ASSURANCE OF VOLUNTARY COMPLIANCE FOR SENSA PRODUCTS, LLC AND SENSA, INC.

Transcription

1 ST ATE OF FLORIDA OFFICE OF THE ATTORNEY GENERAL DEPARTMENT OF LEGAL AFFAIRS IN THE INVESTIGATION OF: AGENCY FILE NO. L SENSA PRODUCTS, LLC and SENSA, INC., RESPONDENTS.! ASSURANCE OF VOLUNTARY COMPLIANCE FOR SENSA PRODUCTS, LLC AND SENSA, INC. Pursuant to the provisions of Chapter 501, Part II, Florida Statutes, the Office of the Attorney General, Department of Legal Affairs, State of Florida ("Attorney Genera1'') has investigated the business practices of SENSA PRODUCTS, LLC, a limited liability company, and SENSA, INC., formerly known as INTELLIGENT BEAUTY, INC., a corporation (alternatively refened to as "RESPONDENTS"). I. ATTORNEY GENERAL'S ALLEGATIONS (WITHOUT ADMISSION OF WRONGDOING OR WRONGFUL INTENT) 1. Respondents, SENSA PRODUCTS, LLC and SENSA, INC., marketed and sold non-prescription dietary aids, nutritional supplements and/or other products, including, but not INITIALS _\\_/ l

2 limited to the weight-loss supplement named "SENSA" to consumers in Florida and throughout the United States and the world over the Internet via various websites and provided trial product offers to consumers relating to this product. 2. Beginning at least in January, 2010, the Office of the Attorney General alleges it became aware of complaints from consumers regarding the business practices of Respondents, SENSA PRODUCTS, LLC and SENSA, INC. The Office of:the Attorney General's investigation,. focused primarily on whether Respondents, SENSA PRODUCTS., LLC and SENSA, INC., engaged in negative option marketing to induce consumers to try SENSA:.on an initial trial basis without providing clear and conspicuous language notifying consumers of the negative option clause and/or its requirements; whethe( Re~pondents, SENSA PRODUCTS, LLC and SENSA, INC., failed to provide adequate mean,$,for consi,u:ners to cancel future automatic, monthly. ' shipments of the product sampled during the ~ee trial period as required by the terms of the trial t:. product offer/negative opti.ons clause; and whetl;ter as a result of the actions of Respondents, SENSA PRO.f)U(TS, LLC and SENSA, INC.,, consumers received automatic monthly shipments of SENSA and related charges. 3. On October 17, 2014,' _Respondents, SENSA PRODUCTS, LLC and SENSA, INC., entered into separat~ Assignment$ for.benefit of Creditors (ABC) proceedings in the State of California., :, 4. In entering ABC proceedings, Respondents, SENSA PRODUCTS, LLC and SENSA, INC., assigned all rights, title and interest in and to all of their assets to, respectively, Sensa Products (assignment for the benefit of creditors), LLC, a California limited liability company and Sensa (assignment for the benefit of creditors), LLC, a Calif9rnla limit.ed liability company 2 INITIALS -~'~---

3 (collectively, "ASSIGNEES"). Apart from the books and records of SENSA PRODUCTS, LLC and SENSA, INC., ASSIGNEES have no separate or independent knowledge relating to the allegations of the Office of the Attorney General or the business practices of SENSA PRODUCTS, :LLC and SENSA, INC. 5. To the best of their knowledge and understanding based Qn information available to them through the books and records ofsensa PRODUCTS, LLC and SENSA, INC., ASSIGNEES believe that SENSA PRODUCTS, LLC and S~NSA, INC., exclusive of any recoveries from fraudulent transfers or other recoveries a~c+inst third parties and/or insiders that the ASSIGNEES may obtain at some point in the : fut.ure, are insolvent, that their assets arc insufficient to satisfy the secured debt of Bank of America, (Secured Lender"), and that these businesses are permanently closed and conduct no business operations through ASSIGNEES or otherwise. ASSIGNEES' are winding-up the affairs of SENSA PRODUCTS, LLC and SENSA, INC., and payirtg the claims of creditors, in accordance with their respective priorities under applicable law ASSIGNEES, to the extent of their interests, are prepared to enter into this Assurance of Voluntary Compliance (hereafter referred to as fhe "AVC") on behalf of Respondents, SENSA PRODUCTS, LLC and SENSA, INC., without admitting to any wrongdoing and make no admission of any.violation of Florida Statute 50 l, Part II, or any other state or federal law, statute or regulation on the part of Respondents, SENSA PRODUCTS, LLC and SENSA, INC. 3 INITIALS --~----

4 7. The Parties agree that this AVC shall not be deemed evidence of any wrongdoing or an admission of any violation of Florida Statute 501, Part II, or any other state or federal law, statute or regulation. II. MONETARY TERMS AND CONDITIONS.8.. In order to amicably resolve any claims by the Office of the Attorney General for the State of Florida against the ABC estates, the Office of the Attorn~y General is willing to accept the amount of SEVEN THOUSAND FIVE HUNDRED DOLLARS A.ND ZERO CENTS ($7,500.00) in current and future attorneys' fees, investigative fees> and/or costs; and the Office of the Attorney General acknowledgeithat, it.has received these funds. Except as otherwise expressly provided herein, neither the ABC ~states nor the ASSIGNE.ES have any liability to the Office of the Attomey General or any other party b~ed on the_ matters referenced herein..9. The Office of the Attorney General aiso is willing to accept the sum of SIX THOUSAND TWQ:HUNDRED DOLLA~ A.ND ZERO CENTS {$6,270.00) to resolve any and all outstanding complaints against RESPONDENT of which it is aware at the time that the instant AVC :is,fully executed by all required Parties. and the Office of the Attomey General acknowledges that k has received these funds. The manner in which the funds are to be.. distributed shall be withiih~e:jso le discretion of the Office of the Attorney General. JO. The Office of the Attorney General has determined that, to date, Respondents have refunded approximately $38, to consumers in conjunction wit11 the activities of SENSA PRODUCTS, LLC and SENSAt INC. Respondents' interest in funds paid in conjunction with this A VC shall fully and completely divest,when the A VC is fully :zed by all Parties. fnitials

5 11. Pursuant to Section (6), Florida Statutes, the Department agrees to accept this A VC in termination of its investigation solely as to Respondents, SENSA PRODUCTS, LLC and S.ENSA, INC., and solely as to the acts and practices which were the subject of the investigation and also with respect to the ASSIGNEES. The Parties to this Agreement expressly stipulate and agree that this A VC has no effect and does not resolve the investigation of any fonner owner(s), opcrator(s), or 9thei)µdividuals or entities. 12. Nothing in this AVC is to be construed as a waiver of any private rights of any person or release of any private rights, causes of action, or remedies of any person against Respondents, SENSA "PRODUCTS, LLC and SENSA, INC., and/or any otb.~r_ person or entity related to Respondents, SENSA PROJ>_UCTS., LLC and SENSA, JNC. 13. TI1is AVC is the final, complete,.and exclui;i.ve statement of the P arties 1 agreement on the matters contained in this A VC, and it supersedes 'all previous negotiations and agreements. Other than any representation expressly stated hi this AVC, the Parties have not made any representati~ns.or WC1:U~nties to each other, and neither Party's decision to enter into this A VC fa baseef,:t1pon any statements _by the other Party outside oftl19se in this AVC It is further agreed that-the Parties jointly pa.i.ticipated in the negotiation ofthetem1s of this AVC. No provision of this A, VC shall be construed for or against any patty on the grounds.... that one party had more cqntrol:over establishing the tem1s of this AVC than another. l 5. The Parties agree that all notices required hereunder shall be sufficient if given as provided below: AS TO THE ATTORNEY GENERAL: 5 INITIALS \_;'- -- a

6 Carol E. A. DeGraffenreidt Assistant Attorney General - Consumer Protection Division 1515 North Flagler Drive # 900 West PahnBeach, FL Office Telephone Number: (561) Facsimile No.: (561) Electronic Mail Address: carol.degraffenreidt@myfloridalegal.com AS TO THE RESPONDENTS: Jeffrey L. Richardson Mitchell Silberberg & Knupp LLP West Olympic Boulevard Los Angeles, CA Office Telephone Number: (310) ;,,. Facsimile No.: (310) Electronic Mail Address:jlr@msk.com... VI. EFFECTIVE DATE 16. The effective date of this AVC shall be the date of its ~execution and delivery by the Department of Legal. Affairs: 'Acceptance by the Department of Legal Affairs shall. be established by the signature of the 'Division Director of the Consumer Pro.tectioi1 Di vision. The receipt by the Department of4gal Affairs 9f monies pursuant to the AVC does not constitute '.. acceptance by the Department of Legal Affairs. and all monies received shall be returned to paying entity in the event that this A VC is not accepted and fully executed by the Department of Legal Affairs.. ' 17. lt is further agreed that facsimile copies of signatures and notary seals may be accepted as original for the purposes of establishing the existence of this agreement, and this A VC may be executed in counterparts the compilation of which shall constitute the full and final agreement. 6 INITIALS --1!6r--/_,..

7 18. IN WJTNESS WHEREOF, ASSIGNEES, on behalf of Respondents, SENSA PRODUCTS, LLC and SENSA, INC., formerly known as INTELLIGENT BEAUTY, INC., have caused this Assurance of Voluntary Compliance to be executed by their respective authorized representatives, as a tme act and deed, in the county and state listed below, as of the date affixed thereon... SIGNATURES FOLLOW ON SEPARATE PAGES ASSIGNEES OFOS:ENSA PRO.DUCTS, LLC and SENSA, INC.. BY MY SIGNATURE I hereby.;t.ffirm that I am acting in my capacity and within my authority of ASSIGNEES of the estates of SEN_SA -J>RODUCT~, LLC and SENSA, INC. SENSA PRODUCTS (AS IGNMENT FOR THE BENEFIT OF CREDITORS), LLC. By: ~- ' --J"-'---=.,,,_~'-----f----- Michael Ma_idy, Managc1;.. Sensa Produqts (Assignment for the Benefit of Creditors), LLC Solely in its capacity as Assignee for the Benefit of Creditors of Sensa Products, LLC.'... :NSA (ASS!G~ F~BENEFIT OF CREDITORS), LLC y ' Michael Maidy, Manager Sensa (Assjgnment for the Benefit of Crcd.itors), LLC Solely in his capacity as Assignee for the Benefit of Creditors of Sensa, Inc. STATE OF CALIFORNIA COUNTY OF ) ) 7 INITIALS_\...,_(_ ' _ i

8 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual. who signed the document to which thls certificate is attached, and not the truthfulness, accuracy, or \laliditv of that document State of ~..L CH, County of~ ~<lara o~'cecvj '2ol5before me, Ca.a~ k<aza ce_k ~ n, (insert name and title of the officer) personally appeared +-"~i-.>-~~~. +;,;:,.,~-"""-L-...,~..,,,..,..-,, who proved to me on the basis o satisfactory evidence to be th. person(s) whose name(s} is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s}, or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and officiat seal (Seal)

9 BEFORE M.E, this day of -- -~ ' 2015, an officer duly authorized to take acknowledgments in the State of California, personally appeared Michael Maidy who acknowledged before me that he executed the foregoing instrument for the purposes therein stated. NOTARY PUBLIC '. '. (print, type or stamp commissioned name of Notary Public) Personally known or Produced Identification (check one) Type of!dentification Produced:... ~cl"-- _...,,_-.Af.-"b~"'"'-"--''-----'=-=..~--~~l Jeffrey L. chardson, Esquire MitcheU Silberberg & Knupp LLP West Olympic Boulevard Los Angeles, CA Office Telephone Number: (310) Facsimile No.: (310) Electronic Mail Address: 8 INITIALS-'----

10 :. FOR THE ATTORNEY GENERAL'S OFFICE Signed this/ 7 '!!!day o~~lii{_, :i(i] 5. I. I.,. I ~(J_fitLJJ,J/. f Carol E. A. DeGraffenryidt / /' Assistant Attorney General Office of the Attorney General Consumer Protection Division Florida Bar No OJ 1515 No1th Flagler Drive, Suite 900 West Palm Beach, Florida, Telephone No.: (561) Facsimile No.: (561) Electronic mail: carol.degraffenreidt@myfloridalegal.com 9 INITIALS,~-----

11 Accepted this~ - day of _dpj,,,,--_, 2015 Richard fl: Lawscfn Rich~cl Lawson Director of Economic Crimes State of Florida Office of the Attorney General The Capitol, Tallahassee, Florida l 050,.... :, : ~ : JO INITIALS,ii-I-- \I