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FAITH S. HOCHBERG
UNITED STATES ATTORNEY
Kimberly M. Guadagno
ASSISTANT U.S. ATTORNEY
970 Broad Street, Room 700
NEWARK, NJ 07102
(973) 645-2771
KG 5323

Robert G. DeMuro
U.S. POSTAL INSPECTION SERVICE
Two Gateway Plaza
Newark, New Jersey 07175
(973) 693-4514
RD 4155


UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

UNITED STATES OF AMERICA,  Plaintiff,
: HONORABLE Civil Action No.v.         :   :


Plaintiff, United States of America, by its attorney,
Faith S. Hochberg, United States Attorney for the
District of New Jersey, by Kimberly M. Guadagno,
Assistant U.S. Attorney and Robert G. DeMuro,
U.S. Postal Inspection Service Attorney, by way
of complaint against defendants.


1998-06-09 -- Miller - Plante -- Complaint

HERBERT MILLER         :
at
79 OGLE ROAD  OLD TAPPAN, NEW JERSEY 07675
and
VERIFIED COMPLAINT GERALD PLANTE
at
3230 TALA LOOP LONGWOOD, FLORIDA 32779
and
LAWRENCE BROWN
at
592 MOHAWK COURT SUFFERN, NEW YORK 10901
and
MILLER-PLANTE, INC. a New Jersey Corporation
at
596 ANDERSON AVENUE CLIFFSIDE PARK, NJ 07010
and at P.O. BOX 2117 CLIFFSIDE PARK, NJ 07010
and
LAWRENCE BROWN
at
592 MOHAWK COURT SUFFERN, NEW YORK 10901
and
MILLER-PLANTE, INC.,
a New Jersey Corporation
at
596 ANDERSON AVENUE CLIFFSIDE PARK, NJ 07010
and at
P.O. BOX 2117
CLIFFSIDE PARK, NJ 07010
and MILLER SEPTIC, INC., a New Jersey Corporation
at
596 ANDERSON AVENUE CLIFFSIDE PARK, NJ 07010
and at
P.O. BOX 2117
CLIFFSIDE PARK, NJ 07010
and
H&S INDUSTRIES, INC., a New York Corporation,
at
P.O. BOX 2117
CLIFFSIDE PARK, NJ 07010
and at
P.O. BOX 389 CONGERS, NY 10920-0389
and at
10 PINE CREST ROAD VALLEY COTTAGE, NY 10989
Defendants.

INTRODUCTION

1. This action is for injunctive and other relief to enjoin immediately and permanently the defendants from continuing to defraud consumers through mail and telephone solicitation that fraudulently collects sums of money from consumers who are billed for unwanted product. Defendants are currently receiving substantial sums of money from consumer victims as the result of defendants' false and misleading business practices further described below.
2. Specifically, plaintiff seeks injunctive relief pursuant to 18 U.S.C. Sect. 1345, enjoining defendants from continuing to defraud the consuming public, directing defendants to make restitution to defrauded consumers, and requiring defendants to disgorge any of their illegal profits.
JURISDICTION AND VENUE
3. This court has jurisdiction under 28 U.S.C. Sect. 1331, and 1345, and 18 U.S.C. Sect. 1345.
4. This court has venue over this action pursuant to 28 U.S.C. Sect. 1391(b) and (c). Moreover, at all relevant times to this action, defendants resided, received mail, transacted business within the District of New Jersey and claims asserted herein arose, and it is reasonable to foresee claims continuing to occur in the District of New Jersey.
PARTIES
5. The United States of America is a sovereign with the power to sue.
6. Defendant HERBERT MILLER ("MILLER") is an individual who currently resides at 79 Ogle Road, Old Tappan, New Jersey 07675. Defendant MILLER is an officer and director of both MILLER-PLANTE, INC. and MILLER SEPTIC, INC. He is authorized to accept mail on behalf of H&S INDUSTRIES, INC. At all times relevant to this action, defendant MILLER did direct and control the acts of defendants MILLER-PLANTE, INC., MILLER SEPTIC, INC., and H&S INDUSTRIES, INC.
7. Defendant GERALD PLANTE ("PLANTE") is an individual who currently resides at 3230 Tala Loop, Longwood, Florida 32779. Defendant PLANTE is the president of defendant MILLER-PLANTE, INC., and sits on its Board of Directors. He is the secretary-treasurer of H&S INDUSTRIES, INC. At all times relevant to this action, defendant PLANTE did direct and control the acts of defendants MILLER-PLANTE, INC., MILLER SEPTIC, INC., and H&S INDUSTRIES, INC.
8. Defendant LAWRENCE BROWN ("BROWN") is an individual who resides at 592 Mohawk Court, Suffern, New York 10901. At times relevant to this action, defendant BROWN acted as the manager of defendant MILLER-PLANTE and he has responded to inquiries by regulatory agencies on behalf of both defendant MILLER-PLANT and defendant MILLER SEPTIC. Defendant Brown was authorized to accept mail on behalf of H&S INDUSTRIES. At all relevant times did control the acts and practices of defendants MILLER-PLANTE, MILLER SEPTIC and H&S INDUSTRIES, INC.
9. Defendant MILLER-PLANTE, INC. ("MILLER-PLANTE"), was until recently a New Jersey corporation organized and doing business under the laws of the State of New Jersey and is presently engaged in the business of selling a product used for septic tank cleaning. Its corporate charter was revoked by the State of New Jersey on February 6, 1997. As part of its marketing technique, the company makes sales calls from New Jersey to residents of other states. Thereafter, and in the manner hereinafter described, the company ships the septic cleaning product to consumers, bills them via the U.S. mails, and collects money from the consumers via the U.S. mails. In addition to its office at 596 Anderson Avenue, Cliffside Park, New Jersey 07010, this defendant has three offices in Florida. 10. Defendant MILLER SEPTIC, INC. ("MILLER SEPTIC"), was until recently a New Jersey corporation organized and doing business under the laws of the State of New Jersey and presently is in the business of selling a product used for septic tank cleaning. Its corporate charter was revoked by the State of New Jersey on January 16, 1998. MILLER SEPTIC is the main organization for the distribution of septic tank cleaning product of defendant MILLER-PLANTE. Its business address is 596 Anderson Avenue, Cliffside Park, New Jersey 07010.
11. Defendant H&S INDUSTRIES, INC. ("H&S INDUSTRIES"), is a New York corporation, organized and operating under the laws of the State of New York, and is engaged in the business of collecting consumer debts. It is the primary collection agency for the debts of defendants MILLER-PLANTE and MILLER SEPTIC. In New Jersey, defendant H&S INDUSTRIES shares a post office box and a telephone number with defendant MILLER-PLANTE.

OVERVIEW
12. Defendants market a septic tank cleaning product called "Septic 2000." They market their product through direct mail and telemarketing solicitations to consumers throughout the United States. An investigation has determined that defendants are currently operating a multi-dimensional telemarketing and mail fraud scheme to defraud consumers throughout the United States.
13. As one part of the scheme, defendants MILLER-PLANTE and MILLER SEPTIC ship a large supply, i.e., one to five years, of septic tank cleaning product to consumers who either 1) did not order the product; 2) accepted only a "free trial" of the product; 3) merely requested information about the product; and/or 4) only agreed to receive a sample of the product. Consumers are thereafter mailed an invoice ranging from approximately $99.00 to approximately $189.00.
14. As a second part of the scheme, defendants MILLER- PLANTE and MILLER SEPTIC represent in writing to consumers that their septic cleaning product was "100% unconditionally guarantee[d]." (See Ex. 13 to Schorr Decl.) When questioned over the telephone, defendants MILLER-PLANTE and MILLER SEPTIC assure consumers that the product could be returned at the expense of the defendants within thirty (30) days, if the consumer was not satisfied. Notwithstanding this representation, defendants MILLER-PLANTE and MILLER SEPTIC refuse to accept returns from dissatisfied consumers. On occasion, these defendants grant consumers additional time to try the product only to later refuse the returned product. Instead of accepting the return, defendants MILLER-PLANTE and MILLER SEPTIC present consumers with a bill for the product and insist on payment. (See Schorr Decl. at 19, 25)
15. The following is a list of materially false representations MILLER-PLANTE employed regarding their return policy        :
(a) MILLER-PLANTE falsely represented its return policy;

(b) MILLER-PLANTE failed to completely disclose to consumers the return policy;

(c) MILLER-PLANTE falsely represented to consumers that the product could be returned at MILLER-PLANTE's cost and/or failed to explain to consumers that the return of product would be at their expense; and

(See Ex. 1, 4-8, 14-16 to Schorr Decl.)

16. As a third part of the scheme, defendants MILLER-PLANTE and MILLER SEPTIC turn over the responsibility of collecting payment from those consumers who refused to pay for the unwanted product to defendant H&S INDUSTRIES. Consumers are lead to believe, wrongly, that H&S INDUSTRIES is a collection agency acting independently of defendants MILLER-PLANTE and MILLER SEPTIC. Consumers were, and are continuing to be, harassed and threatened by defendant H&S INDUSTRIES in violation of federal and state consumer protection laws until they pay for the unwanted product. These violations include, for example        : telephoning consumers repeatedly in the early morning and late evening hours demanding); telling the minor children of consumers that the parent/consumer would be jailed if the bill was not paid (see Schorr Decl. at 5); accusing consumers of engaging in "mail fraud" (see Schorr Decl. at 5); and threatening legal action in the form of so-called "Affidavit for Suit" (see Schorr Decl. at 5). This "Affidavit For Suit" purported to be a "filed" document which would result in the initiation of legal action in New Jersey if payment was not made within a set time period. (See Schorr Decl. at 5) One version of the "Affidavit" included the name of an attorney who was not licensed to practice in New Jersey and who had been suspended from the practice of law in New York. (See Schorr Decl. at 5)
17. Defendants MILLER, PLANTE and MILLER-PLANTE have entered into two consent orders prohibiting the within described business practices. By Order dated June 25, 1987, defendants MILLER, PLANTE and MILLER-PLANTE entered into a Consent Order with the State of New Jersey for violation of the New Jersey Consumer Fraud Act, N.J.S.A., 56        :8-1, et seq.(See Ex. 21 to Schorr Decl.) In that order, these defendants agreed, among other things, "to rescind all bills for unordered merchandise for consumers listed...not to hold consumers liable for any unordered merchandise...and make refunds of all monies to consumers listed". (See Schorr Decl. at 38) By order dated January 4, 1990, these defendants agreed to cease and desist from making certain representations regarding the efficacy of their product and also that the U.S. Chamber of Commerce had endorsed the product. (See Ex. 22 to Schorr Decl.) Our investigation has revealed that defendants MILLER, PLANTE and MILLER-PLANTE have violated and continue to violate these consent orders. (See Schorr Decl. at  13-31)
18. As a result of the defendants' unlawful practices, consumers have paid and are paying for septic cleaning product which was unwanted.
19. Defendants are operating a telemarketing and mail fraud scheme, shipping and billing consumers for unordered products, refusing returns of said products and employing coercive, illegal debt collection practices in violation of federal and state laws to bully consumers into paying defendants for the fraudulently created debt.
20. Through their fraudulent activity, the defendants have caused and are continuing to cause a substantial public injury by inducing consumers throughout the country to remit money through the mail under false pretenses.
CLAIM FOR RELIEF
21. Plaintiff reallege and incorporates by reference herein the allegations contained in paragraphs 1 through 20 above.
22. Defendants have been and are currently engaged in a telemarketing mail fraud scheme and artifice to defraud or obtain money and property by false and fraudulent representations and omissions of material fact. Defendants are conducting these schemes or artifices with intent to defraud or with reckless disregard for the truth.
23. For purposes of executing this scheme and artifice, defendants have used or caused to be used, the U.S. Mail, interstate private commercial carriers and/or interstate telephone lines in violation of the Federal mail fraud statute 18 U.S.C. Sect. 1341.
24. Defendants continue to use the U.S. Mail, private or commercial interstate carriers or interstate telephone lines for this purpose.
25. Through their fraudulent activity, defendants have caused and will continue to cause a substantial public injury by shipping under false pretenses unordered products to consumers, refusing returns and utilizing threatening, coercive debt collection practices in violation of state and federal laws to force consumers to pay for defendants fraudulently created debt.
26. Under 18 U.S.C. Sect. 1345 and this Court's general equitable powers, this Court may issue both preliminary and permanent relief in order to prevent "a continuing and substantial injury" to the public, as a result of mail or wire fraud.
27. Defendants have and will continue operating their telemarketing mail fraud scheme, and in the absence of injunctive relief, consumers will continue to sustain substantial injury and be irreparably harmed.
RELIEF REQUESTED
28. Wherefore, plaintiff requests that the court        :
A. Issue a temporary restraining order and an order for expedite discovery, inter alia, pursuant to 18 U.S.C. Sect. 1345 and the equitable powers of this court, to direct defendants, their agents, employees and contractors to detain any and all mail, parcels, packages, whether received prior to or after the date of this order which is addressed to defendants. This provision in no way prohibits the mailing of product to consumers.
B. Further, grant a preliminary and permanent injunction, pursuant to 18 U.S.C. Sect. 1345 and the equitable powers of this Court        :
1) Enjoining and restraining the defendants and their agents, officers and employees and, all persons in active concert or participation with them, from using the United States mails or private commercial interstate carriers causing others acting on their behalf, to use the United States Mails or private commercial interstate carriers to receive monies from the telemarketing mail fraud scheme which is the subject of this action and/or engage in any act in violation of state or federal laws;

2) Enjoining and restraining the defendants and their agents, officers and employees and all persons in active concert or participation with them from using the telephone or interstate wires or causing others acting on their behalf, to use the telephone or interstate wires from making false representations and engage in any act in violation of state or federal laws;

3) Enjoining and restraining the defendants and their agents, officers and employees and all persons in active concert or participation with them from (a) shipping, or causing to be shipped, any unordered product to any business or consumer, (b) invoicing any consumer or business who accepted defendants offer of a free sample, 30 day trial supply, or any supply of defendants' product not ordered by consumers and/or business, c) requesting, demanding or accepting payment from any consumer or business for any shipment of unordered product, including, but not limited to, invoicing, billing or collecting any bill, and d) engaging in the use of threats and other abusive debt collection practices in violation of state or federal laws. And, thereafter, requiring defendants to accept from consumers at defendants cost the return of any unordered products, any free product sample, or trial supply of product and credit the consumers for the full cost of the respective invoices including shipping and handling,

C. Issue an Order, pendente lite, which directs the defendants and their agents, attorneys and employees, and all persons in active concert or participation with any of them in their affairs, from taking or causing to be taken any action to
sell, pledge, transfer, encumber, remove or otherwise alter the status of any of defendants' personal or corporate assets, except for lawful and ordinary expenses of the defendants; and further directs that defendants shall preserve all records, including both domestic and foreign financial accounts.
D. Issue an order directing defendants' bank accounts at which they receive remittances from their fraudulent schemes be frozen pending further order of this Court, subject to defendants showing that assets in those accounts are not the fruit of fraudulent schemes.
E. Issue an order directing that defendants shall preserve all records, including, but not limited to, customer records, employee and principals human resource records, financial records, all mailing lists, call lists, pitch sheets and take no action to conceal, alter, sell, destroy, lease or loan any such records.
F. Issue an Order directing that defendants disgorge funds received by them as result of the telemarketing mail fraud scheme which is the subject of this action, and any other substantially similar scheme and/or false or misleading solicitation or promotional materials.
G. Issue an Order directing defendants to provide effective notice to all consumers who submitted money in response to defendants telemarketing mail fraud scheme which is the subject of this action, and any other substantially similar false or misleading solicitations or promotional materials that they are entitled to a full and complete refund.
H. Issue an Order directing defendants to honor all returns of products and/or requests for refunds of remittances tendered in response to the telemarketing mail fraud scheme, and any other substantially similar solicitations and promotional materials, and any other false or misleading advertisements, solicitations or promotional materials; and to keep and maintain records of all such refunds requested and made for inspection by the plaintiff and the Court.
I. Award to the United States of America the costs of bringing this action, as well as such other relief as the Court deems just and proper.

FAITH S. HOCHBERG
United States Attorney

Dated        : June , 1998 By        : KIMBERLY M. GUADAGNO
Assistant U.S. Attorney

By        : ROBERT G. DEMURO
U.S. Postal Inspector Attorney

1998-06-09 -- Miller - Plante
Complaint -- Filed Document

U.S. Attorney for the District of New Jersey
Faith S. Hochberg, United States Attorney
970 Broad Street, Seventh Floor, Newark, New Jersey 07102
Main Office Number: 973-645-2700

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