Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 1 of 24 PageID #: 170

UNITED STATES DISTRJCT COURT

EASTERN DISTRJCT OF NEW YORK

FEDERAL TRADE COMMISSION,

Plaintiff,

v.
Case No. _ _ _ _ _ _ __
589()
THE CUBAN EXCHANGE, INC., also d/b/a
CrediSure America and also d/b/a MyiPad.us, a
corporation,

and

SUHAYLEE RIVERA, individually and as an

officer or director of The Cuban Exchange, Inc.,

Defendants. LEVY, M.J.

FEDERAL TRADE COMMISSION'S MEMORANDUM IN
SUPPORT OF MOTION FOR A TEMPORARY
RESTRAINING ORDER, EQUITABLE RELIEF AND AN , > •
ORDER TO SHOW CAUSE WHY A PRELIMINARY =-.::. >'"
(J) ;---::!

INJUNCTION SHOULD NOT ISSUE ~';:;:''"'

r· . )
co ; , r--
,-q
·---·,
'-~
-; .::---:~
::: __ ~ c:::: x.-
.r.
C)
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 2 of 24 PageID #: 171

TABLE OF CONTENTS

I. INTRODUCTION .............................................................................................................. I
II. STATEMENT OF FACTS ................................................................................................. 2
A. The Parties .............................................................................................................. 2
I. The Federal Trade Commission .................................................................. 2
2. Defendants .................................................................................................. 2
B. Defendants' Business Practices .............................................................................. 3
I. Defendants use illegal robocalls to initiate contact with consumers .......... 3
2. Defendants suggest they are part of, or connected with, the FTC .............. 4
3. Defendants direct consumers to a deceptive website .................................. 4
4. Defendants' cannot provide the services promised .................................... 6
III. A TEMPORARY RESTRAINING ORDER SHOULD ISSUE AGAINST THE
DEFENDANTS .................................................................................................................. 8
A. This Court has the authority to grant the requested relief... .................................... 8
B. The evidence justifies entry of a Temporary Restraining Order and a Preliminary
Injunction ................................................................................................................ 9
I. The FTC has demonstrated a likelihood of success on the merits .............. 9
a. The FTC has Demonstrated a Likelihood of Success on the Merits
that Defendants Violated Section 5(a) of the FTC Act... ................ 9
b. The FTC has demonstrated a likelihood of success on the merits
that Defendants violated the Telemarketing Sales Rule ............... II
1. Defendants misrepresented their affiliation with the FTC.!!
n. Defendants made false or misleading statements to induce
persons to pay for goods and services ............................... 12
Ill. Defendants called numbers listed on the National Do Not
Call Registry ..................................................................... 12
IV. Defendants failed to transmit accurate Caller ID
infonnation with their outbound calls ............................... 13
v. Defendants made calls that played a prerecorded message.
··························································································· 13
VI. Defendants failed to make the required oral disclosures .. 13
VII. Defendants failed to pay the required fees to access the
National Do Not Call Registry .......................................... 14
2. The balance of equities mandates preliminary injunctive relief. .............. 14
C. Suhaylee Rivera is liable for CrediSure's illegal business practices .................... 15
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 3 of 24 PageID #: 172

D. The scope of the proposed Temporary Restraining Order is appropriate in light of

defendants' conduct. ............................................................................................. 16
I. The Court should stop Defendants' ongoing illegal conduct.. ................. 16
2. The Court should shut down the offending websites ................................ 17
3. The Court should order the preservation and production of Defendants'
business records ........................................................................................ 17
IV. CONCLUSION ................................................................................................................. 18

II
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 4 of 24 PageID #: 173

TABLE OF AUTHORITIES

Cases
FTC v. 9107-4021 Quebec, Inc., No. I :08-cv-1051 (N.D. Ohio April25, 2008) ........................ 20
FTCv. Amy Travel Servs., Inc., 875 F.2d 564,573 (7th Cir. 1989) ............................................. 16
FTC v. Bronson Partners, LLC, 564 F. Supp. 2d 119, 135 (D. Conn. 2008) ............................... II
FTC v. Bronson Partners, LLC, 654 F. 3d 359, 365 (2d. Cir. 2011) .............................................. 8
FTC v. Edge Solution, Inc. No. 07-4087 (E.D.N.Y. Oct. 12, 2007) ......................................... 9, 18
FTC v. Figgie Int 'I, 994 F.2d 906, 906 (9th Cir. 1993) ........................................... ................... II
FTC v. Finmaestros, LLC eta/., No. 12-cv-7195 (S.D.N.Y. Sept. 25, 2012) .............................. 19
FTC v. Guzetta., No. 01-2335 (E.D.N.Y. Aprill7, 2001) .............................................................. 9
FTCv. Lakshmi!nfosoul Services Pvt. Ltd., No. 12-cv-7191 (S.D.N.Y. Sept. 25, 2012) ............ 19
FTCv. Marczak eta/., No. 12-cv-7192 (S.D.N.Y. Sept. 25, 2012) ............................................. 19
FTCv. Medical Billers Network, Inc., No. 05-2014 (S.D.N.Y. Feb. 18, 2005) ....................... 9, 20
FTCv. Navestad, No. 09-6329 (W.D.N.Y. July I, 2009) ............................................................. 20
FTC v. Navestad, No. 09-6329 (W.D.N.Y. June 25, 2009) ...................................................... 9, 19
FTCv. PCCare247 Inc. eta/., No. 12-cv-7189 (S.D.N.Y. Sept. 25, 2012) ................................. 19
FTCv. Pecan Software Ltd., No. 12-cv-7186 (S.D.N.Y. Sept. 25, 2012) .................................... 19
FTC v. Premier Nationwide Corporation, No. CIV120009 (D. Ariz. Jan. 4, 2012) .................... 20
FTCv. U.S. Oil and Gas Corp., 748 F.2d 1431,1434 (llthCir.l984) ......................................... 9
FTCv. Verity Int'l, 124 F. Supp. 2d 193, 199 (S.D.N.Y. 2000) .................................................. 10
FTCv. Verity Int'/, 443 F.3d 48,63 (2d Cir. 2006) ....................................................................... 9
FTC v. World Travel Vacation Brokers, Inc., 861 F.2d 1020, I 029 (7th Cir. 1988) .................... 16
FTC v. World Wide Factors, 882 F.2d 344, 347 (9th Cir. 1989) .................................................. 15
FTC v. Zeal IT Solutions Pvt. Ltd., No. 12-cv-7188 (S.D.N.Y. Sept. 25, 2012) .......................... 19
In re Thompson Medical Co., 104 F.T.C. 648, 818-19 (1984) ..................................................... 12
SECv. Management Dynamics, Inc., 515 F. 2d 801,808-809 (2d Cir. 1975) ............................ 10
Standard Educ., Inc. v. FTC, 475 F.2d 401,403 (D.C. Cir. 1973) ............................................... 17
United States v. Diapulse Corp. of Am., 457 F.2d 25,29 (2d Cir. 1972) ..................................... 16
United States v. Sun & Sand Imps., Ltd., 725 F.2d 184, 188 (2d Cir. 1984) ................................ 10
Statutes
15 U.S.C. § 41 ................................................................................................................................. 2
15 U.S.C. § 45(a) ..................................................................................................................... 2, 9

111
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 5 of 24 PageID #: 174

15 U.S.C. § 53(b) ........................................................................................................................ 2, 8

15 U.S.C. § 56(a)(2) ....................................................................................................................... 2
15 U.S.C. § 57b ............................................................................................................................... 2
15 U.S.C. § 6101 ....................................................................................................................... 2, 11
15 U.S.C. § 6102 ............................................................................................................................. 2
Rules
16 C.P.R.§ 310 ........................................................................................................... 11, 12, 13, 14

IV
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 6 of 24 PageID #: 175

I. INTRODUCTION

The Federal Trade Commission ("FTC") respectfully requests that the Court stop a

telemarketing and internet scam that uses illegal pre-recorded robocalls designed to appear as if

the calls come from the FTC. Defendants illegally spoof the FTC's toll-free telephone number

and use the website "ftcrefund.com" to solicit consumers' bank account information. Defendants

seek this information by falsely representing, explicitly and implicitly, a connection between

Defendants and the FTC and by making numerous false statements about Defendants' ability to

obtain consumer redress from the FTC.

The scheme is simple. Defendants prey on the fact that the FTC provides thousands of

refund checks (commonly referred to as "consumer redress") after it successfully concludes

litigation against companies accused of engaging in fraudulent and deceptive businesses

practices 1 Defendants place illegal prerecorded "robocalls" to consumers, which inform them of

a supposed FTC "seizure ID number," and tell the consumers to visit the website

www.ftcrefund.com, leading consumers to believe that the FTC is calling them to inform them

that they are due a refund from the FTC.

The ftcrefund.com website (like its identical twin, credisure.net) is replete with

misspellings aud includes numerous false and misleading statements promising that Defendants

can obtain refunds allegedly due consumers from the FTC in "5 to 7 business days instead of the

usual8 to 10 weeks." The websites require consumers to enter personal information, including

bank account numbers, in order to process the fictitious refunds. Defendants claim to have

assisted 13,000 clients in receiving FTC refunds.

1
See, e.g., http://www.ftc.gov/bcp/cases/redress.shtml.

I
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 7 of 24 PageID #: 176

In truth, Defendants have no connection whatsoever with the FTC, and have no way of

knowing the identity of consumers due refunds from the FTC. The FTC sends refunds directly

to consumers through paper checks. Defendants have never worked with the FTC to process

consumer redress payments.

In short, Defendants' claims are false. Defendants tell consumers they are due a refund

from the FTC and that Defendants can expedite payment of the refund all in a ruse to obtain

consumers' personal information and bank account numbers.

II. STATEMENT OF FACTS

A. The Parties

I. The Federal Trade Commission

The FTC is an independent agency of the United States government created by statute.

15 U.S.C. § 41 et seq. The FTC enforces Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), which

prohibits unfair or deceptive acts or practices in or affecting commerce. The FTC also enforces

the Telemarketing Act, 15 U.S.C. § 6101 et seq., and the Telemarketing Sales Rule ("TSR"), 16

C.F.R. Part 310, which prohibits deceptive or abusive telemarketing acts or practices. The FTC

is authorized to initiate United States District Court proceedings by its own attorneys, to enjoin

violations of the FTC Act and the TSR, and to secure such equitable relief as may be appropriate

in each case, including consumer redress. 15 U.S.C. §§ 53(b), 56(a)(2)(A), 56(a)(2)(B), 57b,

6102(c), & 6105(b).

2. Defendants

The Cuban Exchange, Inc., doing business as CrediSure America and MyiPad.us

("CrediSure"), is a Colorado corporation with its principal place of business in Brooklyn, New

2
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 8 of 24 PageID #: 177

Y ork 2 CrediSure operates the websites ftcrefund.com, credisure.us, credisure.net and

MyiPad.us, among others 3

Defendant Suhaylee Rivera is a resident of Brooklyn, New York 4 Rivera incorporated

CrediSure and registered the websites credisure.us and credisure.net 5 She also filed two

"Statement of Trade Name of a Reporting Entity" on behalf of The Cuban Exchange, Inc., which

registered the names "CrediSure America" and "MyiPad.us" to The Cuban Exchange, Inc 6

B. Defendants' Business Practices

1. Defendants use illegal robocalls to initiate contact with consumers.

Defendants are engaged in a telemarketing scheme to sell consumers bogus FTC refund

services. As part of this scheme, Defendants, either directly or through their telemarketers, make

illegal prerecorded "robocalls" to consumers, many of which are to phone numbers registered on

the National Do Not Call Registry 7 When consumers answer these calls, they hear a

prerecorded message that states:

2
Px. 1, Tyndall Dec. -,r-,r 50-53 & Att. M. As the FTC seeks preliminary relief, it is appropriate
for the Court to consider hearsay and other evidence that might not be considered in a full trial
on the merits. See Mullins v. City ofNew York, 626 F.3d 47, 52 (2d Cir. 2010) ("We ... conclude
that hearsay evidence may be considered by a district court in determining whether to grant a
preliminary injunction. The admissibility of hearsay under the Federal Rules of Evidence goes
to weight, not preclusion, at the preliminary injunction stage. To hold otherwise would be at
odds with the summary nature of the remedy and would undermine the ability of courts to
provide timely provisional relief.").
3
Px. 1, Tyndall Dec. -,r-,r 50-53 & Att. M.
4
Px. I, Tyndall Dec. -,r 51.
5
Px. I, Tyndall Dec. -,r-,r 31, 37, 50-53 & Att. H, M. As noted previously, the credisure.net
website is identical to the ftcrefund.com website. I d., -,r 36.

Px. I, Tyndall Dec. -,r~ 50-53 & Att. M.

6

7
Px. I, Tyndall Dec. -,r-,r 3-7; Px. 3, Lee Dec. -,r-,r 2-8; Px. 4, Galagaza Dec. -,r-,r 2-8; Px. 5, Bond
Dec. -,r-,r 2-8. Defendants also have never paid the annual fee to access telephone numbers listed

3
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 9 of 24 PageID #: 178

Please visit www.ftcrefund.com, www.ftcrefund.com. Your

seizure ID number is 123223, again your seizure ID number is
123223. Visit right now www.ftcrefund.com. Your seizure ID
number is 123223. Thank you and have a nice day 8

The messages provide the same "seizure ID number" to all consumers. 9

2. Defendants suggest they are part of, or connected with, the FTC

The website Defendants use- ftcrefund.com- states, explicitly and implicitly, that the

FTC is participating in the supposed "refund" process. Defendants compound the deception by

using the FTC's toll-free consumer response phone number- 877-382-4357 (often published to

the public as 877-FTC-HELP)- as the Caller ID number transmitted with the robocalls. 10 A

reasonable consumer could conclude that the FTC, or someone on its behalf, is calling to alert

them to refunds or redress due the consumer. 11

3. Defendants direct consumers to a deceptive website.

When consumers visit the website ftcrefund.com (or its identical twin, credisure.net),

12
they are told that:

on the National Do Not Call Registry, in violation of the TSR, 16 C.F.R. § 310.8. Px. I, Tyndall
Dec.~~ 54-57.

Px. I, Tyndall Dec.~~ 12-15; Px. 3, Lee Dec.~ 6; Px. 4, Galagaza Dec.~ 6; Px. 5, Bond Dec.~
8

6.

Px. I, Tyndall Dec.~~ 12-15; Px. 3, Lee Dec.~ 6; Px. 4, Galagaza Dec.~ 6; Px. 5, Bond Dec.~
9

6.

Px. I, Tyndall Dec.~~ 7-8.

10

11
Defendants' websites also link to numerous FTC press releases concerning FTC consumer
protection enforcement actions and consumer redress. Px. I, Tyndall Dec., Att. Bat 1-6, Gat I,
3-7.
12
After the FTC discovered the deceptive ftcrefund.com website on November 16,2012, the
FTC issued a press release warning of the deceptive website
(lkgov/opa/2012/ll/robocalls2.shtm) and issued a bulletin at the top of the Commission's
official consumer redress page (tkgov/bcp/cases/redress.shtml). Sometime on the weekend of

4
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 10 of 24 PageID #: 179

CrediSure America is a firm specialized [sic J in corporate FTC

seizures collections. But don't worry, we work for you. Yes we
work for you! CrediSure America specializes in private fmancial
forensic and investigation. Our main targets are large
telemarketing and infomercial firms who get shutdown by the FTC
for misrepresenting or simply defrauding customers like your self
[sic]. CrediSure has the proper knowledge and open doors [sic J to
expedite refunds you may not even know were owed to you.
CrediSure works as a tireless collector and fiercely fights for its
13
clients [sic J refunds to be paid first.

Defendants inform consumers they will receive a refund from the FTC in five to seven

days, instructing consumers: "To get your refund: I. Enter your Siezure [sic] ID (top left.). 2.

Enter your depository information. 3. Wait 5 to 7 busienss [sic] days." 14 The website promises

that "Your refund will be processed within 5 to 7 business days instead of the usual 8 to I 0

weeks." 15 Defendants claim they charge a 5.55% fee for this service, stating: "For only 5.55%

we take care of your refund and process it in less then [sic] 7 business days as opposed to the

standard 8 to 10 weeks." 16 Defendants claim that "Over 13000 clients have received refunds

through CrediSure America." 17

When consumers enter the 123223 "seizure ID number" into the seizure ID box on the

website, they are directed to a page on the website that states:

SEIZURE ID: 123223

REFUND CASE: American Consumer Group, Inc.
NATURE OF REFUND: FTC Seizure- Expedited (5 to 7 business days)

November 17-18, 2012, the website was taken off-line. The website credisure.net- a mirror
image of ftcrefund.com- remains active and online. See Px. 1, Tyndall Dec.~~ 35-37.
13
Px. 1, Tyndall Dec., Att. B at I, G at 3.
14
Px. 1, Tyndall Dec., Att. B at I, G at 3.
15
Px. 1, Tyndall Dec., Att. Bat 4, Gat 5.
16
Px. 1, Tyndall Dec., Att. Bat 1, Gat 3.
17
Px. 1, Tyndall Dec., Att. Bat 3, Gat 4.

5
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 11 of 24 PageID #: 180

AMOUNT TO BE REFUNDED: $399.99

FEE FOR REFUND: $22.19
TOTAL REFUND AMOUNT: $377.80 18

All consumer victims of the scheme receive the same "seizure ID number." 19 Regardless of what

"seizure ID number" consumers enter on the website, they are shown the same refund

information, including the same supposed refund amount- $399.99- and the same supposed

refund case- American Consumer Group, Inc 20

After entering any number in the "seizure ID" box, the website infonns consumers that,

to process the supposed refund, consumers must provide their address, phone number, bank

name (including the name listed on the account), account number, ABNRouting number, and a

check number 21

4. Defendants' cannot provide the services promised.

Defendants' claims are patently false:

• The FTC does not work or contract with Defendants 22

• All refunds from the FTC are provided directly to consumers through one of four

different "prime vendors." Those vendors never charge consumers for their

services; they are paid directly by the FTC. 23

24
• The Defendants are not one of those vendors

18
Px. I, Tyndall Dec.~~ 7-14, 16-22.

Px. I, Tyndall Dec.~~ 12-15; Px. 3, Lee Dec.~ 6; Px. 4, Galagaza Dec.~ 6; Px. 5, Bond Dec.
19

~ 6.

Px. I, Tyndall Dec.~~ 17-18,21-22.

20

21
Px. I, Tyndall Dec. ~ 18, Att. C.
22
Px. 2, Lawson Dec.~~ 5-8, 15.
23
Px. 2, Lawson Dec.~ 5.

6
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 12 of 24 PageID #: 181

• Neither the FTC nor any of its contracted redress vendors ask consumers to

provide their bank account information. 25

• The FTC does not direct deposit refunds; the FTC mails paper checks directly to
. . 26
re fund recipients.

• The FTC does not publish the names of consumers due to receive refunds from its

consumer protection litigation. 27 Thus, Defendants could not know the names of

consumers due refunds or redress from FTC litigation.

• The FTC has never administered a redress program for-a case invelving

"American Consumer Group, Inc."28

In short, Defendants' claims are false and deceptive. Defendants cannot expedite

consumer redress, nor can they receive or process refunds on behalf of consumers. Defendants

simply place illegal robocalls and then attempt to dupe consumers into providing sensitive
29
personal information and bank account numbers

24
Px. 2, Lawson Dec.~ 5.

Px. 2, Lawson Dec. ~~ 11-12.

25

26
Px. 2, Lawson Dec.~ 13.
27
Px. 2, Lawson Dec.~ 14.

Px. I, Tyndall Dec. ~ 20; see also Px. 2, Lawson Dec. ~ I 0.

28

29
The Defendants provide consumers with a web form for contacting the company; no phone
number, email address or physical address is provided. The website states: "We apologies [sic],
due to high levels of contact requests, we only allow email contact. Please do not write to ask if
you are elijible [sic J for a refund, only those who are contacted are elijible [sic]. Should we need
more information from you, one of our experts will enter in (sic) contact with you. Thank you
and we appologies [sic] for any invonvenience [sic]." Px. 1, Tyndall Dec.~ 16, Att. Bat 6. The
FTC's experience with fraudulent and deceptive websites indicates that a significant number of
spelling errors is an indicia of fraud. Px. I, Tyndall Dec. ~ 58.

7
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III. A TEMPORARY RESTRAINING ORDER SHOULD ISSUE AGAINST THE

DEFENDANTS.

The FTC seeks a Temporary Restraining Order ("TRO") to halt Defendants' ongoing

violations of the FTC Act and the TSR. The FTC requests that the Court enjoin Defendants from

their ongoing violations of the law, shut down the offending websites and allow expedited

discovery. As set forth herein, the evidence overwhelmingly supports entry of the proposed

TRO.

A. This Court has the authority to grant the requested relief.

Where, as here, the Defendants have violated the FTC Act by engaging in deceptive

practices, Section 13(b) of the FTC Act authorizes district courts to grant permanent injunctive

relief. See 15 U.S.C. §53(b). The authority to grant permanent injunctive relief necessarily

"carries with it the full range of equitable remedies," including the authority "to grant ancillary

equitable relief." FTC v. Bronson Partners, LLC, 654 F. 3d 359, 365 (2d. Cir. 2011). Ancillary

equitable relief includes the authority to enter a temporary restraining order and other

preliminary relief designed to preserve the possibility of effective final relief. See FTC v. US.

Oil and Gas Cmp., 748 F.2d 1431, 1434 (lith Cir. 1984). District courts in the Second Circuit

have routinely granted the sort of equitable relief the FTC requests here. See, e.g., FTC v. Edge

Solution, Inc. No. 07-4087 (E.D.N.Y. Oct. 12, 2007) (granting TRO prohibiting

misrepresentations, suspending websites, freezing assets, prohibiting dissemination of customer

lists, repatriating foreign assets, granting immediate access, authorizing expedited discovery,

requiring financial reports, preserving records, and appointing temporary receiver); FTC v.

Guzetta., No. 01-2335 (E.D.N.Y. Aprill7, 2001) (granting ex parte TRO prohibiting violations

of the FTC Act, freezing assets, requiring financial reporting, preserving financial records,

granting immediate access, and authorizing expedited discovery); accord FTC v. Medical Billers

8
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 14 of 24 PageID #: 183

Network, Inc., No. 05-2014 (S.D.N.Y. Feb. 18, 2005); FTC v. Naves tad, No. 09-6329 (W.D.N.Y.

June 25, 2009).

B. The evidence justifies entry of a Temporary Restraining Order and a

Preliminary Injunction.

In the Second Circuit, in order to grant preliminary injunctive relief under the FTC Act,

the district court must: (1) determine that the FTC has a "fair and tenable chance of ultimate

success on the merits" and (2) balance the equities. FTC v. Verity Int'l, 124 F. Supp. 2d 193, 199

(S.D.N.Y. 2000) (citing United States v. Sun & Sand Imps., Ltd., 725 F.2d 184, 188 (2d Cir.

1984)). When the FTC acts to prevent violations of federal law, it proceeds "not as an ordinary

litigant, but as a statutory guardian charged with safeguarding the public interest." See SEC v.

Management Dynamics, Inc., 515 F. 2d 801, 808-809 (2d Cir. 1975). For this reason, irreparable

harm is presumed in FTC consumer protection cases like this one. Verity Int 'l, 124 F. Supp.2d at

199.

1. The FTC has demonstrated a likelihood of success on the merits.

a. The FTC has Demonstrated a Likelihood of Success on the Merits

that Defendants Violated Section 5(a) of the FTC Act.

Section 5 of the FTC Act prohibits "unfair or deceptive acts or practices in or affecting

commerce'' 15 U.S.C. § 45(a). In order to show that Defendants violated Section 5(a) of the

FTC Act, the FTC must establish: (1) a representation, omission, or practice, (2) that is likely to

mislead consumers acting reasonably under the circumstances, and (3) that the representation is

material. FTC v. Verity Jnt'l, 443 F.3d 48, 63 (2d Cir. 2006). The FTC is not required to show

that the Defendants acted "with the intent to deceive; it is enough that the representation or

practices were likely to mislead consumers acting reasonably." I d. A misrepresentation is

material if it "involves information that is important to ... consumer's choice of or conduct

regarding a product." FTC v. Bronson Partners, LLC, 564 F. Supp. 2d 119, 135 (D. Conn.

9
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 15 of 24 PageID #: 184

2008). Express claims are presumed to be material. !d. The FTC is also not required to prove

reliance by each consumer misled by the Defendants. FTC v. Figgie lnt 'l, 994 F.2d 906, 906

(9th Cir. 1993). Rather, a "presumption of actual reliance arises once the Commission has

proved that the defendants made material misrepresentations that were widely disseminated." !d.

As explained above, the Defendants make five principal misrepresentations. First,

30
Defendants claim they are affiliated with or endorsed by the FTC. Second, Defendants claim

they can obtain refunds/redress from the FTC on behalf of consumers. 31 Third, Defendants claim

they can reduce FTC refund/redress wait times to 5 to 7 business days from 8 to 10 weeks. 32

Fourth, Defendants claim to know that the consumer is entitled to a refund or redress from the

FTC 33 And fifth, Defendants claim to have assisted more than 13,000 clients in receiving

refunds from the FTC. 34 As set forth above and in the attached evidence, these representations

are false. Moreover, these representations are likely to mislead consumers acting reasonably

under the circumstances.

Finally, the Defendants' representations are material. The Defendants' false

representations are presumed to be material because they are express claims. Bronson Partners,

LLC, 564 F. Supp. 2d at 135; see also In re Thompson Medical Co., 104 F.T.C. 648, 818-19

(1984) aff'd 791 F.2d 189 (D.C. Cir. 1986). No consumer would purchase Defendants' refund

services had the Defendants been candid about the fact that they were not affiliated with the

30
Px. I, Tyndall Dec.~~ 3-8.
31
Px. 1, Tyndall Dec., Att. Bat I, Gat 3.
32
Px. 1, Tyndall Dec., Att. Bat 4, Gat 5.
33
Px. I, Tyndall Dec.~~ 12-15, Att. Bat I, Gat 3; Px. 3, Lee Dec.~ 6; Px. 4, Galagaza Dec.~ 6;
Px. 5, Bond Dec.~ 6.
34
Px. I, Tyndall Dec., Att. Bat 3, Gat 4.

10
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FTC, could not reduce FTC redress processing time, have no ability to know the identity of

consumers entitled to redress, and had never had any prior substantive interaction with the FTC's

Redress Administration Office.

b. The FTC has demonstrated a likelihood of success on the merits

that Defendants violated the Telemarketing Sales Rule.

In 1994, Congress directed the FTC to prescribe rules prohibiting abusive and deceptive

telemarketing acts or practices pursuant to the Telemarketing Act. 15 U.S.C. §§ 6101-6108. The

FTC then adopted the TSR. 16 C.F.R. § 310. Defendants have violated the TSR by: (1)

misrepresenting their affiliation with a government entity; (2) making false or misleading

statements to induce consumers to purchase their FTC refund services; (3) calling consumers on

the National Do Not Call Registry; (4) failing to transmit accurate Caller ID infonnation; (5)

making calls that played a prerecorded message; (6) failing to make required oral disclosures

during the call; and (7) failing to pay the required fee to access the National Do Not Call

Registry. Each violation is discussed in turn.

1. Defendants misrepresented their affiliation with the FTC.

The TSR prohibits sellers and telemarketers from misrepresenting, directly or by

implication, a "seller's or telemarketer's affiliation with, or endorsement or sponsorship by, any

person or government entity." 16 C.F.R. § 310.3(a)(2)(vii). The Defendants "spoofed" the

Caller ID number on their outbound robocalls to match the FTC's toll-free consumer response

phone number- 877-382-4357, frequently published to the public as 877-FTC-HELP? 5 The

Defendants also used the website name "ftcrefund.com" in order to sell their bogus FTC refund

Px. I, Tyndall Dec. ~~ 7-8.

35

II
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 17 of 24 PageID #: 186

service. 36 Accordingly, Defendants have violated the TSR by misrepresenting, directly or by

implication, their affiliation with the FTC.

n. Defendants made false or misleading statements to induce

persons to pay for goods and services.

The TSR prohibits any seller or telemarketer from making a false or misleading statement

to induce any person to pay for goods or services or to induce a charitable contribution. 16

C.F.R. § 310.3(a)(4). The Defendants are sellers or telemarketers engaged in telemarketing as

defined by the TSR since they arrange for the sale of goods or services, or initiate or cause

telemarketers to initiate outbound telephone calls. 16 C.F.R. § 310.2 (aa), (cc), and (dd). As

explained above, Defendants claim they can reduce FTC refund wait times to 5 to 7 business

days from 8 to I 0 weeks. Defendants also claim to know which consumers are entitled to refund

or redress from the FTC. Defendants further claim to have assisted more than 13,000 clients in

receiving refunds from the FTC. And Defendants claim they can obtain refunds/redress from the

FTC on behalf of consumers. Defendants made these false claims to induce consumers to

purchase FTC refund services. Therefore, Defendants violated the TSR by making false claims

to induce the purchase of goods or services.

111. Defendants called numbers listed on the National Do Not

Call Registry.

The TSR prohibits sellers and telemarketers from initiating outbound telephone calls to

numbers on the National Do Not Call Registry. 16 C.F.R. § 31 0.4(b )(l)(iii)(B). The Defendants

placed outbound telemarketing calls to numbers listed on the National Do Not Call Registry 37

36
Px. l, Tyndall Dec.~~ 16,27-37.
37
Px. 3, Lee Dec. ~~ 2-8; Px. 4, Galagaza Dec.~~ 2-8; Px. 5, Bond Dec.~~ 2-8.

12
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 18 of 24 PageID #: 187

Therefore, Defendants have violated the TSR by making calls to phone numbers listed on the

National Do Not Call Registry.

IV. Defendants failed to transmit accurate Caller ID

information with their outbound calls.

Sellers and telemarketers violate the TSR by "failing to transmit or cause to be

transmitted the telephone number, and, when made available by the telemarketer's carrier, the

name of the telemarketer, to any caller identification service in use by a recipient of a

telemarketing call." 16 C.F.R. § 310.4(a)(8). Defendants transmitted the FTC's toll-free

number, 877-382-4357 (877-FTC-HELP), with its outbound robocalls 38 Accordingly,

Defendants have violated the TSR by failing to transmit their telephone number with their

outbound telemarketing calls.

v. Defendants made calls that played a prerecorded message.

The TSR prohibits sellers and telemarketers from initiating an outbound telephone call

that delivers a prerecorded message. 16 C.F.R. § 310.4(b)(l)(v). Defendants made robocalls to

consumers that played a prerecorded message as part of their efforts to sell Defendants' FTC

refund services 39 Therefore, Defendants have violated the TSR by making telemarketing calls

that deliver a prerecorded message.

VI. Defendants failed to make the required oral disclosures.

The TSR requires sellers and telemarketers to disclose "truthfully, promptly, and in a

clear and conspicuous manner," the identity of the seller, that the purpose of the call is to sell

goods or services, the nature of the goods or services. 16 C.F.R. § 310.4(d). Defendants' phone

Px. I, Tyndall Dec.~~ 3-8.

38

39
Px. I, Tyndall Dec.~~ 3-8; Px. 3, Lee Dec.~~ 2-8; Px. 4, Galagaza Dec.~~ 2-8; Px. 5, Bond
Dec.~~ 2-8.

13
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 19 of 24 PageID #: 188

calls make no such disclosures. 40 Accordingly, Defendants have violated the TSR by failing to

make the required oral disclosures.

vn. Defendants failed to pay the required fees to access the

National Do Not Call Registry.

Under the TSR, sellers and telemarketers are prohibited from calling any telephone

number within a given area code unless the seller on whose behalf the call is made has paid the

annual fee for access to the telephone numbers within that area code that are included in the

National Do Not Call Registry. 16 C.F.R. § 310.8. Defendants have not paid the required fee to
41
access to National Do Not Call Registry prior to making their calls Therefore, Defendants

violated the law by making calls prior to the paying the required fee.

2. The balance of equities mandates preliminary injunctive relief

"[W]hen a district court balances the hardships of the public interest against a private

interest, the public interest should receive greater weight." FTC v. World Wide Factors, 882 F.2d

344, 347 (9th Cir. 1989); FTC v. World Travel Vacation Brokers, Inc., 861 F.2d 1020, 1029 (7th

Cir. 1988). The public has a compelling interest in halting Defendants' unlawful and injurious

conduct. By contrast, ceasing their illegal conduct and complying with the law is not a burden

on Defendants. Defendants "can have no vested interest in a business activity found to be

illegal." United States v. Diapu/se Corp. of Am., 457 F.2d 25,29 (2d Cir. 1972) (internal

quotations and citations omitted). In addition, it is likely that only the entry of the requested

temporary and preliminary injunctive relief will prevent Defendants from continuing to deceive

and harm the public during the pendency of this litigation.

40
Px. 1, Tyndall Dec. '1!'1!3-8; Px. 3, Lee Dec. '1!'1!2-8; Px. 4, Galagaza Dec. '1!'1!2-8; Px. 5, Bond
Dec. '1!'1!2-8.
41
Px. I, Tyndall Dec. '1!'1! 54-57.

14
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 20 of 24 PageID #: 189

C. Suhaylee Rivera is liable for CrediSure's illegal business practices.

Suhaylee Rivera is liable for her own violations of the FTC Act and the TSR as well as

the Corporate Defendants' illegal practices. Once the FTC establishes that a corporate defendant

violated Section 5(a) of the FTC Act, individual defendants will be personally liable for

injunctive relief if the individual defendant: (I) participated directly in the illegal practices or

acts or (2) had authority to control a corporation engaging in them. FTC v. Amy Travel Servs.,

Inc., 875 F.2d 564, 573 (7th Cir. 1989). Active involvement in the corporate business affairs and

the making of corporate policy, including assuming the duties of a corporate officer, is evidence

of an individual's authority to control. !d. And, in a small, closely-held corporation, the

corporate officers are presumed to control the corporation. See Standard Educ., Inc. v. FTC, 475

F.2d 401,403 (D.C. Cir. 1973) cert. denied, 414 U.S. 828 (1973) 42

The evidence presented by the FTC demonstrates that Suhaylee Rivera is liable for the

illegal practices of CrediSure. As previously discussed, Rivera incorporated CrediSure and filed

the corporate documents necessary to register "CrediSure America" and "MyiPad.us" as trade
43
names of The Cuban Exchange, Inc Rivera also registered the websites credisure.us and
. 44
ere dJsure.net.

42
An individual defendant is liable for consumer redress if the defendant also had some
knowledge of the illegal practices or acts. Amy Travel Servs., Inc., 875 F.2d at 573. The FTC
can prove the requisite level of knowledge by showing that the individual (I) had actual
knowledge of material misrepresentations; (2) was recklessly indifferent to the truth or falsity of
such misrepresentations; or (3) had an awareness of a high probability of fraud along with
intentional avoidance of the truth. !d.; see also FTC v. Minuteman Press, 53 F. Supp. 2d 248,
259-60 (E.D.N.Y. 1998); FTC v. Crescent Publ'g Group, Inc., 129 F. Supp. 2d 311, 324
(S.D.N.Y. 2001); FTC v. Five-Star Auto Club, Inc., 97 F. Supp. 2d 502, 535 (S.D.N.Y 2000).

Px. I, Tyndall Dec.~~ 37, 50-53 & Att. H, M.

43

Px. 1, Tyndall Dec. ~~ 31, 37. As noted previously, the credisure.net website is identical to the
44

ftcrefund.com website. !d.,~ 36.

15
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 21 of 24 PageID #: 190

In addition, both the credisure.us and myipad.us websites state that Ms. Rivera operates

45
CrediSure The credisure.us website includes a picture captioned "Suhaylee Rivera-

Founder."46 Both ftcrefund.com and credisure.net discuss the services provided by credisure.us

47
and link to the credisure.us website Moreover, CrediSure's principal place of business is Ms.

Rivera's home address 48 Given Ms. Rivera's ability to control CrediSure and active

involvement in the business, the FTC has demonstrated that she is liable for CrediSure's illegal

business practices.

D. The scope of the proposed Temporary Restraining Order is appropriate in

light of defendants' conduct.

As the evidence has shown, the FTC will ultimately succeed in proving that Defendants

are engaging in deceptive practices in violation of the FTC Act and TSR, and that the balance of

equities strongly favors the public interest. Preliminary injunctive relief is thus warranted.

The FTC requests injunctive relief of three general types. As explained below, each type

of preliminary relief is necessary to protect consumers and to preserve the Court's ability to grant

complete relief.

1. The Court should stop Defendants' ongoing illegal conduct.

First, the FTC seeks preliminary relief designed to stop the Defendants' ongoing

violations of the FTC Act and the TSR. The proposed temporary restraining order ("TRO")

includes provisions enjoining the Defendants from continuing their violative conduct.

45
Px. I, Tyndall Dec., Att. Eat 3-4, Kat 19.
46
Px. I, Tyndall Dec., Att. E at 4.
47
Px. I, Tyndall Dec., Att. Bat 4, Gat 5.

Px. I, Tyndall Dec.~~ 50-53 & Att. M.

48

16
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 22 of 24 PageID #: 191

2. The Court should shut down the offending websites.

Additionally, because Defendants rely on their seemingly legitimate websites to lure

consumers into their scheme and process consumers' payments, the TRO also includes

provisions directing webhosting and website registration companies to disable the Defendants'

websites and uris related to the fraudulent FTC refund scheme. Similar TRO provisions have

been included in appropriate FTC cases in the past. See, e.g., FTC v. Edge Solution, Inc. No. 07-

4087 (E.D.N.Y. Oct. 12, 2007) (granting TRO which, in part, enjoined Defendants from

violating the FTC Act and suspended Defendants' websites); FTC v. Finmaestros, LLC et al.,

No. 12-cv-7195 (S.D.N.Y. Sept. 25, 2012) (granting ex parte TRO which in part enjoined

Defendants from violating the FTC Act and suspended Defendants' websites); accord FTC v.

PCCare247 Inc. et al., No. 12-cv-7189 (S.D.N.Y. Sept. 25, 2012); FTC v. Pecan Software Ltd.,

No. 12-cv-7186 (S.D.N.Y. Sept. 25, 2012); FTCv. Lakshmiinfosoul Services Pvt. Ltd., No. 12-

cv-7191 (S.D.N.Y. Sept. 25, 2012); FTC v. Marczak et al., No. 12-cv-7192 (S.D.N.Y. Sept. 25,

2012); FTC v. Zeal IT Solutions Pvt. Ltd., No. 12-cv-7188 (S.D.N.Y. Sept. 25, 2012); FTC v.

Navestad, No. 09-6329 (W.D.N.Y. June 25, 2009).

3. The Court should order the preservation and production ofDefendants'

business records.

And third, the FTC seeks preliminary relief designed to provide access to Defendants'

records before those records can be destroyed. In the FTC's experience, it is likely that

Defendants will take steps to destroy documents that relate to their scams 49 The proposed order

includes several provisions designed to grant access to Defendants' documents before they can

be destroyed including requiring Defendants to turn over records, requiring Defendants to

preserve records of their business activities, and authorizing expedited discovery. Again, these

49
Px. I, Tync\illl Dec.~ 59.

17
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 23 of 24 PageID #: 192

provisions have been included in FTC cases in the past. See, e.g., FTC v. Medical Billers

Network, Inc., No. 05-2014 (S.D.N.Y. Feb. 18, 2005) (TRO requiring defendants to preserve

records and authorizing expedited discovery); FTC v. Navestad, No. 09-6329 (W.D.N.Y. July I,

2009) (TRO requiring defendants to preserve documents and produce documents related to the

merits of the case); FTC v. Premier Nationwide Corporation, No. CIV120009 (D. Ariz. Jan. 4,

2012) (TRO requiring defendants to preserve documents and produce documents related to the

merits of the case); accord FTC v. 9107-4021 Quebec, Inc., No. 1:08-cv-1051 (N.D. Ohio April

25, 2008).

As Defendants operate multiple websites and the extent of their illegal conduct is

unknown, expedited discovery will allow the FTC to quickly identify all victims that have fallen

prey to Defendants' false claims. Moreover, expedited discovery will permit the FTC to learn if

consumers have had assets removed from their bank accounts after providing bank account

numbers to the Defendants.

IV. CONCLUSION

The Defendants' business relies upon illegal conduct from start to finish. Defendants

start their customer contact by placing an illegal robocall, calling consumers on the National Do

Not Call Registry, using the FTC's toll free number as the Caller ID number, and using a

prerecorded message to tell consumers to go to a website seemingly affiliated with the FTC-

ftcrefund.com. Defendants' website is full of false statements and misinformation which falsely

claims that Defendants know whether consumers are due restitution from an FTC enforcement

action and promising a "refund" from the FTC in a matter of days, falsely claiming that they

have helped 13,000 people obtain "refunds" from the FTC. Defendants engage in this illegal

behavior for one reason: to spur consumers into providing Defendants their personal information,

18
Case 1:12-cv-05890-NGG-RML Document 6 Filed 11/28/12 Page 24 of 24 PageID #: 193

including bank account numbers. In order to put an end to these unlawful practices, the FTC

requests that this Court grant the FTC's motion for a TRO and ancillary equitable relief

Respectfully submitted,

DAVID SHONKA
Acting General Counsel

Dated: November 28, 2012 WiifJtt~ ~g~

William T. Maxson
Bikram Bandy
Tel: (202) 326-2635
(202) 326-2978
Email: wmaxson@ftc.gov
bbandy@ftc.gov
Fax: (202) 326-3395
Federal Trade Commission
600 Pennsylvania Ave., NW
Mail Stop H-286
Washington, DC 20580

Attorneys for Plaintiff

FEDERAL TRADE COMMISSION

19