Stipulated preliminary injunction — FTC v. Ponte (D.R.I.)

Summary

This stipulated preliminary injunction, filed 04/20/20 in FTC v. Ponte Investments, LLC (Case 1:20-cv-00177-JJM-PAS, District of Rhode Island), bars Ponte Investments, which did business as SBA Loan Program, and John C. Ponte from claiming to be the SBA or to be authorized to make PPP loans. The defendants agreed to it without admitting wrongdoing; it also orders them to notify, within 48 hours, consumers whose information they obtained and who did not get PPP funding through them, and to preserve their records.

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Case 1:20-cv-00177-JJM-PAS     Document 10     Filed 04/20/20     Page 1 of 9 PageID #:
UNITED STATES DISTRICT COURT
DISTRICT OF RHODE ISLAND

FEDERAL TRADE COMMISSION, CASE NO. 1:20-cv-00177-JJM-PAS
Plaintiff
STIPULATED PRELIMINARY
v- INJUNCTION

PONTE INVESTMENTS, LLC, a
limited liability company, also d/b/a
SBA LOAN PROGRAM and d/b/a SBA
LOAN PROGRAM.com, and

JOHN C. PONTE, individually and as
an officer of PONTE INVESTMENTS,
LLC,

Defendants

THIS MATTER comes before the Court upon the stipulation of Plaintiff, the Federal Trade
Commission (“Commission” or “FTC”), and Defendants, Ponte Investments, LLC, also d/b/a
SBA Loan Program and d/b/a SBA Loan Program.com, and John C. Ponte, for the entry of a
stipulated preliminary injunction order (“Order’’) to resolve the Commission’s Motion For A
Temporary Restraining Order, And Other Equitable Relief, And An Order To Show Cause Why
A Preliminary Injunction Should Not Issue (Dkt. 5).

Having considered the stipulation of the parties, and being otherwise advised, the Court makes
the following findings of fact and conclusions of law:
FINDINGS
A. The FTC and Defendants have stipulated and agreed to the entry of this preliminary
injunction order without any admission of wrongdoing or violation of law, and without a finding

by the Court of law or fact other than stated below.
Case 1:20-cv-00177-JJM-PAS     Document 10     Filed 04/20/20     Page 2 of 9 PageID #:
B. Defendants waive all rights to seek judicial review or otherwise challenge or contest
the validity of their stipulation hereto or this Order.

C. This Court has jurisdiction over the subject matter of this case and all parties hereto,
and venue in this district is proper.

D. The FTC asserts that there is good cause to believe that Defendants John C. Ponte
and Ponte Investments, LLC, d/b/a SBA Loan Program and d/b/a SBALoanProgram.com, have
engaged in and are likely to engage in acts or practices that violate Section 5(a) of the FTC Act,
15 U.S.C. § 45(a). The FTC therefore asserts that it is likely to prevail on the merits of this
action. Defendants deny these assertions.

E. The FTC asserts that there is good cause to believe that immediate and irreparable
harm will result unless Defendants are restrained and enjoined by order of this Court.
Defendants deny these assertions.

F. The entry of this Order is in the public interest.

G. No security is required of any agency of the United States for issuance of a
preliminary injunction. Fed. R. Civ. P. 65(c).

DEFINITIONS
For the purpose of this Order, the following definitions shall apply:

A. “Clear(ly) and conspicuous(ly)” means that a required disclosure is difficult to miss
(i.e., easily noticeable) and easily understandable by ordinary consumers, including in
all of the following ways:

1. In any communication using an interactive electronic medium,
such as the Internet or software, the disclosure must be

unavoidable.
Case 1:20-cv-00177-JJM-PAS     Document 10     Filed 04/20/20     Page 3 of 9 PageID #:
2. The disclosure must use diction and syntax understandable to
ordinary consumers and must appear in each language in which the
representation that requires the disclosure appears.

3. The disclosure must not be contradicted or mitigated by, or
inconsistent with, anything else in the communication.

B. “Corporate Defendant” means Ponte Investments, LLC, a Rhode Island limited
liability company, also d/b/a SBA Loan Program and d/b/a SBALoanProgram.com,
and each of their subsidiaries, affiliates, successors, and assigns.

C. “Defendant(s)” means Corporate Defendant and John C. Ponte, individually and as
the Sole Member of Ponte Investments, LLC, individually, collectively, or in any
combination.

D. “Document” is synonymous in meaning and equal in scope to the usage of
“document” and “electronically stored information” in Federal Rule of Civil
Procedure 34(a), Fed. R. Civ. P. 34(a), and includes writings, drawings, graphs,
charts, photographs, sound and video recordings, images, Internet sites, web pages,
websites, electronic correspondence, including e-mail and instant messages, contracts,
accounting data, advertisements, FTP Logs, Server Access Logs, books, written or
printed records, handwritten notes, telephone logs, telephone scripts, receipt books,
ledgers, personal and business canceled checks and check registers, bank statements,
appointment books, computer records, customer or sales databases and any other
electronically stored information, including Documents located on remote servers or
cloud computing systems, and other data or data compilations from which

information can be obtained directly or, if necessary, after translation into a
Case 1:20-cv-00177-JJM-PAS     Document 10     Filed 04/20/20     Page 4 of 9 PageID #:
reasonably usable form. A draft or non-identical copy is a separate document within
the meaning of the term.

E. “Individual Defendant” means John C. Ponte.

F. “Paycheck Protection Program” or “PPP” means the program enacted under the
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), P.L. 116-136,
to provide immediate assistance to individuals, families, and businesses affected by
the novel coronavirus disease (COVID-19), or any subsequent or related program
enacted or implemented for a similar purpose.

G. “Small Business Administration” or “SBA” means the United States Small Business
Administration, or the U.S. Small Business Administration, established by law and
currently codified in 15 U.S.C. § 633.

ORDER

I. PROHIBITION ON MISREPRESENTATIONS

IT IS THEREFORE ORDERED that Defendants, Defendants’ officers, agents,
employees, and attorneys, and all other persons in active concert or participation with them, who
receive actual notice of this Order by personal service or otherwise, whether acting directly or
indirectly, in connection with the advertising, marketing, promoting, or offering for sale of any
goods or services, are temporarily restrained and enjoined from misrepresenting or assisting
others in misrepresenting, expressly or by implication, any material fact, including, but not
limited to:

A. that any Defendant is authorized to make PPP loans or to otherwise accept or process
PPP loan applications; and

B. that any Defendant is the SBA, or is affiliated or otherwise associated with, or

endorsed, sponsored, or approved by, the SBA or the United States government.
Case 1:20-cv-00177-JJM-PAS     Document 10     Filed 04/20/20     Page 5 of 9 PageID #:
Il. PROHIBITION ON RELEASE OF CUSTOMER INFORMATION

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, and
employees, and all other persons in active concert or participation with any of them, who receive
actual notice of this Order, whether acting directly or indirectly, are hereby temporarily
restrained and enjoined from:

A. Selling, transferring, or otherwise disclosing the name, address, birth date, telephone
number, email address, credit card number, bank account number, Social Security number, or
other financial or identifying information of any person or business that any Defendant obtained
in connection with any activity that pertains to the subject matter of this Order; and

B. Benefitting from or using the name, address, birth date, telephone number, email
address, credit card number, bank account number, Social Security number, or other financial or
identifying information of any person or business that any Defendant obtained in connection
with any activity that pertains to the subject matter of this Order.

Provided, however, that this Section II shall not prohibit the transfer or disclosure of a
consumer’s information, or Defendants from benefitting or using such information, if necessary
to provide the consumer with a requested product or service and the consumer has provided
express, informed consent to the transfer or disclosure.

Provided further, however, that Defendants must disclose such identifying information to
a law enforcement agency, to their attorneys as required for their defense, as required by any
law, regulation, or court order, or in any filings, pleadings or discovery in this action in the
manner required by the Federal Rules of Civil Procedure and by any protective order in the case.

Ill. CONSUMER NOTIFICATION

IT IS FURTHER ORDERED that Corporate Defendant shall:

A. Within forty-eight (48) hours of entry of this Order, notify each consumer whose
Case 1:20-cv-00177-JJM-PAS     Document 10     Filed 04/20/20     Page 6 of 9 PageID #:
information any Defendant obtained in connection with any activity that pertains to the subject
matter of the Order and who has not obtained PPP funding as a result of Defendants’ placement
of the consumer’s application with an authorized PPP lender. Notification shall be given via
electronic mail to the most recent electronic mail address known to the Defendants and Clearly
and Conspicuously state the following:
(1) Defendants are providing this notification as required by a court order with the
FTC;
(2) Defendants are not the SBA, and are not affiliated or otherwise associated
with, or endorsed, sponsored, or approved by the SBA; and
(3) Defendants are not a PPP direct lender or direct lending source authorized by
the SBA.
B. Provide the FTC, within three (3) business days of entry of this Order, with a copy of
the consumer notification and a signed declaration identifying the name, e-mail address, and
telephone number of each consumer required to be notified by Section III.A.

IV. PRESERVATION OF RECORDS

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, and
employees, and all other persons in active concert or participation with any of them, who receive
actual notice of this Order, whether acting directly or indirectly, are hereby temporarily
restrained and enjoined from:

A. Destroying, erasing, falsifying, writing over, mutilating, concealing, altering,
transferring, or otherwise disposing of, in any manner, directly or indirectly, Documents that
relate to: (1) the business, business practices, assets, or business or personal finances of any

Defendant; (2) the business practices or finances of entities directly or indirectly under the
Case 1:20-cv-00177-JJM-PAS     Document 10     Filed 04/20/20     Page 7 of 9 PageID #:
control of any Defendant; or (3) the business practices or finances of entities directly or
indirectly under common control with any other Defendant; and

B. Failing to create and maintain Documents that, in reasonable detail, accurately,
fairly, and completely reflect Defendants’ incomes, disbursements, transactions, and use of
Defendants’ assets.

V. REPORT OF NEW BUSINESS ACTIVITY

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, and
employees, and all other persons in active concert or participation with any of them, who receive
actual notice of this Order, whether acting directly or indirectly, are hereby temporarily
restrained and enjoined from creating, operating, or exercising any control over any business
entity, whether newly formed or previously inactive, including any partnership, limited
partnership, joint venture, sole proprietorship, or corporation, without first providing Plaintiff s
counsel with a written statement disclosing: (1) the name of the business entity; (2) the address
and telephone number of the business entity; (3) the names of the business entity’s officers,
directors, principals, managers, and employees; and (4) a detailed description of the business
entity’s intended activities.

VI. DISTRIBUTION OF ORDER BY DEFENDANTS

IT IS FURTHER ORDERED that Defendants shall immediately provide a copy of this
Order to each (i) affiliate, telemarketer, marketer, sales entity, successor, assign, member,
officer, director, employee, (ii) agent, independent contractor, client, attorney, and
representative who participates in the conduct related to the subject matter of the Order, and (iii)
subsidiary or division of any Defendant, and shall, within ten (10) days from the date of entry of
this Order, provide Plaintiff with a sworn statement that this provision of the Order has been

satisfied, which statement shall include the names, physical addresses, phone number, and email
Case 1:20-cv-00177-JJM-PAS     Document 10     Filed 04/20/20     Page 8 of 9 PageID #:
addresses of each such person or entity who received a copy of the Order. Furthermore,
Defendants shall not take any action that would encourage officers, agents, members, directors,
employees, salespersons, independent contractors, attorneys, subsidiaries, affiliates, successors,
assigns or other persons or entities in active concert or participation with them to disregard this
Order or believe that they are not bound by its provisions.

VI. SERVICE OF THIS ORDER

IT IS FURTHER ORDERED that copies of this Order may be served by any means,
including facsimile transmission, electronic mail or other electronic messaging, personal or
overnight delivery, U.S. Mail or FedEx, by agents and employees of the FTC, by any law
enforcement agency, or by private process server, upon any person or entity that may be subject
to any provision of this Order pursuant to Rule 65(d)(2) of the Federal Rules of Civil Procedure.
For purposes of this Section, service upon any branch, subsidiary, affiliate or office of any entity
shall effect service upon the entire entity.

VI. CORRESPONDENCE AND SERVICE ON PLAINTIFF

IT IS FURTHER ORDERED that, for the purpose of this Order, all correspondence

and service of pleadings on Plaintiff must be emailed to twidor@fitc.gov.
Case 1:20-cv-00177-JJM-PAS     Document 10     Filed 04/20/20     Page 9 of 9 PageID #:
IX. RETENTION OF JURISDICTION

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

purposes.

AGREED, CONSENTED & STIPULATED TO:

Federal Trade Commission

By its Attorneys,

/s/ Thomas J. Widor

Thomas J. Widor (DC Bar #490184)
Sanya Shahrasbi (DC Bar #1671001)
Daniel Dwyer (DC Bar #286701)
Federal Trade Commission

600 Pennsylvania Ave., NW, CC-10232
Washington, D.C. 20580

Tel.: (202) 326-3039

Email: twidor@ftc.gov

Email: sshahrasbi@ftc.gov

Email: ddwyer@ftc.gove

ENTER:

John J. McConnell, Chief Judge
United States District Court for the
District of Rhode Island

Date: April __, 2020

Ponte Investments, LLC, d/b/a SBA Loan
Program, d/b/a SBA Loan Program.com; &
John C. Ponte

By their Attorney,

/s/ Christopher M. Mulhearn

Christopher M. Mulhearn (RI Bar #5188)
Law Office of Christopher M. Mulhearn, Inc.
1300 Division Road, Suite 304

West Warwick, RI 02893

Tel.: (401) 533-9330

Email: cmulhearn@mulhearnlawri.com

PER ORDER:

Date: April __,2020


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