Stipulated Final Order for Permanent Injunction — Federal Trade Commission v. Ponte Investments, LLC (Dkt. 15.1)

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Exhibit 1 to Document 15-1 in Federal Trade Commission v. Ponte Investments, LLC, Case No. 1:20-cv-00177-JJM-PAS in the District of Rhode Island, filed 09/25/20, is a Stipulated Final Order for Permanent Injunction against Ponte Investments, LLC, also d/b/a SBA Loan Program, and John C. Ponte. The FTC's complaint charges deceptive acts in the advertising and sale of SBA-related products or services, including Paycheck Protection Program loans; the defendants neither admit nor deny the allegations. The order permanently bars them from misrepresenting that they are authorized to make loans, including SBA loans, or to process applications for assistance, or that they are the SBA or affiliated with or endorsed by the SBA or the United States government. It also sets acknowledgment, compliance reporting, recordkeeping and monitoring duties; its SO ORDERED line carries no day or month.

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Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 1 of 14 PagelD #: 242

EXHIBIT 1
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 2 of 14 PagelD #: 243

UNITED STATES DISTRICT COURT
DISTRICT OF RHODE ISLAND

FEDERAL TRADE COMMISSION, CASE NO. 1:20-cv-00177-JJM-PAS

Plaintiff, STIPULATED FINAL ORDER
FOR PERMANENT INJUNCTION
V.

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.

Plaintiff, the Federal Trade Commission (“Commission” or “FTC”) filed its Complaint for
Permanent Injunction And Other Equitable Relief (“Complaint”) in this matter, pursuant to
Section 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b). The
Commission and Defendants stipulate to the entry of this Stipulated Final Order for
Preliminary Injunction (“Order”) to resolve all matters in dispute in this actions between
them.

THEREFORE, IT IS ORDERED as follows:
FINDINGS
1. This Court has jurisdiction over this matter.
2. The Complaint charges that Defendants participated in deceptive acts or practices in

violation of Section 5 of the FTC Act, 15 U.S.C §45(a), in connection with the
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 3 of 14 PagelD #: 244

advertising, marketing, promotion, offering for sale, or sale of SBA-related products or
services, including Paycheck Protection Program loans.

3. Defendants neither admit nor deny any of the allegations in the Complaint, except as
specifically stated in the Order. Only for purposes of this action, Defendants admit the
facts necessary to establish jurisdiction.

4. Defendants waive any claim that they may have under the Equal Access to Justice Act,
28 U.S.C. §2412, concerning the prosecution of this action through the date of this Order,
and agree to bear their own costs and attorney fees.

5. Defendants waive all rights to appeal or otherwise challenge or contest the validity of this
Order.

I. 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:

I. In any communication that is solely visual or solely audible, the disclosure
must be made through the same means through which the communication is presented. In any
communication made through both visual and audible means, such as a television advertisement,
the disclosure must be presented simultaneously in both the visual and audible portions of the
communication even if the representation requiring the disclosure is made in only one means.

2. A visual disclosure, by its size, contrast, location, the length of time it appears,
and other characteristics, must stand out from any accompanying text or other visual elements so

that it is easily noticed, read, and understood.
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 4 of 14 PagelD #: 245

3. An audible disclosure, including by telephone or streaming video, must be
delivered in a volume, speed, and cadence sufficient for ordinary consumers to easily hear and
understand it.

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

5. 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.

6. The disclosure must comply with these requirements in each medium through
which it is received, including all electronic devices and face-to-face communications.

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

8. When the representation or sales practice targets a specific audience, such as
children, the elderly, or the terminally ill, “ordinary consumers” includes reasonable members of
that group.

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.

i... “Defendant(s)” means Individual Defendant and Corporate Defendant,
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
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 5 of 14 PagelD #: 246

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 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. “SBA” means United States Small Business Administration.
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, whether acting directly or indirectly, in connection with the
advertising, marketing, promoting, or offering for sale any product or service, are permanently
restrained and enjoined from misrepresenting or assisting others in misrepresenting, expressly or
by implication, including through the use of a trade name, product name, or domain name:

A. that Defendants are authorized (1) to make loans, including SBA loans, or (2) to
accept or process applications for any assistance, including SBA assistance;

B. that Defendants are the SBA, or are affiliated or otherwise associated with, or

endorsed, sponsored, or approved by, SBA or the United States government; and
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 6 of 14 PagelD #: 247

C. any other fact material to consumers, such as: the total cost, any material restrictions,
limitations, or conditions; or any material aspect of its performance, efficacy, nature or central
characteristic.

Il. 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, whether
acting directly or indirectly, are hereby permanently restrained and enjoined from directly or
indirectly:

A. failing to provide sufficient customer information to enable the Commission to
efficiently administer consumer redress. Defendants represent that they have provided this
redress information to the Commission. If a representative of the Commission requests in
writing any information related to redress, Defendants must provide it, in the form prescribed by
the Commission, within fourteen (14) days;

B. disclosing, using, or benefitting from customer information, including the name,
address, telephone number, email address, social security number, other identifying information,
or any data that enables access to a customer’s account (including a credit card, bank account, or
other financial account), that any Defendant obtained prior to entry of this Order in connection
with the advertising, marketing, promotion, offering for sale, or sale of SBA-related products or
services, including Paycheck Protection Program loans;

Provided, however, that Section II.B 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;
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 7 of 14 PagelD #: 248

C. failing to destroy such customer information in all forms in their possession, custody, or
control within thirty (30) days after receipt of written direction to do so from a representative
of the Commission;

Provided, however, that customer information need not be disposed of, and may be
disclosed, to the extent requested by a government agency or required by law, regulation, or
court order.

Il. ORDER ACKNOWLEDGMENTS

IT IS FURTHER ORDERED that Defendants obtain acknowledgments of receipt of
this Order:

A. Each Defendant, within seven (7) days of entry of this Order, must submit to the
Commission an acknowledgment of receipt of this Order sworn under penalty of perjury.

B. For five (5) years after entry of this Order, each Individual Defendant for any
business that such Defendant, individually or collectively with any other Defendants, is the
majority owner or controls directly or indirectly, and each Corporate Defendant, must deliver a
copy of this Order to: (1) all principals, officers, directors, and LLC managers and members; (2)
all employees having managerial responsibilities for conduct related to the subject matter of the
Order; and all agents and representatives who participate in conduct related to the subject matter
of the Order; and (3) any business entity resulting from any change in structure as set forth in the
Section titled Compliance Reporting. Delivery must occur within seven (7) days of entry of this
Order for current personnel. For all others, delivery must occur before they assume their

responsibilities.
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 8 of 14 PagelD #: 249

C. From each individual or entity to which a Defendant delivered a copy of this Order,
that Defendant must obtain, within thirty (30) days, a signed and dated acknowledgment of
receipt of this Order.

IV. COMPLIANCE REPORTING

IT IS FURTHER ORDERED that Defendants make timely submissions to the
Commission:

A. One year after entry of this Order, each Defendant must submit a compliance report,
sworn under penalty of perjury:

L. Each Defendant must: (a) identify the primary physical, postal, and email address
and telephone number, as designated points of contact, which representatives of the Commission
may use to communicate with Defendant; (b) identify all of that Defendant’s businesses by all of
their names, telephone numbers, and physical, postal, email, and Internet addresses; (c) describe
the activities of each business, including the products or services offered, the means of
advertising, marketing, and sales, any websites where its products or services are being sold or
advertised, and the involvement of any other Defendant (which Individual Defendants must
describe if they know or should know due to their own involvement); (d) describe in detail
whether and how that Defendant is in compliance with each Section of this Order; and (e)
provide a copy of each Order Acknowledgment obtained pursuant to this Order, unless
previously submitted to the Commission.

2. Additionally, each Individual Defendant must: (a) identify all telephone numbers
and all physical, postal, email and Internet addresses, including all residences; (b) identify all
business activities, 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;
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 9 of 14 PagelD #: 250

and (c) describe in detail such Defendant’s involvement in each such business, including title,
role, responsibilities, participation, authority, control, and any ownership.

B. For fifteen (15) years after entry of this Order, each Defendant must submit a
compliance notice sworn under penalty of perjury, within fourteen (14) days of any change in the
following:

l. Each Defendant must report any change in: (a) any designated point of contact;
or (b) the structure of any Corporate Defendant or any entity that Defendant has any ownership
interest in or controls directly or indirectly 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.

2. 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 the name, physical address, and any Internet address of the business or entity.

C. Each Defendant must submit to the Commission notice of the filing of any
bankruptcy petition, insolvency proceeding, or similar proceeding by or against such Defendant
within fourteen (14) days of its filing.

D. Any submission to the Commission required by this Order to be sworn under penalty
of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by concluding:
“I declare under penalty of perjury under the laws of the United States of America that the
foregoing is true and correct. Executed on: ____” and supplying the date, signatory’s full

name, title (if applicable), and signature.
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 10 of 14 PagelD #: 251

E. Unless otherwise directed by a Commission representative in writing, all
submissions to the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or
sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement,
Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,

Washington, DC 20580. The subject line must begin: FTC v. Ponte Investments, LLC, et al.

V. RECORDKEEPING

IT IS FURTHER ORDERED that Defendants must create certain records for fifteen
(15) years after entry of the Order, and retain each such record for five (5) years. Specifically,
Corporate Defendant in connection with the advertising of any government loan program and
each Individual Defendant for any business that such Defendant, individually or collectively with
any other Defendants, is a majority owner or controls directly or indirectly, must create and
retain the following records:

A. accounting records showing the revenues from all products or services sold;

B. personnel records showing, for each person providing services, whether as an
employee or otherwise, that person’s: name; addresses; telephone numbers; job title or position;
dates of service; and (if applicable) the reason for termination;

C. records of all consumer complaints and refund requests, whether received directly or
indirectly, such as through a third party, and any response;

D. all records necessary to demonstrate full compliance with each provision of this
Order, including all submissions to the Commission; and

E. acopy of each unique advertisement or other marketing material.
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 11 of 14 PagelD #: 252

VI. COMPLIANCE MONITORING

IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants
compliance with this Order and any failure to transfer any assets as required by this Order:

A. Within 14 days of receipt of a written request from a representative of the
Commission, each Defendant must: submit additional compliance reports or other requested
information, which must be sworn under penalty of perjury; appear for depositions; and produce
documents for inspection and copying. The Commission is also authorized to obtain discovery,
without further leave of court, using any of the procedures prescribed by Federal Rules of Civil
Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69.

B. For matters concerning this Order, the Commission is authorized to communicate
directly with each Defendant. Defendant must permit representatives of the Commission to
interview any employee or other person affiliated with any Defendant who has agreed to such an
interview. The person interviewed may have counsel present.

C. The Commission may use all other lawful means, including posing, through its
representatives as consumers, suppliers, or other individuals or entities, to Defendants or any
individual or entity affiliated with Defendants, without the necessity of identification or prior
notice. Nothing in this Order limits the Commission’s lawful use of compulsory process,
pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1.

D. Upon written request from a representative of the Commission, any consumer
reporting agency must furnish consumer reports concerning Individual Defendants, pursuant to
Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. §1681b(a)(1).

VII. RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for

purposes of construction, modification, and enforcement of this Order.

10
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 12 of 14 PagelD #: 253

SO ORDERED this _ day of , 2020.

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

11
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 13 of 14 PagelD #: 254

SO STIPULATED AND AGREED:

FOR PLAINTIFF:

- ow ie ae Date: 9/24/2020

Thomas Widor, Attorney
Federal Trade Commission
Washington, DC 20580
Phone: 202-326-3039

Fax: 202-326-3768

Email: twidor@ftc.gov

Sanya Shahrasbi, Attorney
Federal Trade Commission
Washington, DC 20580
Phone: 202-326-2709

Fax: 202-326-3768

Email: sshahrasbi@ftc.gov

Daniel Dwyer, Attorney
Federal Trade Commission
Washington, DC 20580
Phone: 202-326-2957
Fax: 202-326-3768
Email: ddwyer@ftc.gov

12
Case 1:20-cv-00177-JJM-PAS Document 15-1 Filed 09/25/20 Page 14 of 14 PagelD #: 255

: Date: cs)
PONTK INVEST dual
By:
JOHN C, / Fi

Date: 06-23-2029

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

West Warwick, RI 02893

Phone: (401) 533-9330

Email: cmulhearn@mulhearnlawri.com

12


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