazar’s
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`
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`services to initiate calls that: (a) were placed to numbers on the National Do Not Call Registry;
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`(b) delivered prerecorded messages; and (c) displayed spoofed caller ID numbers, including
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`displaying “911” as a caller ID number.
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`JURISDICTION AND VENUE
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`3.
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`This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a),
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`and 1345.
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`4.
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`Venue is proper in this District under 28 U.S.C. § 1391(b)(1), (b)(2), (b)(3),
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`(c)(1), (c)(2), (c)(3), and (d), and 15 U.S.C. § 53(b).
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`PLAINTIFF
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`5.
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`The FTC is an independent agency of the United States Government created by
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`statute. 15 U.S.C. §§ 41–58. The FTC enforces Section 5(a) of the FTC Act, 15 U.S.C. § 45(a),
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`which prohibits unfair or deceptive acts or practices in or affecting commerce. The FTC also
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`enforces the Telemarketing Act, 15 U.S.C. §§ 6101-6108. Pursuant to the Telemarketing Act,
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`the FTC promulgated and enforces the TSR, 16 C.F.R. Part 310, which prohibits deceptive and
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`abusive telemarketing acts or practices.
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`DEFENDANTS
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`6.
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`Defendant Alcazar Networks Inc. (“Alcazar”) is a closely held Pennsylvania
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`corporation with its principal place of business in Trexlertown, PA. Alcazar transacts or has
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`transacted business in this district and throughout the United States.
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`7.
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`Defendant Gavin Grabias (“Grabias”) is the founder, sole owner, and president of
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`Alcazar. He is one of its only three employees and is actively involved in Alcazar’s day-to-day
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`operations. He is also in charge of Alcazar’s legal compliance and is the sole signatory on
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`Alcazar’s bank accounts. Grabias resides in this district and, in connection with the matters
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`alleged herein, transacts or has transacted business in this district and throughout the United
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`States. At all times material to this Complaint, acting alone or in concert with others, Grabias
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`had the authority and responsibility to prevent or correct Alcazar’s unlawful acts and practices.
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`Also at all times material to this Complaint, Grabias has formulated, directed, controlled, had the
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`authority to control, or participated in Alcazar’s acts and practices, including the acts and
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`practices set forth in this Complaint.
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`COMMERCE
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`8.
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`At all times material to this Complaint, Alcazar and Grabias (collectively,
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`“Defendants”) have maintained a substantial course of trade in or affecting commerce, as
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`“commerce” is defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
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`THE TELEMARKETING SALES RULE AND
`THE NATIONAL DO NOT CALL REGISTRY
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`9.
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`Congress directed the FTC to prescribe rules prohibiting abusive and deceptive
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`telemarketing acts or practices pursuant to the Telemarketing Act, 15 U.S.C. §§ 6101-6108. The
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`FTC adopted the original TSR in 1995, extensively amended it in 2003, and amended certain
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`provisions thereafter. 16 C.F.R. Part 310.
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`10.
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`Among other things, the 2003 amendments to the TSR established a do not call
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`registry, maintained by the FTC (the “National DNC Registry” or “Registry”), of consumers who
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`do not wish to receive certain types of telemarketing calls. Consumers can register their
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`telephone numbers on the Registry without charge either through a toll-free telephone call or
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`online at donotcall.gov.
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`11.
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`Consumers who receive telemarketing calls to their registered numbers can
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`complain of Registry violations the same way they registered, through a toll-free telephone call
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`or online at donotcall.gov, or by otherwise contacting law enforcement authorities.
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`12.
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`The TSR defines “telemarketing” as a plan, program or campaign which is
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`conducted to induce the purchase of goods or services or a charitable contribution, by use of one
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`or more telephones and which involves more than one interstate telephone call. 16 C.F.R. §
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`310.2(gg).
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`13.
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`Under the TSR, a “telemarketer” is any person who, in connection with
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`telemarketing, initiates or receives telephone calls to or from a customer or donor. 16 C.F.R. §
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`310.2(ff).
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`14.
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`A “seller” means any person who, in connection with a telemarketing transaction,
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`provides, offers to provide, or arranges for others to provide goods or services to the customer in
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`exchange for consideration. 16 C.F.R. § 301.2(dd).
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`15.
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`The FTC allows sellers, telemarketers, and other permitted organizations to access
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`the Registry online at telemarketing.donotcall.gov, to pay any required fee(s), and to download
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`the numbers not to call.
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`16.
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`Under the TSR, an “outbound telephone call” means a telephone call initiated by
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`a telemarketer to induce the purchase of goods or services or to solicit a charitable contribution.
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`16 C.F.R. § 310.2(x).
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`17.
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`The TSR prohibits sellers and telemarketers from initiating an outbound telephone
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`call to numbers on the Registry. 16 C.F.R. § 310.4(b)(1)(iii)(B).
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`18.
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`As amended, effective September 1, 2009, the TSR prohibits initiating an
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`outbound telephone call that delivers a prerecorded message to induce the purchase of any good
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`or service. 16 C.F.R. § 310.4(b)(1)(v). Calls delivering prerecorded messages are commonly
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`called “robocalls.”
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`19.
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`The TSR requires that sellers and telemarketers transmit or cause to be
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`transmitted the telephone number of the telemarketer and, when made available by the
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`telemarketer’s carrier, the name of the telemarketer (“caller ID information”), to any caller
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`identification service in use by a recipient of a telemarketing call, or transmit the customer
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`service number of the seller on whose behalf the call is made and, when made available by the
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`telemarketer's carrier, the name of the seller. 16 C.F.R. § 310.4(a)(8). Transmitting inaccurate
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`caller ID information, or causing inaccurate caller ID information to be transmitted, violates the
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`TSR and is commonly called “spoofing.”
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`20.
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`It is a violation of the TSR for any person to provide substantial assistance or
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`support to any seller or telemarketer when that person knows or consciously avoids knowing that
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`the seller or telemarketer is engaged in any practice that violates Sections 310.3(a), (c) or (d), or
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`310.4 of the TSR. 16 C.F.R. § 310.3(b).
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`21.
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`Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. § 6102(c), and
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`Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation of the TSR constitutes an
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`unfair or deceptive act or practice in or affecting commerce, in violation of Section 5(a) of the
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`FTC Act, 15 U.S.C. § 45(a).
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`DEFENDANTS’ BUSINESS ACTIVITIES
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`Defendants’ General Business Practices
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`22.
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`Alcazar is a nationwide provider of interconnected Voice over Internet Protocol
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`
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`(“VoIP”) services, including termination (outbound) services and origination (inbound) services.
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`23.
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`Alcazar’s interconnected VoIP services offer the capability of generating,
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`acquiring, storing, transforming, processing, retrieving, utilizing, or making available
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`information via telecommunications.
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`24.
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`The Telecommunications Act of 1996 provides two definitions relevant to
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`understanding Alcazar's business activities.
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`25.
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`The first, “information service,” means “the offering of a capability for
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`generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available
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`information via telecommunications, and includes electronic publishing, but does not include any
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`use of any such capability for the management, control, or operation of a telecommunications
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`system or the management of a telecommunications service.” 47 U.S.C. § 153(24).
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`26.
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`The second definition, “telecommunications service,” means “the offering of
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`telecommunications for a fee directly to the public, or to such classes of users as to be effectively
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`available directly to the public, regardless of the facilities used.” 47 U.S.C. § 153(53).
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`27.
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`Alcazar’s interconnected VoIP services offer the “capability for generating,
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`acquiring, storing, transforming, processing, retrieving, utilizing, or making available
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`information via telecommunications.”
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`28.
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`Therefore, Alcazar’s VoIP services fit within the meaning of “information
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`service” as defined by 47 U.S.C. § 153(24).
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`29.
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`Alcazar has advertised on its website that “[u]nlike most wholesale termination
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`carriers, we accept welcome, invite, and cater to all types of dialer traffic.”
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`30.
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`Alcazar also offers its customers Direct Inbound Dialing (“DID”) origination and
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`provisioning.
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`31.
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`Alcazar’s DID origination service uses interconnected VoIP to route inbound calls
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`dialed to a specific DID number to its customers. DID origination service is “information
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`service” as defined by 47 U.S.C. § 153(24).
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`32.
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`Alcazar’s website has stated that “[o]ur origination service transports Public
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`Switched Telephone Network (PSTN) originated local calls from multiple locations (rate
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`centers) and terminates them to the customer’s softswitch or media gateway via IP or TDM
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`connectivity using local DID telephone numbers.”
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`33.
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`In its DID provisioning service, Alcazar licenses caller ID numbers to customers
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`for them to display in their outbound calls. Alcazar’s provisioning and licensing of DID
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`numbers is not telecommunications service activity under the Telecommunications Act, nor is it
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`information service activity.
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`34.
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`Providing interconnected VoIP services to a telemarketer constitutes the provision
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`of substantial support and assistance to a telemarketer under the TSR.
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`35.
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`Providing DID origination and DID provisioning to a telemarketer also constitutes
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`the provision of substantial support and assistance to a telemarketer under the TSR.
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`36.
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`Providers of Interconnected VoIP service are required to register with the Federal
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`Communications Commission (“FCC”) by completing the FCC’s Form 499. Alcazar maintained
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`an active registration—listing Grabias as the company president—until July 1, 2014. Since July
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`1, 2014, Alcazar has failed to maintain an active FCC 499 filer registration.
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`37.
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`Alcazar has also failed to pay required FCC licensing fees, including
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`contributions to the FCC’s Universal Service Fund (“USF”). The USF supports affordable
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`telephone service across the country.
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`38.
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`In July 2019, the United States of America (through private counsel) sued Alcazar
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`for unpaid regulatory fees for the FCC USF as well as the Telecommunication Relay Service,
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`which helps people with hearing or speech disabilities place and receive phone calls. The
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`Complaint alleges that Alcazar owes the FCC $73,198.78 in fees (including interest, penalties,
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`and costs). See USA v. Alcazar Networks, Inc., No. 5:19-cv-03283-JFL (E.D. Pa. filed July 26,
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`2019). According to documents attached to the Complaint in that case, the unpaid regulatory
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`fees were for fiscal years 2012-2014. Alcazar was personally served with the Complaint at its
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`offices in October 2019 and Alcazar retained counsel to appear in the case. On March 27, 2020,
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`Alcazar agreed to a settlement under which it would pay $50,000.
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`39.
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`From July 1, 2014 through at least May 13, 2020, Alcazar failed to reactivate its
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`FCC 499 registration. It remained delinquent in meeting that obligation, as it had at all times
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`since July 1, 2014.
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`40.
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`As the Alcazar employee in charge of the company’s legal compliance, Grabias
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`should know of the company’s failure to meet these regulatory requirements.
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`Alcazar Assisted and Facilitated Derek Bartoli’s Violations of the TSR
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`41.
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`On June 21, 2019, the United States Department of Justice (“DOJ”) filed a lawsuit
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`against Derek Bartoli on behalf of the FTC, alleging that Bartoli violated the TSR. On the same
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`date, the DOJ also filed a Stipulated Final Order in which Bartoli resolved the FTC’s claims by
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`agreeing to a monetary judgment and injunctive relief. Bartoli dialed the illegal calls at issue in
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`that case using VoIP services provided by Alcazar.
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`42.
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`As outlined below, Alcazar continued providing Bartoli with VoIP and DID
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`services even after knowing or consciously avoiding knowing that Bartoli was using those
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`services to dial calls that violated the TSR.
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`43.
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`From December 1, 2017 through May 2018, Alcazar received numerous
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`indications that Bartoli was using Alcazar’s VoIP lines and DID services to dial illegal
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`telemarketing calls. Alcazar even sent Bartoli several communications in which Alcazar
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`expressly acknowledged that it had received complaints about calls dialed through Bartoli’s
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`account.
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`44.
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`First, on December 1, 2017, the FTC sent a letter to Alcazar asking for the name,
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`address, and place of business of Alcazar’s customer or subscriber that dialed a specific
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`telephone call at 12:43 AM. The TSR prohibits telemarketing calls made to a telephone number
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`between 9:00 PM and 8:00 AM of the local time where the called party resides. The letter
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`specifically noted that the written request was “relevant to a law enforcement investigation
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`concerning telemarketing fraud.”
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`45.
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`Alcazar responded and identified Derek Bartoli as the customer or subscriber that
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`dialed the relevant call, but Alcazar’s response incorrectly identified Bartoli’s company as
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`“Medical Alarms,” with an address in the Philippines. In truth, “Medical Alarms” was the name
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`Bartoli assigned to a specific telemarketing campaign. Bartoli’s company name was Marketing
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`Consultation Solutions, incorporated and located in Florida.
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`46.
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`Alcazar had entered into contractual agreements with Marketing Consultation
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`Solutions in Florida, not Medical Alarms.
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`47.
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`On December 20, 2017, the FTC issued a Civil Investigative Demand (“CID”) to
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`Alcazar requesting additional information about Bartoli, Medical Alarms, and the same
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`telephone call previously identified in the FTC’s prior letter dated December 1, 2017. In that
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`CID, the FTC identified the subject of the investigation as an inquiry regarding whether the
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`“Subject Customers,” defined to include Bartoli, had violated the Telemarketing Sales Rule.
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`48.
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`In response to the December 20, 2017 CID, Alcazar produced contracts signed by
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`Bartoli on behalf of Marketing Consultation Solutions, along with other responsive documents
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`and information.
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`49.
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`Grabias personally handled Alcazar’s response to the FTC’s December 20, 2017
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`CID, corresponding with the FTC about Bartoli on multiple occasions. For example, on the
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`morning of January 2, 2018, Grabias participated as Alcazar’s representative during a meet and
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`confer regarding the requirements of the CID. Following the call, the FTC confirmed in
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`writing—and Grabias responded affirmatively—that Grabias understood that the subjects of the
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`CID included all of Alcazar’s customers or subscribers that were associated with Bartoli.
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`Grabias confirmed that Mr. Bartoli prepaid for the services provided by Alcazar using a credit
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`card. In responding to that CID, Grabias personally sent the FTC more than a dozen emails and
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`he directed his employees to compile Bartoli’s call detail records and other responsive
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`information. As a result, Grabias knew that the FTC was investigating whether Bartoli had
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`violated the TSR.
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`50.
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`For several months after it responded to the FTC’s December 2017 CID, Alcazar
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`continued receiving complaints and inquiries about calls dialed through Bartoli’s account from
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`other voice service providers to which Alcazar routed calls, known as upstream line carriers.
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`Alcazar then emailed Bartoli about those complaints.
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`51.
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`For example, on February 15, 2018, Alcazar sent Bartoli an email stating: “We
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`have received complaints for DID 813-320-0315 telemarketing/scamming Florida residences
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`without any regard to the Do Not Call List. Please investigate this report and take proper
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`action.”
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`52.
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`Two weeks later, on February 28, 2018, Alcazar emailed Bartoli and informed
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`him that: “We have received reports of spam calls from DID 217-203-9135 to 7735453890
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`according to our records this DID is assigned to Medical Alarms please investigate and take
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`appropriate action.”
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`53.
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`The following day, on March 1, 2018, Alcazar sent Bartoli yet another email
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`complaining about calls dialed through his account, stating: “We have received more complaints
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`regarding this DID that is assigned to your account. Calls are being reported as receiving spam
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`calls outside of normal business hours and waking people.”
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`54.
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`Then, on March 15, 2018, Alcazar emailed Bartoli again about calls violating the
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`TSR’s DNC rules, stating: “Alcazar Networks is notifying your company that the following TN’s
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`that are assigned to your company are experiencing high levels of complaints per number.
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`Please note that there are two sets of complaints. The first being complaints directly received,
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`and the second being tied to the FTC DNC complaints.”
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`55.
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`By no later than March 15, 2018, Alcazar knew, or consciously avoided knowing,
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`that Bartoli was using Alcazar’s services for calls that violated the TSR.
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`56.
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`Instead, after March 16, 2018, Alcazar continued letting Bartoli use its services.
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`From March 16, 2018 through July 2, 2018, using services provided by Alcazar, Bartoli dialed
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`107,875,507 calls, of which 57,539,792 were to numbers listed on the DNC Registry for more
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`than 31 days. Many of these calls delivered prerecorded messages, and many of these calls used
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`spoofed caller ID numbers.
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`57.
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`After March 16, 2018, Alcazar received additional indications that Bartoli was
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`engaged in illegal dialing.
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`58.
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`On April 25, 2018, the Mississippi Public Service Commission (“Mississippi
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`Commission”), which administers the Mississippi state DNC statute, sent Alcazar a subpoena.
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`The subpoena stated that the Mississippi Commission was serving the subpoena in connection
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`with an investigation about alleged violations of Mississippi’s Do No Call List, which is similar
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`to the FTC’s DNC Registry. The subject line of the subpoena stated: “Alleged Violation of
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`Miss. Code Ann.§77-3-101 et seq., as amended, by telephonic solicitation of a residential line
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`customer who has subscribed to the Mississippi Public Service Commission’s Do Not Call List
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`pursuant to the Mississippi Telephone Solicitation Act and accompanying rules.”
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`59.
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`Alcazar—and Grabias, who was in charge of Alcazar’s legal compliance—failed
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`to respond to the subpoena.
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`60.
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`On May 11, 2018, the Mississippi Commission followed up with a second request
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`that Alcazar respond to its subpoena.
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`61.
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`On May 21, 2018, Alcazar responded by identifying its customer as “Medical
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`Alarms” with an address in the Philippines. It also provided Derek Bartoli’s name, phone
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`number and email address.
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`62.
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`As before, Alcazar incorrectly identified Bartoli’s company as “Medical Alarms.”
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`In truth, “Medical Alarms” was the name Bartoli assigned to a specific telemarketing campaign.
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`Bartoli’s company name was Marketing Consultation Solutions, incorporated and located in
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`Florida. Alcazar had entered into a contract with Marketing Consultation Solutions, not Medical
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`Alarms. Nevertheless, Alcazar did not identify Marketing Consultation Solutions in its response
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`to the Mississippi Commission.
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`63.
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`Alcazar did not send Bartoli emails about these government inquiries, nor did it
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`take any actions to determine whether Bartoli was dialing unlawful calls.
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`64.
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`From May 22, 2018 through July 2, 2018, Bartoli’s “Medical Alarms”
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`telemarketing campaign dialed more than 25 million telemarketing calls using Alcazar’s VoIP
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`and DID services. Of these calls, more than 16 million were placed to numbers that had been
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`listed on the National Do Not Call Registry for more than 31 days, in violation of the TSR.
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`65.
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`In addition, many, if not all, of the telemarketing calls Bartoli dialed using
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`Alcazar’s services delivered prerecorded messages, in violation of the TSR.
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`66.
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`Further, many, if not all, of the telemarketing calls Bartoli dialed using Alcazar’s
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`services displayed spoofed caller ID numbers, also in violation of the TSR.
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`67.
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`At an investigational hearing conducted by the FTC on July 26, 2018, Bartoli
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`testified that, while he owned Marketing Consultation Solutions, he never accessed the National
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`Do Not Call Registry to remove numbers on the registry from his calling lists. He also testified
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`that his “Medical Alarms” telemarketing campaigns used prerecorded messages in outbound
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`telemarketing calls to sell medical alert devices. In addition, Bartoli testified that his usual
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`practice was to spoof caller ID numbers for most of his clients, stating that he would set the
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`caller ID “for a random number” where the first six digits matched the number of the consumer
`
`he was calling. All of these practices violated the TSR.
`
`68.
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`Bartoli’s telemarketing campaigns, including his “Medical Alarms” campaigns,
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`involved millions of interstate telephone calls. Bartoli dialed many of these calls from Florida,
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`using internet service to connect to Alcazar’s VoIP servers located in Pennsylvania, in order to
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`reach consumers in states other than Florida or Pennsylvania.
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`Alcazar Also Assisted and Facilitated Illegally Spoofed Calls Displaying 911 as the Caller ID
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`69. More than twenty of Alcazar’s customers have delivered, transmitted, or routed
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`calls using Alcazar’s VoIP services that displayed “911” as the caller ID number.
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`70.
`
`Under prevailing laws, regulations, and industry standards, “911” is a number
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`used only for calling during an emergency. Only a Public Safety Access Point (“PSAP”) or a
`
`communications center operated for emergency services would have a valid or legal reason to
`
`13
`
`
`
`Case 6:20-cv-02200-PGB-DCI Document 1 Filed 12/03/20 Page 14 of 19 PageID 14
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`display “911” as the caller ID number. Commercial entities have no valid reason to display
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`“911” as the caller ID number in their calls.
`
`71. Mass, autodialed campaigns displaying “911” as the caller ID number present a
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`two-fold danger. First, scammers may scare or deceive consumers into believing they are the
`
`government, police, or law enforcement to fraudulently obtain money. Second, when consumers
`
`return missed calls from “911,” these calls are routed to legitimate PSAPs and can occupy “911”
`
`operators, rendering them unavailable to answer actual emergency calls.
`
`72.
`
`For one specific customer, E. Sampark (located in India), Alcazar continued
`
`providing services even after several specific indications that the customer was illegally spoofing
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`“911” in its calls.
`
`73. Many of the calls that E. Sampark dialed using Alcazar’s VoIP services
`
`impersonated the Social Security Administration.
`
`74.
`
`On July 1, 2019, Alcazar received notice from a telecommunications trade
`
`association, USTelecom, that a call transmitted across Alcazar’s network had “been deemed
`
`suspicious” and displayed “911” as the caller ID number. In an email response that same day,
`
`Alcazar identified its customer responsible for that call as a business named “E. Sampark”
`
`located in the Gujarat province of India.
`
`75.
`
`Alcazar did not email E. Sampark to inquire about these suspicious calls
`
`displaying “911” as a caller ID number.
`
`76.
`
`After July 2, 2019, Alcazar consciously avoided knowing that E. Sampark’s calls
`
`were fraudulent calls to solicit money from consumers. The Defendants also knew that E.
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`Sampark’s calls displayed spoofed caller ID numbers.
`
`14
`
`
`
`Case 6:20-cv-02200-PGB-DCI Document 1 Filed 12/03/20 Page 15 of 19 PageID 15
`
`77.
`
`Nonetheless, Alcazar emailed E. Sampark to solicit additional business, noting
`
`that the number of minutes E. Sampark had been dialing decreased.
`
`78.
`
`Alcazar continued permitting its customers—including E. Sampark—to transmit
`
`calls displaying “911” as the caller ID number.
`
`79.
`
`After July 2, 2019, Alcazar permitted E. Sampark to dial more than 250,000
`
`additional calls using Alcazar’s VoIP services, including more than 300 calls displaying “911” as
`
`the caller ID number, along with numerous others displaying “1911”, “10911, or “11911” as the
`
`caller ID number.
`
`80.
`
`The FTC issued Alcazar a CID on October 4, 2019 requesting records regarding
`
`any customers which had originated, initiated, or routed telephone calls using Alcazar’s services
`
`in which “911” was displayed as the caller ID. The CID also specifically requested records
`
`related to E. Sampark. The CID stated that the purpose of its investigation was to determine
`
`whether Alcazar had assisted and facilitated violations of the TSR.
`
`81.
`
`Alcazar responded on October 29, 2019. These responses showed that 24 of
`
`Alcazar’s customers had dialed calls which displayed “911” as the caller ID.
`
`82.
`
`Between July 2, 2019 and October 29, 2019, Alcazar sent E. Sampark
`
`approximately 400 emails. None of them inquires of E. Sampark as to why it was using “911” as
`
`a caller ID.
`
`83.
`
`Between October 2019 and February 2020, Alcazar permitted E. Sampark and
`
`thirteen other customers to dial calls showing “911” as the caller ID.
`
`COUNT I
`
`Assisting and Facilitating Violations of the Telemarketing Sales Rule
`
`15
`
`
`
`Case 6:20-cv-02200-PGB-DCI Document 1 Filed 12/03/20 Page 16 of 19 PageID 16
`
`84.
`
`Defendants provided substantial assistance or support to Bartoli and / or his
`
`customers, who were “seller[s]” and/or “telemarketer[s]” engaged in “telemarketing,” as defined
`
`by the TSR, 16 C.F.R. § 310.2.
`
`85.
`
`As set forth above in paragraphs 41 to 68, in numerous instances, in connection
`
`with telemarketing, Bartoli and / or his customers:
`
`a. Initiated or caused the initiation of outbound telephone calls to telephone
`
`numbers on the National DNC Registry to induce the purchase of goods or
`
`services, in violation of 16 C.F.R. § 310.4(b)(1)(iii)(B);
`
`b. Initiated or caused the initiation of outbound telephone calls that delivered
`
`prerecorded messages to induce the purchase of goods or services, in violation
`
`of 16 C.F.R. § 310.4(b)(1)(v); and
`
`c. Failed to transmit or cause to be transmitted to caller identification services
`
`the telephone number and name of the telemarketer making the call, or the
`
`customer service number and name of the seller on whose behalf the
`
`telemarketer called, in violation of 16 C.F.R. § 310.4(a)(8).
`
`86.
`
`At all relevant times, Defendants knew, or consciously avoided knowing, that
`
`Bartoli and or his customers were making the unlawful calls described in paragraph 85, which
`
`violated § 310.4 of the TSR.
`
`87.
`
`Defendants’ substantial assistance and support, as alleged in paragraphs 41 to 68,
`
`above, violates the TSR, 16 C.F.R. § 310.3(b).
`
`88.
`
`Defendants have also provided substantial assistance or support to E. Sampark
`
`and / or its customers, which is a “seller[s]” and/or “telemarketer[s]” engaged in “telemarketing,”
`
`as defined by the TSR, 16 C.F.R. § 310.2.
`
`16
`
`
`
`Case 6:20-cv-02200-PGB-DCI Document 1 Filed 12/03/20 Page 17 of 19 PageID 17
`
`89.
`
`As set forth above in paragraphs 69 to 83, in numerous instances, in connection
`
`with telemarketing, E. Sampark and / or its customers transmitted false caller identification in
`
`violation of 16 C.F.R. § 310.4(a)(8).
`
`90.
`
`At all relevant times, Defendants knew, or consciously avoided knowing, that E.
`
`Sampark was making the unlawful calls described in paragraph 89, which violated § 310.4 of the
`
`TSR.
`
`91.
`
`Defendants’ substantial assistance and support, as alleged in paragraphs 69 to 83,
`
`above, violates the TSR, 16 C.F.R. § 310.3(b).
`
`CONSUMER INJURY
`
`92.
`
`Consumers in the United States have suffered and will suffer substantial injury as
`
`a result of Defendants’ violations of the TSR. In addition, Defendants have been unjustly
`
`enriched as a result of their unlawful acts or practices. Absent injunctive relief by this Court,
`
`Alcazar is likely to continue to injure consumers and harm the public interest.
`
`93.
`
`Based on the facts and violations of law alleged in this Complaint, the FTC has
`
`reason to believe that Defendants are violating or are about to violate laws enforced by the
`
`Commission, and that consumers will continue to be injured by those ongoing violations,
`
`because, among other things: (a) Defendants have shown a pattern and practice of continuing to
`
`assist and facilitate violations of the TSR, even after learning of the violations; (b) Defendants
`
`remain in the VoIP industry and maintain the means, ability, and incentive to resume their
`
`unlawful conduct; (c) Defendants repeatedly provided law enforcement agencies with inaccurate
`
`information about the identity of their customer; and (e) Defendants have shown a disdain for
`
`following other legal requirements, such as the requirement that interconnected VoIP service
`
`providers maintain an active registration with the FCC and pay all required regulatory fees.
`
`17
`
`
`
`Case 6:20-cv-02200-PGB-DCI Document 1 Filed 12/03/20 Page 18 of 19 PageID 18
`
`THIS COURT’S POWER TO GRANT RELIEF
`
`94.
`
`Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to grant
`
`injunctive and other ancillary relief to prevent and remedy any violation of any provision of law
`
`enforced by the FTC.
`
`95.
`
`Section 19 of the FTC Act, 15 U.S.C. § 57b, and Section 6 of the Telemarketing
`
`Act, 15 U.S.C. § 6105, authorize this Court to award damages and grant such relief as the Court
`
`finds necessary to redress injury to consumers resulting from Alcazar’s violations of the TSR.
`
`96.
`
`This Court, in the exercise of its equitable jurisdiction, may order disgorgement,
`
`restitution, the refund of monies paid, and award ancillary relief to prevent and remedy any
`
`violation of the TSR or the FTC Act.
`
`PRAYER FOR RELIEF
`
`
`
`WHEREFORE, Plaintiff requests that this Court, as authorized by Sections 5(a), 13(b),
`
`and 19 of the FTC Act, 15 U.S.C. §§ 45(a), 53(b), 57b, and Section 6 of the Telemarketing Act,
`
`15 U.S.C. § 6105, and pursuant to its own equitable powers:
`
`A.
`
`Enter judgment against Defendants and in favor of Plaintiff for each violation
`
`alleged in thi
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