Case 2:21-cv-13350-MCA-LDW Document 1 Filed 07/06/21 Page 1 of 17 PageID: 1
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`BRIAN M. BOYNTON
`Acting Assistant Attorney General, Civil Division
`ARUN G. RAO
`Deputy Assistant Attorney General
`GUSTAV W. EYLER
`Director, Consumer Protection Branch
`LISA K. HSIAO
`Assistant Director
`ZACHARY L. COWAN
`Trial Attorney
`Consumer Protection Branch
`U.S. Department of Justice
`P.O. Box 386
`Washington, DC 20044
`Telephone: (202) 598-7566 (Cowan)
`Email: Zachary.L.Cowan@usdoj.gov
`Attorneys for Plaintiff
`UNITED STATES OF AMERICA
`
`
`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY
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`
`
`
`
`
`Case No. 2:21-13350
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`
`
`
`
`COMPLAINT FOR
`PERMANENT INJUNCTION
`AND CIVIL PENALTIES
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`
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`
`
`UNITED STATES OF AMERICA,
`
` Plaintiff,
`
`
` v.
`
`
`ENVIRONMENTAL SAFETY
`INTERNATIONAL, INC., a New Jersey
`corporation, also d/b/a Environmental Products
`International, Inc., and EPI,
`
`JOSEPH CARNEY, individually and as an officer
`of Environmental Safety International, Inc.,
`
`SEAN CARNEY, individually and as an officer of
`Environmental Safety International, Inc., and
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`RAYMOND CARNEY, individually,
`
`
`
`
` Defendants.
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`
`
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`
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`Plaintiff, the United States of America, located at 950 Pennsylvania Avenue, N.W.,
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`Washington, D.C., acting upon notification and authorization to the Attorney General by the
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`Federal Trade Commission (“FTC”), pursuant to Section 16(a)(1) of the Federal Trade
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`Commission Act (“FTC Act”), 15 U.S.C. § 56(a)(1), for its Complaint against Defendants
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`Environmental Safety International, Inc., also doing business as Environmental Products
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`International, Inc., and EPI (“ESI”), with a principal place of business at 216 Anderson Avenue,
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`Fairview, New Jersey 07022; Joseph Carney, residing at 20 Appletree Lane, Hillsdale, New Jersey
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`07642; Sean Carney, residing at 245 Wierimus Lane, Hillsdale, New Jersey 07642; and Raymond
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`Carney, residing at 165 Mistletoe Court, Toms River, New Jersey 08753 (collectively, “the
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`Defendants”), alleges:
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`1.
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`Plaintiff brings this action under Sections 5(a), 5(m)(1)(A), 13(b), 16(a), and 19 of the FTC
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`Act, 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), 56(a), 57b, and Section 6 of the Telemarketing and
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`Consumer Fraud and Abuse Prevention Act (the “Telemarketing Act”), 15 U.S.C. § 6105, to
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`obtain monetary civil penalties, a permanent injunction, and other equitable relief for the
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`Defendants’ acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and in
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`violation of the FTC’s Telemarketing Sales Rule (“TSR”), as amended, 16 C.F.R. pt. 310.
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`JURISDICTION AND VENUE
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`2.
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`This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), and
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`1345.
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`3.
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`Venue is proper in this District under 28 U.S.C. § 1391(b)(1), (b)(2), (c)(1), and (c)(2), and
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`15 U.S.C. § 53(b). The Defendants reside and transact business in this District.
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`2
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`DEFENDANTS
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`4.
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`Defendant ESI is a New Jersey corporation with its principal office or place of business at
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`216 Anderson Avenue, Fairview, New Jersey 07022. ESI transacts or has transacted business in
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`this District and throughout the United States. Defendant ESI sells septic tank cleaning products
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`under the brand name “Activator 1000” or “Activator 2000” to consumers who own a septic
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`system or cesspool. At all times relevant to this Complaint, acting alone or in concert with others,
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`ESI has advertised, marketed, distributed, or sold septic tank cleaning products to consumers
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`throughout the United States.
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`5.
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`Defendant Joseph Carney is the President of ESI and is ESI’s co-owner. Joseph Carney,
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`along with his brother Sean, supervises and approves marketing activities conducted by Raymond
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`Carney and Carbro Sales & Survey, L.L.C. (“Carbro”). He is actively involved in ESI’s day-to-
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`day operations, including speaking directly to customers to confirm their addresses for shipment.
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`He is the primary signatory to the bank account from which ESI transferred funds to pay for
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`Carbro’s expenses, including the means to deliver prerecorded telephone messages such as Voice
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`over Internet Protocol (“VoIP”) minutes and Carbro’s predictive and automatic dialing equipment
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`and software, further demonstrating his knowledge of Carbro’s illegal calls. During the past two
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`decades, Joseph Carney served as ESI’s President while ESI has been the subject of at least four
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`federal and state government investigations involving the use of illegal telemarketing practices,
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`including personally signing a stipulation on behalf of ESI to settle the action brought by the State
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`of Wisconsin and unsuccessfully defending ESI against the Federal Communication
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`Commission’s action for delivering unsolicited prerecorded advertising messages. Twice he was
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`sued individually for engaging in illegal telemarketing practices, including the use of prerecorded
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`messages to sell septic tank cleaning products. At all times relevant to this Complaint, acting
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`alone or in concert with others, Joseph Carney has formulated, directed, controlled, had the
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`authority to control, or participated in the acts and practices of ESI and Carbro, including the acts
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`and practices set forth in this Complaint. Joseph Carney resides in this District and, in connection
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`with the matters alleged herein, transacts or has transacted business in this District and throughout
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`the United States.
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`6.
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`Defendant Sean Carney, the brother of Joseph Carney, is the Vice President of ESI and is
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`ESI’s other co-owner. Sean Carney has been the Vice President of ESI for at least the last two
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`decades. In addition to approving, along with his brother Joseph Carney, marketing activities
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`conducted by Raymond Carney and Carbro, Sean Carney was the secondary signatory to the bank
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`account from which ESI transferred funds to pay for Carbro’s expenses, including payroll, VoIP
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`minutes, predictive and automatic dialing software and equipment, and postage, further
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`demonstrating his knowledge of Carbro’s illegal calls. Sean Carney received invoices and a report
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`from Carbro’s VoIP provider, which showed hundreds of thousands of calls consisting of tens of
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`thousands of minutes to United States-based telephone numbers. During a July 2019 investigative
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`hearing, Sean Carney, testifying on behalf of ESI, admitted that he understood that legal
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`responsibility for ensuring compliance with the National Do Not Call Registry remains with ESI
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`and Carbro. Further, Sean Carney directed that letters be mailed to customers threatening to direct
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`their purportedly delinquent accounts to a collection agency or legal department even though ESI
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`never intended to send customer accounts to either a collections agency or legal department. At
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`all times relevant to this Complaint, acting alone or in concert with others, Sean Carney has
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`formulated, directed, controlled, had the authority to control, or participated in the acts and
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`practices of ESI and Carbro, including the acts and practices set forth in this Complaint. Sean
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`Carney resides in this District and, in connection with the matters alleged herein, 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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`Together, ESI, Joseph Carney, and Sean Carney shall be referred to as “the ESI
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`Defendants.”
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`8.
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`Defendant Raymond Carney was the sole owner and head of Carbro, a New Jersey limited
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`liability company that was dissolved on January 11, 2021. He is the younger brother of
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`Defendants Joseph Carney and Sean Carney. At all times relevant to this Complaint, acting alone
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`or in concert with others, Raymond Carney formulated, directed, controlled, had the authority to
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`control, or participated in the acts and practices of Carbro, including the acts and practices set
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`forth in this Complaint. Raymond Carney resides in this District and, in connection with the
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`matters alleged herein, transacts or has transacted business in this District and throughout the
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`United States.
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`COMMON ENTERPRISE
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`9.
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`Defendant ESI and Carbro operated as a common enterprise while engaging in the
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`deceptive and unlawful acts and practices alleged below. ESI and Carbro conducted these
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`business practices through interrelated, family-owned companies that have common control and
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`business functions. Since its founding in 2009, Carbro had only one customer—ESI. ESI paid
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`Carbro’s expenses, including but not limited to rent, VoIP minutes, predictive dialer equipment,
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`payroll, and the health insurance and car payments of Raymond Carney and his wife. Further, ESI
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`and Carbro shared branding, advertising, and website maintenance costs. ESI and Carbro
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`communicated interchangeably with vendors regarding Carbro’s bills and vendors did not
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`distinguish between the two companies. ESI treated Carbro’s employees and contractors as if they
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`worked for ESI, including by reviewing their hours worked and terminating or threatening to
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`terminate employees. Because ESI and Carbro operated as a common enterprise, ESI is liable for
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`Carbro’s acts and practices alleged below.
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`COMMERCE
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`10.
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`At all times relevant to this Complaint, the Defendants have maintained a substantial
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`course of trade or business in marketing goods or services via the telephone, in or affecting
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`commerce, as “commerce” is defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
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`DEFENDANTS’ BUSINESS ACTIVITIES
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`11.
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`The Defendants are “seller[s]” and/or “telemarketer[s]” engaged in “telemarketing,” and
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`the Defendants have initiated, or have caused telemarketers to initiate, “outbound telephone
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`call[s]” to consumers to induce the purchase of goods or services, as those terms are defined in the
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`TSR, 16 C.F.R. § 310.2(x), (dd), (ff), and (gg).
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`12.
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`In 2009, Defendant Raymond Carney established Carbro, after consultation with his
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`brothers, Defendants Joseph and Sean Carney, to dial and call consumers to obtain new customers
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`for ESI’s Activator 1000 line of septic tank cleaning products. In order to achieve this singular
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`goal, the Defendants and Carbro initiated or caused to be initiated over 45 million outbound
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`telemarketing calls to consumers throughout the United States from January 1, 2018, to March 18,
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`2019. Of this total, over 31 million were to telephone numbers that had been listed on the
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`National Do Not Call Registry for more than 30 days prior to the date of the calls (a “hit rate” of
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`over 68%). In addition, from January 1, 2020, to December 7, 2020, the Defendants and Carbro
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`initiated or caused to be initiated over 14.6 million calls of which over 6.7 million were to
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`telephone numbers that had been listed on the National Do Not Call Registry for more than 30
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`days prior to the date of the calls (over 45.7% hit rate).
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`6
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`13.
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`The ESI Defendants handled product fulfillment and payment collection from the new
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`customers obtained through illegal telephone calls initiated by Carbro.
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`14.
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`ESI was Carbro’s only client. Through wire transfers and check deposits placed into
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`Carbro’s corporate bank accounts, ESI paid the expenses incurred by Carbro, including payroll,
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`VoIP minutes, predictive and automatic dialer software and equipment, and postage. ESI also
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`paid for the health insurance and car payments of Raymond Carney and his wife.
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`15.
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`From at least 2016 to after the time of learning of the FTC investigation into their
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`practices, the Defendants and Carbro advertised Activator 1000 by blasting millions of telephone
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`calls that deliver unsolicited prerecorded telephone messages, or “robocalls,” to consumers across
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`the United States.
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`16.
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`The Defendants’ prerecorded message falsely claims that it is “not a sales call or
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`solicitation,” but purportedly invites septic tank and cesspool owners to receive free information
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`on how to maintain their system and protect the environment:
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`Hello, this is not a sales call or a solicitation. We’re calling from an
`environmental company with information for all septic tank and
`cesspool owners. We would like to give you some free info on our
`environmentally safe, all natural septic tank cleaning product. The
`product is U.S.D.A. approved for safety and is fully guaranteed to
`eliminate the need for tank pump outs and prevent any costly repairs
`by maintaining your entire septic system or cesspool. If you’d like
`free information on how to maintain your system and protect the
`environment please press one. If you would like to be removed
`from our calling list, please press two.
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`Consumers who pressed “1” then heard a message that directed them to leave their name,
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`17.
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`telephone number, and mailing address to receive “free information.”
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`18.
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`The robocall message does not disclose the Defendants’ identities, nor does the message
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`state the actual purpose of the call, which is to sell Activator 1000.
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`19.
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`The initial robocall message consumers received is a crucial part of the Defendants’
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`telemarketing sales campaign. Consumers who heard the message about “free information” and
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`left their contact information then received a telephone call from one of Carbro’s telemarketers.
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`The telemarketer identified himself or herself to the consumer as calling from “Activator 1000”
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`and then attempted to sell the Activator 1000 septic tank cleaning product to the consumer.
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`20.
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`Consumers who agreed to purchase Activator 1000 received a second telephone call soon
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`after from a Carbro employee to verify the shipping address and purchase.
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`21.
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`The Defendants did not remove telephone numbers listed on the National Do Not Call
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`Registry from their callings lists.
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`22.
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`The Defendants continued to call consumers despite the consumers having told the
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`Defendants to stop calling and to place the consumers’ telephone number on the Defendants’
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`internal do not call list.
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`23.
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`The ESI Defendants also sent letters to consumers with unpaid invoices, one of which
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`stated that ESI will refer the consumer to a “NATIONAL COLLECTION AGENCY” if the
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`consumer does not pay. Another letter informed consumers that ESI Defendants will refer the
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`unpaid invoice to an attorney. These statements were false, since the ESI Defendants did not refer
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`consumers to any collection agency or attorney.
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`24.
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`The FTC required ESI and Carbro to each testify under oath at an investigational hearing
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`in the summer of 2019 regarding their business practices.
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`25.
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`At that hearing, Raymond Carney, testifying on behalf of Carbro, admitted that it would be
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`unlawful for a seller to use prerecorded messages to sell septic products in the United States.
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`Raymond Carney also testified that he is responsible for ensuring compliance with the National
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`Do Not Call Registry. Subsequently, Raymond Carney further testified that he knew that Carbro
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`delivered prerecorded messages to United States telephone numbers.
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`26.
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`At that hearing, Sean Carney admitted that companies hired to market ESI’s products have
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`to use the National Do Not Call Registry to “scrub any lists that they have or existing lists that
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`they have monthly before they make calls on our behalf” to ensure that ESI is not causing
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`outbound calls to people who do not want to be called. He also testified that delivering
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`prerecorded messages to consumers in the United States would place his livelihood at risk,
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`demonstrating his knowledge that such a practice would be illegal.
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`27.
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`28.
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`ESI-related entities have been operating for years using illegal telemarketing practices.
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`In 2001, Oregon enjoined ESI-related entity DJC Holding Company of New Jersey d/b/a
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`Septic Safety from telemarketing or accepting payment for business obtained through solicitation
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`in Oregon.
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`29.
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`In 2003, public authorities in Missouri and Wisconsin sued ESI over its use of robocalls
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`and calling consumers who were registered with their respective state’s “do not call” registries.
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`ESI stipulated to a consent judgment, signed by Joseph Carney, enjoining it from soliciting
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`Wisconsin consumers whose telephone number appeared on the state do-not-call registry.
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`30.
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`In 2006, the Federal Communications Commission assessed, with notice to Joseph Carney,
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`a Forfeiture Order against ESI for willful or repeated violations of the Telephone Consumer
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`Protection Act, 47 U.S.C. § 227(b), for delivering unsolicited, prerecorded messages.
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`31.
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`In June 2017, the Better Business Bureau (“BBB”) placed an alert on ESI’s publicly
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`available BBB profile, which remains there today, advising the public that the BBB contacted ESI
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`about a “possible pattern of complaints” related to unordered products, difficulty returning
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`products, and “threats of being turned over to a collection agency.” Defendant Joseph Carney
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`9
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`responded to the BBB’s alert, but did not address reports of ESI threatening to turn consumers
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`over to a collection agency. Defendant Joseph Carney further responded that Defendant Sean
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`Carney handles BBB complaints.
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`32.
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`Additionally, since 2013, three private citizens have sued one or more of the Defendants
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`after having received unsolicited robocalls.
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`33.
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`Based on the facts and violations of law alleged in this Complaint, Plaintiff has reason to
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`believe that the Defendants are violating or are about to violate laws enforced by the FTC because,
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`among other things:
`
`a.
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`The Defendants engaged in their unlawful activity repeatedly for over a
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`period of at least fifteen years.
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`b.
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`The Defendants engaged in their unlawful acts and practices willfully and
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`knowingly.
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`c.
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`The Defendants continued their unlawful acts or practices despite
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`knowledge of numerous complaints.
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`d.
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`The Defendants continued their unlawful acts or practices despite
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`knowledge of the FTC’s investigation and even after they received a Civil
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`Investigative Demand from the FTC.
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`e.
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`The Defendants’ unlawful acts and practices were the subject of prior law
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`enforcement actions, yet the Defendants continued to engage in such practices.
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`VIOLATIONS OF THE FTC ACT
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`34.
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`Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive acts or
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`practices in or affecting commerce.” Misrepresentations or deceptive omissions of material facts
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`constitute deceptive acts or practices prohibited by Section 5(a) of the FTC Act.
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`10
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`Count I
`False Representations to Induce Payment
`(against ESI and Joseph and Sean Carney)
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`35.
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`In numerous instances, in connection with the sale and collection of payment for septic
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`tank products, including through the means described in Paragraphs 11-32, ESI, Joseph Carney,
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`and Sean Carney have represented, directly or indirectly, expressly or by implication, that failure
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`to pay will result in legal action or collection activities by a collection agency.
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`36.
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`In truth and in fact, these representations are false or misleading or are not substantiated at
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`the time the representations are made.
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`37.
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`Therefore, the making of the representations set forth in Paragraph 35 constitutes a
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`deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
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`VIOLATIONS OF THE TELEMARKETING SALES RULE
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`In 1994, Congress directed the FTC to prescribe rules prohibiting abusive and deceptive
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`38.
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`telemarketing acts or practices pursuant to the Telemarketing Act, 15 U.S.C. §§ 6101-08. The
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`FTC adopted the original TSR in 1995, extensively amended it in 2003, and amended certain
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`sections thereafter. 16 C.F.R. pt. 310.
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`39.
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`Among other things, the 2003 amendments to the TSR established the National Do Not
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`Call Registry, maintained by the FTC, of consumers who do not wish to receive certain types of
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`telemarketing calls. Consumers can register their telephone numbers on the Registry without
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`charge either through a toll-free telephone call or over the Internet at donotcall.gov.
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`40.
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`Consumers who receive telemarketing calls to their registered numbers can complain of
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`Registry violations the same way they registered, through a toll-free telephone call or over the
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`Internet at donotcall.gov, or by otherwise contacting law enforcement authorities.
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`11
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`41.
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`The FTC allows sellers, telemarketers, and other permitted organizations to access the
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`Registry over the Internet at telemarketing.donotcall.gov, to pay the fee(s) if required, and to
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`download the numbers not to call.
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`42.
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`Under the TSR, a “telemarketer” means any person who, in connection with telemarketing,
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`initiates or receives telephone calls to or from a customer or donor. 16 C.F.R. § 310.2(ff). A
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`“seller” means any person who, in connection with a telemarketing transaction, provides, offers to
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`provide, or arranges for others to provide goods or services to the customer in exchange for
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`consideration. 16 C.F.R. § 310.2(dd).
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`43.
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`Under the TSR, an “outbound telephone call” means a telephone call initiated by a
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`telemarketer to induce the purchase of goods or services or to solicit a charitable contribution. 16
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`C.F.R. § 310.2(x).
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`44.
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`The TSR prohibits sellers and telemarketers from initiating an outbound telephone call to
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`numbers on the National Do Not Call Registry unless the seller (1) has obtained the consumer’s
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`express agreement, in writing, to place such calls, or (2) has an established business relationship
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`with that consumer, and the consumer has not stated that he or she does not wish to receive such
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`calls. 16 C.F.R. § 310.4(b)(l)(iii)(B).
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`45.
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`The TSR prohibits sellers and telemarketers from initiating an outbound telephone call that
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`delivers a prerecorded message, unless the seller has obtained the consumer’s express agreement
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`in writing to receive such calls. 16 C.F.R. § 310.4(b)(1)(v). Such express agreement must
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`include: (1) a clear and conspicuous disclosure that the purpose of the agreement is to authorize
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`the seller to place prerecorded calls to such person; (2) that the seller did not require the agreement
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`to be executed as a condition of purchasing a good or service; (3) the specific seller the consumer
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`is authorizing to make such calls; and (4) the consumer’s telephone number and signature. 16
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`C.F.R. § 310.4(b)(1)(v)(A)(i)-(iv).
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`46.
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`Under the TSR, sellers and telemarketers bear the burden of proof to demonstrate they had
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`a legal basis for initiating or causing the initiation of each outbound telephone call dialed to
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`numbers listed on the National Do Not Call Registry and each outbound telephone call that
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`delivered a prerecorded message. The TSR requires sellers and telemarketers to maintain all
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`records of express agreements for a period of 24 months. 16 C.F.R. § 310.5(a)(5).
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`47.
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`The TSR prohibits sellers and telemarketers from initiating an outbound telephone call to a
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`person who previously has stated that he or she does not wish to receive an outbound telephone
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`call made by or on behalf of the seller whose goods or services are being offered. 16 C.F.R.
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`§ 310.4(b)(1)(iii)(A).
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`48.
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`It is an abusive telemarketing act or practice and a violation of the TSR for a telemarketer
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`making an outbound telephone call to fail to promptly, truthfully, and in a clear and conspicuous
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`manner disclose the identity of the seller, that the purpose of the call is to sell goods or services,
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`and the nature of the services. 16 C.F.R. § 310.4(d).
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`49.
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`The TSR prohibits a person from providing substantial assistance or support to any seller
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`or telemarketer when that person knows or consciously avoids knowing that the seller or
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`telemarketer is engaged in acts or practices that violate Sections 310.3(a), (c) or (d), or 310.4 of
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`the TSR. 16 C.F.R. § 310.3(b).
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`50.
`
`Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. § 6102(c), and Section
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`18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation of the TSR constitutes an unfair or
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`deceptive act or practice in or affecting commerce, in violation of Section 5(a) of the FTC Act, 15
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`U.S.C. § 45(a).
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`51.
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`Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(1)(A), as modified by Section 4 of
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`the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461, as amended, and
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`as implemented by FTC Rule 1.98(d), 16 C.F.R. § 1.98(d), authorizes this Court to award
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`monetary civil penalties. Effective January 24, 2017, the Court was authorized to award a penalty
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`of up to $40,654 for each violation of the TSR. 16 C.F.R. § 1.98 (2017). Effective January 22,
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`2018, the maximum civil penalty amount was adjusted to $41,484 for each violation of the
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`TSR. 16 C.F.R. § 1.98 (2018). As of February 14, 2019, the maximum civil penalty amount was
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`adjusted to $42,530 for each violation of the TSR. 16 C.F.R. § 1.98 (2019). On January 13, 2020,
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`the maximum civil penalty amount was adjusted to $43,280. 16 C.F.R. § 1.98 (2020). On January
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`13, 2021, the maximum civil penalty amount was adjusted to $43,792. 16 C.F.R. § 1.98 (2021).
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`The Defendants’ violations of the TSR were committed with the knowledge required by Section
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`5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(1)(A).
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`52.
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`Each instance in which the Defendants have failed to comply with the TSR, 16 C.F.R. pt.
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`310, constitutes a separate violation of the TSR for the purpose of assessing monetary civil
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`penalties.
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`Count II
`Violating the National Do Not Call Registry
` (against all Defendants)
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`In numerous instances, in connection with telemarketing, the Defendants have initiated or
`
`53.
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`caused others to initiate an outbound telephone call to a person’s telephone number on the
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`National Do Not Call Registry, in violation of the TSR. 16 C.F.R. § 310.4(b)(1)(iii)(B).
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`Count III
`Initiating Unlawful Prerecorded Messages
`(against all Defendants)
`
`In numerous instances, in connection with telemarketing, the Defendants have initiated or
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`54.
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`Case 2:21-cv-13350-MCA-LDW Document 1 Filed 07/06/21 Page 15 of 17 PageID: 15
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`caused others to initiate outbound telephone calls that delivered prerecorded messages to induce
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`the purchase of goods or services, in violation of the TSR. 16 C.F.R. § 310.4(b)(1)(v)(A).
`
`Count IV
`Failing to Honor Do Not Call Requests
`(against all Defendants)
`
`In numerous instances, in connection with telemarketing, the Defendants have initiated or
`
`55.
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`caused others to initiate an outbound telephone call to a person who previously has stated that he
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`or she does not wish to receive an outbound call made by or on behalf of the Defendants.
`
`56.
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`Therefore, Defendants’ acts or practices as set forth in Paragraph 55 violate the TSR.
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`16 C.F.R. § 310.4(b)(1)(iii)(A).
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`Count V
`Failing to Make Required Oral Disclosures
`(against all Defendants)
`
`In numerous instances, in connection with telemarketing, the Defendants have initiated or
`
`57.
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`caused others to initiate an outbound telephone call that failed to disclose truthfully, promptly, and
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`in a clear and conspicuous manner to the person receiving the call (a) the seller’s identity and (b)
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`that the purpose of the call is to sell goods and services.
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`58.
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`Therefore, Defendants’ acts or practices as set forth in Paragraph 57 violate the TSR.
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`16 C.F.R. § 310.4(d)(1) and (2).
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`Case 2:21-cv-13350-MCA-LDW Document 1 Filed 07/06/21 Page 16 of 17 PageID: 16
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`Count VI
`Assisting and Facilitating Abusive Telemarketing Acts and Practices
`(against the ESI Defendants)
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`59.
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`In numerous instances, the ESI Defendants have provided substantial assistance or support
`
`to Defendant Raymond Carney and Carbro, whom the ESI Defendants knew or consciously
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`avoided knowing were engaged in violations of Section 310.4 of the TSR.
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`60.
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`Therefore, the ESI Defendants’ acts or practices as set forth in Paragraph 59 violate the
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`TSR. 16 C.F.R. § 310.3(b).
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`CONSUMER INJURY
`
`61.
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`Consumers have suffered and will continue to suffer substantial injury as a result of the
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`Defendants’ violations of the FTC Act and the TSR. In addition, the Defendants have been
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`unjustly enriched as a result of their unlawful acts or practices. Absent injunctive relief by this
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`Court, the Defendants are likely to continue to injure consumers, reap unjust enrichment, and harm
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`the public interest.
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`PRAYER FOR RELIEF
`
`WHEREFORE, Plaintiff FTC, pursuant to Sections 13(b) and 19 of the FTC Act, 15
`
`U.S.C. §§ 53(b), 57b, and Section 6 of the Telemarketing Act, 15 U.S.C. § 6105, and the Court’s
`
`own equitable powers, requests that the Court:
`
`A.
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`Enter a permanent injunction to prevent future violations of the FTC Act and the TSR by
`
`the Defendants;
`
`B.
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`Award Plaintiff monetary civil penalties against the Defendants for each violation of the
`
`TSR alleged in this Complaint; and
`
`
`
`C.
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`Award Plaintiff the costs of bringing this action, as well as such other and additional relief
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`as the Court may determine to be just and proper.
`
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`Case 2:21-cv-13350-MCA-LDW Document 1 Filed 07/06/21 Page 17 of 17 PageID: 17
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`Dated: July 6, 2021
`
`OF COUNSEL:
`
`JON MILLER STEIGER
`Regional Director
`East Central Region
`
`FEDERAL TRADE COMMISSION
`
`Amy C. Hocevar, OH # 0075510
`Christian M. Capece, WV # 10717
`Derek E. Diaz, OH # 0069755
`Fil M. de Banate, OH # 0086039
`Federal Trade Commission
`1111 Superior Avenue East, Suite 200
`Cleveland, Ohio 44114
`Tel: (216) 263-3409 (Hocevar)
`Tel: (216) 263-3419 (Capece)
`Tel: (216) 263-3421 (Diaz)
`Tel: (216) 263-3413 (de Banate)
`Fax: (216) 263-3426
`ahocevar@ftc.gov
`ccapece@ftc.gov
`ddiaz@ftc.gov
`fdebanate@ftc.gov
`
`
`
`
`
`Respectfully submitted,
`
`FOR THE UNITED STATES OF
`AMERICA:
`
`BRIAN M. BOYNTON
`Acting Assistant Attorney General
`Civil Division
`
`ARUN G. RAO
`Deputy Assistant Attorney General
`
`GUSTAV W. EYLER
`Director
`Consumer Protection Branch
`
`LISA K. HSIAO
`Assistant Director
`
`By: s/ Zachary L. Cowan
`
`Zachary L. Cowan
`Trial Attorney
`Consumer Protection Branch
`U.S. Department of Justice
`P.O. Box 386
`Washington, DC 20044
`(202) 598-7566
`Zachary.L.Cowan@usdoj.gov
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`17
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