United States District Court, E.D. New York
For United States of America, Plaintiff: Ann F. Entwistle, LEAD ATTORNEY, U.S. Department of Justice, Washington, DC; John Vagelatos, LEAD ATTORNEY, United States Attorneys Office, Brooklyn, NY.
For Christine Moussu, individually, and as an officer, director, or managing member of I.D. Marketing Solutions, Inc. and CLGE, Inc., I.D. Marketing Solutions, Inc., Defendants: Scott Lloyd Fenstermaker, The Law Offices of Scott L. Fenstermaker, P.C., New York, NY.
For Metro Data Management, Inc., doing business as Data Marketing Group, Ltd., Keitha Rocco, individually and as an Officer of Metro Data Management, Inc., Defendants: Carlo M. Fusco, LEAD ATTORNEY, C.M. Fusco Law Group, P.C., Westbury, NY.
OPINION & ORDER
Sandra J. Feuerstein, United States District Judge.
On November 19, 2014, plaintiff United States of America (" the Government") filed, inter alia : (1) a complaint against defendant CLGE, Inc. (" CLGE") and defendants Christine Moussu (" Moussu"), individually, and as an officer, director, or managing member of I.D. Marketing Solutions, Inc. (" I.D. Marketing") and CLGE; I.D. Marketing; Metro Data Management, Inc. (" MDM"), d/b/a Data Marketing Group, Ltd. (" DMG"); and Keitha Rocco, individually and as an officer of MDM (collectively, " the appearing defendants"), pursuant to the Anti-Fraud Injunction Statute, 18 U.S.C. § 1345 (" Section 1345"), seeking a temporary restraining order (" TRO"), preliminary injunction and permanent injunction enjoining the ongoing commission of criminal mail fraud in violation of 18 U.S.C. § 1341 by CLGE and the appearing defendants; and (2) an application pursuant to Rule 65 of the Federal Rules of Civil Procedure seeking a TRO and preliminary injunction (a) enjoining CLGE and the appearing defendants from (i) committing mail fraud, as defined by 18 U.S.C. § 1341, (ii) using the United States mails or causing others to use the mails to distribute: (A) any advertisements, solicitations, or promotional materials on behalf of CLGE, David Phild, Sandra Rochefort, Antonia Donera, Nicholas Chakan or any other actual or fictional individual or entity purporting to offer psychic, clairvoyant or astrological items or services for a fee; (B) any advertisements, solicitations, or promotional materials that represent, directly or indirectly, expressly or impliedly, that the recipient of the solicitation was specifically selected to receive the mailing based on a reason other than the fact that the recipient's name appears on a mailing list; (C) any advertisements, solicitations, or promotional materials that represent, directly or indirectly, expressly or impliedly, that services or items offered for purchase will, or could, improve the consumer's financial condition; or (D) any other false and misleading advertisements, solicitations, or promotional materials, (iii) receiving or causing to be delivered any incoming mail, at any address anywhere in the United States of America, which is responsive to the solicitations that are the subject of this action, or any other solicitations substantially similar thereto, (iv) selling or offering for sale any lists of consumers or mailing lists of any type compiled from consumers who have responded to solicitations bearing the names CLGE, David Phild, Sandra Rochefort, Antonia Donera, or Nicholas Chakan, and (v) performing " caging services, " including processing direct mail payments and orders, credit card processing, and check scanning, with regard to direct mail solicitations on behalf of CLGE, David Phild, Sandra Rochefort, Antonia Donera, Nicholas Chakan or any other individual or entity purporting to offer psychic, clairvoyant or astrological items or services for a fee; (b) directing CLGE, the appearing defendants, their agents, officers, and employees, and all other persons and entities in active concert or participation with them, to preserve all business, financial, accounting, and other records concerning the operations of CLGE, DMG, I.D. Marketing and any other corporate entity controlled by CLGE and the appearing defendants; and (c) authorizing the United States Postal Service (" USPS") to detain (i) all of CLGE's and the appearing defendants' incoming mail, at any address anywhere in the United States of America, which is responsive to the solicitations which are the subject of this action, or any others substantially similar thereto, and (ii) any advertisements, solicitations, and promotional materials which are the subject of this action and any substantially similar advertisements, solicitations, and promotional materials that are deposited into the United States mails by CLGE, the appearing defendants, their agents, officers, or employees, or any other persons or entities in active concert or participation with them. By order dated November 19, 2014, I, inter alia, (1) granted the branch of the Government's motion seeking a TRO against CLGE and the appearing defendants pending a hearing on its motion for a preliminary injunction; (2) directed CLGE and the appearing defendants to appear before me on December 1, 2014 at 11:00 a.m. to show cause why a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure should not be granted; (3) directed the Government to serve copies of that order, the complaint, and its motion papers by personal service or overnight mail upon CLGE and the appearing defendants on or before 5:00 p.m. on November 20, 2014; and (4) directed CLGE and the appearing defendants to serve and file any response to the application for a preliminary injunction on or before 3:00 p.m. on November 28, 2014. The Government served the documents by overnight mail upon CLGE on November 20, 2014, at approximately 4:15 p.m. (Government's Letter Motion dated December 2, 2014 [" Mot." ], Ex. A). In addition, on November 25, 2014, the Government served the same documents upon the New York Secretary of State, who is designated by law to accept service of process on behalf of CLGE, in accordance with Rule 4(h) of the Federal Rules of Civil Procedure. (Mot., Ex. B).
On November 25, 2014, the motion for a preliminary injunction was referred to the Honorable Gary R. Brown, United States Magistrate Judge, to hear and report. Upon the filing of motions by Moussu and I.D. Marketing to continue the preliminary injunction hearing, Magistrate Judge Brown converted the hearing into a telephone conference and ordered the Government to notify all parties of the change. On November 26, 2014, the Government served, inter alia, copies of the summons, complaint, Magistrate Judge Brown's electronic order entered on November 26, 2014, the TRO and order to show cause and all motion papers upon Jean Francois Bouillaguet, the President of CLGE, by International Priority shipping. (Mot., Ex. C). On November 28, 2014, the Government received confirmation that the documents had been delivered on that same date and had been signed for by " Bouillaguet." (Id.) In addition, the Government received a letter from counsel for Mr. Bouillaguet, albeit in French, confirming his receipt of the documents. (Mot., Ex. D).
All parties except CLGE appeared for the telephone conference before Magistrate Judge Brown on December 1, 2014 and consented to extend the TRO " indefinitely" provided that, as part of the extension, any party may request a preliminary injunction hearing after January 1, 2015 on fifteen (15) days notice. Pending before the Court is the Government's motion for a preliminary injunction against CLGE for its Mure to appear and show cause why a preliminary injunction should not be entered against it. CLGE has not filed any response or opposition to the Government's motion or otherwise appeared in this action to date. For the reasons set forth herein, plaintiff's motion for a preliminary injunction against CLGE is granted.
A. 18 U.S.C. § 1345
Section 1345(a)(1) provides, in relevant part, that " [i]f a person is-- (A) violating or about to violate this chapter [Chapter 63 of Part I of Title 18 of the United States Code entitled Mail Fraud and Other Fraud Offenses] * * *; the Attorney General may commence a civil action in any Federal Court to enjoin such violation." Section 1345(b) provides, in relevant part, that " [t]he court * * * may, at any time before final determination, enter such a restraining order or prohibition, or take such other action, as is warranted to prevent a continuing and substantial injury to the United States or to any person or class of persons for whose protection the action is brought. * * *"
" To support an application for a preliminary injunction under 18 U.S.C. § 1345, the Government must demonstrate that 'probable cause' exists to believe that the defendant is currently engaged or about to engage in a fraudulent scheme violative of either the mail, wire or bank fraud statutes * * *." United States v. William Savran & Assoc., Inc., 755 F.Supp. 1165, 1177 (E.D.N.Y. 1991); see also United States v. Belden, 714 F.Supp. 42, 45-46 (N.D.N.Y. 1987). Section 1345 authorizes injunctive relief so long as " the alleged fraudulent scheme is ongoing and there exists a threat of continued perpetration[.]" William Savran, 755 F.Supp. 1178.
B. Mail Fraud
A person commits mail fraud, in ...