Lifting a partially suspended judgment, a federal court judge in Illinois issued a new order requiring the defendant in a 2014 text spam case brought by the Federal Trade Commission to pay the remaining $180,000.
Vito Glazers agreed to a court order with the agency in 2014 to settle charges related to a spam text message scheme. The FTC alleged that multiple defendants, including Glazers, took part in an operation that "bombarded" consumers with tens of millions of unsolicited text messages offering purportedly "free" merchandise, such as $1,000 gift cards for Best Buy and Wal-Mart. The defendants paid affiliates to send out the messages, which included a link that directed recipients to deceptive websites, the agency said, but did not provide consumers with the promised items.
To settle the charges, the defendants reached a deal that imposed a $200,000 judgment against Glazers. The judgment was partially suspended due to his inability to pay, although he was required to turn over $20,000 in cash plus the proceeds from the sale of certain assets (including his 2007 Bentley). The agreement also contained a so-called "avalanche clause," stating that if the defendant misrepresented his assets or ability to pay, the full judgment against him would become due.
The FTC subsequently found evidence that Glazers withdrew approximately $450,000 in assets from a bank account just five months prior to signing the financial disclosure required as part of the 2014 order and then attempted to hide the money (an amount larger than the total judgment) from the agency.
"Glazers's gross misrepresentation(s) regarding his assets were material to the Commission's decision to agree to the suspension," the agency argued in its motion to lift the suspension order. "The Stipulated Judgment is clear that [t]he Commission's agreement to the suspension of part of the judgment against … Vito Glazers is expressly premised upon the truthfulness, accuracy, and completeness of his Financial Statement."
Having triggered the avalanche clause, Glazers must now pay the remaining $180,000 from the original judgment, the Illinois federal court judge ruled.
To read the court orders in FTC v. CPATank, Inc., click here.
Why it matters: "The moral of this story is plain and simple – don't mislead the Commission about your financial condition or attempt to hide assets," Jessica Rich, Director of the FTC's Bureau of Consumer Protection, said in a statement. "If you do, we will find out, and we will not hesitate to collect every penny you owe under the law."