Tim McCallan, of AmeriCorp fame has eneted into a stipulated final judgment and order for permanent injunction with the FTC over the FTC action against McCallan and his company IMM Interactive.
The court order covers IMM Interactive, Intermark Communications, COPEAC, Intermark Media, Timothy McCallan, Michael Krongel, and Danielle Krongel.
The order was signed previously but only recently publicly filed with the court.
The facts of the underlying case can be found here. In a nutshell, the FTC alleged:
Defendant promotes products through websites designed to look like news reports. The sites use domain names such as channel2local.com, channel9healthbeat.com, channel9investigates.com, consumerproductsdaily.com, nbssnewsat6.com, and news4daily.tv, and include titles such as “Consumer Products Daily,” “Channel Local 2,” “9 News,” “News 9,” “NBS News 6,” and “News 4 Daily.” The sites often include the names and logos of major broadcast and cable television networks, falsely representing that the reports on the sites have been seen on these networks.
The sites purport to provide objective investigative reports authored by reporters or commentators typically pictured on the sites. The supposed authors of the reports claim to have tested the products on themselves and experienced dramatic and positive results. Following the reports are “responses” or “comments” that appear to be independent statements made by ordinary consumers.
In fact, Defendant’s news reports are fake. Reporters or commentators pictured on the sites are fictional and never conducted the tests or experienced the results described in the reports. The “responses” and “comments” following the reports are simply additional advertising content, not independent statements from ordinary consumers.
The order states:
IT IS THEREFORE ORDERED that Defendants and their officers, agents, servants, employees and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any trust, corporation, subsidiary, division, or other device, or any of them, in connection with the advertising, marketing, promotion, offering for sale, or sale of any product, service, or program, are hereby permanently restrained and enjoined from:
- Misrepresenting, or Assisting Others in misrepresenting, any material fact, expressly or by implication
- Failing to disclose, Clearly and Prominently
- Failing to, in connection with the advertising, promotion, marketing, offering for
sale, sale, or provision of any goods or services through an Affiliate Program
Judgment is hereby entered in favor of the Commission and against Defendants, jointly and severally, for equitable monetary relief, in the amount of One Million Three Hundred Fifty Four Thousand Dollars ($1,354,000.00) to remedy the violations of law alleged by the FTC. Within twenty-one (21) days of their execution of this Order, Defendants shall turn over the full amount of the monetary judgment to the Law Offices of Mark L. Rosenberg, attorney for Defendant IMM Marketing, who shall hold the entire sum in a client’s trust account. Defendants’ attorney shall promptly notify counsel for the FTC of receipt of said judgment amount, and the identity of the client’s trust account where the judgment amount is maintained.
On or before five (5) business days after the date of entry of this Order, Defendants’ attorney shall wire transfer the sum of One Million Three Hundred Fifty Four Thousand Dollars ($1,354,000.00) to the Commission or such agent as the Commission may direct, pursuant to instructions provided by the Commission.
And it appear McCallan will need to disclose this FTC action against him to all his business enterprises and employees for the next five years.
For 5 years after entry of this Order, each Individual Defendant, for any business that such Defendant, individually or collectively with any other Defendant, is the majority owner or directly or indirectly controls, and the Corporate Defendant, must deliver a copy of this Order to: (1) all principals, officers, directors, and managers; (2) all employees, agents, and representatives who participate in affiliate marketing; and (3) any business entity resulting from any change in structure as set forth in the Section titled Compliance Reporting. Delivery must occur within 7 days of entry of this Order for current personnel. To all others, delivery must occur before they assume their responsibilities.
From each individual or entity to which a Defendant delivered a copy of this Order, that Defendant must obtain, within 30 days, a signed and dated acknowledgment of receipt of this Order.
For the next twenty years Tim McCallan will need to alert the FTC about:
For twenty (20) years following entry of this Order, each Defendant must submit
to the Commission a compliance notice, sworn under penalty of perjury, within 14 days of any
change in the following:
- Each Defendant must report any change in: (a) any designated point of contact; or (b) the structure of the Corporate Defendant or any entity that Defendant has any ownership interest in or directly or indirectly controls that may affect compliance obligations arising under this Order, including: creation, merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order.
- Additionally, each Individual Defendant must report any change in: (a) name, including aliases or fictitious name, or residence address; or (b) title or role in any business activity, including any business for which such Defendant performs services whether as an employee or otherwise and any entity in which such Defendant has any ownership interest, and identify its name, physical address, and Internet address, if any.
If you wish to read the full order, you can read it here.
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