FTC versus Innovative Marketing et al – developments
The FTC's Renewed Motion for Rule 37 Sanctions against Sam Jan was granted on 19 January 2010.
It was further ordered that Default be entered against Jain pursuant to Rule 37(d) and that the FTC shall submit evidence to the Court as to the total consumer injury resulting from the allegations in the Complaint.
The Court will review the evidence of total consumer injury and then enter default judgment.
Now we wait to see what sort of monetary and other penalties the Court will impose upon Jain. The FTC’s second motion claimed that “Jain perpetrated one of the largest online frauds ever prosecuted by the FTC, with a total consumer injury figure that – as the Court will soon hear – exceeds $150 million”, which gives you some idea of the sort of fiscal penalty Jain now faces.
In other developments, Marc D'Souza had disputed the scope of discovery being sought by the FTC.
Because of a concern that "broad enquiries from the FTC aimed at each of Mr D'Souza's business partners could result in significant disruption to Mr D'Souza's new business" the Court has decided that the FTC can conduct discovery regarding D'Souza's post January 1, 2007 activities, but only if the FTC has identified a particular company as having done business with D'Souza prior to January 1, 2007. The FTC is also free to seek discovery from D'Souza about any continued use of "computer scans" to sell security software.