Yesterday, the Federal Trade Commission announced "Project
Scofflaw," a comprehensive law enforcement operation designed
to stop repeat offenders from violating existing federal court
orders and to deter other defendants in FTC cases from ignoring
order provisions.
In the cases announced yesterday, two defendants have been charged with criminal contempt for violating court orders settling FTC civil actions. The contempt actions were filed by the Department of Justice, with FTC attorneys appointed as Special Assistant United States Attorneys to assist with the prosecution of the cases.
In one case, the U.S. District Court for the District of Nevada has ordered Jeffrey Jordan to show why he should not be held in criminal contempt for five counts of violating a court ordered asset freeze.
In August 1995, Jordan was charged by the FTC, as part of a large case involving Meridian Capital Management, Inc., with operating a "recovery room" telemarketing scam. The FTC claimed that Jordan and the other defendants in that case called victims of previous telemarketing scams and promised to help them get most of their money back, if they paid an up-front fee. "Recovery rooms" rarely, if ever, get any refunds for consumers. In September 1995, the court entered an order temporarily halting the allegedly deceptive business practices and froze the defendants' assets to preserve them for consumer redress or disgorgement of ill-gotten gains. In February 1997, the court entered a default judgment against Jeffrey Jordan.
In the FTC/Justice Dept. petition, the government alleges that on 5 occasions, Jordan violated the asset freeze by cashing checks and selling property. Jordan was formally charged with violating the court order and default judgment on April 4, 1997. He has pleaded not guilty and a trail has been set for June 18, 1997.
"The FTC has litigated long and hard to secure orders that protect consumers from fraud and deception. The message we are sending with these cases is that the FTC will vigorously pursue defendants who do not obey these court orders," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. Bernstein warns repeat offenders in particular. "If you violate the court's orders, the FTC will seek appropriate sanctions - including criminal penalties."
The FTC press release has more information on "Project Scofflaw" and the initial cases.
Note: The issuance of an order to show cause why a defendant should not be held in criminal contempt does not constitute a finding or ruling that the defendant actually violated the court's order. The order is merely an accusation, and the defendant is presumed innocent until and unless proven guilty. The cases will be decided by the court or by a jury following trial.
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