2019 11 05 - Motion For Restraining Order and Injunction To Freeze Assets (FTC V Nudge, Ryan Poelman, Brandon Lewis, Phillip W. Smith, Shawn L. Finnegan, and Clint R. Sanderson

Case 2:19-cv-00867-RJS Document 6 Filed 11/05/19 Page 1 of 90
Darren H. Lubetzky Robert G. Wing (4445)

Savvas S. Diacosavvas Thomas M. Melton (4999)
Brian N. Lasky Kevin McLean (16101)
Christopher Y. Miller Assistant Attorneys General
Laura A. Zuckerwise Utah Attorney General’s Office
(Each appearing per DUCivR 83-1.1(d)(1)) 160 East 300 South, Fifth Floor
Federal Trade Commission Salt Lake City, Utah 84114
Northeast Regional Office Tel: (801) 366-0310
One Bowling Green, Suite 318
New York, NY 10004 Attorneys for Plaintiff
Tel: (212) 607-2829 UTAH DIVISION OF CONSUMER
PROTECTION
Attorneys for Plaintiff
FEDERAL TRADE COMMISSION
UNITED STATES DISTRICT COURT

DISTRICT OF UTAH, CENTRAL DIVISION
FEDERAL TRADE COMMISSION, and

Case No. 2:19-cv-00867
UTAH DIVISION OF CONSUMER
PROTECTION,
Plaintiffs,
v. PLAINTIFFS’ MOTION ON NOTICE

FOR A TEMPORARY RESTRAINING
NUDGE, LLC, a Utah limited liability ORDER AND ORDER TO SHOW
company, CAUSE WHY A PRELIMINARY
INJUNCTION SHOULD NOT ISSUE
RESPONSE MARKETING GROUP, LLC,
also doing business as 3 DAY REAL
ESTATE TRAINING, ABUNDANCE
EDU, LLC, AFFLUENCE EDU, LLC,
AMERICAN MONEY TOUR, CASH
FLOW EDU, CLARK EDU, LLC, EDGE 2 REDACTED VERSION
REAL ESTATE, EVTECH MEDIA
NORTH, FLIP FOR LIFE, FLIPPING FOR
LIFE, INCOME EVENTS, INSIDER’S
FINANCIAL EDUCATION, LLC,
LEADING FINANCIAL EDUCATION,
LLC, ONWEALTH, POWER FLIP,
PROSPER LIVE, PROPERTY
EDUCATION, LLC, RENOVATE TO
RENT, SIMPLE REAL ESTATE
TRAINING, SMART FLIP, SNAP FLIP,
US EDUCATION ADVANCE, VINTAGE
FLIP, VISIONARY EVENTS, WEALTH
TRIBE, WOMEN’S EMPOWERMENT,
YANCEY EVENTS, YANCEY, LLC, and

YOUR REAL ESTATE TODAY, a Utah
limited liability company,
BUYPD, LLC, a Utah limited liability

company,
BRANDON B. LEWIS, individually and as

a principal and owner of NUDGE, LLC,
and BUYPD, LLC,
RYAN C. POELMAN, individually and as a

principal and owner of NUDGE, LLC,
and BUYPD, LLC,
PHILLIP W. SMITH, individually and as a

principal and owner of NUDGE, LLC,
and BUYPD, LLC
SHAWN L. FINNEGAN, individually and

as a principal and owner of NUDGE, LLC,
and BUYPD, LLC, and
CLINT R. SANDERSON, individually and

as an officer of RESPONSE MARKETING
GROUP, LLC and BUYPD, LLC,
Defendants.
ii
TABLE OF CONTENTS
I. INTRODUCTION AND REQUESTED RELIEF ................................................................. 1
II. FACTUAL BACKGROUND ................................................................................................ 7
A. DEFENDANTS’ DECEPTIVE PRACTICES ............................................................... 7
1. The Preview Events ................................................................................................ 8

a. An Example of How the Preview Event Unfolds ........................................... 11
b. The Reality ...................................................................................................... 19
2. The Workshops ..................................................................................................... 20
a. Additional Purported “Funding” ..................................................................... 23
b. An Example of How the Workshop Unfolds .................................................. 27
3. The “Inner Circle”................................................................................................. 36
4. The “Exclusive” Buying Summits ........................................................................ 40
B. DEFENDANTS’ EFFORTS TO SILENCE WITNESSES.......................................... 47
1. Rick Ruby ............................................................................................................. 47

2. Nicole Slater.......................................................................................................... 49
C. THE DEFENDANTS ................................................................................................... 50
1. The Corporate Defendants .................................................................................... 51

2. The Individual Defendants .................................................................................... 53
III. ARGUMENT ....................................................................................................................... 56
A. THE COURT HAS AUTHORITY TO GRANT THE REQUESTED RELIEF.......... 56
B. THE EVIDENCE JUSTIFIES PRELIMINARY RELIEF ........................................... 58
1. The Standard for Relief ......................................................................................... 58

2. Plaintiffs Are Likely To Succeed on the Merits ................................................... 58
a. Defendants Have Violated Section 5 of the FTC Act ...................................... 58
(i) Defendants Misrepresent Likely Earnings ................................................. 60
(ii) Defendants Misrepresent the Products and Services Provided .................. 62
(a) Defendants Misrepresent the Training Packages ................................ 62
(b) Defendants Misrepresented the Property Investments ........................ 63
(c) Defendants’ Product and Service Misrepresentations Are Deceptive . 65
(iii) Defendants Induce Consumers To Disclose Their Personal Financial
Information and Extend Their Available Credit Through False Pretenses 65
b. Defendants Have Violated the Telemarketing Sales Rule ............................... 66
iii
c. Defendants Violate The CSPA......................................................................... 67

d. Defendants Violate BODA .............................................................................. 68
3. The Balance of Equities Favors Preliminary Injunctive Relief Which Serves the
Public Interest ....................................................................................................... 70
4. Defendants Have Caused Irreparable Harm to Consumers .................................. 71
C. THE CORPORATE DEFENDANTS ARE SUBJECT TO JOINT AND

SEVERAL LIABILITY AS A COMMON ENTERPRISE ......................................... 73
D. THE INDIVIDUAL DEFENDANTS ARE PERSONALLY LIABLE ....................... 74
E. AN ASSET FREEZE IS NECESSARY TO PRESERVE EFFECTIVE RELIEF ...... 78
F. IMMEDIATE ACCESS TO RECORDS, FINANCIAL DISCLOSURE, AND

EXPEDITED DISCOVERY ARE WARRANTED AND PROPER ........................... 80
IV. CONCLUSION .................................................................................................................... 80
iv
TABLE OF AUTHORITIES
Cases
Brier Creek Integrated Pain & Spine PLLC v. U.S. Dep’t of Health & Human Servs., No. 19-
CV-300-BR, 2019 WL 4207408 (E.D.N.C. Sept. 5, 2019) ...................................................... 72
Countrywide Home Loans, Inc. v. Arb. Alliance Int’l, LLC, No. 204CV152 TS, 2004 WL
987131 (D. Utah Apr. 14, 2004) ............................................................................................... 72
FTC v. Accusearch, Inc., No. 06-CV-105-D, 2007 WL 4356786 (D. Wyo. Sept. 28, 2007) ....... 56
FTC v. Affiliate Strategies, Inc., 849 F. Supp. 2d 1085 (D. Kan. 2011) ................................. 56, 59
FTC v. Affordable Media, LLC, 179 F.3d 1228 (9th Cir. 1999) ................................................... 71
FTC v. Bay Area Bus. Council, Inc., 423 F.3d 627 (7th Cir. 2005).............................................. 73
FTC v. Bay Area Bus. Council, Inc., No. 02 Civ. 5762, 2004 WL 769388 (N.D.Ill. Apr. 9,
2004), aff’d, 423 F.3d 627 (7th Cir. 2005)................................................................................ 65
FTC v. Career Assistance Planning, Inc., No. 96 Civ. 2187, 1996 WL 929696 (N.D. Ga. Sept.
19, 1996) ................................................................................................................................... 65
FTC v. COORGA Nutraceuticals, 201 F. Supp. 3d 1300 (D. Wyo. 2016) ................................... 77
FTC v. Cyberspace.com LLC, 453 F.3d 1196 (9th Cir. 2006)...................................................... 60
FTC v. Elite IT Partners, Inc., No. 19-cv-125, 2019 WL 1568400 (D. Utah Apr. 5, 2019) ........ 79
FTC v. E.M.A. Nationwide, Inc., 767 F.3d 611 (6th Cir. 2014)........................................ 60, 73, 75
FTC v. Freecom Commc’ns, Inc., 401 F.3d 1192 (10th Cir. 2005) ....................................... passim
FTC v. Gill, 71 F. Supp. 2d 1030 (C.D. Cal. 1999) ...................................................................... 60
FTC v. IAB Mktg. Assocs., LP, 746 F.3d 1228 (11th Cir. 2014) .................................................. 78
FTC v. IAB Mktg. Assocs., LP, 972 F. Supp. 2d 1307 (S.D. Fla. 2013), aff’d, 746 F.3d 1228
(11th Cir. 2014)......................................................................................................................... 79
FTC v. Int’l Comp. Concepts, Inc., No. 94CV1678, 1994 WL 730144 (N.D. Ohio Oct. 24,
1994) ......................................................................................................................................... 78
FTC v. Ivy Capital, Inc., No. 11-CV-283 JCM (GWF), 2013 WL 1224613 (D. Nev. Mar. 26,
2013), aff’d in rel. part, 616 F. App’x 360 (9th Cir. 2015) ...................................................... 61
FTC v. John Beck Amazing Profits, LLC, No. 09-cv-4719-FMC-FFMx, 2009 WL 7844076
(C.D. Cal. Nov. 17, 2009) ......................................................................................................... 78
FTC v. Lights of Am., Inc., No. SACV10-01333 JVS (MLGx), 2013 WL 5230681 (C.D. Cal.
Sept. 17, 2013) .................................................................................................................... 66, 75
FTC v. LoanPointe, LLC, 525 F. App’x 696 (10th Cir. 2013) ................................................... 57, 59
FTC v. LoanPointe, LLC, No. 10-CV-225-DAK, 2011 WL 4348304 (D. Utah Sept. 16, 2011),
aff’d, 525 F. App’x 696 (10th Cir. 2013)................................................................ 59, 73, 74, 75
FTC v. MacGregor, 360 F. App’x 891 (9th Cir. 2009) ................................................................ 75
FTC v. Minuteman Press, 53 F. Supp. 2d 248 (E.D.N.Y. 1998) .................................................. 65
FTC v. Simple Health Plans LLC, 379 F. Supp. 3d 1346 (S.D. Fla. 2019) .................................. 78
FTC v. SkyBiz.com, Inc., No. 01-CV-396-K(E), 2001 WL 1673645 (N.D. Okla. Aug. 31, 2001),
aff’d, 57 F. App’x 374 (10th Cir. 2003) ............................................................... 56, 57, 58, 70 75
FTC v. Tashman, 318 F.3d 1273 (11th Cir. 2003)........................................................................ 61
FTC v. Tax Club, Inc., 994 F. Supp. 2d 461 (S.D.N.Y. 2014)...................................................... 67
v
FTC v. World Patent Mktg., Inc., No. 17-cv-20848-GAYLES, 2017 WL 3508639 (S.D. Fla.
Aug. 16, 2017) .......................................................................................................................... 79
FTC v. World Travel Vacation Brokers, Inc., 861 F.2d 1020 (7th Cir. 1988).................. 58, 71, 78
FTC v. World Wide Factors, Ltd., 882 F.2d 344 (9th Cir. 1989) ........................................... 58, 71
FTC v. Your Yellow Book, Inc., No. CIV 14-786-D, 2014 WL 4187012 (W.D. Okla. Aug. 21,
2014) ....................................................................................................................... 57, 58, 60, 74
In re Sanctuary Belize Litig., No. 18-3309, 2019 WL 3714392 (D. Md. Aug. 2, 2019) .............. 78
In re Thompson Med. Co., Inc., 104 F.T.C. 648, 1984 WL 565377 (F.T.C. 1984) (final order),
aff’d, 791 F.2d 189 (D.C. Cir. 1986) ........................................................................................ 59
Joint Tech., Inc. v. Weaver, No. CIV-11-846-M, 2011 WL 6888633 (W.D. Okla. Dec. 29,
2011) ......................................................................................................................................... 72
K-Mart Corp. v. Oriental Plaza, Inc., 875 F.2d 907 (1st Cir. 1989) ............................................ 72
Perez v. Coffman, No. 15-CV-1394-JPS, 2016 WL 7168113 (E.D. Wis. Dec. 8, 2016) ............. 72
Porter v. Warner Holding Co., 328 U.S. 395 (1946) ................................................................. 57, 80
Removatron Int’l Corp. v. FTC, 884 F.2d 1489 (1st Cir. 1989) ................................................... 60
SEC v. Manor Nursing Ctrs., Inc., 458 F.2d 1082 (2d Cir. 1972) ................................................ 78
SEC v. Traffic Monsoon, LLC, 245 F. Supp. 3d 1275 (D. Utah 2017), aff’d, 913 F.3d 1204
(10th Cir. 2019)................................................................................................................... 72, 79
United States v. Corps. for Character, L.C., 116 F. Supp. 3d 1258 (D. Utah 2015) .................... 59
United States v. Greenwood, No. 19-cv-249, 2019 WL 3717679 (D. Utah Aug. 17, 2019) .. 58, 71
Statutes
Utah Code § 13-2-5(3) .................................................................................................................. 58

Utah Code §§ 13-11-1 et seq. ................................................................................................... 7, 58
Utah Code § 13-11-2(2) ............................................................................................................... 68
Utah Code § 13-11-2(4) .......................................................................................................... 58, 68
Utah Code § 13-11-4(2)(b) .......................................................................................................... 68
Utah Code § 13-11-4(2)(c)............................................................................................................ 68
Utah Code §§ 13-15-1 et seq. ................................................................................................... 7, 58
Utah Code § 13-15-2(1) ............................................................................................................... 68
Utah Code § 13-15-2(1)(a)(iv) ...................................................................................................... 70
Utah Code § 13-15-2(2) ................................................................................................................ 68
Utah Code § 13-15-3(1) ................................................................................................................ 58
Utah Code § 13-15-4 ..................................................................................................................... 69
Utah Code § 13-15-5 ............................................................................................................... 69, 70
Utah Code § 13-11-17(1)(b) ......................................................................................................... 58
15 U.S.C. §§ 41-58 ....................................................................................................................... 56
15 U.S.C. § 45(a) .......................................................................................................... 6, 56, 59, 61
15 U.S.C. § 53(b) .................................................................................................................... 56, 58
15 U.S.C. § 57a(d)(3) .................................................................................................................... 56
15 U.S.C. § 6102(c) ...................................................................................................................... 56
18 U.S.C. §§ 1961-1968 ......................................................................................................... 47, 76
21 U.S.C. §§ 801-971 ................................................................................................................... 59
vi
Rules
Fed. R. Civ. P. 1 ............................................................................................................................ 80

Fed. R. Civ. P. 26(d) ..................................................................................................................... 80
Regulations
16 C.F.R. Part 310..................................................................................................................... 6, 56

16 C.F.R. § 310.2(dd) ............................................................................................................. 66, 67
16 C.F.R. § 310.2(ff) ............................................................................................................... 66, 67
16 C.F.R. § 310.2(gg) ............................................................................................................. 66, 67
16 C.F.R. § 310.3(a)(2)(iii) ........................................................................................................... 67
Other Authorities
S. Rep. No. 103-130, 1993 WL 322671 (1993) ............................................................................ 57
vii
TABLE OF EXHIBITS
Vol. No. Tab(s) Exhibit Description Bates Range (FTC-PI)

Consumer declarations and testimony
1 1 Declaration of Kevin Baisley (consumer) 3 – 340
1 2 Declaration of Victory Stratton (consumer) 342 – 450
2 3 Declaration of Maria Sanchez Cortes (consumer) 453 - 695
2 4 Declaration of Bettye Page (consumer) 697 - 794
3 5 Declaration of Tranvi Khuong (consumer) 797 - 980
3 6 Declaration of Debra Schultz (consumer) 982 – 1251
4 7 Declaration of Budi Adiwidjaja (consumer) 1254 - 1392
4 8 Declaration of Kimberly Kreiner (consumer) 1394 - 1707
5 9 Declaration of Mitch Norris (consumer) 1710 – 2255
6 10 Declaration of Juanita Gonzalez (consumer) 2258 - 2619
7 11 Declaration of Ann Dooling (consumer) 2622 - 2671
Declaration of John Enterline (consumer) – 2 2673 - 3419
7-8 12-13 Parts
9-10 14-15 Declaration of Sharon Kling (consumer) – 2 Parts 3422 – 4341

Excerpts of Investigational Hearing Testimony -- 4342.001 – 4342.060
10 16 Richard J. Ruby (consumer) [REDACTED FOR
PUBLIC FILING]
Excerpts of Investigational Hearing Testimony -- 4343.001 – 4343.024

10 17 Nicole Slater (consumer) [REDACTED FOR
PUBLIC FILING]
11 18 Declaration of Rebecca Muchowski (consumer) 4346 – 4928
Declaration of Deirdre Mingo (consumer) – 2 4931 – 5982

12-13 19-20 Parts
Declarations from FTC and Utah Division of Consumer Protection Staff
14-17 23-26 Declaration of Daniel Larsen (DCP Commerce 5994 - 7518

Analyst) – 4 Parts [EXHIBITS 23 AND 26
viii
REDACTED FOR PUBLIC FILING]
Declaration of Michael Marino (FTC 7521 - 7716

18 27 Investigator) [REDACTED FOR PUBLIC
FILING]
Declaration of Dr. Kenneth H. Kelly (FTC 7718 - 7810

18 28 Economist)
Former Employee and Third-Party Declarations and Testimony

Declaration of Alfred Touchet (former 5985 - 5991
14 21 Nudge/Response employee)
Excerpts of Investigational Hearing Testimony -- 5992.001 – 5992.017`

14 22 Ashley Abdo (Seed Capital employee)
[REDACTED FOR PUBLIC FILING]
Excerpts of Investigational Hearing Testimony -- 8660 - 8665

20 32 Brady Blackett (former Nudge employee)
Excerpts of Investigational Hearing Testimony -- 8667 - 8682

20 33 Gian Improta (former Nudge Employee)
Expert Reports
Expert Report of Teo Nicolais / Nicolais LLC 7812 – 7938
18 29 (real estate investment expert)
Expert Report of Dr. Bruce Isaacson / MMR 7941 – 8446

19 30 Strategy Group (survey expert)
Expert Report of Douglas F. Pollock / 8449 - 8658

20 31 IDSnetwork, Inc. (real estate fraud expert)
ix
I. INTRODUCTION AND REQUESTED RELIEF
Plaintiffs Federal Trade Commission (“FTC”) and the Utah Division of Consumer
Protection (“Division”) seek a temporary restraining order (“TRO”) to halt a Utah-based real
estate seminar scam that has taken in over $400 million dollars in total from tens of thousands of
consumers across the country and overseas. 1 From at least 2012 to present, Defendants have
bilked consumers by falsely claiming they will show them how to make substantial money by
1
An appendix containing declarations, expert reports, and excerpts of investigational hearing
testimony accompanies this motion. The preceding lettered pages include a Table of Exhibits
listing the Volume and Tab number for each exhibit in the paper copy of the appendix.
• Volumes 1 through 13 contain declarations and investigational hearing testimony from 17
consumers detailing their experiences with Defendants from 2012 through 2018. The
declarations contain numerous exhibits, including marketing materials and workbooks
they each received at Defendants’ events, in order to demonstrate similar experiences.
• Volumes 14 through 18 contain declarations from Dan Larsen, a Division investigator (at
Tabs 23 to 26), Mike Marino, an FTC investigator (at Tab 27), and Dr. Kenneth Kelly, an
FTC economist who reviewed company bank records (at Tab 28). Mr. Larsen’s
declaration attaches voluminous transcripts of undercover recordings he made of
Defendants’ seminars in late 2017.
• Volumes 14 and 20 contain statements from former employees and a third-party: a
declaration from Al Touchet, a former telemarketer for Defendants from 2014 to 2016 (at
Tab 21); and excerpts of testimony at investigational hearings from two former sales
representatives for Defendant BuyPD, Brady Blackett and Gian Improta (at Tabs 32 and
33), and a representative for third-party Seed Capital, Ashley Abdo (at Tab 22).
• Volumes 18 through 20 contain three expert reports. First, Dr. Bruce Isaacson conducted
a telephone survey of consumers who joined Defendants’ program. His survey report is
at Tab 30. Second, Teo Nicolais, a real estate investment expert, reviewed recordings of
Defendants’ seminars and materials provided at those events. His report is at Tab 29.
Third, Douglas Pollock, a real estate fraud expert, reviewed property records and
conducted valuations of a sample of properties in Michigan that Defendants sold or
brokered to consumers and also reviewed purported comparable sales reports that
Defendants provided to consumers. His report is at Tab 31.
Citations herein to the accompanying exhibits identify the exhibit source by the witness name
and statement type (i.e., Declaration (“Dec.”), Expert Report (“Report”), or investigational
hearing testimony (“IH”)), and its location within the appendix paper copy by Tab number.
Volumes that contain consumers’ declarations and testimony are bound with a black backing,
and Volumes that contain expert reports, declarations from FTC and Division staff, and
testimony from former employees and a third-party are bound with a blue backing.
1
investing in real estate. In fact, almost everyone who joins Defendants’ program loses money.
The company defendants, which include Nudge, LLC (“Nudge”), Response Marketing
Group, LLC (“Response”), and BuyPD, LLC (“BuyPD”) (collectively, the “Corporate
Defendants” or the “Nudge Enterprise”), and their principals, Brandon Lewis (“Lewis”), Ryan
Poelman (“Poelman”), Phillip Smith (“Smith”), Shawn Finnegan (Finnegan”), and Clint
Sanderson (“Sanderson”) (collectively, the “Individual Defendants” and, together with the
Corporate Defendants, “Defendants” or “Nudge”), 2 use television personalities from reality-style
real estate shows to attract consumers to free ninety-minute events (referred to as the “Preview
Events”) that are held primarily in hotel conference rooms throughout the United States.
Defendants use these Preview Events as marketing events to sell additional training at a three-
day workshop (referred to as “Workshops”). To induce consumers to pay for the Workshops,
Defendants claim that they make money as a “funding partner” that takes only a small
percentage of the profits from their students’ deals that Defendants fund. Consumers are told
that paying for the Workshop will give them access to this funding. Defendants’ promised
funding, however, is illusory and only available in very limited circumstances. In actuality,
Defendants make money by funneling consumers through a deceptive sales cycle of more
trainings and other add-on products or services.
Defendants typically charge consumers $1,147 to attend a Workshop, which is just the
start of the sales cycle. The Workshops primarily serve as well-choreographed sales
presentations designed to convince consumers to pay for the next, more expensive, level of
training and related products and services (referred to as “Advanced Training”), for tens of
2
The Corporate Defendants operated as a common enterprise as discussed in Section III.C, and
the Individual Defendants’ respective roles as principals are described in Section II.C(2) below.
2
thousands of dollars. Defendants use part of the Workshop to get consumers to increase their
existing credit card limits and obtain additional credit cards—sometimes encouraging consumers
to obtain this personal credit in order to fund their real estate investments. Defendants refer
consumers to a Nevada company that applies
. Defendants then try to convince consumers to purchase one of the
Advanced Training packages using their newly-available credit cards or other financial
resources, such as retirement funds.
Defendants continue to target consumers with telemarketing calls to induce additional
sales, including access to a purportedly more exclusive “Inner Circle” program that supposedly
provides personalized guidance from “coaches” and “mentors” for up to $20,000 more. No
matter how much consumers spend on Defendants’ training programs, they rarely ever recoup
their substantial investments, let alone earn a profit, and they do not receive what is promised.
Consumers do not receive, for example, the promised training or tools to find and secure
undervalued properties or the promised access to a network of cash buyers willing to buy the
properties. The supposed proprietary software that Defendants tout as providing consumers a
competitive advantage contains information that is generally available for modest fees elsewhere.
While the consumer losses from the seminar sales are substantial, the consumer injury
from this scam extends far beyond the seminar sales. From 2012 to 2016, Defendants promised
consumers “exclusive” access to “Buying Summit” events in Las Vegas where they could
purportedly buy “turnkey,” “cash flowing” rental properties at below market value prices if they
purchased an Advanced Training package. Defendants were actually the ones selling or
3
brokering these properties, and did so often after marking up the price as much as 20% or more
for their own profit. Defendants provided consumers high-risk, short-term loans to purchase
these properties at the inflated prices. Defendants then induced other consumers to purchase
these loans by portraying them as safe, “risk free” investments. While Defendants no longer host
these “Buying Summits,” consumers still incur costs from owning dilapidated properties they
purchased from Defendants, and, Plaintiffs believe, a number of consumers risk additional harm
as a result of “underwater” mortgages originated by Defendants that are likely to default.
In the end, many consumers who have joined Defendants’ program have ended up
heavily in debt with their credit ruined. Others have lost their life savings. For example, Betty
Page, a retiree, attended Defendants’ Preview Event in February 2012. Within three months,
Defendants charged her over $45,000 for a series of training and mentoring packages that
included the Inner Circle program, which was pitched to her as “the equivalent of a PhD level
education” and having “a success rate of 97-98%.” She was also encouraged to use her savings
to buy properties, trust deeds, and tax liens at the Buying Summit. She ultimately lost over
$100,000 from her dealings with Defendants. 3 In 2013, Kimberly Kreiner attended a Preview
Event and within several months paid Defendants over $65,000 for a series of training packages.
She and her husband then used additional savings to purchase properties at inflated prices at the
Buying Summit. She had to file for bankruptcy. 4 In 2014, Debra Schultz, a single mom who
was a special education teacher, paid Defendants almost $48,000 for a series of trainings. She
spent most of her remaining savings to purchase overpriced real estate from Defendants at a
3
Page Dec., Tab 4, ¶¶ 6-8, 16.
4
Kreiner Dec., Tab 8, ¶¶ 13,16, 64.
4
Buying Summit. 5 The same year, Deidre Mingo and her husband, both ministers, paid
Defendants almost $40,000 for trainings and then used their retirement funds to purchase real
estate at the Buying Summit. They ultimately lost over $100,000. 6 In 2015, John Enterline
spent over $30,000 for a series of Defendants’ training packages and then incurred
approximately $50,000 in additional losses through a combination of real estate and financial
investments sold by Defendants. 7 In 2017, Maria Cortes paid over $60,000 in training packages
using new credit cards she obtained through a company referred to her by Defendants.
Thereafter, she could only make minimum payments on those cards, and at one point, her credit
score dropped by roughly 150-200 points. 8 In 2018, Sharon Kling and her husband, a retired
couple, paid nearly $60,000 to Defendants in just two months for a series of trainings—including
a financial investment training package for $20,000 after the couple indicated they were
“computer illiterate.” 9
The consumer loss is widespread. A survey of Defendants’ customers conducted by an
experienced survey expert found that only 10% of the respondents indicated they completed a
profitable real estate transaction using Defendants’ training, and less than 5% netted more from
real estate transactions than what they spent on Defendants’ programs. These findings
correspond with Defendants’ own records from a program in which they promised to reimburse
Workshop “tuition” costs for consumers if they subsequently completed a profitable real estate
5
Schultz Dec., Tab 6, ¶¶ 3, 27.
6
Mingo Dec., Tab 19, ¶ 45. Deirdre Mingo appears in a local television news segment that aired
in 2016. Id, ¶¶ 44-45 (program appears at: https://fox6now.com/2016/10/27/there-is-a-price-to-
be-paid-milwaukee-womans-warning-about-free-real-estate-seminars/).
7
Enterline Dec., Tab 12, ¶¶ 3, 50-51.
8
Cortes Dec., Tab 3, ¶¶ 15, 24-29, 40, 71.
9
Kling Dec., Tab 14, ¶¶ 4, 26, 74.
5
transaction. Those records indicate just 1% of eligible customers were reimbursed.
Defendants’ illegal conduct is pervasive. Undercover recordings conducted by a Division
investigator of a late 2017 Preview Event and Workshop are consistent with the experiences of
the consumer declarants over a six-year period before and after 2017. 10 These recorded events,
which illustrate how the deceptive scheme unfolds, are described in Sections II.A(1) and II.A(2).
The Individual Defendants have profited greatly from this scheme, together receiving
over $30 million since 2015, and using millions more to fund the use of private airplanes.
Defendants continued their deceptive scheme even after being tipped off in January 2018 about a
confidential FTC investigation, 11 and, as detailed below in Section II.B, attempted to pressure at
least two witnesses to stop pursuing their complaints with law enforcement. Defendants’
unlawful conduct is deliberate and egregious. Plaintiffs believe immediate injunctive relief is
needed to protect the public from further harm and to preserve assets and evidence.
Defendants’ actions violate: Section 5(a) of the FTC Act, 15 U.S.C. § 45(a); Section
310.3(a)(2)(iii) of the FTC’s trade regulation rule entitled Telemarketing Sales Rule, 16 C.F.R.
10
Complete transcripts of these recorded events are attached as exhibits to Larsen’s Declaration:
Preview Event transcript (at Tab 23, Ex. H at FTC-PI 6124-2285); Day 1 Workshop transcript (at
Tab 24, Ex. P at FTC-PI 6406-6617); Day 2 Workshop transcript (at Tab 25, Ex. S at FTC-PI
6627-7026); and Day 3 Workshop transcript (at Tab 26, Ex. W at FTC-PI 7040-7272). Copies of
ten selected audio clips are on a CD manually submitted as Exhibit A to Marino Dec., Tab 27.
Citations to the transcripts from the Preview Event appear as “Preview Tr. [Page]: [Line],” and
as “Day [1, 2 or 3] Tr. [Page]: Line] for the Workshop.” Citations to selected audio clips from
the events appear as “Audio Clip [Number] [time stamp range].”
11
As part of Plaintiffs’ investigation, the FTC issued administrative subpoenas for records and
for testimony from Defendants Lewis, Poelman, Smith, and Finnegan. Defendants did not
comply with the subpoenas for testimony and produced some of the subpoenaed material. This
motion and the accompanying exhibits cite to, and include copies of, certain materials produced
by Defendants and by third-parties pursuant to administrative subpoenas. Plaintiffs are filing a
contemporaneous seal motion requesting that such portions of this motion and these exhibits be
filed under seal temporarily to give those parties an opportunity to seek an appropriate protective
order. In the meantime, Plaintiffs are filing redacted versions of these materials publicly.
6
Part 310 (“TSR”); Sections 13-11-4(1) and 13-11-5(1) of the Utah Consumer Sales Practices Act
("CSPA"), Utah Code §§ 13-11-1 et seq., and Sections 13-15-4 and 13-15-5 of the Utah Business
Opportunity Disclosure Act (“BODA”), Utah Code §§ 13-15-1 et seq. To protect consumers
from Defendants’ ongoing scheme, Plaintiffs move this Court for a TRO that: (1) halts
Defendants’ deceptive conduct; (2) temporarily freezes their assets; (3) permits FTC and
Division staff immediate access to Defendants’ business records; (4) orders Defendants to
provide sworn financial disclosures to Plaintiffs; and (5) allows limited expedited discovery to
identify assets and records. Plaintiffs also request that the Court order Defendants to show cause
why a preliminary injunction should not issue against them.
II. FACTUAL BACKGROUND
A. DEFENDANTS’ DECEPTIVE PRACTICES
Defendants use a variety of deceptive tactics to sell multiple levels of increasingly
expensive real estate investment seminars, other trainings, and related services, purportedly
designed to help consumers become successful real estate investors. Consumers are initially
solicited primarily through direct mailings, television commercials, and online advertisements to
attend a “free seminar” (Preview Event) on how to make money by investing in real estate. 12
These advertisements often feature reality television personalities whose shows involve real
estate flipping, such as Scott and Amie Yancey from A&E’s Flipping Vegas or Doug Clark from
Spike TV’s Flip Men, and promise that consumers will learn “how to buy property for wholesale
prices just like the institutional investors!” and “how to get the best properties before the public
12
E.g., Ruby IH, Tab 16, at 12:14-13:21 );
Slater IH, Tab 17, at 18:13-19:14 ).
7
has access to them!” 13 Defendants market the seminars under various brand names associated
with the featured television personality.
1. The Preview Events
The free Preview Events typically last two hours and actually serve as marketing events
for Defendants’ 3-day Workshops. The Preview Events are held in hotel conference rooms
throughout the country. Typically, around eighty consumers attend an event, although some
events may have as many as several hundred. 14 The events often have a primary or keynote
speaker who covers real estate investing, and another speaker follows with a shorter, “bonus”
presentation on investing in stock options or . 15 The speakers are aided by a sales crew.
. 16
While the event speakers cover several basic real estate concepts, no detailed information
13
An early example of a direct mailing from 2012 featuring Graziosi, who is described as a
“Real Estate Millionaire Mentor” and purportedly “widely recognized as a real estate expert and
best-selling author” is at Marino Dec., Tab 27, ¶ 10(b) & Ex. F at FTC-PI 7615. The mailer is
titled “Make Serious Money With Income Properties!” and portrays the Preview Event as “an in-
depth Income Property event designed to answer such questions as: How do I find valuable real
estate for pennies on the dollar? . . . How can I find income properties I can flip overnight?”
Examples of mailers from 2013 to 2015 appear at Figures 1 to 3 in the Complaint at ¶¶ 51-54.
Quoted representations from infomercials shown from 2016 to 2018 are referenced in the
Complaint at ¶¶ 55-57. An example of a 2017 online advertisement is at Larsen Dec., Tab 23,
¶ 13 & Ex. F at FTC-PI 6112, 6115 (advertisement for “Live Wealth-Building Event,” featuring
Levin and Perkins from HGTV’s Renovate to Rent, states “Our teams . . . show you how to
locate deals for your own professional portfolio,” and “At this live event, you will learn how to:
Quickly get your start as an investor [and] Conduct real estate deals from start to finish.”)
14
Slater IH, Tab 17, at 75:14-76:11 (
); Larsen Dec., Tab 23, at ¶ 17 (approximately 70 people at event he attended,
majority appeared to be over 50 years old).
15
Larsen Dec., Tab 23, at ¶¶ 20, 35-38 (“bonus” presentation at end about “learning to trade
stock options”); Slater IH, Tab 17, at 74:2-75:13 ).
Defendants use these “bonus” presentations to sell other services and products, such as purported
stock investment courses under the brand “Interactive Trader.” Larsen Dec., Tab 23, at ¶ 35.
16
Slater IH, Tab 17, at 76:12-77:4 ).
8
on how to go about investing in real estate is provided. 17 The speakers focus on earning money
by “wholesale flipping” or “wholesaling” residential properties. 18 “Wholesaling” is a common
real estate investment strategy where one acquires an interest in a property and promptly
transfers it to another investor at a higher price. 19 While wholesaling can be appealing to new
investors because it appears to require minimal capital and does not involve renovating and then
reselling the property, this investment strategy still requires substantial time and resources and
carries significant risk, particularly if one uses high interest financing to acquire the property. 20
The speakers indicate that those who pay for the Workshops will be taught the same
techniques, and be given access to the same funding, that they and others have used to become
17
Ruby IH, Tab 16, at 18:8-19:22
; Enterline Dec., Tab 12, ¶ 6 (free

seminar was “largely an infomercial for a subsequent seminar”); Kreiner Dec., Tab 8, ¶ 5
(“There was a lot of hype [and] clapping”).
18
See, e.g., Gonzales Dec., Tab 10, ¶ 4 (at October 2018 Preview Event, speakers “spoke about
making lots of money by flipping houses”)
19
“Wholesaling” or “wholesale flipping” is a type of property flipping where “an investor enters
into a contract to purchase the property and then either assigns the purchase contract to another
investor for a fee or closes on the purchase contract and shortly thereafter closes on a second,
prearranged sale of the property to another investor at a higher price.” Nicolais Report, Tab 29,
p. 6 (FTC-PI 7817). In contrast to wholesale flipping, a “fix and flip” transaction is where the
investor renovates or otherwise improves the property prior to selling it to an end user at a higher
price commonly referred to as the “After Repair Value.” Id. at p. 11 (FTC-PI 7822).
20
Plaintiffs’ expert, Teo Nicolais, discusses the significant time and resources required for
executing wholesale flipping—which involves identifying properties to acquire, finding a willing
seller, negotiating a purchase contract, and finding a willing investor almost simultaneously to
purchase the property—and the risks associated with wholesaling that are not conveyed in
Defendants’ training materials he reviewed. Tab 29, at pp. 16-27 (Section 4.5) (FTC-PI 7827-
38); see also Adiwidjaja Dec., Tab 7, ¶ 6 (consumer discovered only after spending more than
$25,000 on Defendants’ training how difficult it is to find properties that are “far below market
value” to wholesale because “everyone has access to the same listings online,” and how risky it
is if you use loans and are not able to “flip [the] property quickly”).
9
successful. 21 The speakers tell consumers that they can start flipping properties for profit
without using any of their own money or credit soon after they complete the three-day
Workshop. 22 They reinforce this claim by sharing examples and testimonials of former students
who purportedly were able to do a number of deals within weeks or months after attending a
Workshop. 23 The speakers promise consumers that if they purchase the Workshop they will
21
Enterline Dec., Tab 12, ¶ 7 (speaker said we could get funding “using their money” without a
credit check or income verification if we were one of their students); Page Dec., Tab 4, ¶ 4
(speakers claimed they “would teach me how to duplicate what they did,” and “assured me they
would work with me through the process and make real estate investing a ‘turnkey situation’”);
Cortes Dec., Tab 3, ¶ 4 (speakers said they know how to find properties that are vacant or in pre-
foreclosure and would teach us how to contract and negotiate with the property owners to buy
these properties, and “with these techniques, they said we would be able to make amazing
returns on our investments”); Ruby IH, Tab 16, at 16:24-17:4
); Slater IH, Tab 17, at 109:18-111:11
).
22
Baisley Dec., Tab 1, ¶ 3 (speaker said we could get access to buy investment properties at a
nominal fee if we signed up for the Workshop); Cortes Dec., Tab 3, ¶ 4 (speaker said you could
make money in real estate without using your own money); Slater IH, Tab 17, at 117:3-117:11
(Preview event speaker says in recording: “most of the people in here have zero experience, so
you’ll be in good company. . . . I believe most of the people, after the 3-day class, start doing
wholesale quickly because that makes money a lot quicker, you don’t have to use your own
money, does everybody understand that?”).
23
See, e.g., Schultz Dec., Tab 5, ¶ 4 (at a 2014 Prevent event, a former student talked about how
she made money buying real estate after she signed up for the program); Stratton Dec., Tab 2, ¶ 8
(at a 2018 Preview Event, speakers introduced “investors” who said they made millions within a
few years). Nicole Slater was
Slater IH, Tab 17, at 72:1-72:14, 102:11-106:23.
. Id. at
64:1-69:21, 112:15-113:13, 117:24-119:7.
Id. at 125:14-125:22.
10
receive all the training and help they need to start doing their own real estate transactions. 24
a. An Example of How the Preview Event Unfolds
In August 2017, a Division investigator, using a pseudonym, attended and recorded a
Preview Event held at a Red Lion Hotel conference room in Twin Falls, Idaho. Defendants
marketed the event using the stars of the reality television show “Renovate to Event,” Drew
Levin and Danny Perkins, advertising it as a “Free Wealth Building Event.” 25 The recorded
event illustrates Defendants’ deceptive tactics. 26
At the outset, the keynote speaker, Steve Johnson, introduces himself as having “been
working with Drew and Danny” for several years, and explains that the “company” does both
rental properties and flip deals. 27 The event speakers refer to their supposed close relationship
with the featured television personalities to give themselves credibility. 28
The speaker discusses why it is a good time now to invest in real estate and identifies
lack of knowledge and money or credit as the “main obstacles that keep people from success in
real estate investing.” 29 To overcome these obstacles, the speaker says his company trains
24
Kreiner Dec., Tab 8, ¶6 (speakers said if you signed up for the next training event, you “would
get all the education and training you needed to start up your own real estate business”); Cortes
Dec., Tab 3, ¶¶ 4, 5 (consumer left with the impression that teachers would “take us by the hand”
in growing our real estate business, and the next seminar is where “they would teach you the
actual techniques and give you materials”).
25
Larsen Dec., Tab 23, ¶¶13-14 & Ex. F at FTC-PI 6112 (8/16/17 printout of
UtWealthEvent.com website).
26
A transcript of the recording is attached at Larsen Dec., Tab 23, Ex. H. Citations to the
transcript of this Preview Event follow this format: “Preview Tr. [page number]: [line number].”
27
Tab 23, Preview Tr. 14:9 – 14:12; 14:24-15:13 (FTC-PI 6137-38).
28
“You guys don’t know anything about who we are or what we do really. What you do know is
that we partner with Drew & Danny and we invest in real estate and we invest in the stock
market.” Id., Tr. 135:20-24 (FTC-PI 6258) (second speaker, Steve Trotzel (or “Troxel”)).
29
Id., Tr. 24:21 – 26:8 (FTC-PI 6147-49). For example, the speaker refers to the average gross
11
consumers how to do real estate deals and provides consumers the funding to flip properties for
profits. He claims the company does so because it makes “more money” when it does “deals
together” with consumers:
But we as a company, we offer training and education. We offer

classes. We literally show people how to do these deals the way
we do them. And the reason why we do that is when we show
others how to do it, we like to do deals together with them so that
we make more money in the long run. And I’m very direct about
that purpose. That’s the reason why we have that training and that
education, classes, whatever you want to call them. A lot of you
don’t know this one, though. About the money issue here. We
have a funding partner that funds our deals for us. We’ve been
doing so for years and years. Students who do our training or our
classes with us, they get to use our funding partner to fund those
transactions. It’s really cool. I’ll talk about that here today.
* * * *
I don’t make very many promises whenever I teach a class for
obvious reasons. I make one promise and one promise only. You
know what it is. By the time that I am done here today with my
portion, I will be very detailed, very specific, I’m talking step by
step on how each one of you here has the opportunity to do multiple
real estate transactions without using a dime of your personal
money, without accessing your credit to do it. Still control the deal,
get the deal, profit from it without using your money or credit. 30
The speaker throughout this event repeatedly represents that his company offers training
so that its students can take advantage of its funding to do deals—and so both the company
(acting as a funding partner) and the students make money together from the deals they do. 31
profit of $64,000 and an average gross return of 47.4% for single-family home flips reported in
2017 by RealtyTrac. Id., Tr. 20 – 21 (FTC-PI 6143-44).
30
Id., Tr. 26:10-27:18 (FTC-PI 6149-50). The recording can be heard at Clip 1.
31
The other event presenter, Trotzel, repeats this claim too: “When Drew & Danny started
giving their students access to funding, that’s the number one challenge that people have
investing in real estate. Once we solve that problem, get this. I know this will surprise some of
you. Our student success skyrocketed. I mean now you have access to money. The big problem
is this, though. Many of our students as they started going out and doing deals or multiple deals,
they didn’t realize how much the government was entitled to from their profits.” Id., Tr. 126:3-
12
This recurring claim is a lie. The transactional funding that Defendants offer 32 is only
available in the limited circumstances of a wholesale transaction where an end buyer has already
placed the cash payment for the property in escrow at a title company. 33 This limitation makes
the funding, which is repeatedly presented as a key benefit of the various training programs,
effectively unnecessary and the purported benefit illusory. 34
The speaker asks the attendees who among them is “completely new to real estate
investing,” and confirms that the majority have no experience. 35 He then discusses the need to
first “find a good deal” by buying from “motivated sellers” and then to secure the transaction by
making a cash offer not subject to financing. 36 He refers to “our proof of funds letter,” which he
claims “is what keeps the deal alive” and has “helped us quite a bit.” 37 This characterization is
misleading. The “proof of funds” letter actually has little value. It is not proof that the consumer
has sufficient cash on hand or that the offer is not subject to financing, as Defendants imply. 38
13 (FTC-PI 6249). The recording is at Clip 7.

32
Defendants’ “transactional funding” is a type of short-term funding provided by other
alternative lenders to complete a type of flip transaction, which Defendants refer to as “ABC or
Flip Deals.” In such a transaction, commonly known as a “Double Closing” or “Simultaneous
Closing,” the investor arranges a contract to buy a property as well as a contract to sell the same
property to a cash buyer (also referred to as the “end-buyer”). Nicolais Report, Tab 29, p. 49
(FTC-PI 7860).
33
Nicolais Report, Tab 29, pp. 47-50 (FTC-PI 7858-61).
34
As Plaintiffs’ expert explains, funding may not even be needed if the end buyers’ funds are
placed in escrow since the title company “will already have access to sufficient funds.” Id. at p.
49 (FTC-PI 7860).
35
Tab 23, Preview Tr. 28:12-16 (FTC-PI 6151).
36
Id., Tr. 46-48 (FTC–PI 6169-71) (discussion of paying all cash to get bank to “agree to sell the
property short for less than what is owed on the debt”). Discussion of finding a “good deal” and
“motivated sellers” is at pages 29 to 48 (FTC-PI 6152-71).
37
Id., Tr. 48:21-49:18 (FTC-PI 6171-72). The “proof of funds” discussion is at Clip 2.
38
Nicolais Report, Tab 29, pp. 51-58 (FTC-PI 7862-69) (“Proof of funds” letters typically come
13
Next, using a hypothetical scenario where they are able to buy a property valued at
$269,000 for only $145,000, the speaker talks about doing a “wholesale flip” strategy where they
sell the property for a $40,000 profit “without spending any more money or time on it.” 39 He
then says he will show “how to do these deals without using your money or your credit,” and that
“[w]hat I’m about to show you is very powerful,” before asking rhetorically, “[i]f it’s so
powerful, why do we want to share it with some of you?” 40
The speaker claims, again, that his company shows consumers how to do deals like it
does and shares its funding because it profits too when its students do deals. 41 He first explains
that consumers pay a “one-time tuition” of $1,147 for training, 42 and that, at the paid training, the
company will “show them how to do these deals the way we do them.” 43
The speaker then explains that the second supposed way the company makes money is by
funding the consumers’ deals and getting “a slice of their profit”:
So at that point, they’re students of ours, they know -- they get to

use our company’s -- our company’s proof of funds letter, number
one, to lock it up. Number two, they get to use our funding partner
under the same -- under the same rate and everything that we use.
So we facilitate funding on the deal. We get it funded for them so
they don’t lose the deal. Everything else is the same. We show
from a bank to show one has sufficient cash on hand. Defendants’ “proof of funds” letter is
more akin to a standard “pre-approval” letter issued by lenders agreeing to loan a certain amount
subject to their underwriting approval).
39
Tab 23, Preview Tr. 55:16-56:4, 59:14-60:3 (FTC-PI 6178-79, 6182-83) (describing
wholesaling flipping as “our favorite type of transaction” and “[o]ne of the best ways to start”).
40
Id., Tr. 61:2-61:13 (FTC-PI 6184).
41
Id., Tr. 62:10-62:23 (FTC-PI 6185).
42
Id., Tr. 63-65 (FTC-PI 6186-88).
43
Id., Tr. 63:21-64:1 (FTC-PI 6186-87). He adds that, besides showing consumers “how to find
their first deal, locate it, get the offer, get it under contract,” the company gives consumers use of
its “buyer system to get the buyer in place, which is very valuable to them.” Id. at Tr. 67:4-11
(FTC-PI 6190). The recording is at Clip 3.
14
them how to get a buyer, they make money on the deal. The[] only
difference is we had to fund the deal for them. Now do we deserve
a slice of their profit? . . . . Yeah, heck, yes. Right? If we had to
fund them, we’re going to take a slice of profit. So I’m going to
tell you how that works. I asked the question earlier, I’m going to
do it again. How many of you would love to access to funding
right now? You can use it without using your credit or income. 44
He describes the key features of the company’s funding, such as “no upfront points, fees
or interest,” “no credit checks,” “no income verification,” and its 1.65% “cut of the profit.” 45 He
claims the “no up-front points, fees or interest” is a “big deal,” which the company was “able to
negotiate out” because it has done “a lot of deals” – even though in fact these terms are common
for wholesale funding. 46 He adds that the company checks to make sure the deal is profitable
“because they have money on the deal,” which helps ensure the consumer does not lose money. 47
The speaker repeats again that the company’s funding arrangement with its students is a
“win-win” for both, “it’s very effective,” and “[o]ur students like to use it.” 48 While noting the
funding must be for a “wholesale flip deal,” and not for a rental property, the speaker says
students can buy rentals from their flip deal profits, which is why they teach their students to do
“[f]our or five flip deals,” and then “use those profits to pay cash and keep one [property to rent]
44
Id., Tr. 68:23-69:17 (FTC-PI 6191-92). The recording is at Clip 4.
45
Id., Tr. 70:14-77:22 (FTC-PI 6193-6200).
46
Id., Tr. 71:8-12 (FTC-PI 6194); see Nicolais Report, Tab 29, pp. 50-51 (FTC-PI 7861-62)
(consumers can obtain transactional funding at similar terms and rates from other sources
without having to pay a large fee for a training program).
47
Id., Tr. 71:20-73:23 (FTC-PI 6194-96). The speaker provides a “real life example” where “in
your first month you bring us five deals,” and “[o]ut of the five, let’s say we fund two of them,”
but not the other three because “[i]f you would have done those, you would have lost money.”
Id. Tr. 72:8-73:22 (FTC-PI 6195-96). The speaker touts the company’s purported deal review as
a “huge benefit.” Id. Tr. 73:22-23; 74:19-22 (FTC-PI 6196-97).
48
Id., Tr. 78:12-79:12; 80:25-81:1 (FTC-PI 6201-04).
15
for yourself . . . [a]nd slowly build up your little real estate empire.” 49
The speaker then says once again that the company will “show you how to do the exact
same thing and give you access to the exact same tools” it has because “the more deals you do,
the more money we make”:
I try to be as direct as possible with you. If we’re showing you

how to find them and we’ve got the funding already in place, and
we show you how to get a buyer and you’re calling us 10 times a
day every day, why don’t we just go get that one on our own?
Why don’t we just go do that deal? . . . .
We are doing it, yes. The problem is, we cannot be in every state,
every county, every day, every neighborhood, all the time doing all
of them. I love them. Together with you we can do more.
So a couple years ago our business strategy became this. We said,

hey, we’re going to do as many deals as we can handle, and we’ll
make money on those. But at the same time, we want to get a
handful of you up and running. We want to show you how to do
the exact same thing and give you access to the exact same tools.
We just want to make a little bit of money on each one of those
deals we help you with and fund them.
How many of you agree that’s a genius business strategy? It’s

awesome. Because it’s win-win. The more deals you do, the more
money we make, the more money you make. We want you to go
do 12 deals this year. Seriously. We want you to do a ton of deals.
The more deals you do, the more money we make, and obviously
the more money you make there as well. 50
The speaker tells the audience that “this can be generational. This is for you and then it’s
for the kids, grandkids, friends, family, people around you,” and that the “majority of you can do
it from your home or office.” 51 He adds: “If you can send e-mail, you’ll be able to do all of this.
49
Id., Tr. 80:4-81:13 (FTC-PI 6203-04).
50
Id., Tr. 82:10-83:13 (FTC-PI 6205-06); Audio recording is at Clip 5.
51
Id., Tr. 84:10-14; 85:7-12 (FTC-PI 6207-08).
16
All right? So it’s not rocket science is what I’m telling you.” 52
In order to create a false sense of urgency, the speaker suggests that the Workshops have
limited spots and that certain “bonus” offers are only available to those who sign up at the
events. 53 For example, the speaker says if they register now they will get access to the funding
and customer support that is usually not included as part of the tuition fee, and so “when you
register here today, the $1,147 gets you everything you need right now. You just get it all at
once.” 54 He adds that by using the funding, consumers can also use the company’s proof of
funds letter to “secure the transaction” as well as the “buyer’s system.” 55 He then emphasizes
that the company will show consumers how to get the buyers, how to get the deals, and the exact
price at which they should sell the property:
The very first thing we show you at that training, especially for the
newbies, is we show you how to use our buyer’s system to locate
and find five to 15 buyers in the market you want to invest in and
know where they [bought] property and how much they want to
pay for it.
We show you how to get the buyers first and then we show you
how to get the deals. Have the buyers first. You can’t pre-sell
property. That’s not what I’m saying. But you can have
relationships with buyers and know where they want deals. So by
52
Id., Tr. 85:16-18 (FTC-PI 6208).
53
The speaker indicates the three-day training is a “smaller class on purpose” because otherwise
“you don’t get the one-on-one time” if there are too many people. Id., Tr. 92:5-19 (FTC-PI
6215). To help foster a sense of urgency, Slater explained that
Slater IH, Tab 17, at 108:7-108:21.

54
Tab 23, Preview Tr. 87:13-88:1 (FTC-PI 6210-11). The speaker then encourages consumers
to take advantage of various bonus benefits by registering now to attend the three-day training.
Id., Tr. 87-97 (FTC-PI 6210-20).
55
The speaker says that the proof of funds letter “alone is worth the entire” tuition amount, and
that the company wants the consumer to have a buyer “because they’re funding” the transaction,
and so “we do it together.” Id., Tr. 88:23-89:9; 89:10-17 (FTC-PI 6211-12).
17
the time we go and we have your deal and are funding it, there’s
already two or three people fighting over that thing, that they want
it at the $186,000. How many of you agree if you price your
property right in a hot market like we have going on right now, if
you price it below market value and give them a good deal, too,
how many of you agree buyers are going to go like this, Whoomm.
They’re going to come out of the woodwork for that thing. If you
price it too high, no buyer. We tell you exactly what you should
price it at. There will be no question in your mind what you
should sell it for. All right? So we help you with that, too. 56
The speaker offers other “bonus” incentives for attendees to register for the training on
site, including the ability to bring a guest for free and a tuition reimbursement that allows a
person who completes a profitable deal to receive a refund. 57 Echoing his earlier claim that the
company makes money from funding its students’ deals, the speaker says the tuition
reimbursement is “a benefit for the company” too because “a student who has done one deal and
made money doing this” is “going to do more than one” and the company makes money “on
your future deals.” 58 The speaker concludes by presenting a past student who purportedly was
able to do profitable deals and achieve his financial goals soon after he finished the training. 59
56
Id., Tr. 89:18-90:19 (FTC-PI 6212-13). The recording is at Clip 6.
57
Id., Tr. 93:6-95:22 (FTC-PI 6216-18). An example of the “tuition reimbursement” certificate
is at Larsen Dec., Tab 23, Ex. M at FTC-PI 6304 (refund 100% of “your Real Estate Education
Workshop tuition when you close a new positive cash flow real estate transaction and submit the
supporting documentation . . . within 6 months of purchasing the workshop”).
58
Tab 23, Preview Tr. 95:17-96:11 (FTC-PI 6218-19). Despite the claims that “bonus packets”
were limited to only those who purchased the Workshop at the Preview Event, the Division
investigator received one when he signed up for the Workshop over the phone after the Preview
Event. Larsen Dec., Tab 23, ¶¶ 42, 45.
59
Tab 23, Preview Tr. 99:18-101:14 (FTC-PI 6222-24) (speaker presents a former student who
lost his job and needed to take care of his wife who had health problems; prompted by the
speaker’s questions, the former student says he did his first deal within three weeks after
attending the three-day training and that he has done 61 total deals and has 33 rental properties).
At other Preview Events, Defendants presented similar stories of consumers who purportedly
were able to afford medical care for a sick family member from their real estate investments.
Ruby IH, Tab 16, at 17:5-17:25
18
Consumers who signed up and paid for the Workshop received a letter stating: “You are
well on your way to creating financial independence by making one successful real estate
investment at a time,” and that they are now “as a result of participating in our workshop – on
track to achieving the wealth and success they’ve always dreamed of.” 60
b. The Reality
The vast majority of consumers who pay for Nudge’s training do not recoup what they
paid. Plaintiffs retained Dr. Bruce Isaacson, 61 who conducted a telephone survey in 2019 of
customers who had attended one or more of Nudge’s seminars between June 2014 and June
2017. 62 Over 92% percent of the 194 consumers who completed the survey indicated that
Defendants’ representatives said or suggested that they would earn more money from investing
in real estate than they would pay for the program. 63 Only 9.8% of consumers, however,
.
60
See, e.g., Schultz Dec., Tab 6, Ex. A at FTC-PI 989; Norris Dec, Tab 9, Ex. B at FTC-PI 1731.
61
Dr. Isaacson’s expert report is attached as Tab 30. His report sets forth his qualifications and
experience in paragraphs 12 to 21, the materials he reviewed in paragraphs 22 to 24, the survey’s
methodology in paragraphs 26 to 47, and his findings in paragraphs 49 to 103.
62
MMR Strategy Group, a marketing research-based company, conducted the survey from
February 2019 to May 2019. The survey database contains 194 completed interviews. Isaacson
Report, Tab 30, ¶¶ 4, 7. The potential survey respondents consisted of a random sample of
individuals who established a Utah limited liability company (“LLC”) through BuyPD’s
subsidiary, Veil Corporate. Id. at ¶ 27 & Ex. 2 at FTC-PI 8005-07. Defendants encourage
consumers during the Workshop to pay Veil Corporate to set up an LLC for their future real
estate businesses. See infra notes 126, 187 and accompanying text.
63
Isaacson Report, Tab 30, ¶¶ 9(v). A substantial percentage of the respondents also indicated
that Defendants’ representatives said or suggested that they would receive certain benefits, such
as real estate listings at below market value or discounted properties (62.7 to 71.2% of
respondents, depending on the program), and/or low-cost or zero-percent financing for real estate
deals (66.7% to 71.9%), and that over half of the respondents indicated either that the training
did not provide these items, or provided the items much less or somewhat less than they
expected. Id. at ¶¶ 9(ii),(iii) & 104(ii), (iii).
19
reported they used what they learned to complete a profitable deal, 64 and just 4.6% percent
reported they netted more from their real estate transactions than what they paid Nudge. 65
These survey results correspond with Nudge’s own tuition reimbursement records. While
Nudge offers to reimburse consumers the amount they pay to attend the Workshop if they
complete profitable (“net cash flow”) transactions within either three or six months after the
Workshop, Nudge has reported that only about 1% of consumers who paid for the Workshop had
received the tuition reimbursement. 66
2. The Workshops
The Workshops occur in the same geographical areas as the free seminars. While the
Workshop speakers cover basic real estate concepts, they do not provide much specific useable
information to execute the concepts taught. 67 Instead, the main thrust is to upsell another level of
64
Id. at ¶ 96. Most of the respondents (62.4%) reported they did not use what they learned in the
training program to conduct any transactions, while 36.1% answered they did conduct a
transaction using what they learned. Of those who indicated they did use what they learned to
conduct a transaction, half said they lost money on the transaction and another 27% said they
only broke even on the transaction. Id. at ¶¶ 9(iv), 104(iv).
65
Id. at ¶¶ 9(v), 104(v). The survey asked respondents additional questions about their
experience with Defendants’ programs, including their expectations and evaluations of the
training. Almost 70% of those who attended the Workshop (69.5%) and Advanced Training
(69.2%) said the training did not provide what they expected, and 77.6% of those who joined the
Inner Circle said that program did not provide what they expected. Id. at ¶¶ 9(i), 104(i).
66
The tuition reimbursement rates are contained in “Tuition Reimbursement Certificates”
included in materials given to consumers at the seminars. Examples are at Schultz Dec., Tab 6,
Ex. J at FTC-PI 1033 (“From January 1, 2013 to February 15, 2014, there were 14,467
individuals given the opportunity” to receive a tuition reimbursement, but only 183, or 1.26% of
eligible consumes, received one.); Norris Dec., Tab 9, Ex. G at FTC-PI 1956 (“From January 1,
2015 to December 31, 2015, there were 11,582 customers given the opportunity” to receive a
tuition reimbursement, but only 123, or 1.06%, received one,”); Larsen Dec., Tab 23, Ex. M at
FTC-PI 6305 (“From January 1, 2016 to December 31, 2016, there were 6,065 consumers given
the opportunity” to receive a tuition reimbursement, but only 49, or 0.8% of eligible consumers
received one.)
67
Nicolais Report, Tab 29, pp. 63-70 (FTC-PI 7874-81) (reviewed October 2017 Workshop
20
training, the Advanced Training, which ranges anywhere from $19,000 to as much as $40,000. 68
Workshop attendees are assigned a salesperson who meets with each consumer privately,
apart from the rest of the group. The salespeople are presented as “mentors” or “consultants” to
engender the consumers’ trust. 69 In these “private” meetings, the mentors ask consumers about
their personal financial situations, 70 and indicate that consumers can earn significant income and
recording and materials and concluded that “much of the material presented at the Workshop was
either (1) general knowledge commonly available through free online resources or books, or (2)
so vague or non-specific that it was not likely to be useful”); see also Ruby IH, Tab 16, at 47:2-
49:13 (
).
68
The different price points for the Advanced Training packages allow Defendants’
representatives to encourage consumers to choose the most expensive package the consumers
can afford based on their available credit and funds. See Norris Dec., Tab 9, Ex. D at FTC-PI
1923 (in 2017, Advanced Training prices given to consumers range from $20,592 to $38,592);
Enterline Dec., Tab 12, Ex. E at FTC-PI 2853-54 (in 2015, Advanced Training purchase order
lists prices from $18,997 to $29,997); Mingo Dec., Tab 19, ¶¶ 8, 11 (in 2014, Advanced Training
packages included “Gold” for $18,997, “Platinum” for $24,997, and “Diamond” for $29,997;
consumer paid $24,997 for Platinum package and then paid $12,495 more for additional
“mentoring and online education,” but found out later that consumers who paid less “got the
same amount of mentoring as we got”); Dooling Dec., Tab 11, Ex. B at FTC-PI 2634 (in 2013,
Advanced Training purchase order lists prices from $18,997 to $39,997).
69
Kling Dec., Tab 14, ¶ 11 (consumer explained that Workshop attendees were divided into
groups and that she thought the groups were led by “coaches” who would work with her in
creating her real estate business); Cortes Dec., Tab 3, ¶¶ 8, 11 (consumer followed the advice of
her assigned sales representative to take out more credit cards to pay for Advanced Training
because she believed the representative was a “coach” who she could trust); Ruby IH, Tab 16, at
44:8-44:24, 49:10-50:13
; Mingo Dec., Tab 19, ¶ 8 (“The speakers knew my husband and I

were ministers and one of them appealed to us by telling us that he was a Christian who prayed
about his own business.”)
70
Ruby IH, Tab 16, 34:16-37:18 & Ex. 4 at FTC-PI 4342.055
; Slater IH, Tab 17,

at 24:14-25:10 (
); Khuong Dec., Tab 5, ¶ 10 (consumer had to fill out form about
his personal finances); Enterline Dec., Tab 12, ¶ 10 (speakers encouraged us to discuss our
personal finances with a representative, making it “sound like they wanted to find out how
21
reach their financial goals if they join the system. 71 The mentors also assure consumers that they
will receive personalized mentoring to walk them through the process. 72
Throughout the Workshops, the speakers claim that the Advanced Training is part of an
exclusive, proven system that has helped the speakers themselves and many students succeed
quickly. 73
serious we were about investing and that sharing our personal finances was just part of the
process”) & Ex. C at FTC-PI 2708 (“Financial Inventory” form consumer had to fill out); Norris
Dec, Tab 9, ¶ 9 & Ex. C at FTC-PI 1909 (script consumer was given to call credit card
companies to increase credit limits); Mingo Dec., Tab 19, ¶¶ 7-8 & Ex. B at FTC-PI 4947 (“We
had to provide all of our financial information, and also prepare a statement listing our dreams;”
consumer asked to complete an “Investor Goal Sheet” at 2014 Workshop); Gonzales Dec., Tab
10, Ex. D at FTC-PI 2368 (“Investor Gap Funding Sheet” consumer was asked to complete at
2018 Workshop).
71
Norris Dec, Tab 9, ¶¶ 9, 13-14 (consumer was asked about his financial goals and told during
his consultation that company “would stand behind us and do everything possible to help us
succeed,” that “we were on the way to financial freedom,” and that “we would make our initial
investment back and a lot more”); Cortes Dec., Tab 3, ¶¶ 11, 13-14 (consumer explaining how
the “coaches” met with them one-by-one out of the room to encourage us to sign up for the next
training; her coach told her that: “with their further training, it would take only six months” to
build a successful business, “that the teachers would take my hand to lead me through the entire
deal,” and “I would be able to pay off my debts through real estate investments within the first
year”); Ruby IH, Tab 16, at 37:19-40:3
).
72
Page Dec., Tab 4, ¶ 4 (someone pulled her aside during the Workshop to convince her to sign
up for more training, which included one-on-one mentoring where someone “would always be
there for me on the mentoring hotline”).
73
Gonzales Dec., Tab 10, ¶¶ 5-6 (speaker talked about “how easy it was to make a lot of money
using their program for flipping homes,” and claimed “their program would change our lives”);
Schultz Dec., Tab 6, ¶ 7 (Workshop speaker indicated that within 6 months consumers would be
buying and selling properties, using their system); Enterline Dec., Tab 12, ¶ 11 (speakers made
it sound like we would pretty much be guaranteed to do 5 real estate deals within the first year if
we continued with their program). In at least 2016 and 2017, Defendants’ representatives also
distributed Advanced Training brochures that reported that more than half (and as high as 70%)
of the consumers they surveyed who paid for Advanced Training stated they had “completed a
real estate transaction.” See Khuong Dec., Tab 5, Ex. RR at FTC-PI 972 (2015 brochure
reporting “60% of students” stated they “completed a transaction”); Cortes Dec., Tab 3, Ex. L at
FTC-PI 604 (2016 brochure reporting “70%” have done a deal). However, the survey results
that Defendants presented are misleading. The reported survey results inflated the actual
22
. 74 The speakers indicate that the Advanced Training will teach the same
techniques that they used to become successful, including how to find discounted properties, and
provide personalized assistance from a “coach” who will help them make their own real estate
deals. 75 They also present or refer to former students who purchased the Advanced Training and
have since made substantial income. 76
a. Additional Purported “Funding”
A key part of the Workshops is to encourage consumers to increase their existing credit
percentages of surveyed consumers who said they did a transaction. Defendants increased their
own survey percentages by adding to the results consumers who made a purchase at a Buying
Summit, but who were not themselves survey respondents. See Marino Dec., Tab 27, Ex K at
FTC-PI 7668 (Response’s “Done a Deal Audit” website page reports in a footnote that in 2015
and 2016, consumers who completed a transaction at “various training events” are “included in
the data as “Survey Respondents.”)
74
Ruby IH, Tab 16, at 33:14-34:16, 58:22-59:16
.
75
Cortes Dec., Tab 3, ¶ 8 (speakers “emphasized how personalized their advanced trainings
were, with a personal coach available to meet in person in my area and take you by the hand
throughout your real estate investing,” that the “training would also include access to a website
where you could find properties that were vacant or in pre-foreclosure, and they would teach you
how to reach these owners and how to make different kinds of deals”); Schultz Dec., Tab 6, ¶ 10
(speaker said they “would show us where the best properties were to purchase and who the
owners were”); Norris Dec., Tab 9, ¶¶ 6, 11 (told we would get a “mentor who would walk us
through each deal” and who “would tell you if any prospective deal makes sense”); Adiwidjaja
Dec., Tab 7, ¶ 5 (speaker claimed Advanced Training provided “personal help throughout the
entire process,” including finding the deal with you, inspecting the properties, estimating repair
costs, and making offers); Ruby IH, Tab 16, at 32:16-33:4 (
); Stratton Dec., Tab 2, ¶

19 (told Advanced Training “would teach us everything we needed to know” to be successful).
76
Schultz Dec., Tab 6, ¶9 (former student told attendees how she had lived in a mobile home and
is now making money); Stratton Dec., Tab 2, ¶ 16 (multiple “investors” talked about how they
learned how to flip houses from this program and how they have financially prospered); Dooling
Dec., Tab 11, ¶9 (Workshop speakers “made it sound like many people had realized their dreams
of being successful by using the Dean Graziosi real estate program”).
23
card limits 77 and to use the services of a recommended third party, a Nevada-based company
called Seed Capital, to obtain “funding.” 78
. 79
However, these pitches are really designed to ensure that consumers have enough credit to pay
for the more expensive packages sold by Defendants. 80
Seed Capital does not provide “funding,” but instead charges consumers $3,000 or more
to apply for numerous new personal credit cards on the consumer’s behalf. 81
77
Schultz Dec., Tab 6, ¶¶ 6-7 & Ex. E at FTC-PI 1001 (consumer received a script to use to call
credit card companies to increase credit limits); Kreiner Dec., Tab 8, ¶¶ 12-13 (speakers told
attendees to call their credit card companies to increase their credit limits).
78
The sales representatives encourage consumers to sign the Seed Capital contract at the
Workshop. Norris Dec, Tab 9, ¶¶ 10 (sales representative talked about Seed Capital providing
funding for our real estate deals): Ruby IH, Tab 16, at 113:1-113:25
); Cortes Dec., Tab 3, ¶ 19
(consumer did not even realize that Seed Capital would only be applying for credit cards on her
behalf because the sign up process was “very rushed” and she did not have time to review the
documentation). Defendants also offered consumers discounts on the Advanced Training
packages if they used Seed Capital to obtain more credit cards. Ruby IH, Tab 16, at 62:2-62:25
). To expedite the signup process, a notary public is at the Workshop so

that Seed Capital’s contract can be notarized on site. Ruby IH, Tab 16, at 114:3-114:12.
79
Ruby IH, Tab 16, 97:23-98:15 (
).
80
Cortes Dec., Tab 3, ¶ 18 (“coach” assured consumer that she should use the new credit cards
obtained through Seed Capital to pay for the Advanced Training); Ruby IH, Tab 16, at 153:4-
153:20
).
81
The Seed Capital representative prepares the consumer’s credit card applications and sets up a
new email account for the consumer to communicate with the banks. The Seed Capital
representative also has access to these email accounts to monitor the applications. Ruby IH, Tab
16, at 115:12-117:6, 120:14-121:10; Abdo IH, Tab 22, at 72:2-73:22; Kling Dec., Tab 14, ¶¶ 21-
22 (Seed Capital representative told consumer which email account and what income amount the
representative used for the consumer’s credit card applications).
24
. 82
Seed Capital maintained for its customer applications “Ability to Pay” worksheets, which
it used to calculate the “income” it would include in credit card applications submitted for
Nudge’s customers. 83 In many instances, along with consumers’ actual stated income, Seed
Capital representatives advised consumers to
. 84 reinforced the
earnings claims made by the Workshop presenters.
For example, one Seed Capital employee prepared worksheets for 319 consumers
referred by Nudge from 2016 to 2018. 85 While the average current income reported on the
82
Abdo IH, Tab 22, at 60:24-61:8 (
)
83
See two versions of the “Ability to Repay/Income Calculation Worksheets” attached to Larsen
Dec., Tab 23, ¶ 146 & Tab 26, Ex. FF at FTC-PI 7426 (February 2018 worksheet version does
not include “Projected Income”), Ex. GG at FTC-PI 7428 (October 2017 worksheet lists
“Current Income,” “Anticipated/Projected Income,” and “Income of Others in which you have
Reasonable Access”). The average total stated income listed in the worksheets dropped from
when the worksheets stopped including a “Projected
Income” Section. Larsen Dec., Tab 23, ¶ 148(d)(ii).
84
Ruby IH, Tab 16, at 121:11-124:10
; Norris Dec, Tab 9, ¶ 18 &

Ex. T at FTC-PI 2084 (Seed Capital representative advised consumer what to put down for his
“anticipated projected earnings” from future real estate investments, telling consumer that he
could expect to earn $10,000 per deal); Cortes Dec., Tab 3, ¶ 20 (Seed Capital representative
projected consumer’s income to be $120,000 more than her current income).
85
Abdo IH, Tab 22, at 46:2-47:24. An analysis of these 319 worksheets by a Division
25
worksheets was more than
listed separately a projected income amount of . The total
income listed on these worksheets was than the stated current income. 86
. In
January 2017, Sanderson and another Nudge executive discussed hearing from consumers that
. 87 However, Seed Capital
-- after
Defendants learned about the FTC investigation in January 2018. 88
Unbeknownst to consumers, Seed Capital
. 89
investigator is set forth at Larsen Dec., Tab 23, ¶¶ 145-49 & Tab 26, Ex. HH at FTC-PI 7430-33.
86
Id., at ¶ 145 (average total stated income was while the average current income was
). When presented with the income projections in her worksheets at an investigational
hearing, Abdo claimed that
Abdo IH, Tab 22, at 47:21-50:14.
87
Marino Dec., Tab 27, Ex. I at FTC-PI 7656-57 (1/20/17 email from Response’s Kent North to
Sanderson:
88
Abdo IH, Tab 22, at 85:2-14.
89
For example, in June 2017, a Nudge employee emailed a Seed Capital employee:
Marino Dec., Tab 27, Ex. I at

FTC-PI 7659; see also Cortes Dec., Tab 3, ¶ 24 (the Seed Capital representative outlined for the
consumer how she should make payments for the Advanced Training by “allocating the amount I
26
. 90
b. An Example of How the Workshop Unfolds
In October 2017, a Division investigator, using a pseudonym, attended and recorded a
Workshop presentation featuring the television personality from Spike TV’s “Flip Men,” Doug
Clark. 91 The Workshop was held at a Springhill Suites hotel in South Jordan, Utah. 92 The
recorded event illustrates how Defendants induce consumers to pay tens of thousands of dollars
for the next training package.
The featured speaker, Doug Clark, begins his presentation by saying he is going to teach
strategies that the consumers “cannot learn anywhere else,” and that he teaches people all over
the world and “most of them have never done real estate.” 93 He talks about how he had no real
estate experience before he met a “mentor” named “Sean” who “developed a system of real
should put on each credit card Seed Capital had obtained for me.”).
90
For example, in May 2017, an email among several Seed Capital employees stated:
.” Marino Dec., Tab

27, Ex. I at FTC-PI 7658.
91
Larsen Dec., Tab 23, ¶¶ 46-47, 79, 113. Transcripts of the recordings for each Workshop day
are attached at Tab 24, Ex. P (Day 1), Tab 25, Ex. S (Day 2), and Tab 26, Ex. W (Day 3).
Citations to the Workshop transcripts follow the format: Day [#] Tr. [page #]: [line #].
92
According to hotel records, the event agreement was signed by Response’s Vice President,
Defendant Finnegan, and paid for using Defendant Lewis’s credit card. The hotel had another
agreement for a Boots on the Ground event that listed Response’s Chief Executive Officer,
Defendant Smith, as a contact person and indicated reward points associated with the contract
should be credited to Smith’s rewards account. Larsen Dec., Tab 23, ¶¶ 139-41.
93
Tab 24, Day 1 Tr. 24:21-25, 27:19-24 (FTC-PI 6429, 6432). Clark repeatedly says during his
presentation that the information he teaches cannot be learned anywhere else. See Tr. 51:3-4
(FTC-PI 6456) (“What you’re about to learn, you can’t learn anywhere else”); Tr. 113:2-5 (FTC-
PI 6518) (“we’re going to use other people’s credit, which no one else in this country can teach
you”); Tab 25, Day 2 Tr. 48:15-20 (FTC-PI 6674) (“The strategies … you’re going to learn
today no one knows”).
27
estate.” He says he did his first real estate deal within twenty-two hours after meeting his mentor
and has since made substantial money from this system. 94 Clark alludes to his lavish lifestyle
throughout his presentation, 95 and he arrived each day with a different exotic car – two different
Ferraris and a Range Rover – that he prominently parked in front of the main hotel entrance. 96
Throughout his presentation, Clark introduces a number of basic real estate concepts or
strategies without much, if any, specific instruction on how to implement any of them. 97 For
example, he refers to basic investor terms, such as “after repair value” and “maximum acceptable
offer,” and well-known investment strategies, such as wholesaling and rehabbing, which he calls
“snap flip” and “fix and flip.” 98 To execute these strategies, Clark indicates that instead of
looking for properties on the multiple listing service or “MLS,” 99 consumers should target
unlisted properties whose public records show “pain triggers” or “distressed situations.” 100 He
provides no further specifics on how to do so until later when he discusses Defendants’ supposed
94
Tab 24, Day 1 Tr. 42:7-44:24, 50:14-17 (FTC-PI 6447-49, 6455).
95
Larsen Dec., Tab 23, ¶ 69 (presentation featured photos and videos of Clark on yachts and
with exotic cars); Tab 24, Day 1 Tr. 199:5-6 (FTC-PI 6604) (sending email and texts from “my
yacht in the Mediterranean”).
96
Larsen Dec., Tab 23, ¶¶ 48, 77, 99, 111 & Tab 26, Ex. U at FTC-PI 7035 (photograph of
Ferrari that Clark used during the Workshop).
97
Larsen Dec., Tab 23, ¶¶ 65-66.
98
Tab 24, Day 1 Tr. 54-60 (FTC-PI 6459-65); Nicolais Report, Tab 29, pp. 59-60 (FTC-PI 787-
71) (noting these strategies are “well known” and are covered in easily accessible online
resources and books).
99
MLS is “a suite of approximately 700 regional databases operated by the National Association
of Realtors through which properties are marketed (or ‘Listed’) for sale.” Nicolais Report, Tab
29, p. 32 fn. 39 (FTC-PI 7843).
100
Tab 24, Day 1 Tr, 56:15-24, 61:14-64:22 (FTC-PI 6461, 6466-69) (“we’re looking for pain
triggers on public records, and as you learn this side, and see the strategies, it's going to blow you
away.”)
28
unique software, which is only available for those who purchase the Advanced Training. 101
The software product that Defendants offer is actually not unique. As Plaintiffs’ expert,
Teo Nicolais, explains in his report, Defendants’ software resembles other software products that
are widely accessible for modest monthly fees. 102 While these software products enable users to
search online county property records for public filings that indicate, for example, a property is
in a foreclosure process, they cannot automatically generate accurate market value prices nor
enable users to readily identify and contact distressed sellers, as Clark suggests. 103
Later, Clark indicates his students have done a number of successful deals and that it is
realistic for consumers to start doing deals themselves soon after the Workshop. He shows a
“few random” student deals where the properties consumers acquired dramatically increased in
value almost ten times what consumers paid for them. 104 After he presents various calculations
showing how much money one needs for retirement, he encourages everyone to provide their
personal financial information so that he can recommend a “blueprint” and “set a goal” based on
101
Tab 25, Day 2 Tr. 62:4-10 (FTC-PI 6688) (“it is astronomical, there's nothing like it that
exists. I've researched every single potential tool, potential Website, they've all begged me to
work with them or (inaudible). Never seen anything like it. Well here’s what we do, we do allow
anyone who does any form of advanced training to use it full bore”).
102
Nicolais Report, Tab 29, p. 8, 31-44 (FTC-PI 7819, 7842-55) (discusses limitations of these
software packages).
103
Tab 25, Day 2 Tr. 64:20-24 (FTC-PI 6690) (“I can see who owns it, where they live . . . the
market value is what it’s worth, all the math we did yesterday is done for you. I never, ever do
math again anymore”), Tr. 69:6-7 (FTC-PI 6695) (“it has the after repair value already done and
set and established”). Clark tells a story where years earlier someone nicknamed “conservative
Mike” developed a device that tracked certain property data online and Clark realized that it gave
him “the most unfair advantage” over other investors. Id., Tr. 54:7-56:2 (FTC-PI 6680-82).
104
Tab 24, Day 1 Tr. 77:9-78:9 (FTC-PI 6482-83); Larsen Dec., Tab 23, ¶ 67 (Clark showed
several slides showing various “student deals” where students acquired properties that then
dramatically increased in value. In some examples, the values increased almost tenfold.).
29
their specific financial situation. 105 Clark repeatedly suggests that the attendees should expect to
do at least one deal each month soon after the Workshop. 106
Near the end of the Workshop’s first day, Clark mentions they have “advanced training”
and points out the “Diamond Elite 360” program, which he refers to as “a private invite only
club” that comes with “software that sort of automates the process for you.” 107 He adds that it
also has a “three transaction guarantee,” which he says he is “only willing to do that for people
that I think can get through three transactions pretty quickly and pretty efficiently.” 108
The Workshop’s second day begins with the “consultants” discussing the book “Who
Moved My Cheese?” which the attendees were told to read at the end of the first day. The
105
Tab 24, Day 1 Tr. 104:7-106:11 (FTC-PI 6509-11). A copy of a “Private Consultation
Questionnaire” that the Division investigator was asked to complete during the Workshop is
attached at Larsen Dec., Tab 26, Ex. T at FTC-PI 7030 (requests information about “Available
Financial Resources,” including amounts held in bank accounts, retirement funds, and credit card
balances and limits); see also Ruby IH, Tab 16, Ex. 4 at FTC-PI 4342.055
).
106
Tab 24, Day 1 Tr. 103:4-11 (FTC-PI 6508) (Clarks says he wants everyone “to have at least
five properties in the next 90 days”); Tr. 146:22-147:13 (FTC-PI 6551-52) (Clark says someone
who has “never done real estate,” “has kids, grandkids,” and “doesn't really like to do a lot,”
should start with a goal of one deal a month); Tab 25, Day 2 Tr. 34:15-17 (FTC-PI 6660) (Clark
notes it is mid-October now and so “if you haven’t done a deal by December 31st, it’s going to
make me look bad.”).
107
Tab 24, Day 1 Tr. 159:12-160:11 (FTC-PI 6564-65). Clark later indicates he personally
monitors and works with some of the consumers who purchase Advanced Training. Tab 25, Day
2 Tr. 272:22-24 (FTC-PI 6898) (“So I have a handful of students at a very high level that I call
360s that I help monitor them, personally”); Day 2 Tr. 312:11-25 (FTC-PI 6938) (“I work with a
special group,” he refers to as “the world of 360s”); Day 2 Tr. 351:6-9 (FTC-PI 6977) (“the
special group that I work with, you know I work with 360s. Why, because it’s kind of like the
all-star team”).
108
Tab 24, Day 1 Tr. 160:14-19 (FTC-PI 6565). The “three transaction guarantee” Clark refers
to is simply a supposed “commitment” that the company will “continue to work with you” by
providing a customer support line. See Khuong Dec., Tab 5, Ex. H at FTC-PI 830 (2015
“Investor Education Certificate” provides if you meet certain conditions, including attending the
Buying Summit, “we will continue to work with you through our ‘Boots Trainer Line’ at our
expense until you have completed (3) real estate transactions.”)
30
discussion’s apparent purpose is to encourage the attendees to make large investment decisions
(like the Advanced Training purchase) more quickly. 109 Much of Clark’s presentation includes
numerous motivational videos and personal stories about Clark’s own family hardships and
altruism, 110 part of a well-choreographed sales pitch designed to appeal to attendees’ emotions.
Clark then discusses several foreclosure “strategies” where he and his students acquired
properties at foreclosure auctions far below market value or at discounted prices. 111 However, as
Plaintiffs’ expert Nicolais explains, these strategies are unlikely to be practical since foreclosure
auctions typically have a competitive bidding process and do not usually present the “riskless,
arbitrage opportunity” that these purported “strategies” depend on. 112
After saying he will teach them even “better strategies” later, 113 Clark tells the attendees
that the “dilemma” is that these deals happen quickly and so consumers need to be able to “fund
109
Larsen Dec., Tab 23, ¶¶ 76, 80.
110
Larsen Dec., Tab 23, ¶ 112 (Clark talks about his children’s medical conditions), ¶¶ 118-20
(Division investigator observed several attendees crying during video of Clark’s work with a
children’s charity). The Preview Events speakers also talk about their own family adversity. See
Tab 23, Preview Event Tr. 136:23-138:3 (FTC-PI 6259-61) (Speaker says “motivation for
passive income” was to pay for treatments of his child’s medical condition).
111
In one of Clark’s examples, his student acquired a property supposedly worth over $250,000
for only $170,000 in a foreclosure auction. Although the homeowner “could have sold the
house” herself because her mortgage was less than the value of the home, Clark claimed “she
didn’t understand it.” Tab 25, Day 2 Tr. 152-55 (FTC-PI 6778-81).
112
Nicolais Report, Tab 29, p. 68 (FTC-PI 7879) (explains that “[f]oreclosure auctions are
publicly advertised and typically attract sophisticated, professional investors”).
113
Tab 25, Day 2 Tr. 180:13-16 (FTC-PI 6806) (“the afternoon’s going to get outrageous
because, yeah, everything I've taught you so far you will forg[e]t for better strategies, several
times today”); Tr. 180:24-181:2 (FTC-PI 6806-07 (“So the strategies I’m going to teach you this
afternoon are so powerful and so much better than anything I’ve already taught you and so much
bigger of a bucket of opportunity”). Throughout his presentation, Clark continued to promise
that he would show better strategies later in the Workshop. See, e.g., id., Tr. 267:12-14 (FTC-PI
6893) (“I’m going to teach you something far better after” and “then far better after that”); Tr.
265:820-23 (FTC-PI 6895) (“this is actually a tease . . . . There’s better ways to do it.”).
31
the deal fast or somebody else will” get them. 114 Clark then discusses at length that (1) although
the company provides transactional funding to its students, the process takes time because there
are so many deals for the company to review, and so (2) they “came up with a solution” and
found a company that provides students with immediate, zero-percent funding to do these deals:
My preferred method for you to do that is our funding, no surprise.

But to be completely transparent with you, some of these deals you
should probably fund quicker than it takes to get the money in
place. I don’t want you to wait, I want you to do what’s best for
you. Now we can fund your deals, but it takes about three weeks,
that’s why I told you 21 days, expect that. Here’s why. Because if
you look at all the students worldwide, today’s Friday, it’s not even
at 1:00, I don’t know, because I’m not near the office, so here’s my
assumption, my assumption is that today is like most all days and
there could be, there could be anywhere from 600 to 800 deals that
have come through the office so far today already of students
wanting to fund deals, probably like something like that, right.
Well they all go in the queue and we have to check them and verify
them, which is good for you because then our system goes what is
it, let’s verify times, dates, stamp, boom, ba, if something’s wrong,
we go something’s wrong. You don’t pay anything for that, we just
check it, right. But to fund that many deals in 50 States, I’m
teaching you guys nationally, we’re talking about Salt Lake because
we’re sitting here, I’m teaching you how to be a national investor,
it’s all the same to me, it's all on the computer.
But I don’t want you to wait three weeks, if you've got something
that's so good, write a check and do the deal, I don't know -- just do
it, fund it, get it done. 115
* * * *
But we came up with a solution. Now what’s interesting is I was
looking for a way to help my students that maybe like didn’t have
as much financial means as some people do, right. . . . I’m thinking
how can I help my students that don’t have tons and tons of money
when they begin, how can I help them get ahead boost. And what's
interesting is my wealthiest clients actually like the product most,
114
Id., Tr. 181:6-18 (FTC-PI 6807) (“some of these deals are so good, so no-brainer,” so “do it
as quick as you can, fund the deal quickly”).
115
Tab 25, Day 2 Tr. 181:19-182:25 (FTC-PI 6807-08). The recording is at Clip 9.
32
but it makes sense because it’s other people’s money.
So here’s what we did, we found a company that does start-ups and

they do household names, the Aldis, the Subways, 7-Elevens, all
these things there. The company itself is called Seed Capital and
they provide seed capital for businesses. And here’s our approach
with them, we go you know what, if you, if you pay for start-ups,
we’re helping people start a real estate business . . . .
Anyways, I’m like we have a bunch of start-up people starting

companies in real estate, can you create a product for them. They
go well sure. Well, they did . . . . Now, here’s the program. They
offer our students anywhere from 50 to 150 grand just based on
credit. Our average client in about a five-minute process gets
anywhere from 80 to 100 grand standing by; and that’s not the best
part, the best part is zero percent. Zero percent locked in
guaranteed for a certain time frame depending on the person and --
the zero percent can be extended.
Now it is, it takes a couple weeks to set it up, but for a lot of people
they’re going okay, well I could really help a lot of students if they
had 80 to 100,000 standing by at zero percent. I can’t lend at zero -
- I can’t lend at zero percent, it’s like impossible. 1.65, hard to do.
Zero percent, pretty impressive. They charge a one-time set-up fee
to pay, depending on how much you get. Under a certain level it’s
free. They do look at credit though, so they look at anything major,
they look for a 640 and they (inaudible) obviously. And then what
happens is the people who really want it, we kind of go to bat for
you if it’s something you really want, but that kind of money
starting with strategies I’m teaching you and about to teach you is
more than most people ever need to start off. 116
Clark then says that “Seed Capital is a pretty amazing deal to give people kind of just a
big start,” and that “I can look you in the eye and tell you this, it has been the single biggest
116
Id., Tr. 184:6-186:15 (FTC-PI 6810-12); the recording is at Clip 10. Earlier, Clark discussed
how the company provides its students “access” to its “partners money” where “we make money
together” funding students’ deals. Tab 24, Day 1 Tr. 128:2-129:1 (FTC-PI 6533-34); the
recording is at Clip 8 (“And if you’ve never had a massive, extremely powerful, large, national
company that makes money when you do, you are going to enjoy the result more than anything
you’ve probably ever seen.”); see also id., Tr. 141-142:5 (FTC-PI 6546-47) (“we only make a
tiny fraction” funding your deals, but “[i]t adds up”).
33
boost to the start of students that I have seen added in years, period.” 117
Defendants’ sales representatives then tell attendees to complete a worksheet detailing
their personal finances and credit card balances and limits. 118 They then encourage the attendees
to use computers set up outside the hotel conference room to see if they qualify for Seed
Capital’s funding, 119 which they say can be used “towards your business in real estate” and “to
start your real estate ventures.” 120
Later, Clark again pitches the Advanced Training. He talks about people from all
different backgrounds who are “successfully doing this program” after “they joined the system,”
and “for those who want extra help,” “let’s get you on the software and you can fire in offers
tomorrow, boom, as many as you want, nationwide.” 121 He indicates that he makes sure those
who sign up for the “360” Advanced Training will do three deals. 122 He concludes the
Workshop’s second day by asking the attendees to complete their goals and let his team know if
they are interested in the Advanced Training because he and his team will spend “hours and
hours” tonight going through everyone’s file and discussing whether someone would be “a good
117
Tab 25, Day 2 Tr. 193:20-21, 194:2-5 (FTC-PI 6819-20).
118
Id., Tr. 195:17-196:11 (FTC-PI 6821-22) (presenter asks attendees to complete and return
worksheets for their “blueprints”); Larsen Dec., Tab 23, ¶ 101 & Tab 26, Ex. V at FTC-PI 7037
(worksheet titled “Hidden Treasure Chest Assignment” that includes a Section called “Investor
Credit Card Assignment”).
119
Tab 25, Day 2 Tr. 201:5-11 (FTC-PI 6827) (“we definitely advise you to at least try it out, see
if you guys can get approved, because then we can show you how to utilize that and to grow your
real estate”); Id., Tr. 204:7-10 (FTC-PI 6830).
120
Id., Tr. 197:2-4; 198:1-3 (FTC-PI 6823-24).
121
Id., Tr. 347:6-348:10 (FTC-PI 6973-74).
122
Id., Tr. 353:13-18 (FTC-PI 6979) (“this is what separates everything, but especially on some
of the 360, it’s me signing going I'm going to guarantee you to get three deals and I wouldn’t
guarantee that for everyone because some people are not comfortable or I think would take up
too much of my time”); Tr. 354:13-14 (FTC-PI 6980) (“if you’re a 360, I'm going to make sure
34
fit” for the Advanced Training. 123
A large part of the final Workshop day is spent on motivational stories and anecdotes
designed to encourage attendees to purchase one of the costly Advanced Training packages. 124
The attendees then meet privately with their assigned “consultants.” The consultants use these
meetings to convince attendees to pay for an Advanced Training package. 125
Clark discusses “asset protection,” and he recommends that attendees use Defendants’
Veil Corporate services because “they take great care of my people worldwide.” 126 He also talks
about several “exit” strategies, such as lease options and wholesaling. He then ends by talking
about why he teaches: “I want to meet a few people and I want to look them in the eyes and I
want to start their career,” “I’m the only legit one” who has a real estate investment program, and
“if I meet you day one and I create a bond and I commit to you, I don’t break it.” 127
However, Defendants do not provide consumers what they promise. Consumers who pay
for the Advanced Training do not receive specialized tools or funding, nor do they get the level
of promised personal assistance to do real estate transactions. 128 Defendants instead use the
you do three deals”).

123
Id., Tr. 397:7-25 (FTC-PI 7023).
124
Larsen Dec., Tab 23, ¶129.
125
Larsen Dec., Tab 23, ¶¶ 121-125 (consultant represented during private meeting that the
advanced training provided everything a person would need to run a successful real estate
business, the company’s Investor Expo had fully rehabbed rental properties that were “cash
flowing,” and that 40% of the company’s “mentors” were former students).
126
Tab 26, Day 3 Tr. 98:3-8 (FTC-PI 7137). Even though Veil Corporate is part of BuyPD,
Clark says he “owns no part of the company” to suggest his recommendation is unbiased. He
plays a video promoting Veil Corporate. Id., Tr. 99-106 (FTC-PI 7138-45).
127
Id., Tr. 192:10-21, 206:9-17 (FTC-PI 7231, 7245).
128
E.g., Cortes Dec., Tab 3, ¶¶ 33-34 (consumer referred to third-party public lending websites
for funding and not shown how to contact property owners in distressed situations); Norris Dec,
Tab 9, ¶¶ 16, 20-21 (consumer received minimal value from the “educational tools,” never
35
Advanced Training events to sell additional training packages and programs. 129 Many
consumers who purchase the Advanced Training end up heavily in debt with ruined credit. 130
3. The “Inner Circle”
Defendants continue to target consumers with telemarketing calls pitching additional
products, including purported personalized coaching services, using brand names such as
shown how to find below market value properties, and the promised funding was not helpful
since the consumer could get the same transactional funding at the same rate on his own); Ruby
IH, Tab 16, at 86:17-87:13, 92:24-96:7, 105:1-105:12
; Mingo Dec., Tab 19, ¶¶ 32-33 (training “provided only a generic understanding of real
estate investing,” and the “mentoring was just half an hour per week” and “was not enough to be
useful to us.”) An example of the generic materials provided consumers is the business plan one
consumer received in 2018 at Stratton Dec., Tab 2, ¶¶ 21-22 & Ex. G at FTC-PI 378-413.
In addition, the usefulness of Defendants’ software and other online products is limited.
As Nicolais explains, these software products allow users to search online county property
records for properties that have, for example, public filings suggesting that they are in a
foreclosure process or have been purchased with cash. Nicolais Report, Tab, 29, p. 35 (FTC-PI
7846). However, these products do no automatically generate accurate market value prices or
rehab costs needed to identify discounted properties to purchase. Consumers need to
independently estimate market value prices that are dependent on a particular property’s
condition. Id. at pp. 40-43 (FTC-PI 7851-54). Nor do these products provide an efficient
mechanism to find and contact property owners willing to purchase the investment property. Id.
at pp. 35-37 (FTC-PI 7846-48). Instead, consumers need to spend significant time and resources
just to make unsolicited offers to individuals and entities listed on the property records. Id. at pp.
22-24 (Section 4.5.4) (FTC-PI 7833-35).
129
Cortes Dec., Tab 3, ¶¶ 43, 45 (consumer attended 2017 Investor Expo where she was
presented with numerous additional training programs to purchase, including programs that
would set up unlimited LLCs, do your business taxes, and teach how to apply for non-profit
status); Khuong Dec., Tab 5, ¶ 25 (consumer paid $7,095 at 2015 Buying Summit for a program
that offered unlimited entity formation services and asset protection strategies); Enterline Dec.,
Tab 12, ¶ 15 (consumer attended 2015 Buying Summit and felt focus was on selling the
attendees more services, such as stock option trading services and asset protection services).
130
As discussed in Section II.A(1)(b), Dr. Isaacson’s survey found that just 4.6% of consumers
who paid for Nudge’s training netted more from their real estate investments than what they paid
Nudge. See also Cortes Dec., Tab 3, ¶¶ 17, 28-29 (credit score dropped 200 points); Schultz
Dec., Tab 6, ¶¶ 27, 31 (credit score dropped approximately 150-200 points); Kreiner Dec., Tab 8,
¶¶ 64, 65 (credit rating was “ruined” and had to file for bankruptcy); Ruby IH, Tab 16, at
36
“Protégé” and, later, the “Inner Circle.” 131 Defendants’ telemarketers used scripts that instructed
them to ask about the consumers’ personal financial situation, including their credit card limits
and savings. 132 The telemarketing scripts also instructed the telemarketers to ask the consumers
about their goals – information that is known as an effective “pain trigger” – that telemarketers
use to help convince consumers to make a purchase. 133 The telemarketers had discretion in
setting the price for the coaching package, which could be as high as $20,000, “based in part on
the number of sessions the consumers could afford.” 134 The telemarketers were instructed to tell
126:11-127:15 ( ).
131
Touchet Dec., Tab 21, ¶¶ 12, 17 (telemarketers called consumers who had purchased or
attended a Response seminar and attempted to sell them additional services, including one-on-
one coaching and tax services; the “coaching packages were sold under brand names such as
‘The Success Team’ or ‘The Inner Circle’”); Gonzales Dec., Tab 10, ¶ 11 (consumer received a
call from one of her “mentors” who asked if she wanted to buy a “Protégé mentoring program;”
the “mentor” told the consumer why not spend the extra money since she had already spent
$12,000 so far on trainings).
132
Touchet Dec., Tab 21, ¶ 14. At least some of Defendants’ telemarketers had access to forms
that consumers filled out at seminars detailing their personal finances. Id. at ¶ 13.
133
Id. at ¶ 15. The telemarketers’ probing of consumers’ personal finances and goals and use of
this information as “pain triggers” is found in scripts attached to telemarketing registration
applications filed with the Division. For example, in 2015, Defendants submitted a setter or
“set” script and a “close” script for “Yancey, Events, LLC.” Larsen Dec., Tab 23, ¶ 9 & Ex. B at
FTC-PI 6032-33. The “set” script indicates the telemarketer is “from Response North and the
Inner Circle Program,” and refers to the personal financial probe: “I need to create a profile with
you to get an idea of who you are, where you are financially vs. where you want to go financially
and see if your goals match what we’re doing here.” Id., at FTC-PI 6032. The script for the
“closer,” who is called a “senior advisor,” refers to recapping the profile and the consumer’s
goals: “Review Profile. Current Income vs. Goals, What Drives Them What’s Your Plan Without
Us.” Id. at FTC-PI 6033 (emphasis in original).
134
Id. at ¶ 22. This is consistent with the varying amounts, from as low as $1,999 to over
$20,000, that Defendants charged consumers to join the Inner Circle program from 2012 through
2018. E.g., Page Dec., Tab 4, at ¶ 8 (in 2012, consumer charged $17,000 to join Protégé-branded
program after having spent already spent $30,000 on trainings); Schultz Dec., Tab 6, ¶¶ 15-16 (in
2014, consumer charged $15,995 to join a mentoring program after having spent more than
$30,000 on trainings); Cortes Dec., Tab 3, ¶ 40 (in 2017, consumer charged $20,995 after having
spent over $40,000 on trainings); Ruby IH, Tab 16, at 80:23-81:14 (
); Kling Dec., Tab 14, ¶ 39 (in 2018, consumer charged
37
the consumers to charge the cost of the coaching package on their available credit cards, and if
they did not have available credit, then they were instructed to “get the consumers to pay for the
coaching packages from their savings or retirement accounts.” 135
Defendants tracked how much their telemarketers sold to each consumer by tracking each
telemarketer’s “dollar per lead” (“DPL”) amount, which was the dollar sum of all sales made to a
set number of consumer leads divided by the number of leads. The telemarketers discussed their
DPLs and acceptable DPL levels with Response’s Chief Executive Officer, Defendant Smith. 136
Defendants’ telemarketers claim consumers will get more personalized help from a coach
who will show them exactly how to do profitable real estate deals if they pay for the Inner Circle
coaching program. 137 Defendants’ telemarketers encourage consumers to purchase the additional
$13,495 to join Inner Circle after having spent more than $45,000 on trainings); Gonzales Dec.,
Tab 10, ¶ 11 (in 2018, consumer charged $1,999 to join “Protégé mentoring program”).
135
Touchet Dec., Tab 21, ¶ 14; see also Ruby IH, Tab 16, at 80:6-83:1 (
).
136
Touchet Dec., Tab 21, ¶ 16. Defendant Smith supervised Nudge’s highest paid telemarketers,
known as the “buyer buyers” group. They targeted consumers who had purchased the more
expensive Advanced Training packages, such as the Diamond Elite 360 package. Id. at ¶ 17.
137
Ruby IH, Tab 16, at 76:20-80:5, 110:6-110:15
);
Kling Dec., Tab 14, ¶ 38 (consumer told that they “had a program for us,” that “we needed this
program in order to become successful,” and “this was a special program” where “we would
have individual coaching sessions”); Page Dec., Tab 4, ¶ 8 (“this would give me unlimited access
to a panel of supporters who would offer me customized and individualized help”); Cortes Dec.,
Tab 3, ¶ 38 (“this training would give me access to a coach that I could talk to one-on-one on a
weekly basis”). The consumer testimony corresponds with statements contained throughout the
scripts that Defendants attached to their registration applications filed with the Division. Larsen
Dec., Tab 23, Ex. B at FTC-PI 6032-33 (Yancey, LLC Set Script: “Simply put, by providing a
more personal approach to your real estate training and education, we can show you exactly how
to mirror his [the guru] system and business model . . . . Here’s the deal, we can help eliminate
the guesswork and trial & error completely;” Yancey LLC Close Script: “The benefit of our
38
coaching program by representing that consumers will be able to recoup the cost of the coaching
program and earn several thousand dollars a month from future real estate deals. 138
The overwhelming majority of students who purchase the Inner Circle coaching program
do not earn substantial income and do not complete a real estate transaction within months of
starting the purported one-on-one coaching. 139
education is that it allows you to work closely with us for the next 12 months inside our system.
We surround these people with successful investors and business owners, including_(guru’s)_,
who speed up the learning curve and eliminate much of the guesswork. Really, what we do is
teach you a proven process which if applied properly will systemize your real estate investing.”).
138
Page Dec., Tab 4, at ¶ 8 (“they promised it was an investment that would pay for itself” and
“they said those at Diamond level were receiving the equivalent of a PhD level education and
had a success rate of 97-98%”); Cortes Dec., Tab 3, at ¶ 38 (telemarketer promised that, within
six months, I would make back the money I had spent on Inner Circle because the coaches had
so much experience with investing”); Adiwidjaja Dec., Tab 7, ¶¶ 15-16 (told if he purchased the
Inner Circle program, “not only would they do it together with me for a 5-deal-minimum, but I
was also guaranteed to make money”). According to former Response telemarketer Al Touchet:
“By my general estimation, 95% of the leads I called had not made any money by the time I
contacted them,” but Response “nevertheless would often tell stories to prospective customers
about the comparatively rare consumers who made some money after taking one of Response’s
courses.” Touchet Dec., Tab 21, at ¶ 24. Defendants’ telemarketing scripts also refer to students’
past successes in doing deals: “So typically our clients average 6 to 12 months to complete their
1st couple of transactions,” and “we’ve been investing successfully for a long time in our system
and have literally created hundreds upon hundreds of successful individuals and businesses.”
Larsen Dec., Tab 23, Ex. B at FTC-PI 6034, 6036 (Yancey Events LLC CLOSE Script).
139
See supra note 130 (survey results showing less than 5% of respondents reported netting more
from real estate deals than what they paid Defendants); Gonzales Dec., Tab 10, ¶¶ 11-12
(consumer purchased additional mentoring package because she thought she would get one-on-
one meetings with a coach who would help her step-by-step, but she only received webinars that
contained general information and motivational-focused videos, and her trainings “consisted of
mainly upselling additional trainings packages”), Schultz Dec., Tab 6, ¶¶16-17 (consumer paid
$15,995 for an additional mentoring package but she only had a limited number of phone calls
with purported “mentor” who never helped consumer buy a property; instead, she was told she
“would have to pay another $5,000” for additional help); Kling Dec., Tab 14, ¶¶ 41, 44
(consumers spoke with Inner Circle “trainer” once a week but he “had trouble” answering
questions and “could not provide any information”); Cortes Dec., Tab 3, ¶¶ 38-41 (consumer told
she would make back the money she spent on Inner Circle program within six months and get
one-on-one sessions with a coach, whose advice was to visit www.realtor.com and make as
many offers as possible); Page Dec., Tab 4, ¶¶ 8, 15, 16 (consumer promised Inner Circle
program would pay for itself and provide individualized support, but she had trouble reaching a
39
4. The “Exclusive” Buying Summits
As part of the Advanced Training packages, Defendants hosted “Buying Summits” (later
called “Investor Expos”) through 2017, where consumers were targeted for additional products
and services that were pitched as necessary to support the consumers’ real estate business or help
diversify the consumer’s projected income portfolio. 140 For example, third-party vendors such as
Lear Capital sold precious metals to consumers at the Buying Summits for which Defendants
received a sales “commission.” 141
From 2012 to 2016, Defendants induced consumers to buy the Advanced Trainings, in
part, in order to take advantage of the supposed “exclusive” opportunity to buy properties at
three-day Buying Summit events in Las Vegas. 142 Consumers were told the properties were
available at discounted prices and in good condition with paying tenants in place, and that
consumers could make substantial investment returns. 143 At times, Defendants provided
coach).
140
Cortes Dec., Tab 3, ¶¶ 43, 45 (consumer attended 2017 Investor Expo where there were
multiple training programs for sale, including unlimited entity setup, tax preparation services,
and establishing a non-profit); Enterline Dec., Tab 12, ¶ 16 (consumer offered at 2015 Buying
Summit variety of services pitched as “necessary” for his real estate business); Dooling Dec.,
Tab 11, Ex. D at FTC-PI 2644 (purchased asset protection and tax planning services for $6,095
at 2013 Buying Summit).
141
Examples of 2016 checks from Lear Capital to BuyPD for “commissions” are attached at
Marino Dec., Tab 27, ¶ 7(c) & Ex. C at FTC-PI 7566-68. In June 2019, the City of Los Angeles
sued Lear Capital for deceptively selling gold and silver coins. Marino Dec., Tab 27, ¶ 19 & Ex.
L at FTC-PI 7677.
142
Slater IH, Tab 17, at 26:17-27:13
); Adiwidjaja Dec., Tab 7, ¶ 7 (Advanced

Training package provided access to an “asset buying retreat” at special events called Investor
Expo and Buying Summit).
143
Mingo Dec., Tab 19, ¶ 17 & Tab 20, Ex. Q at FTC-PI 5480 (2014 Buying Summit marketing
materials represent “Rental Properties” as “Rent Ready,” in which “[w]e find low cost and
distressed properties in great neighborhoods. We then perform any repairs or rehabbing needed.
40
consumers with “price opinions” and purported sales comparables to support the sale prices. 144
Defendants pressured consumers to purchase the properties “on the spot” before they left
the Buying Summit. Consumers were directed to meet with sales representatives (called
“property specialists”) who showed them properties on a computer screen and told them they
should act quickly before losing out on a “good deal” to someone else. 145 Defendants steered
By the time we sell them to our clients they are either tenanted or rent ready. Our clients are
then able to get great prices without the hassle of doing repairs themselves.”); Khuong Dec., Tab
5, ¶ 18 (consumer was told that properties offered were “in excellent turnkey condition and ready
to rent or already rented,” and led to believe that “I would be purchasing these properties at an
advantageous below market value price”); Page Dec., Tab 4, ¶6 (consumer was told that
properties were “really good deals in which we could make good returns” but later learned that
Defendants had paid substantially less for properties just months before she purchased them);
Kreiner Dec, Tab 8, ¶¶ 29, 50, 55) (consumer told she would get a 20% rate of return on her
investment and the properties offered were “all fully renovated homes with paying tenants” but
discovered later from a broker that sales comparables for properties she bought from Defendants
were far less than what she had paid Defendants); Dooling Dec., Tab 11, ¶¶ 11, 18-20
(consumer led to believe she was “getting a deal” on properties that were renovated with paying
tenants but discovered from a broker that she had significantly overpaid for them); Schultz Dec.,
Tab 6, ¶¶ 24, 26, 29 (consumer was told that the rental was a “good deal” because it would
appreciate in a few years and she could pay off the loan in two years with the rental income but
had to sell property for more than 20% less than what she paid); Enterline Dec., Tab 12, at ¶¶ 18,
28 (consumer told during “Diamond” bus tour at beginning of Buying Summit and throughout
the event that the properties available for sale were tenanted, in good condition and in good
neighborhoods, and were being sold at “wholesale” prices) & Tab 13, Ex. J at FTC-PI 3113-14
(“Sample Cash Flow Worksheets” showing returns on investment (ROI) of 105% to 153% “with
leverage and appreciation”).
144
Some consumers were provided “purchase detail” sheets that listed a “price opinion” that was
higher than the listed sale price. See Kreiner Dec., Tab 8, Ex. N at FTC-PI 1443, Ex. Y at FTC-
PI 1472, Ex. HH at FTC-PI 1496; Dooling Dec., Tab 11, Ex. C at FTC-PI 2641 (“Purchase
details” sheet lists “price opinion” of $65,000 and sale price of $62,200). For examples of
purported sales comparables given to consumers, see Schultz Dec., Tab 6, Ex. NN at FTC-PI
1182; Mingo Dec., Tab 20, Ex. S at FTC-PI 5547 to 5551. In 2015, BuyPD sales representatives
Improta IH, Tab 33, 95:22-99:7.

145
Kreiner Dec., Tab 8, ¶27-28 (consumer shown properties on a computer screen that displayed
supposed discounted prices for Buying Summit attendees, and told she only had a certain amount
of time to decide to buy the property before it was available to others); Schultz Dec., Tab 6, ¶¶
21, 25 (consumer told that these “transactions moved quickly,” and it all “happened very
41
consumers to use law firms closely aligned with Defendants to act as the consumers’ attorney
and the title company relating to the property purchases. 146
To pay for the properties, Defendants encouraged consumers to use their retirement
funds 147 and take out a two or three-year interest-only loan that Defendants issued through a
quickly” for her to select the properties and then she was presented the purchase documents to
sign”); Khuong Dec., Tab 5, ¶¶ 19-20 (consumer shown properties available to buy on a
computer screen and was pressured to “make a purchase quickly so you would not miss a good
deal;” consumer also told that he did not need to visit the properties because he “could trust
them”); Enterline Dec., Tab 12, ¶¶ 29 (shown properties on a laptop and encouraged to buy
either the properties or trust deeds on the spot); Mingo Dec., Tab 19, ¶¶ 18, 20 (at 2014 Buying
Summit, a salesman “briefly showed us pictures of properties to purchase and placed extreme
pressure on us to make sale;” “[w]e did not see the properties in person before purchasing” and
“[w]e did not have an opportunity to independently verify that we were getting good deals”).
146
For example, Defendants prepared “Limited Power of Attorney” forms for consumers to sign
that appointed representatives of the law firm American Legal & Escrow, LLC as the consumer’s
“attorney in fact” relating to the property transaction. See Schultz Dec., Tab 6, at Ex. OO at
FTC-PI 1207; Khuong Dec., Tab 5, Ex. Y at FTC-PI 892; Muchowski Dec., Tab 18, Ex. L at
FTC-PI 4826. American Legal & Escrow, LLC was formed in December 2013 by Blair Jackson,
an attorney with Invictus Law, who received substantial funds from Defendants, including
$400,000 in 2015 from a BuyPD account (identified as a “short term loan from [Defendants]
Ryan [Poelman] and Brandon [Lewis]”) and another $2.4 million in 2018 from a Response
account. Marino Dec., Tab 27, ¶¶7(b), 8(c), 19 & Ex. C at FTC-PI 7558-61, Ex. D at FTC 7577-
85, Ex. L at FTC-PI 7672, 7675. Invictus Law has offices in Defendants’ building. Larsen Dec.,
Tab 26, ¶ 151(a), Ex. KK at FTC-PI 7439 (showing Invictus Law is a tenant).
147
Defendants encouraged consumers to set up a self-directed IRA with a Nevada company
called American Estate & Trust and then transfer their retirement savings to the newly formed
IRA to purchase the rental properties and trust deeds offered at the Buying Summit. See Slater
IH, Tab 17, at 31:15-34:12
; Khuong Dec., Tab 5, ¶ 21 (consumer was encouraged to transfer her

retirement funds to a self-directed IRA in order to purchase properties at the Buying Summit);
Baisley Dec., Tab 1, ¶¶ 5, 8, 27 (consumer purchased five trust deeds from Defendants at Buying
Summit using funds he transferred from his retirement account to a self-directed IRA with
American Estate and Trust); Enterline Dec., Tab 12, ¶¶ 24, 26 (consumer transferred funds from
his retirement account to a self-directed IRA with Accuplan); Mingo Dec., Tab 19, ¶ 15 (“We
were urged to take money from our IRAs and 401k accounts so that they would covert it for us
into self-directed IRA accounts, using a company called ‘Accuplan.’”).
42
BuyPD affiliated entity. 148 BuyPD then sold these loans to other consumers as “trust deeds.”
Consumers who purchased the trust deeds were assigned BuyPD’s rights and interests in the loan
agreements, including the right to payments due on the loans. 149 The Buying Summit speakers
portrayed the trust deeds as safe or “solid investments.” 150
Defendants’ representations about the value and condition of the properties and the
investment risk of the trust deeds were not true. 151 At times, Defendants bought back properties
from consumers who complained (and who agreed to sign a release and non-disclosure
agreement), 152 and then sold the same properties to other consumers later at above-market
148
An exemplar loan issued by BuyPD’s subsidiary, Insider’s Cash, is at Khuong Dec., Tab 5,
Ex. U at FTC-PI 862; see also Pollock Report, Tab 31, ¶ 47 (Insider’s Cash “often would make
high-interest loans to the end consumer, charging as much as 12% interest over a three year term
with monthly interest-only payments and a balloon payment for full principal and outstanding
interest at the end of the three year period.”).
149
Slater IH, Tab 17, at 30:2-31:14
). An
example of the loan assignment to a trust deed purchaser is at Muchowski Dec., Tab 18, Ex. P at
FTC-PI 4913 (“Assignment of Rights and Disclosure Agreement”).
150
Baisley Dec., Tab 1, ¶ 7 (Buying Summit speakers indicate trust deed had “minimal risk”
because they “do lots of research on the properties they buy for resale”); Page Dec., Tab 4, ¶ 11
(Buying Summit speaker described property notes as “no risk” investments); Slater IH, Tab 17,
at 53:10-53:17 (
).
151
See supra notes 143, 150, 159, 166, 167; see also Khuong Dec., Tab 5, ¶¶ 35, 38 (consumer
abandoned dilapidated property that had received blight violations from the city); Muchowski
Dec., Tab 18, ¶¶ 17, 19 (discovered properties were not fully rehabbed as promised; the roof for
one property “was in immediate need of repair,” water heater was installed without permit
resulting in violation, and the consumer spent nearly $40,000 in repairs); Kreiner Dec., Tab 8, ¶
50 (discovered property had squatter and was missing a front door, plumbing, and furnace);
Mingo Dec., Tab 19, ¶¶ 34-35 (discovered properties purchased needed repairs including
damaged driveway, broken pipes, and rodents, and one property failed city inspections).
152
Kreiner Dec., Tab 8, ¶¶ 59-61 & Ex. TTT (Buyback agreements) at FTC-PI 1630, 1635
(terms of agreement must remain confidential, and: “If asked about the terms of the Agreement,
the Client is authorized to state their dispute with the Company has been amicably resolved.”);
Dooling Dec., Tab 11, ¶¶ 24-27 (BuyPD bought back properties after consumer signed non-
43
prices. 153 For example, in August 2013, Defendants sold a property near St. Louis to Ann
Dooling at the Buying Summit for $62,600. 154 The property was worth only $20,000 to $30,000,
according to multiple local real estate agents. 155 Defendants bought back the property in
December 2014 after Dooling filed a complaint with the Montana Department of Justice. 156 In
2015, Defendants sold the same property to someone else using the entity Cedar Ridge Investors
1, LLC, for $53,500. 157 Defendants issued a loan for $42,000 to the new property owner, and
then sold that loan to another consumer, John Enterline, for $41,700 at a Buying Summit
event. 158 The loan defaulted in 2017. 159
A real estate fraud expert, Douglas Pollock, reviewed available property records for more
than 60 properties that Defendants sold or brokered to consumers between 2013 and 2017. 160
Pollock found that the following was the typical chain of events for properties sold to consumers
before 2016: a property sourcer acquired a distressed, foreclosed or REO (“real estate owned”)
disclosure agreement and withdrew complaint she filed with the state Attorney General office
that “this is a serious cases of misrepresentation and fraud.”).
153
See infra note 161.
154
Dooling Dec., Tab 11, Ex. C at FTC-PI 2641 (“Purchase Details” sheet).
155
Enterline Dec. Tab 12, ¶ 39; Dooling Dec., Tab 11, ¶ 18 (consumer told by real estate agent
that she had “significantly overpaid”).
156
Dooling Dec., Tab 11, ¶¶ 24-27.
157
Marino Dec., Tab 27, Ex. P at FTC-PI 7711 (showing property sold on May 22, 2015 for
$53,550 to Cedar Ridge Investors 1, LLC).
158
Enterline Dec., Tab 12, ¶¶ 32-33 & Tab 13, Ex. N at FTC-PI 3328 (“Purchase Details” page)
& Ex. O at FTC-PI 3330 (transaction summary prepared by Accuplan).
159
Enterline Dec., Tab 12, ¶¶ 34-35.
160
Pollock’s report, which sets forth his qualifications and analysis, is at Tab 31. The sample of
properties analyzed were drawn from two counties in Michigan, Macomb County and Wayne
County. Properties in these counties were used for the sample because Defendants sold a large
number of properties in these areas and both counties maintained a database of records that could
be easily accessed online. Pollock Report, Tab 31, ¶ 26.
44
property from the lender, a government agency, or a buyer looking to recover from a failed
investment. The property would generally be acquired by the property sourcer for approximately
$20,000 to $30,000. The property would often then be conveyed to Defendants for more than
twice the amount paid by the property sourcer. Defendants then sold the properties to consumers
at higher prices, typically more than $10,000 (or 15% to 25%) over what Defendants paid. 161
Further, Pollock’s analysis shows that, in most instances, the properties he reviewed were
sold to consumers at substantially above-market prices, 162 and when he examined subsequent
sales by consumers, he did not find any instances in which consumers were able to sell a
property for more than they paid. 163
In addition, Pollock reviewed sales comparables (“comps”) that Defendants provided
consumers to support the above-market sales prices for four properties. 164 For each of the four
properties, Pollock found that Defendants included purported comparable sales that were more
than one mile from the property being offered for sale, despite an explicit statement in
161
Id. ¶ 46-47. Pollock also found that some of the properties were sold to consumers before the
Defendants took title from the property sourcer. Id. ¶ 47. For a sample of over 30 properties
sold or brokered by Defendants to consumers after 2016, Pollock found that six properties had
been sold previously by Defendants to a consumer who had transferred the property back to
Defendants before another consumer purchased the same property. Id. ¶ 48.
162
Specifically, a review of a sample of 31 properties that Defendants sold to consumers before
2016 showed that 26 of the 31 properties were sold at higher prices than those for comparable
properties. Four of the properties were sold at about the same price as comparable homes, and
only one was sold for substantially less than the comparable properties. Id. ¶¶ 35-37. A review
of a second sample of 30 properties that Defendants sold or brokered to consumers after 2016
showed that 19 properties were sold at higher prices than the average comparable sales price. Id.
¶ 41. Thus, overall, 45 (or 74%) of the 61 properties were sold at higher prices than the
comparable sales prices.
163
Id. ¶¶ 49-51.
164
Id. ¶¶ 54-89. These sales comparables are contained in “Comparative Market Analysis”
(“CMA”) reports, dated November 2014, that Defendants’ sales representatives provided to
consumers at the Buying Summit events. Copies of the CMA reports Pollock reviewed are at
45
Defendants’ comp reports that “[a]ll comps are within 1 mile of the property.” In addition,
Pollock found that Defendants used their own sales to consumers as purported comps. When
Pollock identified appropriate comparable sales within 1 mile of the properties Defendants
offered for sale, he found the average sales prices for the comps he identified were $23,000 to
$39,000 less than the average sales price for the comps Defendants gave consumers. As a result,
Pollock concluded that the purported comps Defendants gave consumers provided a “misleading
picture” of the market value of each of the four properties. 165
Consumers who purchased properties from Defendants are still subject to “underwater”
loans (where the loan principal is more than the property value) that Defendants originated for
properties they sold. 166 On the other side, consumers who purchased trust deeds from
Defendants continue to hold “underwater” loans originated by Defendants that have defaulted. 167
Pollock Report, Ex. C to F at FTC-PI 8574-75, 8603-04, 8632-33, 8657-58.

165
Id. ¶ 5b.
166
Mingo Dec., Tab 19, ¶¶ 25, 31, 41-42 (consumer is unable to sell a property he purchased
from BuyPD at a 2014 Buying Summit and has incurred tax penalties because the self-directed
IRA account he set up for the property was shut down); Muchowski Dec., Tab 18, ¶ 18
(consumers who purchased property at 2014 Buying Summit continue to pay for a property that
is “worth little more than half of what we paid for it”). In some cases, Defendants direct
consumers who cannot make loan payments to lawyers closely aligned with Defendants, who
then prepare agreements between the consumer who owns the property and the note holder (the
consumer who purchased the trust deed) that includes a release of both consumers’ claims
against the entity through which Defendants originate the loans. See Baisley Dec., Tab 1, ¶ 19 &
Ex. L at FTC-PI 304 (letter from Phillip Martin of Invictus Law proposing agreement that
provides: “Likewise, Borrower and Lender release any claims they may have against Insider’s
Cash, LLC”); Enterline Dec., Tab 13, Ex. Y at FTC-PI 3370 (Invictus Law emails consumer who
purchased a trust deed that the borrower “asked if you’d be willing to do” a deed in lieu of
foreclosure, and that “Attorney Phillip Martin has been asked to act as an escrow agent to
prepare paperwork to transfer the property” and “you will be responsible for his fee of $850”).
167
Baisley Dec., Tab 1, ¶¶ 5, 8, 27 (consumer who purchased trust deeds at 2015 Buying Summit
using retirement funds owed almost $50,000 on two loans that have defaulted); Enterline Dec.,
Tab 12, ¶¶ 37, 39 (trust deed purchaser is unable to acquire a property securing the loan he
purchased from Defendants for a house worth substantially less than the amount of the loan).
46
B. DEFENDANTS’ EFFORTS TO SILENCE WITNESSES
Defendants have continued their illicit conduct despite a number of consumer complaints
and lawsuits detailing Defendants’ deceptive practices. 168 Rather than cease these practices,
Defendants have tried to silence consumers they deceived through non-disclosure agreements,
, and by relying on arbitration clauses contained in their form purchase orders. 169
After learning they were the subjects of an FTC investigation, Defendants, directly or
through associates, pressured consumers to withdraw complaints they filed with government
agencies. Although Plaintiffs ultimately obtained information from the witnesses, the instances
detailed below demonstrate Defendants’ efforts to prevent witnesses from coming forward.
1. Rick Ruby
168
Since 2015, over twenty consumers have filed at least eight lawsuits against Defendants in
federal and state courts, asserting claims under the Racketeer Influenced and Corrupt
Organizations Act, 18 U.S.C. §§ 1961-1968, and state law fraud claims. The lawsuits contain
similar allegations that Defendants falsely induce consumers to purchase a series of increasingly
expensive seminars and then properties at inflated prices. Just Us Realtors, LLC v. Nudge, LLC,
No. 18-cv-00128 (D. Utah) (filed Feb. 2018); Grisby v. Income Property USA, LLC, No. 17-cv-
0110 (D. Utah) (filed Oct. 2017); Nelson v. BuyPD, LLC, No. 170300095 (Utah County Dist.
Ct.) (filed July 2017); Johnson v. 5 Choices, LLC, No. 17-cv-1394 (E.D. Mo.) (filed Apr. 2017);
Chadwick REI16, LLC v. Income Property USA, LLC, No. 170400183 (Utah County Dist. Ct.)
(filed Nov. 2016); Wilson v. 5 Choices, LLC, No. 16-cv-10659 (E.D. Mich.) (filed Nov. 2016);
Paxson v. Yancey, No. 16-cv-05787 (N.D. Ill.) (filed June 2016); Kane v. Yancey, No. 15-cv-
1861 (S.D. Tex.) (filed June 2015). The Just Us Realtors case is pending before Judge Nielson.
The others settled or were dismissed based on arbitration clauses in the training sales contracts.
In addition, the Division has received 98 complaints relating to Defendants since 2012 and
routinely forwarded them to Defendants or their attorneys. Larsen Dec., Tab 23, at ¶¶ 4-7.
169
An exemplar arbitration clause in the training sales contract is at Adiwidjaja Dec., Tab 7, Ex.
A at FTC-PI 1261 (Visionary Events, LLC’s Workshop purchase order). For examples where
Defendants have pressured consumers to sign non-disclosure agreements or withdraw
complaints, see supra note 152; Mingo Dec., Tab 19, ¶ 37 (Defendants refused to pay the repairs
for property it sold unless consumers signed a nondisclosure agreement).
47
171
173
: 175
170
Ruby IH, Tab 16 at 138:2-138:22.
171
Id., at 78:10-83:24, 138:11-138:12.
172
Id., Ex. 3 (excerpt) at FTC-PI 4342.042 – 4342.054 (Ruby’s complaint letter with attached
“Ability to Repay/Income Calculation Worksheet” reporting $100,000 as “Anticipated/Projected
Income”).
173
Abdo IH, Tab 22, at 65:1-66:14. When shown Ruby’s complaint by Plaintiffs at an
investigational hearing, Abdo said she did not recall any conversations with Ruby about what to
put down as his projected income, but that “[i]f a client asks me if that’s a normal amount, I do
tell them that is where most of our clients are projecting around.” Abdo IH, Tab 22, at 68:2-14.
174
Ruby IH, Tab 16, at 144:7-145:7.
175
Id., at 145:8-146:6 & Ex. 17 at FTC-PI 4342.057 (3/22/2018 email from Lang to Ruby).
48
. 176 The next day, March 23, 2018, Defendants’ counsel sent Ruby’s email (
) to the Division as part of Defendants’ request to close the complaint. 177
2. Nicole Slater
176
Id., at 146:7-148:22.
177
Id., Ex 18 at FTC-PI 4342.058-4342.060 (3/23/18 letter from Venable LLP to the Division).
178
Slater IH, Tab 17, at 72:1-72:14, 87:19-90:20, 102:11-106:23.
49
. 179
.” 180
C. THE DEFENDANTS
The Individual Defendants have operated and profited from this scheme through the
Corporate Defendants, which have operated as a common enterprise out of the same office
building in Lindon, Utah (the “Lindon Building”). 181 The Nudge Enterprise has taken in
approximately $400 million through its escalating funnel of training and coaching programs. 182
179
The November 9, 2018 letter is attached to Marino Dec., Tab 27, Ex. J at FTC-PI 7661-62.
The letter is from Phillip Martin under Vallis Legal, PLLC letterhead. Martin has also
corresponded with consumers under Invictus Law letterhead. See Baisley Dec., Tab 1, Ex. L at
FTC-PI 304 (May 2017 letter from Martin to Kevin Baisley).
180
See Marino Dec., Tab 27, Ex. J at FTC 7663-66
).
181
Bank records for Response and BuyPD listed the same office address in American Fork, Utah
in May 2015 and then the same office address in Lindon, Utah starting in September 2015.
Marino Dec, Tab 27, ¶9(b) & Ex. E at FTC-PI 7590-92. The Lindon Building is owned by an
entity, Building One Lindon, LLC (“Building One Lindon”), that lists Poelman as a manager.
Larsen Dec., Tab 23, at ¶ 151(a). Defendants used more than $5 million dollars from this
scheme to fund the Lindon Building’s construction. Kelly Dec., Tab 28, ¶ 33, Table 4 (FTC-PI
7730) (identifying over $5.8 million transferred to a Building One Lindon bank account).
182
An FTC economist reviewed bank records associated with Response from December 2014 to
December 2017, and identified transactions totaling approximately $400 million that appear to
reflect consumers’ payments. Kelly Dec., Tab 28, ¶¶ 7-15 (FTC-PI 7720-23). Approximately
$368 million reflects consumers payments made by credit or debit cards, of which approximately
$197 million (more than half) is from bank accounts with “ME” DBAs that reflect sales of
Advanced Training packages, approximately $95 million is from Response North bank accounts
that reflect telemarketing sales of coaching packages and other services, and approximately $75
million is from bank accounts with “FE” DBAs that reflect sales of Workshop packages. Id. at ¶
12 (FTC-PI 7722); see infra notes 185, 186 for discussion of accounts associated with Response
North and “FE” and “ME” DBAs.
50
Since 2015, the Individual Defendants all together have taken in over $30 million from the
scheme, and have used millions more to help fund their private jets. 183 In addition, beginning in
February 2018, approximately a month after learning of the FTC’s investigation, Defendants
transferred $2.4 million to Invictus Law. 184
1. The Corporate Defendants
Response is the main operating company within the Nudge Enterprise that markets and
sells the real estate training packages at the live seminar events. 185 Defendants also conduct
telemarketing calls through Response to upsell consumers with purported personalized coaching
packages and other services. 186
BuyPD is the entity through which the Nudge Enterprise sells at the training events
services that are purportedly necessary for consumers’ prospective real estate businesses, such as
183
Kelly Dec., Tab 28, ¶¶ 29-31. Defendants own private jets through entities named Leto
Logistics Team, LLC and 415NG, LLC. Larsen Dec., Tab 23, ¶¶ 152-53. Over $6 million was
transferred into accounts associated with 415 NG and Leto Logistics Team from December 2014
to December 2017. Kelly Dec., Tab 28, ¶ 34 (noting checks from a BuyPD account to Leto
Logistics had notations referring to “Airplane Services”); see also Marino Dec., Tab 27, ¶ 9(e) &
Ex. E at FTC-PI 7603-05 (checks from BuyPD deposited into a 415NG account indicate
payments for “Aircraft Service.”)
184
Marino Dec., Tab 27, ¶ 8(c) & Ex. D at FTC-PI 7577-85 (9 checks drawn from a Response
Live bank account to Invictus Law from February 2018 to April 2018).
185
Defendants set up merchant accounts – a type of account that allows a business to receive
consumer payments by credit or debit card – for its real estate seminar sales in the name of
Evtech Media, LLC (Response’s predecessor) and, later, in the names of Response’s wholly-
owned subsidiaries, Constat Medium, LLC (“Constat Medium”) and Constat Primum, LLC
(“Constat Primum”). Marino Dec., Tab 27, ¶¶ 10(a), 12-13 & Ex. F at FTC-PI 7610, 7624,
7627. The Constant Primum accounts have DBAs starting with “FE” for “front event” sales of
the Workshop at the Preview Events. The Constat Medium have DBAs starting with “ME” for
“middle event” sales of the Advanced Training at the Workshop Events. Id. at ¶¶ 12-13.
186
Defendants set up merchant accounts under another Response subsidiary, Response North,
LLC, for telemarketing sales of its coaching and mentoring packages under the brand names
“Protégé” and “Inner Circle.” Marino Dec., Tab 27, ¶11 & Ex. F at FTC-PI 7616, 7623; Larsen
Dec., Tab 23, ¶ 9 & Ex. B at FTC-PI 6032 (telemarketing script identifies caller is with
51
entity setup and asset protection services. 187 In addition, from 2012 to 2017, BuyPD sold the
properties offered to consumers who attended “Buying Summit” events as part of the Advanced
Training packages they purchased. BuyPD also provided loans to consumers to purchase these
properties, and then sold the loans (which BuyPD called “trust deeds”) to other consumers. 188
Nudge, LLC serves as the holding company for partners of the Nudge Enterprise,
including Defendants Lewis, Poelman, Smith, and Finnegan. 189 In at least 2015 and 2016,
millions of dollars were transferred from the operating bank accounts for Response and BuyPD
into a Nudge, LLC bank account. From there, funds were disbursed as profit distributions to the
Nudge partners and several other executives. 190
“Response North” and “Inner Circle”).

187
BuyPD sells these services through wholly-owned subsidiaries, Veil Solutions and Entity Set-
Up Services, LLC. See Marino Dec., Tab 27, ¶ 7(a) & Ex. C at FTC-PI 7554 (“Universal
Resolution” listing BuyPD, Veil Solutions, and Entity Set-Up Solutions as affiliated entities
under common management). Consumers are encouraged at the Workshops to pay $595 to a
BuyPD subsidiary to set up their business entity in Utah even though most consumers do not live
or do business in Utah. See Ruby IH, Tab 16, 103:12-104:19
; Schultz Dec.,
Tab 6, at ¶ 12, Ex. U at FTC-PI 1072 (paid a “lawyers group called Veil” to set up Utah LLC).
188
Defendants represented BuyPD as “the asset side of the business” in marketing materials
provided to consumers at the Buying Summit. See, e.g., Enterline Dec., Tab 13, Ex. L at FTC-PI
3243; Mingo Dec., Tab 19, ¶ 17 & Tab 20, Ex. Q at FTC-PI 5478 and Ex. R at FTC-PI 5498
(consumer received marketing materials at Buying Summit that represented “Income Property
USA is the online presence of BuyPD,” which has sold over 2,300 properties and 4,500 trust
deeds, and includes quote from “CEO Ryan Poelman” that BuyPD “focused on quality assets”).
189
Marino Dec., Tab 27, ¶¶ 11(b), 22 & Ex. F at FTC-PI 7621-22, Ex. O at FTC-PI 7708-09
(Smith’s 2015 signed financial statement submitted to a bank lists partnership investment in
Nudge; and Finnegan’s LinkedIn profile from January 2018 indicates he is a Nudge “partner”).
190
More than $7.6 million was transferred into a Nudge, LLC bank account from accounts
associated with Response and BuyPD from 2015 to 2017. The bulk of the withdrawals from this
Nudge, LLC account consisted of check payments to fifteen recipients. Some checks indicated
the payments were “profit share” distributions. Lewis and Poelman together received over $7.4
million, which was approximately 78% of the total withdrawals from the Nudge, LLC account
during this time period. Kelly Dec., Tab 28, ¶¶ 26-27 (FTC-PI 7727).
52
2. The Individual Defendants
The Individual Defendants have each directed and profited from this scheme.
Lewis is one of the primary principals of the Nudge Enterprise. Although Lewis is not
listed as an officer of the Corporate Defendants, he (along with Poelman) are the primary
beneficial owners of the business. Bank records show Lewis has received more than $10 million
from the scheme. 191 Lewis’s close relatives are signatories on the Nudge Enterprise’s operating
accounts from which he has received millions of dollars through various LLCs he controls. 192
Poelman is the other primary principal of the Nudge Enterprise. He also received more
than $10 million from the business through various entities he controls. 193 He is BuyPD’s Chief
Executive Officer and has signed company “resolutions” as a member for Nudge and BuyPD
authorizing signatories on company bank accounts. 194 He was told in 2015 of
. 195
Smith has received more than $5 million from the scheme as a Nudge partner. 196 He is
191
Kelly Dec., Tab 28, ¶ 29, Table 3 (FTC-PI 7728).
192
Marino Dec., Tab 27, ¶¶ 6-7(a) & Ex. B at FTC-PI 7537-38, Ex. C at FTC-PI 7554 (showing
Matt Lewis as signatory on the Response accounts and Robert Lewis as having signatory
authority on the BuyPD accounts).
193
194
See supra note 188 and accompanying text; Marino Dec., Tab 27, ¶¶ 7(a), 9(a) & Ex. C at
FTC-PI 7554, Ex. E at FTC-PI 7588 (Poelman signs resolution as a member of BuyPD,
authorizing Lewis’s brother as a signatory on the BuyPD accounts; Poelman signs resolution for
Nudge, LLC account as “President of 900 West Associates, LLC which is a member of Mick
Hardy Productions, LLC which is member of Nudge, LLC,” authorizing his sister, Aftyn
Morrison, to have signatory authority on the account).
195
Improta IH, Tab 33, at 95:22-99:7.
196
Kelly Dec., Tab 28, ¶29, Table 3 (FTC-PI 7729). Smith is also one of the signatories on
Response’s bank accounts. Lewis’s brother is the other signatory. Marino Dec., Tab 27, ¶ 6 &
Ex. B at FTC-PI 7537-38.
53
the Chief Executive Officer of Response. 197 He supervised Defendants’ highest paid
telemarketers that target consumers (referred to as the “buyer buyers”) who have purchased the
most expensive Advanced Training packages. 198 He also submitted applications for merchant
accounts used by the Nudge Enterprise to process consumer credit and debit card payments and
is a signatory on bank accounts used to receive and distribute proceeds from the scheme. 199
Finnegan has received more than $4 million as a Nudge partner. 200 He has served as
Chief Executive of Sales and Vice President of Response. 201 He also submitted applications on
behalf of Response’s predecessor Evtech Media for merchant accounts used by the Nudge
Enterprise to process consumer payments in this scheme. 202
Sanderson has been the President and Chief Operating Officer of Response since May
2015, and was the Chief Sales Officer of BuyPD from 2012 to May 2015. 203 When Sanderson
was BuyPD’s Chief Sales Officer,
. 204 Emails obtained from Seed Capital show that Sanderson
was notified in early 2017 that
. 205
197
Larsen Dec., Tab 23, ¶ 9 (Response’s telemarketing applications list Smith as its CEO).
198
Touchet Dec., Tab 21, ¶ 17.
199
Marino Dec. Tab 27, ¶¶ 6, 10-11 (signatory on Response North, LLC accounts and submitted
merchant account applications for Response North, LLC, Constat Primum, LLC, and Constat
Medium, LLC).
200
201
Larsen Dec., Tab 23, ¶ 139(a) (signing sales agreement as Response’s Vice President).
202
Marino Dec., Tab 27, ¶ 10(a) & Ex. F at FTC-PI 7610.
203
Marino Dec., Tab 27, ¶ 20 & Ex. N at FTC-PI 7696 (copy of Sanderson’s LinkedIn page).
204
Blackett IH, Tab 32, at 17:12-19:9, 33:6-36:11.
205
Marino Dec., Tab 27, ¶ 13 at Ex. I at FTC-PI 7656-57 (1/20/17 email from North to
54
The Individual Defendants directed and participated in the Nudge Enterprise’s marketing
and sales strategies. Lewis, Poelman, and Finnegan each participated in Response’s weekly sales
meetings, which were typically led by Smith from at least 2014 to 2016, and
. 206 Further, Nudge held bi-
annual company retreats in April and November from at least 2015 to 2017.
. 207
Sanderson:
.
206
Touchet Dec., Tab 21, ¶ 25 (Lewis, Poelman, and Finnegan “would often talk” at weekly
Response sales meetings, which were “typically run by Phil Smith or Chris Brown,” when he
was a Response telemarketer from 2014 to 2016); Improta IH, Tab 33, at 83:4-84:12
).
207
Marino Dec., Tab 27, ¶ 12 & Ex. H at FTC-PI 7645-54. For example, an April 2015 retreat
agenda
. Id. at FTC-PI 7646 (row 30). A November 2016 retreat agenda lists the
.” Id. at FTC-PI 7651 (row 109). Another agenda item listed
Id. at FTC-PI 7648 (row 13). A fall 2017 retreat agenda listed
” id. at FTC-PI 7653 (row 27), and
.” Id. at FTC-PI 7654 (row 60).

55
III. ARGUMENT
The FTC and the Division seek a TRO halting Defendants’ ongoing law violations,
including their (i) deceptive sales practices and (ii) collection efforts that perpetuate consumer
harm from prior property sales and related financing. Plaintiffs also request an asset freeze,
immediate access to Defendants’ business records, expedited financial disclosure, and expedited
discovery. Each request is warranted by the facts and necessary to protect consumers.
A. THE COURT HAS AUTHORITY TO GRANT THE REQUESTED RELIEF
The FTC is an independent agency of the United States government created by the FTC
Act, 15 U.S.C. §§ 41-58. The FTC enforces Section 5(a) of the FTC Act, which prohibits
“unfair and deceptive acts or practices in or affecting commerce.” Id. § 45(a). The FTC also
enforces the TSR, which prohibits deceptive and abusive telemarketing acts or practices. 16
C.F.R. Part 310. Pursuant to Section 3(c) of the Telemarketing and Consumer Fraud and Abuse
Prevention Act, 15 U.S.C. § 6102(c), and Section 18(d)(3) of the FTC Act, 15 U.S.C.
§ 57a(d)(3), a violation of the TSR constitutes a deceptive act or practice in or affecting
commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), authorizes the Court to permanently
enjoin practices that violate any law enforced by the Commission. FTC v. Accusearch, Inc., No.
06-CV-105-D, 2007 WL 4356786, at *9 (D. Wyo. Sept. 28, 2007). This “grant of authority to
provide injunctive relief carries with it the full range of equitable remedies,” FTC v. Freecom
Commc’ns, Inc., 401 F.3d 1192, 1202 n.6 (10th Cir. 2005), including “any measures that may be
needed to make permanent relief possible,” FTC v. SkyBiz.com, Inc., No. 01-CV-396-K(E), 2001
WL 1673645, at *8 (N.D. Okla. Aug. 31, 2001), aff’d, 57 F. App’x 374 (10th Cir. 2003); see FTC v.
Affiliate Strategies, Inc., 849 F. Supp. 2d 1085, 1118-19 (D. Kan. 2011) (same). The available
56
relief therefore includes, among other things, a TRO, a preliminary injunction, an asset freeze
and, ultimately, a permanent injunction and disgorgement. E.g., FTC v. LoanPointe, LLC, 525 F.
App’x 696, 699 (10th Cir. 2013) (affirming permanent injunction and disgorgement); FTC v. Your
Yellow Book, Inc., No. CIV 14-786-D, 2014 WL 4187012, at *4, *6, *8-9 (W.D. Okla. Aug. 21,
2014) (granting preliminary injunction with asset freeze following entry of a TRO); SkyBiz.com,
2001 WL 1673645, at *7-8, *12 (same). 208 In fact, in matters involving the public interest, the
court’s equitable powers “assume an even broader and more flexible character.” Porter v.
Warner Holding Co., 328 U.S. 395, 398 (1946); accord SkyBiz.com, 2001 WL 1673645, at *8. This
District and others within the Tenth Circuit have granted the type of preliminary relief the FTC
and the Division are seeking here. 209
208
Congress noted the FTC’s authority to obtain an asset freeze and monetary relief under
Section 13(b) when it further amended that statute to expand venue and service of process
procedures in 1994. S. Rep. No. 103-130, 1993 WL 322671, at *15-16 (1993) (“Section 13 of
the FTC Act authorizes the FTC to file suit to enjoin any violation of the FTC [Act]. The FTC
can go into court ex parte to obtain an order freezing assets, and is also able to obtain consumer
redress. Section 13(b) also provides that any such suit is to be brought in the district where the
defendant resides or transacts business. The FTC has used its Section 13(b) injunction authority
to counteract consumer fraud, and the Committee believes that the expansion of venue and
service of process in the reported bill should assist the FTC in its overall efforts.”).
209
E.g., TRO, FTC v. Zurixx, LLC, No. 19-cv-00713-DAK (D. Utah Oct. 1, 2019), ECF No. 24
(unpublished) (ex parte TRO with conduct prohibitions, financial disclosure, asset preservation,
monitor, immediate access to records, and expedited discovery in case against provider of real estate
investment seminars); TRO, FTC v. Elite IT Partners, Inc., No. 19-cv-125-RJS (D. Utah Feb. 27,
2019), ECF No. 15 (unpublished) (ex parte TRO with conduct prohibitions, financial disclosure,
asset freeze, receiver, immediate access to records, and expedited discovery); TRO, FTC v.
Peterson, No. 18-cv-00049-DN (D. Utah July 10, 2018), ECF No. 10 (unpublished) (ex parte
TRO with conduct prohibitions, asset freeze, and financial disclosure); TRO, FTC v. Your Yellow
Book, Inc., No. 14-cv-00786-D (W.D. Okla. July 25, 2014), ECF No. 10 (unpublished) (ex parte
TRO with conduct prohibitions, asset freeze, and financial disclosure); TRO, FTC v. Skybiz.com,
Inc., No. 01-CV-396-K(E) (N.D. Okla. June 6, 2001), ECF No. 12 (unpublished) (ex parte TRO with
conduct prohibitions, asset freeze, receiver, immediate access to records, and expedited asset
discovery); cf. Stip. TRO, FTC v. Vision Solution Mktg. LLC, No. 18-cv-00356-TC (D. Utah May 4,
2018), ECF No. 46 (unpublished) (stipulated TRO with conduct prohibitions, asset freeze, financial
disclosure, immediate access to records, and expedited discovery); Stip. Prelim. Inj., FTC v.
57
Utah enforces the CSPA, Utah Code §§ 13-11-1 et seq., and BODA, Utah Code §§ 13-
15-1 et seq. The CSPA authorizes injunctive relief against violators. Utah Code § 13-11-
17(1)(b). BODA authorizes the Division to take judicial action against those who violate its
provisions. Id. §§ 13-15-3(1), 13-2-5(3). They are to be construed liberally and consistently
with the policies of the FTC Act relating to consumer protection. Id. § 13-11-2(4).
B. THE EVIDENCE JUSTIFIES PRELIMINARY RELIEF
1. The Standard for Relief
To obtain preliminary relief under Section 13(b), the FTC must show: “(1) a likelihood
of ultimate success on the merits; and (2) that a balance of the equities weighs in favor of
granting the requested relief.” Your Yellow Book, 2014 WL 4187012, at *4; see FTC v. World
Travel Vacation Brokers, Inc., 861 F.2d 1020, 1029 (7th Cir. 1988); Skybiz.com, 2001 WL
1673645, at *7-8. This statutory (or “public interest”) standard for preliminary relief places a
lighter burden on the Commission than the common law equity standard, which does not apply in
Section 13(b) actions. Unlike at common law, the FTC does not have to show irreparable harm
and, as to the degree of probable success, need only demonstrate “some chance” that it is likely
to prevail. FTC v. World Wide Factors, Ltd., 882 F.2d 344, 347 (9th Cir. 1989); Your Yellow
Book, 2014 WL 4187012, at *4, *6; Skybiz.com, 2001 WL 1673645, at *7-8. 210
2. Plaintiffs Are Likely To Succeed on the Merits
a. Defendants Have Violated Section 5 of the FTC Act
Section 5(a) of the FTC Act prohibits “deceptive acts or practices in or affecting
LoanPointe, LLC, No. 10-cv-00225-DAK (D. Utah Apr. 2, 2010), ECF No. 14 (unpublished)
(stipulated preliminary injunction with conduct prohibitions and financial disclosure).
210
Preliminary relief would be proper even under the common law standard, cf. United States v.
Greenwood, No. 19-cv-249, 2019 WL 3717679, at *2 (D. Utah Aug. 17, 2019) (involving the
58
commerce.” 15 U.S.C. § 45(a). A deceptive act or practice is one that involves (1) “a material
misrepresentation or omission” that is (2) “likely to mislead consumers acting reasonably under
the circumstances.” LoanPointe, 525 F. App’x at 700; United States v. Corps. for Character,
L.C., 116 F. Supp. 3d 1258, 1266 (D. Utah 2015) (quoting LoanPointe). 211
A statement is material if it “is likely to affect the consumer’s conduct or decision with
regard to a product or service.” Corps. for Character, 116 F. Supp. 3d at 1268 (citation and
quotation marks omitted); see FTC v. LoanPointe, LLC, No. 10-CV-225-DAK, 2011 WL
4348304, at *5 (D. Utah Sept. 16, 2011) (same), aff’d, 525 F. App’x 696 (10th Cir. 2013).
Express claims and deliberate claims (even if implied) are presumed to be material. Corps. for
Character, 116 F. Supp. 3d at 1268; LoanPointe, 2011 WL 4348304, at *4; In re Thompson
Med. Co., Inc., 104 F.T.C. 648, 1984 WL 565377, at *59 (F.T.C. 1984) (final order), aff’d, 791
F.2d 189 (D.C. Cir. 1986).
“[T]he FTC carries its burden of showing that a statement is likely to mislead a
reasonable consumer by proving that at least one reasonable interpretation of the statement
contains false information.” Corps. for Character, 116 F. Supp. 3d at 1268-69. 212 Where
multiple statements are involved, courts look to the “overall net impression of the promotional
statements” to determine whether a claim is deceptive. Affiliate Strategies, 849 F. Supp. 2d at
1104; see Freecom Commc’ns, 401 F.3d at 1202 n.5 (consumers are governed by “general
Controlled Substances Act, 21 U.S.C. §§ 801-971), for the reasons discussed in Section III.B(4).
211
Proof of individual consumer reliance or consumer injury is not required to establish a
violation of Section 5(a). Freecom Commc’ns, 401 F.3d at 1203; Corps. for Character, 116 F.
Supp. 3d at 1272.
212
“[I]ntent to deceive the consumer is not an element of a § 5 violation. … Instead, the ‘cardinal
factor’ in determining whether an act or practice is deceptive under § 5 is the likely effect the
promotor’s handiwork will have on the mind of the ordinary consumer.” Freecom Commc’ns,
401 F.3d at 1202 (citations omitted).
59
impressions”). 213 “While proof of actual deception is unnecessary,” it is “highly probative to
show that a practice is likely to mislead consumers acting reasonably under the circumstances.”
FTC v. E.M.A. Nationwide, Inc., 767 F.3d 611, 633 (6th Cir. 2014) (citation and quotation marks
omitted); see FTC v. Cyberspace.com LLC, 453 F.3d 1196, 1201 (9th Cir. 2006) (same).
(i) Defendants Misrepresent Likely Earnings
Through their seminar speakers, 214 promotional materials, 215 telemarketers, 216 and
through Seed Capital, 217 Defendants represent that consumers who purchase the Defendants’
training packages are likely to complete profitable real estate transactions and earn significant
income. Dr. Isaacson’s consumer experience survey confirms that these representations are in
fact conveyed. For example, over 92% percent of the 194 consumers who completed Dr.
Isaacson’s survey reported that Defendants’ representatives said or suggested that consumers
would earn more money from investing in real estate than they would spend on the training. 218
In fact, Defendants’ earnings representations are false. Only 9.8% of consumers who Dr.
Isaacson surveyed completed a profitable deal and just 4.6% made more money than they paid
for training. 219 Defendants’ own records corroborate these results, showing that just 1% of
213
“Disclaimers or qualifications in any particular ad are not adequate to avoid liability unless
they are sufficiently prominent and unambiguous to change the apparent meaning of the claims
and to leave an accurate impression.” Removatron Int’l Corp. v. FTC, 884 F.2d 1489, 1497 (1st
Cir. 1989); see Your Yellow Book, 2014 WL 4187012, at *5 (same). They do not “automatically
exonerate” deceptive conduct. FTC v. Gill, 71 F. Supp. 2d 1030, 1044 (C.D. Cal. 1999).
214
See supra notes 21, 23, 29, 31, 39, 47-51, 59, 71, 74, 76, 95, 96 and accompanying text.
215
See supra note 13 and accompanying text.
216
217
See supra notes 83-88 and accompanying text.
218
219
See supra notes 64, 65 and accompanying text. The accompanying consumer declarations
provide examples of consumers who were not able to complete profitable real estate deals. E.g.,
60
consumers completed a profitable deal within three to six months of attending a Workshop. 220
Defendants’ misrepresentations concerning “anticipated income” are both likely to
mislead and material because they “strike at the heart of a consumer’s purchasing decision.”
Freecom Commc’ns, 401 F.3d at 1203. 221 Therefore, Plaintiffs are likely to succeed on Count
One and Count Five of the Complaint.
Mingo Dec., Tab 19, ¶ 45 (consumer and spouse lost over $100,000 by paying almost $40,000
for Defendants’ trainings and using their retirement funds to buy overpriced properties in
disrepair at Buying Summit); Muchowski Dec., Tab 18, ¶ 24 (consumer and spouse paid
Defendants over $160,000 for trainings and overpriced properties in disrepair); Page Dec., Tab 4,
¶ 16 (consumer lost over $100,000 from her dealings with Defendants); Khuong Dec., Tab 5,
¶¶ 13, 15, 23, 38 (consumer lost over $100,000, including funds she used to purchase dilapidated
properties from Defendants that she had to abandon); Kreiner Dec., Tab 8, ¶¶ 13, 16, 64
(consumer spent over $65,000 for a series of Defendants’ training packages and eventually filed
for bankruptcy); Schultz Dec., Tab 6, ¶ 27 (consumer spent over $48,000 on trainings and most
of her remaining savings on overpriced properties she purchased from Defendants); Cortes Dec.,
Tab 3, ¶¶ 15, 40 (consumer spent over $60,000 for Defendants’ trainings); Enterline Dec., Tab
12, ¶¶ 3, 51 (consumer lost approximately $80,000 from his dealings with Defendants); Kling
Dec., Tab 14, ¶¶ 4, 74 (retired couple paid over $70,000 for Defendants’ trainings); Baisley Dec.,
Tab 1, ¶¶ 4, 26, 27 (consumer lost over $50,000 after paying Defendants for trainings and trust
deeds that have since defaulted); Adiwidjaja Dec., Tab 7, ¶ 23 (consumer spent over $25,000 for
Defendants’ trainings and eventually had to refinance his home mortgage).
220
221
A separate basis for liability exists based on claim substantiation. On this theory, earnings
representations are considered deceptive under Section 5(a) of the FTC Act if the seller lacked
substantiation to support the representations at the time they were made. E.g., FTC v. Tashman,
318 F.3d 1273, 1277 (11th Cir. 2003) (“[defendant] had no basis for the representations it
made”); FTC v. Ivy Capital, Inc., No. 11-CV-283 JCM (GWF), 2013 WL 1224613, at *8 (D.
Nev. Mar. 26, 2013) (“Courts have long held that unsubstantiated claims of high potential
earnings, even without specific figures, are deceptive under the [FTC A]ct.”), aff’d in rel. part,
616 F. App’x 360 (9th Cir. 2015). Here, because less than 10% of consumers conducted a
profitable real estate transaction and less than 5% made more money than they paid for training,
Defendants could not have had evidence to substantiate their earnings claims. See supra notes
64, 65 and accompanying text. Moreover, Defendants’ own records undermine their
representations. While the Nudge Enterprise offers to reimburse consumers for the cost of the
Workshop if they complete a profitable (“net cash flow”) transaction within either three or six
months, the enterprise has reported that only about 1% of consumers who paid to attend a
Workshop received the tuition reimbursement. See supra note 66 and accompanying text.
61
(ii) Defendants Misrepresent the Products and Services Provided
(a) Defendants Misrepresent the Training Packages
Defendants claim that consumers who purchase the training packages will receive:
(1) transactional funding and a “proof of funds” letter to help them conduct real estate deals; 222
(2) access to specialized software that allows users to find properties at discounted prices and
“automates” the deal analysis; 223 and (3) step-by-step training and personalized mentoring to
conduct real estate deals. 224 These representations are misleading and false.
Even though Defendants repeatedly promise to provide transactional funding which they
claim will enable consumers to conduct real estate deals, in actuality, Defendants only provide
this funding under circumstances that are so restrictive as to render this purported benefit illusory
in practice. To receive funding, a consumer has to conduct a wholesaling transaction – in which
the consumer signs a contract to buy a property and contemporaneously finds a buyer to assume
that contract (or to sign a parallel contract to repurchase the property from the consumer) – and
Defendants provide funding only after the end buyer places the purchase money into escrow. 225
At that point, funding from Defendants would have little, if any, practical benefit. Defendants’
claim that their “proof of funds” letter helps facilitate deals is similarly hollow, because unlike a
proof of funds letter from a bank confirming cash on hand, Defendants’ version is more like a
“pre-approval” letter in which a lender agrees to loan money subject to underwriting approval. 226
222
See supra notes 21-23, 30, 37, 40, 44-46, 50, 53-55 and accompanying text.
223
See supra notes 101, 107, 121 and accompanying text.
224
See supra notes 21, 24, 30, 41, 43, 56, 72-76, 115, 122, 131, 137 and accompanying text.
225
See supra notes 19, 20, 32-34, 39 and accompanying text.
226
See supra notes 36-38, 55. Consumers likewise receive neither “seed” money nor funding
from Seed Capital, which merely applies for additional credit cards on consumers’ behalf. See
supra notes 81, 82, 114-117, 119, 120 and accompanying text.
62
Defendants’ software product, sold as part of the Advanced Training, does not enable
consumers to find undervalued, distressed properties and does not “automate” the deal analysis,
as Defendants claim. Like many others of its kind, the software does provide publicly-filed
property information like sale price and foreclosure status, but it cannot automatically generate
accurate market values or enable users to readily identify and contact distressed sellers. 227
Defendants falsely claim that consumers who pay for training will receive individualized
guidance and step-by-step training on how to conduct real estate deals. Defendants typically
provide only superficial information and basic concepts that are not detailed enough to teach
consumers how to conduct an actual deal. 228 Less than 10% of consumers who purchase training
from Defendants are able to conduct a profitable real estate transaction, and less than 5% make
more money than they spend on training. 229 Even Defendants’ repeated focus on wholesaling as
a viable investment strategy is misleading, because Defendants do not explain the challenges in
finding a willing property seller, finding an end buyer interested in that property, and negotiating
the purchase and resale contemporaneously, nor do they explain the financial risks if the
consumer utilizes a short-term, high interest loan and the resale falls through. 230
(b) Defendants Misrepresented the Property Investments
As discussed in Section II.A(4), Defendants induced consumers to purchase Advanced
Training, in part, in order to gain access to so-called “Buying Summits” (or “Investor Expos”),
which were three-day events in Las Vegas where consumers supposedly could purchase
227
See supra notes 102, 103, 112, 128 and accompanying text.
228
See supra notes 64, 65, 67, 97-101, 128 and accompanying text.
229
See supra notes 64-66, 139 and accompanying text.
230
63
favorable properties at discounted prices. 231 At these events, Defendants presented the properties
as turnkey, renovated investments priced below their market value. 232 These properties were
distantly-located in states around the country, but Defendants pressured consumers to purchase
them on-the-spot, sight-unseen based on Defendants’ descriptions at the buying events. 233
Defendants’ representations about the condition and value of the properties were false.
Properties often needed repairs (e.g., missing front door, deteriorated roof, damaged driveway,
broken furnace) or had building code violations that had to be corrected. 234 Defendants typically
sold (or brokered) properties at inflated prices and, at times, used data from their own sales of
other properties and cherry-picked comparables to portray those prices as below market value. 235
Defendants encouraged consumers to pay for these properties with their retirement funds
or by financing part of the purchase price with interest-only loans through Defendants’ affiliated
lending company. 236 Because Defendants misrepresented the value and condition of the
properties, consumers in numerous instances lost their retirement savings or ended up heavily in
debt, saddled with interest-only loans and balloon payments they could not afford to make. 237
Defendants insulated themselves from the risk associated with extending financing to
consumers purchasing these overpriced properties by selling the loan notes (or “trust deeds”)
231
232
See supra notes 143, 144 and accompanying text.
233
234
235
See supra notes 143, 144, 160-165 and accompanying text.
236
237
64
they originated to other consumers, pitching them as safe investments. 238 In fact, because front-
end consumers purchased the properties securing the trust deeds at inflated prices, the trust deeds
were underwater, and recourse to enforce them in the event of default is therefore limited. 239
(c) Defendants’ Product and Service Misrepresentations Are Deceptive
Defendants promise services they do not actually provide through their training packages,
as described in Section III.B(2)(a)(ii)(a) above. They also misrepresented the value and
condition of the properties they sold (or brokered) and the risks associated with the trust deeds
secured by those properties, as described in Section III.B(2)(a)(ii)(b) above. These
misrepresentations are both likely to mislead ordinary consumers and material to the buying
decision and, therefore, violate the FTC Act and the CSPA. See generally FTC v. Bay Area Bus.
Council, Inc., No. 02 Civ. 5762, 2004 WL 769388, at *11 (N.D.Ill. Apr. 9, 2004) (granting
summary judgment against “Defendants [who] sold a product and failed to deliver that product”),
aff’d, 423 F.3d 627 (7th Cir. 2005); FTC v. Minuteman Press, 53 F. Supp. 2d 248, 258 (E.D.N.Y.
1998) (“misrepresentations [that] tend to bear directly on the economic viability of the
transaction under consideration … are both likely to deceive and material”); FTC v. Career
Assistance Planning, Inc., No. 96 Civ. 2187, 1996 WL 929696, at *2-3 (N.D. Ga. Sept. 19,
1996) (granting summary judgment against principals of company that promised individualized
scholarship information but delivered only generalized, often outdated scholarship lists). For
these reasons, Plaintiffs are likely to succeed on Count Two and Count Six of the Complaint.
(iii) Defendants Induce Consumers To Disclose Their Personal Financial

Information and Extend Their Available Credit Through False Pretenses
During the seminars and telemarketing calls, Defendants induce consumers to disclose
238
65
their personal financial information and to extend their available credit by misrepresenting the
purpose for doing so. For example, at the Workshops, Defendants tell consumers to complete
financial worksheets including a “Private Consultation Questionnaire” in order to receive a
tailored “blueprint” and “set a goal.” 240 Defendants also encourage consumers to increase their
existing credit card limits and to open new credit card accounts (characterized as additional
“funding”) through Seed Capital in order to have funds available to conduct real estate deals. 241
Both of these stated reasons are false. In fact, Defendants use consumers’ financial
information to determine how much additional training consumers can afford to buy, 242 and the
additional credit is designed to ensure that consumers have the means to purchase the more
expensive training packages. 243 These misrepresentations are likely to mislead consumers into
disclosing their personal financial information and extending their credit, and they are material
because they concern the purpose of a transaction. See FTC v. Lights of Am., Inc., No. SACV10-
01333 JVS (MLGx), 2013 WL 5230681, at *41 (C.D. Cal. Sept. 17, 2013) (information about
purpose is material). Therefore, Plaintiffs are likely to succeed on Counts Three and Seven.
b. Defendants Have Violated the Telemarketing Sales Rule
Defendants are “sellers” and “telemarketers” engaged in “telemarketing” as defined by
the TSR, 16 C.F.R. §§ 310.2(dd), (ff), and (gg). 244 The TSR prohibits sellers and telemarketers
239
240
See supra notes 105, 118-120 and accompanying text.
241
See supra notes 77-79, 117-120 and accompanying text.
242
See supra notes 68, 89, 132-135 and accompanying text.
243
See supra notes 80-82, 135 and accompanying text. Most consumers pay for training using
credit cards. Isaacson Report, Tab 30, ¶ 83 (66%-72% of consumers, depending on the training).
244
The TSR defines “seller” as “any person who, in connection with a telemarketing transaction,
provides, offers to provide, or arranges for others to provide goods or services to the customer in
66
from “[m]isrepresenting, directly or by implication, in the sale of goods or services … [a]ny
material aspect of the performance, efficacy, nature, or central characteristics of goods or
services that are the subject of a sales offer.” Id. § 310.3(a)(2)(iii).
As discussed in Section II.A(3) above, Defendants sold one-on-one coaching packages
(called “Protégé” or “Inner Circle”) to existing customers by telephone, claiming that buyers
would receive one-on-one training and coaching and would complete profitable real estate
transactions. 245 Here, too, consumers received only general information and were not able to
complete profitable deals. 246 Therefore, Plaintiffs are likely to succeed on Count Four.
c. Defendants Violate The CSPA
The Nudge business model is deceptive, and Nudge implements it by making
misrepresentations. Nudge tells consumers they are likely to make large sums of money using
the Nudge model to fix and flip real estate. 247 The reality is that only a small percentage of
consumers make money. 248 It is a deceptive act or practice violative of the CSPA to indicate that
a product or service has performance characteristics or benefits, if it does not, or that the product
exchange for consideration.” 16 C.F.R. § 310.2(dd). The TSR defines “telemarketer” as “any
person who, in connection with telemarketing, initiates or receives telephone calls to or from a
customer or donor.” Id. § 310.2(ff). The TSR defines “telemarketing,” in relevant part, as “a
plan, program, or campaign which is conducted to induce the purchase of goods or services or a
charitable contribution, by use of one or more telephones and which involves more than one
interstate telephone call.” Id. § 310.2(gg). Response sells training products (in particular, the
“Protégé” and “Inner Circle” programs) through telemarketing calls on behalf of the Corporate
Defendants. See supra note 131 and accompanying text. Because Response is part of a common
enterprise with Nudge and BuyPD, see Section III.C infra, all three are responsible for the
telemarketing violations. FTC v. Tax Club, Inc., 994 F. Supp. 2d 461, 470 (S.D.N.Y. 2014).
245
246
247
See supra notes 51, 63, 71, 73, 74, 76 and accompanying text.
248
67
or service is of a particular standard or quality if it is not. Utah Code §§ 13-11-4(2)(b), (c).
The CSPA provides that it is to be construed liberally to promote the protection of
consumers from suppliers who commit deceptive and unconscionable sales practices and to make
state regulation of consumer sales practices not inconsistent with the policies of the FTC Act
relating to consumer protection. Id. §§ 13-11-2(2), (4). As both the CSPA and the FTC Act
prohibit deceptive conduct, this Court should interpret them similarly.
The CSPA also prohibits a seller from engaging in unconscionable acts or practices. Id. §
13-11-5. Nudge referred its consumers to Seed Capital under the pretense that the money would
be used to start the consumers’ real estate ventures. 249 Seed Capital helped consumers apply for
new credit cards and instructed them to include income figures on the applications that included
projected real estate income of . 250 Seed Capital would then
when the consumers obtained the new credit cards. 251 This conduct is unconscionable.
d. Defendants Violate BODA
A “business opportunity,” also called an “assisted marketing plan,” is a combination of
goods and services sold to consumers purportedly to enable them to start a business and derive
income. Id. §§ 13-15-2(1), (2). The Utah legislature saw the potential for consumer abuse and
harm in such transactions, and enacted BODA, which requires sellers of assisted marketing plans
to a) file information with the Division, including, among other things, marketing materials,
previous purchasers’ income results, and criminal histories of principals; and b) provide that
249
See supra notes 78, 79, 116, 117, 119, 120 and accompanying text.
250
251
68
information and additional disclosures to consumers. Id. §§ 13-15-4, 5.
Nudge sold assisted marketing plans. It did not file information required by BODA with
the Division and did not provide consumers with information and disclosures required by
BODA. 252 Most importantly, Nudge does not disclose the percentage of consumers who have
actually made money using its system, and instead, falsely claims it does not offer a business
opportunity. 253 BODA requires suppliers who make earnings representations to provide a
disclosure in not less than 12 point boldface type saying:
CAUTION
No guarantee of earnings or ranges of earnings can be made. The number of

purchasers who have earned through this business an amount in excess of the
amount of their initial payment is at least ___ which represents ___% of the
total number of purchasers of this business opportunity.
Id. §§ 13-15-4, 5.
If there is one piece of information any consumer would need before spending tens of
thousands of dollars on Nudge’s products and services, it is information about the success of
prior consumers. Nudge’s failure to provide this information is part and parcel of its deceptive
business model. If it told consumers at the free Preview Event that the final cost of training
would be in the tens of thousands of dollars and that fewer than 5% of students would make back
the cost of their investment, Nudge could not succeed.
An assisted marketing plan means the sale or lease of any products, equipment, supplies,
or services that are sold to the purchaser upon payment of an initial required consideration of
252
The Division’s database of registered business opportunity sellers yields no matching results
for any of the Defendants (https://dcp.utah.gov/registered.html, last searched October 29, 2019).
253
The required disclosure language is not present in Defendants’ purchase contracts. E.g.,
Sanchez Dec., Tab 3, Ex. B at FTC-PI 563-66; Khuong Dec., Tab 5, Exs. A, B at FTC-PI 807-
811; Gonzalez Dec., Tab 10, Ex. A at FTC-PI 2263-66; Kling Dec., Tab 14, Exs. B, H at FTC-PI
69
$500 or more for the purpose of enabling the purchaser to start a business, when the seller
represents that the purchaser will derive income that exceeds the price paid. Id. § 13-15-
2(1)(a)(iv). Nudge made such earnings representations about their products and services, for
which they charged consumers between $1,147 and tens of thousands of dollars. 254 Over 92% of
the Nudge consumers surveyed indicated that Nudge’s representatives said or suggested they
would earn more money from investing in real estate than they would pay for the program. 255
In addition, BODA disclosures require a cooling off period. A seller must provide the
mandated information at least ten days before a purchase. Id. § 13-15-5. Utah’s Legislature
determined that ten days would give consumers a chance to consider their purchase outside the
high-pressure sales meetings. Nudge does not provide this cooling off period. 256
These violations of BODA are not fact-intensive. Nudge made earnings representations,
it did not register, it did not provide disclosures, and it failed to provide a cooling off period.
The Division is likely to succeed on the merits of its BODA claim.
3. The Balance of Equities Favors Preliminary Injunctive Relief Which Serves

the Public Interest
The balance of equities weighs in favor of the requested relief because there is a
compelling public interest in halting Defendants’ deceptive scheme to take money from
consumers trying to invest in real estate. “When a district court balances the hardships of the
public interest against a private interest, the public interest should receive greater weight.”
Skybiz.com, 2001 WL 1673645, at *8 (citing FTC v. Affordable Media, LLC, 179 F.3d 1228,
3442, 3529; Muchowski Dec., Tab 18, Exs. A, E at FTC-PI 4354-59, 4442-43.
254
See supra notes 3-9, 42, 68, 134, 214-217 and accompanying text.
255
256
See supra notes 252, 253.
70
1236 (9th Cir. 1999)); see World Travel Vacation Brokers, 861 F.2d at 1029 (same). Here, the
Defendants have been deceptively marketing their bogus training packages since at least 2012
(and they deceptively sold or brokered properties until 2017). 257 From 2014 through 2017 alone,
they took in over $400 million in total from tens of thousands of consumers. 258 Defendants’
products are expensive, making the injury to consumers individually and in the aggregate
enormous. 259 The requested relief is critical to prevent future harm to consumers and to ensure
that there are assets available for redress to those who already have been deceived. By contrast,
Defendants have no legitimate interest in continuing to engage in deceptive practices. World
Wide Factors, 882 F.2d at 347 (affirming district court finding that “there is no oppressive
hardship to defendants in requiring them to comply with the FTC Act, refrain from fraudulent
representation or preserve their assets from dissipation or concealment”). An injunction that
stops Defendants’ deceptive conduct is therefore necessary and in the public interest.
4. Defendants Have Caused Irreparable Harm to Consumers
An injunction is warranted even under the traditional common law equity standard
because Defendants have caused and are causing consumers irreparable harm. 260 Consumers
257
See supra notes 3-9, 160 and accompanying text; Larsen Dec, Tab 23, ¶ 6.
258
See supra note 182. This $400 million figure does not include property sales revenue. Id.
259
See supra notes 3-9, 54 ($1,147 for Workshop), 68 ($19,000 to $40,000 for Advanced
Training), 134 (up to $20,000 for Protégé/Inner Circle/coaching), 182 and accompanying text.
260
A party seeking preliminary relief under the traditional common law standard must show that:
“(1) the movant is substantially likely to succeed on the merits; (2) the movant will suffer
irreparable injury if the injunction is denied; (3) the movant’s threatened injury outweighs the
injury the opposing party will suffer under the injunction; and (4) the injunction would not be
adverse to the public interest.” Greenwood, 2019 WL 3717679, at *1 (citation and quotation
marks omitted). Because the FTC brings this action to enforce laws protecting the public interest
and vindicate consumer harm, the third factor subsumes the fourth in this matter as reflected in
the analysis set forth in Section III.B(3) above. Additionally, if instead of requiring “some
chance” of likely success on the merits, see Section III.B(1) supra, the Court were to require a
71
who fall victim to Defendants’ deceptive scheme suffer a variety of harms that cannot be cured
adequately by a future monetary payment, including: bankruptcy; 261 drained retirement
accounts; 262 damaged credit ratings; 263 and disclosure of their personal financial information. 264
These are precisely the sorts of injuries courts have found irreparable. See generally, e.g., Brier
Creek Integrated Pain & Spine PLLC v. U.S. Dep’t of Health & Human Servs., No. 19-CV-300-
BR, 2019 WL 4207408, at *7 (E.D.N.C. Sept. 5, 2019) (“threat of bankruptcy”); Perez v.
Coffman, No. 15-CV-1394-JPS, 2016 WL 7168113, at *3 (E.D. Wis. Dec. 8, 2016) (retirees
denied access to retirement funds for long periods); Joint Tech., Inc. v. Weaver, No. CIV-11-846-
M, 2011 WL 6888633, at *5 (W.D. Okla. Dec. 29, 2011) (unauthorized disclosure of personal
tax information); Countrywide Home Loans, Inc. v. Arb. Alliance Int’l, LLC, No. 204CV152 TS,
2004 WL 987131, at *8 (D. Utah Apr. 14, 2004) (“potential damage to … credit ratings”). Even
the harm from prior overpriced property purchases, including resale difficulties and building
code violations, and underwater trust deeds continues to burden consumers. 265 See generally K-
Mart Corp. v. Oriental Plaza, Inc., 875 F.2d 907, 915 (1st Cir. 1989) (injunctions often are
appropriate to protect interests in real estate, which “has long been thought unique”).
Moreover, the scope of the consumer injury is massive and far exceeds the funds likely
available from Defendants for consumer redress. Accordingly, any future consumers deceived
“clear showing” of likely success and favorable equities, see generally SEC v. Traffic Monsoon,
LLC, 245 F. Supp. 3d 1275, 1296 (D. Utah 2017), aff’d, 913 F.3d 1204 (10th Cir. 2019), the
compelling evidence discussed in Section III.B(2) above would satisfy this heightened standard.
261
262
263
264
See supra notes 70, 89, 105, 118-120, 132-135 and accompanying text.
265
See supra notes 143, 144, 151, 160-167 and accompanying text.
72
by Defendants’ misrepresentations could not be made whole through a monetary recovery.
Finally, Defendants have shown a willingness to silence consumers
. 266 If this activity continues, it could
frustrate Plaintiffs’ ability to locate additional witnesses willing to participate in this case.
C. THE CORPORATE DEFENDANTS ARE SUBJECT TO JOINT AND

SEVERAL LIABILITY AS A COMMON ENTERPRISE
If the “structure, organization, and operation” of a business involving multiple entities
reveal a “maze of interrelated companies,” the FTC Act disregards the corporate form, and each
entity is jointly and severally liable for the actions of the group as a “common enterprise.”
E.M.A. Nationwide, 767 F.3d at 637; FTC v. Bay Area Bus. Council, Inc., 423 F.3d 627, 635 (7th
Cir. 2005); LoanPointe, 2011 WL 4348304, at *10. To determine whether a common enterprise
exists, courts consider such factors as common ownership and control, common employees,
shared offices, comingled funds, and coordinated or unified advertising. E.M.A. Nationwide, 767
F.3d at 637; LoanPointe, 2011 WL 4348304, at *10.
The Corporate Defendants operate as an integrated business. Response sells the
training; 267 BuyPD sells ancillary business services (e.g., entity formation and asset protection
products) and, in prior years, properties and trust deeds at seminars marketed by Response; 268
and Nudge serves as the holding company for the Individual Defendants through which profits
from both Response and BuyPD are pooled and distributed (and, at times, noted as “profit
shares”). 269 The Corporate Defendants’ employees sell both the trainings and the ancillary
266
See supra notes 152, 169 and accompanying text; Section II.B.
267
268
269
73
business services (and, in prior years, properties) through a common, escalating sales funnel,
beginning with solicitations to attend the free Preview Events, then the Workshops, then
Advanced Training (including Buying Summits/Investor Expos), then Protégé/Inner Circle
coaching and beyond. 270 The Corporate Defendants operate out of the Lindon Building, 271
comingle funds, 272 and are managed and controlled by some combination of the Individual
Defendants (at least two of whom, Smith and Finnegan, have referred to themselves as
“partners” in “Nudge”) including at . 273 This
organizational and operational integration demonstrates that Response, BuyPD, and Nudge are a
common enterprise and, therefore, jointly and severally responsible for the actions of the group.
D. THE INDIVIDUAL DEFENDANTS ARE PERSONALLY LIABLE
To enjoin an individual based on corporate conduct, the FTC must show that that
individual participated directly in the deceptive acts or practices or had the authority to control
them. Freecom Commc’ns, 401 F.3d at 1204; LoanPointe, 2011 WL 4348304, at *10. For
monetary relief, the FTC also must show: (i) that the individual had some knowledge of the
deceptive acts or practices; and (ii) reliance by consumers generally. Freecom Commc’ns, 401
F.3d at 1204, 1207; Your Yellow Book, 2014 WL 4187012, at *5.
The knowledge requirement is construed broadly. It is satisfied by proof of either “actual
knowledge of material misrepresentations, reckless indifference to the truth or falsity of such
misrepresentations, or an awareness of a high probability of fraud along with an intentional
avoidance of the truth.” Freecom Commc’ns, 401 F.3d at 1207 (citation and quotation marks
270
See supra notes 13, 25, 42, 54, 68, 131, 142, 143, 149, 150 and accompanying text.
271
272
74
omitted); see Skybiz.com, 2001 WL 1673645, at *11 (same). Courts have considered “awareness
of consumer complaints … sufficient to establish knowledge.” Lights of Am., 2013 WL
5230681, at *50; e.g., E.M.A. Nationwide, 767 F.3d at 636; FTC v. MacGregor, 360 F. App’x
891, 894-95 (9th Cir. 2009). More generally, courts can infer knowledge and control based on
an individual’s degree of involvement in the business affairs of the company. Freecom
Commc’ns, 401 F.3d at 1205 (“substantial inference” of control where defendant was controlling
shareholder of closely-held entities); LoanPointe, 2011 WL 4348304, at *10 (“assuming the
duties of a corporate officer” demonstrates participation and control); Skybiz.com, 2001 WL
1673645, at *11 (“participation in corporate affairs is probative of knowledge”).
All five Individual Defendants participated in the deceptive practices of the enterprise.
For example, Sanderson and Smith
. 274 All five also
. 275
Each Individual Defendant also has held positions of control within the enterprise. Smith
and Finnegan have held senior management titles at Response, 276 Poelman has held a senior
management title at BuyPD, 277 and Sanderson has held senior management titles at both
Response and BuyPD. 278 Poelman, Smith, and Finnegan each also signed corporate banking
273
274
275
276
277
278
75
resolutions or applications for bank and merchant accounts used by the enterprise to process and
receive payments from consumers. 279 Although Lewis does not have a formal corporate title, he
does have control over the business. For example, Lewis and Poelman each received over $10
million from the Nudge Enterprise, more than any other Individual Defendant. 280 Also, Lewis’s
family members were signatories on Response and BuyPD bank accounts, 281 Lewis spoke at
weekly management meetings with enterprise staff, 282 and the enterprise used Lewis’s credit
card to pay for the hotel that hosted the Workshop attended by a Division investigator. 283
The Individual Defendants also had knowledge of the deceptive practices. For example,
. 284
. 285 Moreover, since 2012, the
Division has forwarded dozens of consumer complaints to the Nudge Enterprise (or its
attorneys), 286 and since 2015, over twenty consumers have filed at least eight lawsuits against
Defendants in federal and state courts asserting claims under the Racketeer Influenced and
Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968, and state law fraud claims. 287 The lawsuits
279
280
281
282
283
See supra note 92 and accompanying text. Finnegan booked that hotel to host the event. Id.
284
285
286
287
Id.
76
contain similar allegations that Defendants falsely induce consumers to purchase a series of
increasingly expensive seminars and then properties at inflated prices. 288 Given these
, the customer complaints and lawsuits, and particularly given their
status as senior managers and control persons, the Individual Defendants knew, or should have
known, that the Nudge Enterprise was engaged in deceptive practices.
Finally, while reliance is a component of monetary relief, the FTC does not have to prove
subjective reliance by individual consumers because “such a requirement would thwart effective
prosecutions of large consumer redress actions and frustrate the statutory goals” of the FTC Act.
Freecom Commc’ns, 401 F.3d at 1205-06. Instead, reliance is presumed if: “(1) the business …
made material misrepresentations likely to deceive consumers, (2) those misrepresentations were
widely disseminated, and (3) consumers purchased the [business’s] products.” Id. at 1205; see
FTC v. COORGA Nutraceuticals, 201 F. Supp. 3d 1300, 1313 (D. Wyo. 2016) (same).
Defendants’ false earnings claims and misrepresentations about their products and
services, discussed in Sections III.B(2)(a)(i) to III.B(2)(a)(iii), were widely disseminated during
frequent seminars staged nationwide 289 and during telemarketing calls to consumers across the
country. 290 Tens of thousands of consumers purchased training from Defendants, who took in
over $400 million in revenue, including $75 million from sales of the Workshop, $197 million
288
Id.
289
E.g., Baisley Dec., Tab 1, ¶¶ 3, 4, 6 (New York, Pennsylvania, Nevada); Stratton Dec., Tab 2,
¶¶ 7, 13, 24 (California); Cortes Dec., Tab 3, ¶¶ 4, 6, 30, 42 (Florida, Utah); Page Dec., Tab 4,
¶¶ 4, 5, 9 (Indiana, Nevada); Schultz Dec., Tab 6, ¶¶ 4, 6, 18, 20 (Michigan, Nevada); Adiwidjaja
Dec., Tab 7, ¶¶ 4, 13 (California); Kreiner Dec., Tab 8, ¶¶ 5, 8, 20, 47 (Michigan, Nevada);
Norris Dec., Tab 9, ¶¶ 3, 5, 25 (Texas); Gonzalez Dec., Tab 10, ¶¶ 4, 5, 9 (Texas); Kling Dec.,
Tab 14, ¶¶ 4, 10, 29, 46 (California, Utah).
290
E.g., Cortes Dec., Tab 3, ¶¶ 1, 38 (Florida); Page Dec., Tab 4, ¶¶ 1, 8 (Kentucky); Gonzalez
Dec., Tab 10, ¶¶ 1, 11 (Texas); Kling Dec., Tab 14, ¶¶ 1, 38 (California).
77
from sales of Advanced Training packages, and $95 million from telemarketing sales of the
Inner Circle/Protégé programs and other services. 291 Reliance, therefore, is presumed.
The Individual Defendants participated in the deceptive practices of the Nudge
Enterprise. They had knowledge of and authority to control those practices. Tens of thousands
of consumers paid hundreds of millions of dollars for Defendants’ products, demonstrating
reliance on widespread deceptive claims. Therefore, Lewis, Poelman, Smith, Finnegan, and
Sanderson are jointly and severally liable for the deceptive practices of the Nudge Enterprise.
E. AN ASSET FREEZE IS NECESSARY TO PRESERVE EFFECTIVE RELIEF
Granting an asset freeze is a matter of discretion. FTC v. IAB Mktg. Assocs., LP, 746
F.3d 1228, 1232-34 (11th Cir. 2014); World Travel Vacation Brokers, 861 F.2d at 1031. Some
courts recognize that where, as here, a business is permeated by fraud or deceit, assets may be
dissipated during the pendency of the case, thereby justifying an asset freeze to preserve those
funds for final relief. E.g., SEC v. Manor Nursing Ctrs., Inc., 458 F.2d 1082, 1106 (2d Cir.
1972); FTC v. Int’l Comp. Concepts, Inc., No. 94CV1678, 1994 WL 730144, at *16 (N.D. Ohio
Oct. 24, 1994). Other courts have granted asset freezes where there exists a “concern” or
“possibility” of dissipation. E.g., FTC v. Simple Health Plans LLC, 379 F. Supp. 3d 1346, 1364
(S.D. Fla. 2019); In re Sanctuary Belize Litig., No. 18-3309, 2019 WL 3714392, at *27 (D. Md.
Aug. 2, 2019); cf. FTC v. John Beck Amazing Profits, LLC, No. 09-cv-4719-FMC-FFMx, 2009
WL 7844076, at *15 (C.D. Cal. Nov. 17, 2009) (requiring “likelihood” of dissipation “or other
inability to recover”). Still others recognize that “[d]issipation does not necessarily mean that
assets will be spirited away in secret” and have granted asset freezes where the available funds
would be insufficient to compensate consumer victims. FTC v. World Patent Mktg., Inc., No.
291
See supra note 182. The $400 million figure does not include property sales revenue. Id.
78
17-cv-20848-GAYLES, 2017 WL 3508639, at *17 (S.D. Fla. Aug. 16, 2017); e.g., FTC v. IAB
Mktg. Assocs., LP, 972 F. Supp. 2d 1307, 1313 n.3 (S.D. Fla. 2013), aff’d, 746 F.3d 1228 (11th
Cir. 2014). Either way, the Court may order an asset freeze where the probability of success is
“better than fifty percent.” Traffic Monsoon, 245 F. Supp. 3d at 1296 (citations omitted).
In FTC v. Elite IT Partners, Chief Judge Shelby recently summarized factors relevant to
the Court’s evaluation of a request to release receivership funds for payment of attorney’s fees,
including: (i) the strength of the evidence supporting the injunction and asset freeze; (ii) the
purpose and terms of the injunction; (iii) the source of the restricted funds (i.e., whether they
derive from the conduct in dispute); (iv) the amount needed to redress consumer injury compared
to the amount of funds currently available; and (v) Defendants’ access to alternate funds and
efforts to earn, borrow, or otherwise obtain such funds. No. 19-cv-125, 2019 WL 1568400, at
*1-2 (D. Utah Apr. 5, 2019). 292 These factors logically inform the determination of whether to
impose an asset freeze in the first instance, and each weighs squarely in Plaintiffs’ favor:
• First, Defendants engaged in a years-long, widespread deceptive scheme that bilked

tens of thousands of consumers out of hundreds of millions of dollars. The evidence
Plaintiffs already have gathered is compelling and includes: declarations and recorded
testimony from 17 consumers; testimony from three former Nudge employees;
undercover recordings of two seminars; analysis by a real estate fraud expert; analysis
by a real estate investment expert; and a consumer experience survey showing that
consumers were promised services, training, and results that they did not receive. 293
• Second, the frozen funds would be used to redress injured consumers.
• Third, the asset freeze seeks to preserve ill-gotten gains generated by Defendants’
deceptive practices (which totaled $400 million from 2015 through 2017 alone,
including $30 million in profits distributed to the Individual Defendants). 294
292
The Court also considered the likelihood of a subsequent criminal case and the reasonableness
of the fee request in view of prevailing market rates and the complexity of the case. Id.
293
See supra note 1.
294
79
• Fourth, given the massive scale of Defendants’ scheme, the available funds likely are
insufficient to redress the injury to consumers.
• Fifth, Defendants appear to have access to alternate funds because they transferred
$2.4 million to their attorneys at Invictus Law, located within Nudge’s Lindon
Building, in early 2018 (soon after learning that the FTC was investigating them). A
portion of these funds could be excluded from an asset freeze order, as appropriate. 295
Therefore, an asset freeze is necessary and appropriate to preserve funds for effective final relief.
F. IMMEDIATE ACCESS TO RECORDS, FINANCIAL DISCLOSURE, AND

EXPEDITED DISCOVERY ARE WARRANTED AND PROPER
In order to locate documents and assets related to the deceptive conduct at issue,
Plaintiffs request immediate access to the Corporate Defendants’ business records, financial
disclosure, and expedited discovery. Courts may depart from normal discovery procedures and
fashion discovery by order to meet particular needs in particular cases. Fed. R. Civ. P. 1, 26(d);
see also Porter, 328 U.S. at 398 (added flexibility in cases involving the public interest).
The prompt and full disclosure of the scope and financial status of Defendants’ business
operations will help to ensure that the Court is fully advised about: (1) the full range and extent
of Defendants’ law violations; (2) the extent of the Individual Defendants’ participation; (3) the
identities of injured consumers; (4) the total amount of consumer injury; and (5) the nature,
extent, and location of Defendants’ assets. Any hardship to Defendants would be temporary and
greatly outweighed by the public’s interest in preserving evidence and unlawfully obtained
assets. Courts in this District have granted preliminary relief that includes these provisions. 296
IV. CONCLUSION
For these reasons, Plaintiffs respectfully request that the Court grant the requested TRO
and order Defendants to show cause why a preliminary injunction should not issue.
295
80

2019 11 05 - Motion For Restraining Order and Injunction To Freeze Assets (FTC V Nudge, Ryan Poelman, Brandon Lewis, Phillip W. Smith, Shawn L. Finnegan, and Clint R. Sanderson

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2019 11 05 - Motion For Restraining Order and Injunction To Freeze Assets (FTC V Nudge, Ryan Poelman, Brandon Lewis, Phillip W. Smith, Shawn L. Finnegan, and Clint R. Sanderson

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Case 2:19-cv-00867-RJS Document 6 Filed 11/05/19 Page 1 of 90

Darren H. Lubetzky Robert G. Wing (4445)

UNITED STATES DISTRICT COURT

FEDERAL TRADE COMMISSION, and

v. PLAINTIFFS’ MOTION ON NOTICE

YANCEY EVENTS, YANCEY, LLC, and

BUYPD, LLC, a Utah limited liability

BRANDON B. LEWIS, individually and as

RYAN C. POELMAN, individually and as a

PHILLIP W. SMITH, individually and as a

SHAWN L. FINNEGAN, individually and

CLINT R. SANDERSON, individually and

I. INTRODUCTION AND REQUESTED RELIEF ................................................................. 1

II. FACTUAL BACKGROUND ................................................................................................ 7

A. DEFENDANTS’ DECEPTIVE PRACTICES ............................................................... 7

1. The Preview Events ................................................................................................ 8

B. DEFENDANTS’ EFFORTS TO SILENCE WITNESSES.......................................... 47

1. Rick Ruby ............................................................................................................. 47

C. THE DEFENDANTS ................................................................................................... 50

1. The Corporate Defendants .................................................................................... 51

III. ARGUMENT ....................................................................................................................... 56

A. THE COURT HAS AUTHORITY TO GRANT THE REQUESTED RELIEF.......... 56

B. THE EVIDENCE JUSTIFIES PRELIMINARY RELIEF ........................................... 58

1. The Standard for Relief ......................................................................................... 58

c. Defendants Violate The CSPA......................................................................... 67

C. THE CORPORATE DEFENDANTS ARE SUBJECT TO JOINT AND

D. THE INDIVIDUAL DEFENDANTS ARE PERSONALLY LIABLE ....................... 74

E. AN ASSET FREEZE IS NECESSARY TO PRESERVE EFFECTIVE RELIEF ...... 78

F. IMMEDIATE ACCESS TO RECORDS, FINANCIAL DISCLOSURE, AND

IV. CONCLUSION .................................................................................................................... 80

Utah Code § 13-2-5(3) .................................................................................................................. 58

Fed. R. Civ. P. 1 ............................................................................................................................ 80

16 C.F.R. Part 310..................................................................................................................... 6, 56

S. Rep. No. 103-130, 1993 WL 322671 (1993) ............................................................................ 57

Vol. No. Tab(s) Exhibit Description Bates Range (FTC-PI)

9-10 14-15 Declaration of Sharon Kling (consumer) – 2 Parts 3422 – 4341

Excerpts of Investigational Hearing Testimony -- 4343.001 – 4343.024

11 18 Declaration of Rebecca Muchowski (consumer) 4346 – 4928

Declaration of Deirdre Mingo (consumer) – 2 4931 – 5982

Declarations from FTC and Utah Division of Consumer Protection Staff

14-17 23-26 Declaration of Daniel Larsen (DCP Commerce 5994 - 7518

REDACTED FOR PUBLIC FILING]

Declaration of Michael Marino (FTC 7521 - 7716

Declaration of Dr. Kenneth H. Kelly (FTC 7718 - 7810

Former Employee and Third-Party Declarations and Testimony

Excerpts of Investigational Hearing Testimony -- 5992.001 – 5992.017`

Excerpts of Investigational Hearing Testimony -- 8660 - 8665

Excerpts of Investigational Hearing Testimony -- 8667 - 8682

Expert Report of Dr. Bruce Isaacson / MMR 7941 – 8446

Expert Report of Douglas F. Pollock / 8449 - 8658

I. INTRODUCTION AND REQUESTED RELIEF

Corporate Defendants, “Defendants” or “Nudge”), 2 use television personalities from reality-style

trainings and other add-on products or services.

consumers to a Nevada company that applies

. Defendants then try to convince consumers to purchase one of the

resources, such as retirement funds.

Defendants continue to target consumers with telemarketing calls to induce additional

as a result of “underwater” mortgages originated by Defendants that are likely to default.

The consumer loss is widespread. A survey of Defendants’ customers conducted by an

transaction. Those records indicate just 1% of eligible customers were reimbursed.

Defendants’ illegal conduct is pervasive. Undercover recordings conducted by a Division

why a preliminary injunction should not issue against them.

II. FACTUAL BACKGROUND