The following is the text of the Stipulated Order For Preliminary Injunction against JewelWay, Inc. For comments from Jeffrey Babener you can return to FTC vs JewelWay.

 

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA

Tucson Division

FEDERAL TRADE COMMISSION,
Plaintiff,

V.

JEWELWAY INTERNATIONAL, INC., an Arizona Corporation,

BRUCE A. CARUTH, individually and as an officer of JewelWay International, Inc.,

ROBERT J. CHARETTE, JR., individually and as an officer of JewelWay International, Inc., and ROBERT J CHARETTE, JR. and ANGELA D. CHARETTE, Husband and Wife, and

DONILYN A. WALDEN, individually and as an officer of JewelWay International, Inc., and

GREG G. STEWART, an individual, and GREG G. STEWART AND BEVERLY STEWART, Husband and Wife,

Defendants

CV-97-383 TUC JMR

STIPULATED ORDER FOR
PRELIMINARY INJUNCTION
AS TO DEFENDANTS
JEWELWAY INTERNATIONAL, INC.
BRUCE A. CARUTH, ROBERT
J. CHARETTE, JR., ANGELA
D. CHARETTE, DONILYN A.
WALDEN, GREG G. STEWART
AND BEVERLY STEWART


Plaintiff, the Federal Trade Commission ("Commission or FTC"), filed its Complaint and Ex Parte Motion for a Temporary Restraining Order and other equitable relief on June 24, 1997. The Court partially granted plaintiff's request for a temporary restraining order on June 25, 1997. The Complaint charged defendants JewelWay International, Inc., Bruce A. Caruth, Robert J. Charette, Jr., Donilyn A. Walden, and Greg G. Stewart with violations of Section 5 of the Federal Trade Commission Act ("FTC Act"), l5 U.S.C. 45. The Commission and defendants JewelWay International, Inc., Bruce A. Caruth, Robert J. Charette, Jr., Donilyn A. Walden, and Greg G. Stewart, and relief defendants Angela D. Charette and Beverly Stewart, represented by the attorneys whose names appear hereafter, have agreed to entry of this Stipulated Order for Preliminary Injunction ("Order") by the Court.

FINDINGS

  1. This Court has jurisdiction of the subject matter of this case and over defendants and relief defendants.
  2. The Complaint states claims upon which relief may be granted against the defendants, under Sections 5 and 13(b) of the FTC Act, as amended, 15 U.S.C. 45 and 52(b).
  3. Entry of this Order is in the public interest.
  4. The defendants and relief defendants enter into this Order freely and without coercion and acknowledge that they understand the provisions of this Order and are prepared to abide by them.
  5. Venue in this district is proper under 28 U.S.C. 1391 (b) and (c) and 15 U. S. C. 53(b).
  6. The acts and practices of the defendants were or are in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. 44.
  7. This Order does not constitute and shall not be interpreted to constitute either an admission by the defendants or a finding by the Court that the defendants have engaged in deceptive acts and practices.

DEFINITIONS

For the purposes of this Order, the following definitions apply:

  1. "Defendants" means JewelWay International, Inc., Bruce A. Caruth, Robert J. Charette, Jr., Donilyn A. Walden, and Greg G. Stewart.
  2. "Relief defendants" means Angela D. Charette and Beverly Stewart.
  3. "Multi-level marketing program" means any marketing program in which sales revenue comes primarily from retail sales to persons who are not connected in any way to the company engaged in multi-level marketing ("the company"), including as representatives. Under this definition, sales to businesses or corporations connected to the company or to its participants, or to members of a participant's household, or otherwise not solely for the purpose of sale of the product to a person with no connection to the company's sales force, shall not be considered retail sales; should a retail customer subsequently establish such a connection by becoming a representative, any prior sales made to that customer within ten days of becoming a representative shall be considered an internal sale from the time of sale and shall not be considered a retail sale for any purpose at any time. This definition also requires that the company has instituted and enforces rules to ensure it is not selling a program where sales revenues do not come primarily from recruiting additional representatives rather than by the sale of goods or services to persons not eligible to recruit representatives into the marketing program.
  4. "Chain or pyramid marketing program" is a sales device whereby a person, under a condition that he or she make a payment, directly or indirectly, even if a good or service is received in return for the payment, is granted a license or right to recruit for consideration one or more additional persons who are also granted a license or right upon condition of making a payment, directly or indirectly, even if a good or service is received in return for the payment, and may further perpetuate the chain or pyramid of persons who are granted a license or right upon such condition. A limitation as to the number of persons who may participate, or the presence of additional conditions affecting eligibility for the above license or right to recruit or the receipt of the profits therefrom, does not change the identity of the program as a chain or pyramid marketing program.
  5. "Representative" means any person or entity that pays money to the defendants in return for the right to (1) recruit additional participants, or have additional participants placed by the promoter or any other person into the participant's downline, tree, cooperative, income center, or other similar program grouping; (2) sell goods or services; and (3) receive payment or other compensation.
  6. "Product" means anything purchased by a representative except non-jewelry sales aids.
  7. "Receivership estate" means the business operations of JewelWay and all funds, properties, premises and other assets directly or indirectly owned, beneficially or otherwise, wherever situated, that relate to the business operations of JewelWay, specifically including the premises at 5151 E. Broadway, Tucson, Arizona, and 5210 E. Williams Circle, Tucson, Arizona, excluding defendants' personal residences, except to the extent that business records are maintained there.

ORDER

I.

IT IS THEREFORE ORDERED that defendants, their successors, assigns, officers, agents, servants, employees, distributors, and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, are permanently restrained and enjoined from engaging, participating, or assisting in any manner or capacity whatsoever, directly, in concert with others, or through any business entity or other device, in the advertising, promoting, offering for sale, or sale of any pyramid marketing program, except that defendants are not enjoined from engaging, participating, or assisting in multi-level marketing programs subject to the terms of this Order.

II.

IT IS FURTHER ORDERED that defendants, their successors, assigns, officers, agents, servants, employees, distributors, and those persons in active concert or participation them who receive actual notice of this Order by personal service or otherwise, in connection with the advertising, promoting, offering for sale, sale, or distribution of any product or service, are hereby permanently restrained and enjoined from:

  1. Misrepresenting, directly or by implication, the earnings any person actually made, is making, or potentially can make;
  2. Misrepresenting, directly or by implication, the amount of sales any person actually made, is making, or potentially can make;
  3. Misrepresenting, directly or by implication, the discounts or benefits any person actually received, is receiving, or potentially can receive;
  4. Misrepresenting, directly or by implication, the value or characteristics of any product or service available for purchase;
  5. Making any statement relating to rewards that were, are, or will be received by a representative or representatives through participation in the marketing plan to any person without also disclosing (1) the number of representatives who are receiving at least the same rewards; and (2) the percentage of total representatives who are receiving at least the same rewards, excluding general descriptions of rewards that may be received by participation in the program;
  6. Tying, implicitly or explicitly, a participant's purchase of product or service for personal use or consumption with his level of compensation or any other business benefit, or his qualification or certification as a participant;
  7. Making any statement that any person is required, or that it would be beneficial, to make a product purchase in order to participate in the program, except as it relates to success in making retail sales; and
  8. Misrepresenting any material fact.

III.

IT IS FURTHER ORDERED that defendants, their successors, assigns, officers, agents, servants, employees, distributors, and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, in connection with the advertising, promoting, offering for sale, sale, or distribution of any product or service by means of multi-level marketing, are hereby permanently restrained and enjoined from failing to pay refunds according to the following terms, which must be disclosed in a clear and conspicuous manner: (1) 100% of the purchase price if the purchaser requests a refund within sixty days of delivery for any reason; and (2) 100% of the purchase price less a 10% restocking fee if a representative requests a refund within sixty-one days to one year after the date of delivery, provided that the defendants will have the right to terminate the representative's affiliation. Refund amounts may be (1) offset by any compensation received by the representative as a result of such purchase and (2) conditioned upon the return of the product in resalable condition, (i.e., it has not been worn and is in its original packaging.)

IV.

IT IS FURTHER ORDERED that defendants, their successors, assigns, officers, agents, servants, employees, distributors, and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, in connection with the advertising, promoting, offering for sale, sale, or distribution of any product or service sold by means of multi-level marketing are permanently enjoined and restrained from failing to verify each sale. Defendants shall give each new representative a written verification form at the time such new representative becomes affiliated with the marketing program. The verification form may not be signed prior to or on the same day that the representative becomes affiliated with the marketing program. The verification form shall contain only the language contained in Exhibit I to this Order or such other language approved by the FTC. The defendants shall retain in chronological order the original of each complete verification form and shall review it to ensure that the representative received accurate information and that the provisions of this Order were not violated, and shall provide such verifications to the Commission upon request. If the representative did not receive accurate information or a provision of this Order was violated, the defendants shall immediately inform the representative in writing that he or she did not receive accurate information and that he or she has the right to receive a full refund of the purchase price. Defendants shall not deposit any portion of a representative's payment until the defendants have received and reviewed the representative's completed verification form and determined that the representative received accurate information. In the event the defendants do not receive a completed, dated, and signed verification form within sixty days of sending the form to a representative, defendants shall immediately return all funds paid by the representative.

V.

IT IS FURTHER ORDERED that defendants, their successors, assigns, officers, agents, servants, employees, distributors, and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, in connection with the advertising, promoting, offering for sale, sale, or distribution of any product or service by means of multi-level marketing, are hereby permanently restrained and enjoined from:

  1. Failing to take reasonable steps sufficient to monitor and ensure that all agents, representatives, distributors, employees, or independent contractors engaged in marketing or sales comply with Paragraphs I-IV of this Order. Reasonable steps shall include, at a minimum, setting up a compliance program which conducts random, blind testing of the oral representations made by any agent or representative of the company engaged in multi-level marketing; spot checking of representatives to ensure that no misrepresentations were made; ascertaining the number and nature of any consumer complaints; and requiring any representative to submit proof of retail sales, including the name and address of all retail customers. The defendants shall submit a summary report of the data concerning the amount of retail sales, which shall include a comparison of the amount of retail sales revenues received from representatives to total product sales revenues received from representatives to the Federal Trade Commission once every six months starting three months from the date of this Order. Such report shall be submitted to: Regional Director, Federal Trade Commission, Denver Regional Office, 1961 Stout Street, Suite 1523, Denver, Colorado 80294;
  2. Continuing to retain any person, whether as an employee, distributor, independent contractor, or representative once any defendant knows or should know, either through steps taken pursuant to the requirements of this Paragraph, Paragraph IV, or otherwise, that such person is or has engaged in conduct prohibited by Paragraphs I-IV of this Order. Defendants shall terminate such person upon his or her second action of any sort prohibited by Paragraphs I-IV; and
  3. Failing to investigate and make a good faith effort to resolve promptly any consumer complaint received by any defendant from any third party such as a consumer, government agency, or Better Business Bureau, regarding any sales promotion or sale of any product or service, and to notify the consumer of the resolution of the complaint and the reason therefore.

VI.

IT IS FURTHER ORDERED that the receiver, within two weeks of this Order, shall publish a copy of this Order on the World Wide Web and shall distribute a copy of this Order to each principal, officer, director, employee, agent or other person having advertising, marketing, distribution, sales, or managerial responsibilities relating to any defendant's business, to any other person engaged in activities that are the subject of this Order, and to each person in active concert or participation with them, excluding representatives, and shall obtain a signed and dated statement acknowledging receipt of the Order.

VII.

IT IS FURTHER ORDERED that the receiver, within three weeks of this Order, shall distribute two copies of the letter attached herein as Exhibit 2 to any person who is a representative as of the date of this Order.

VIII.

IT IS FURTHER ORDERED that defendants JewelWay International, Inc., Bruce A. Caruth, Robert J. Charette, Jr., Donilyn A. Walden (a.k.a. Deedee Walden), and Greg G. Stewart, and relief defendants Beverly Stewart and Angela D. Charette (a.k.a. Angie Charette) with regard to marital community assets, and their agents, employees, officers, servants, and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, are hereby temporarily restrained and enjoined from:

  1. {Information Missing}
  2. Destroying, erasing, mutilating, concealing, altering, transferring, or otherwise disposing of, in any manner, directly or indirectly, any contracts, membership or mailing lists, accounting data, written or electronic correspondence (including "E-mail"), advertisements, computer tapes, discs, or other computerized records (e.g., databases), books, written or printed records, handwritten notes, telephone logs, telephone scripts, receipts, ledgers, personal and business canceled checks and check registers, bank statements, appointment books, copies of federal, state or local business or personal income or property tax returns, customer or Representative complaints, inquiries, information, communications or complaints from any governmental organizations, any JewelWay business forms, in any format maintained, including Retail Sales Logs, Retail Customer Lists, Notification of Gold or Platinum Status Forms, Gift Certificate Redemption Forms, Return Authorization Forms, U.S. Jewelry Customer Order & Receipt Forms, U.S. Independent Representative Application and Agreement (RU Forms), U.S. Independent Representative Jewelry Order Forms, and other documents or records of any kind that relate to the business practices or business or personal finances of the defendants.

X.

IT IS FURTHER ORDERED that, except as stipulated by the parties or as directed by further order of this Court:

  1. Any financial or brokerage institution, business entity, or person, who receives actual notice of this Order, that holds, controls or maintains custody of any account or asset, including any membership or mailing (including E-mail) lists, real or personal property of the defendants (JewelWay International, Inc.; Bruce A. Caruth, SS4 349-40-4681; Donilyn A. Walden (a.k.a. Deedee Walden), SS# 526-04-4809; Robert J. Charette, Jr., SS4 073-46-7144; and Greg G. Stewart, SS# 526-02-4529 or 526-02-0529), whether held by defendants individually or as a marital community asset, or has held, controlled or maintained custody of any such account, or asset, at any time since November 7, 1990, shall:
    1. Prohibit all persons and entities except, with respect to JewelWay's assets, receiver appointed by this Order and his designated representatives or agents, from withdrawing, removing, assigning, transferring, pledging, encumbering, disbursing, dissipating, converting, selling or otherwise disposing of any of these assets.
    2. Deny all persons and entities, except, with respect to JewelWay's assets, any receiver appointed by this Order and his designated representatives or agents, access to any safe deposit box, wherever located, that is:
      1. titled in the name of any defendant, either individually or jointly; or
      2. otherwise subject to access by any defendant;
    3. Provide the Commission's counsel and, with respect to JewelWay's assets, any receiver appointed herein, within five (5) business days of receiving a copy of this Order, a sworn statement setting forth:
      1. the identification number of each such account or asset titled in the name, individually or jointly, of any of the defendants, or held on behalf of, or for the benefit of, any of the defendants, including all trust accounts managed on behalf of these defendants or subject to any of these defendants' control;
      2. the balance of each such account, or a description of the nature and value of such asset as of the close of business on the day on which this Order is served, and, if the account or other asset has been closed or removed, the date closed or removed, the total funds removed in order to close the account, and the name of the person or entity to whom such account or other asset was remitted;
    4. Upon request and within five calendar days therefrom, provide to Commission counsel, and with respect to JewelWay's assets, to any appointed receiver herein, all records or other documentation pertaining to such account or asset, including but not limited to', originals or copies of account applications, account statements, signature cards, checks, drafts, deposit tickets, transfers to and from the accounts (including wire transfers), all other debit and credit instruments or slips, currency transaction reports, 1099 and safe deposit box logs. Any such financial institution, account custodian, or other aforementioned entity may arrange for the Commission to obtain copies of any such records which the Commission seeks.
  2. Any commercial mail receiving company that holds, controls or maintains custody of any asset, including any membership or mailing (including E-mail) lists, real or personal property of the defendants, or has held, controlled or maintained custody of any such asset, at any time since the date of entry of this Order shall:
    1. Deny defendants access to any commercial mailbox, wherever located, including any mailbox located at 5151 E. Broadway and 5210 East Williams Circle, Tucson, Arizona, that is:
      1. titled in the name of any defendant, either individually or jointly; or
      2. otherwise subject to access by any defendant;
    2. Provide the Commission's counsel, within five (5) business days after receiving a copy of this Order, a sworn statement setting forth the identification of any mailbox that is subject to access by any defendant and a list or inventory setting forth for each piece of mail contained therein, a description of the item, to whom it is addressed, from whom it was sent (including name and address), date of postmark, and date of receipt.

XI.

IT IS FURTHER ORDERED that copies of this Order may be served by first class mail, overnight delivery, facsimile, or personally, by employees or agents of the FTC or any receiver appointed herein, upon any bank, savings and loan institution, credit union, financial institution, brokerage house, escrow agent, money market or mutual fund, title company, commodity trading company, common carrier, storage company, trustee, commercial mail receiving agency, mail holding or forwarding company, or any other person, partnership, corporation, or legal entity that may be in possession of any records, assets, property, or property right of any defendant, and any other person, partnership, corporation, or legal entity may be subject to any provision of this Order. For purposes of service on anyone (e.g., financial institutions) in possession of records, assets, property, or property rights, actual notice of this Order shall include notice from service by facsimile transmission of this Order, provided that this notice is followed within five business days by delivery of a copy of this Order.

XII.

IT IS FURTHER ORDERED that defendants JewelWay International, Inc., Bruce A. Caruth, Robert J. Charette, Jr., Donilyn A. Walden (a.k.a. Deedee Walden), and Greg G. Stewart, shall each prepare and deliver to the counsel for the FTC and any receiver appointed herein, completed financial statements, verified under oath, on the forms attached to this Order by July 11, 1997. The completed financial statement shall. be accurate as of June 25, 1997 and shall apply to all foreign as well as domestic assets and liabilities, Each individual defendant shall attach to this completed financial statement copies of all federal and state personal income and property tax returns filed since January 1, 1991. In addition, each defendant shall also submit a statement identifying all transfers or assignments of assets or property worth $1,000 or more since January 1, 1991, including the name of each transferee or assignee, the nature and value of the asset or property involved, the date of the assignment or transfer, and the nature and amount of any consideration provided to defendants.

XIII.

IT IS FURTHER ORDERED that defendants shall allow plaintiff and any receiver appointed herein, and their representatives, agents, and assistants, immediate access to JewelWay's business premises and any other location where JewelWay's property or business records are located. Such locations specifically include, but are not limited to, JewelWay's offices and facilities at 5151 E. Broadway, Tucson, Arizona, 8571 1, and 521 0 E. Williams Circle, Tucson, Arizona, 8571 1. The receiver is authorized to employ the assistance of law enforcement officers as he deems necessary, to effect service and to implement peacefully the provisions of this Order. The purpose of access shall be to inspect and inventory all of JewelWay's property, assets, and documents and inspect and copy any documents relevant to this action. For purposes of this provision, the term "document" shall include all those items described in Section IX above. Plaintiff, and its agents, and assistants, shall have the right to use defendants' copier(s) to make copies of any such documents. In addition, the receiver shall have the right to remove documents from JewelWay's premises in order that they may be inspected, inventoried, and copied.

Named defendants shall vacate JewelWay's business premises at the receiver's discretion or until further order of this Court.

If any business records or property relating to JewelWay International, Inc., is located in the personal residence of a defendant and consent to enter such residence is denied, then such defendant shall:

  1. Produce to plaintiff, at a location designated by plaintiff, all contracts, accounting data, written or electronic correspondence, advertisements, computer tapes, discs, or other computerized records, books, written or printed records, handwritten notes, telephone logs, telephone scripts, membership records and lists, refund records, receipts, ledgers, personal and business canceled checks and check registers, bank statements, appointment books, copies of federal, state or local business or personal income or property tax returns, and other documents or records of any kind that relate to defendants' business practices; and
  2. Produce to plaintiff, at a location designated by plaintiff, all computers and data in whatever form, used by such defendant or any of such defendant's agents, employees, officers, servants or those persons in active concert with him or her, in activities relating to defendants' business practices.

XIV.

IT IS FURTHER ORDERED that James C. Sell, C.P.A., C.F.E., is appointed temporary receiver, with the full power of an equity receiver, for JewelWay International, Inc., and any subsidiaries and affiliates of JewelWay, and of all funds, properties, premises and other assets directly or indirectly owned, wherever situated, beneficially or otherwise, by JewelWay with directions and authority to accomplish the following:

  1. Take custody, control, and possession of all funds, property, premises, mail, and other assets of, or in the possession or control of JewelWay, including the contents of any safe deposit box, wherever situated, with full power to divert, return to sender, hold without opening, open, or copy any mail, and to receive and take in possession all goods, chattels, rights, credits, monies, effects, lands, leases, books, work papers, and records of accounts, including electronic files on any media, and other papers and documents of defendant JewelWay and members of the public whose interests are now held by or under the direction, possession, custody or control of JewelWay.
  2. Upon request, provide counsel for the FTC with JewelWay's bank account information and an accounting within 24 hours of taking custody of JewelWay's assets or as soon as practical thereafter;
  3. Conserve, hold, and manage all such assets, pending stipulation of the parties or further order of this Court; to obtain an accounting thereof; and to report to this Court and counsel for the FTC any violations of this Order or of Section 5(a) of the FTC Act, 15 U.S.C. 45(a), that the receiver may become aware of by defendants, their respective officers, directors, agents, servants, employees, "Independent Representatives," volunteers, attorneys, salespersons, successors, assigns, subsidiaries, affiliates, corporations, and other persons or entities under their control and all persons in active concert or participation with them.
  4. Hold, preserve, and administer the business of the receivership estate until further order of this Court, with full authority to perform all acts necessary or incidental to the normal operation of the business, excluding any payments or disbursements to the named defendants, except as otherwise provided in this Order.
  5. Continue and conduct any business of the receivership estate until further order of the Court. Defendant JewelWay shall immediately, and thereafter from time to time upon the request of the receiver, advise the receiver concerning each location at which JewelWay conducts the business subject to the receivership and all matters relevant to the continuation and conduct of that business.
  6. Employ any managers, agents, employees, servants, accountants, attorneys, and technical specialists as may in the receiver's judgment be necessary or advisable in the management, conduct, control, or custody of the affairs of JewelWay and the assets thereof, and otherwise generally to assist in the receivership.
  7. Make any payments and disbursements that may be necessary or advisable for the preservation of the properties of JewelWay and as may be necessary or advisable in discharging the receivership duties. Pursuant to Section VIII of this Order, any funds due and owing to the named defendants shall be frozen and not disbursed except upon stipulation of the parties or until further Order of this Court.
  8. Receive and collect any and all sums of money due or owing JewelWay in any manner whatsoever, whether the same are now due or shall hereafter become due and payable, and to do such things and enter into such agreements in connection with the administration, care, preservation, and maintenance of the assets of JewelWay as the receiver may deem advisable.
  9. Identify all persons with responsibility for maintaining and operating defendants' computer systems, and identify and provide computer systems documentation including requirements analysis studies, system design documentation, and operating procedures documentation used in support of defendant's computer systems operations.
  10. Make periodic reports, observations, and recommendations to this Court, and seek guidance and instructions from this Court, if the receiver deems it necessary, upon one day's written or oral notice to all parties who have, filed an appearance in this proceeding.
  11. The receiver and his accountants, attorneys, agents, and consultants shall be compensated from the assets of the receivership estate for their normal hourly charges and for all expenses incurred by them in fulfilling the terms of this Order. This compensation for the receiver's personnel shall be at the rate of $115 per hour for James C. Sell, C.P.A., C.F.E., and the customary hourly rates for other agents and consultants. The receiver may pay himself and his accountants, attorneys, agents, and consultants on a regular basis as and when billed from assets of the receivership estate, provided that the receiver shall provide a monthly accounting to the Court, that the Court shall retain the right to accept or deny any particular charge, and that the receiver shall apply to the Court for approval of these charges at regular intervals of three months.

XV.

IT IS FURTHER ORDERED that, immediately upon service of this Order upon them, defendants, and any other person or entity served, with a copy of this Order, shall immediately deliver over to the receiver:

  1. Possession and custody of all funds, assets, property owned beneficially or otherwise, and all other assets, wherever situated, of JewelWay.
  2. Possession and custody of all books and records of accounts, all financial and accounting records, balance sheets, income statements, bank records (including monthly statements, canceled checks, records of wire transfers, and check registers), client lists, membership and mailing lists (including E-mail), title documents, and other papers of JewelWay.
  3. Possession and custody of all funds and other assets belonging to members of the public now held by JewelWay.
  4. All passwords or codes required to access any hardware, software, or electronic files on any media.
  5. All keys, passwords, identification numbers, entry codes, and combinations to locks required to open or gain access to any of JewelWay's property or effects, JewelWay's computer files (including all backup tapes), safe deposit boxes, and all monies in any bank deposited by or to the credit of JewelWay wherever situated.
  6. information identifying the accounts, employees, properties, or other assets or obligations of JewelWay.
  7. Information identifying the total number of individuals and entities, and the name, address, telephone number, and payment record of each of them, who or which is listed as a participant, including but not limited to all "independent representatives," in JewelWay, whether directly or through any other entity.
  8. Any information necessary to enable the receiver to identify the location of particular JewelWay records and assets.

XVI.

IT IS FURTHER ORDERED that the defendants shall refrain from interfering with the receiver taking custody, control, or possession and from interfering in any manner, directly or indirectly, with the custody, possession, and control of the receiver; shall fully cooperate with and assist the receiver appointed in this action; and shall take no action, directly or indirectly, to hinder or obstruct the receiver in the conduct of his duties or to interfere in any manner, directly or indirectly, with the custody, possession, management, or control by the receiver.

XVII.

IT IS FURTHER ORDERED that any bank, savings and loan institution, credit union, financial institution, brokerage house, escrow agent, money market or mutual fund, title company, commodity trading company, common carrier, storage company, trustee, commercial mail receiving agency, mail holding or forwarding corn any, or any other person, partnership, corporation, or other person or legal entity that is served with a copy of this Order, shall cooperate with all reasonable requests of the receiver relating to implementation of this Order, including transferring funds and the contents of safe deposit boxes at the receiver's discretion and producing for the receiver records related to defendants' accounts or assets.

XVIII.

IT IS FURTHER ORDERED that the bond previously filed by the receiver shall remain in effect until further order of the Court. The bond is conditioned on the receiver performing the duties of the office and duly accounting for all monies and properties that may come into his hands and abiding by and performing all things which he shall be directed to do.

XVIII.

IT IS FURTHER ORDERED that, except by leave of this Court, the defendants and all customers, principals, investors, creditors, stockholders, lessors, and other persons seeking to establish or enforce any claim, right or interest against defendants or. their subsidiaries or affiliates, and all others acting for or on behalf of those persons including attorneys, trustees, agents, sheriffs, constables, marshals, and other officers and their deputies and their respective attorneys, agents, servants, and employees be and are hereby stayed from:

  1. Commencing, prosecuting, continuing, or enforcing any suit or proceeding against defendants or their subsidiaries or affiliates, or the receiver, except that any action may be filed to toll any applicable statutes of limitations.
  2. Accelerating the due date of any obligation or claimed obligation, enforcing any lien upon, or taking or attempting to take possession or retaining possession of property of defendants or their subsidiaries or affiliates, or any property claimed by defendants or attempting to foreclose, forfeit, alter, or terminate any interests of defendants in any property, whether these acts are part of a judicial proceeding or otherwise.
  3. Using self-help or executing or issuing, or causing the execution or issuance of any court attachment, subpoena, replevin, execution, or other process for the purpose of impounding or taking possession of or interfering with or creating or enforcing a lien upon any property, wheresoever located, owned or in the possession of defendants or their subsidiaries or affiliates, or the receiver appointed pursuant to this Order or any agents appointed by the receiver.
  4. Doing any act or thing whatsoever to interfere with the receiver taking control, possession, or management of the property subject to this receivership, or to in any way interfere with the receiver, or to harass or interfere in any manner with the duties of the receiver, or to interfere in any manner with the exclusive jurisdiction of this Court over the property and assets of defendant JewelWay or its subsidiaries or affiliates.

Provided, however, that nothing in this section shall prohibit any federal, state, or local law enforcement or regulatory authority from commencing or prosecuting an action against any defendant.

XX.

IT IS FURTHER ORDERED that pursuant to Section 604(l) of the Fair Credit Reporting Act, 15 U.S. C. 168 1 b(l), any consumer reporting agency may furnish a consumer report concerning any of the defendants to plaintiff or any receiver appointed herein.

XXI.

IT IS FURTHER ORDERED that the asset freeze will remain in effect except that living expenses for the individual and relief defendants will be available to the individual defendants upon stipulation by the Commission and the respective named defendants or upon further Court order.

XXII.

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for all purposes.


Dated: July 1, 1997

SIGNED AND STIPULATED BY:

FEDERAL TRADE COMMISSION

{Signature(s)}

FOR THE DEFENDANTS:

{Signature(s)}

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