Inmate Magazine Service, Inc.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF FLORIDA

PENSACOLA DIVISION

FEDERAL TRADE COMMISSION and

OFFICE OF THE ATTORNEY GENERAL,

STATE OF FLORIDA, DEPARTMENT

OF LEGAL AFFAIRS,

                                                Plaintiffs,                                Case no. 3:21-cv294-TKW-HTC

V.

INMATE MAGAZINE SERVICE, INC.,

a Wyoming corporation, 318 LLC,

a Florida limited liability company,

318 LLC, a Wyoming limited liability

company, INMATE MAGAZINE

SERVICE of N.A. LLC, a Wyoming

Limited liability company, INMATE

MAGAZINES PLUS.COM of N.A., LLC,

a Wyoming Limited liability company,

and ROY SNOWDEN,

                                                Defendants.

                                                                                    /

RECEIVER'S INITIAL NOTICE TO CUSTOMERS OF INMATE MAGAZINE SERVICE, INC. AND INMATE MAGAZINES PLUS.COM OF N.A., LLC

On Monday, February 22, 2021, the Federal Trade Commission (“FTC”) and the State of Florida, Office of the Attorney General ("FLAG") filed a civil lawsuit against the following persons and entities:

• Inmate Magazine Service, Inc., a Wyoming Corporation;
• 318 LLC, a Florida limited liability company;
• 318 LLC, a Wyoming limited liability company;
• Inmate Magazine Service of N.A., LLC, a Wyoming limited liability company;
• Inmate Magazines Plus.com of N.A., LLC, a Wyoming limited liability company; and
• Roy Snowden

In the lawsuit, the FTC alleged that the defendants operated their magazine sales businesses in violation of (i) Section 5(a) of the FTC Act, 15 U.S.C.A. §45(a), (ii) the FTC's Trade Regulation Rule Concerning the Sale of Mail, Internet or Telephone Order Merchandise, 16 CFR Part 435 ("MITOR"), and (iii) the Florida Deceptive and Unfair Trade practices Act, Fla. Stat. §§501.201 et seq ("FDUTPA").  Later the same day federal district judge T. Kent Wetherell entered an Ex Parte Temporary Restraining Order with Asset Freeze, Appointment of a Temporary Receiver, Immediate Access to Business Records, Limited Expedited Discovery and Other Equitable Relief, and Order to Show Cause why a Preliminary Injunction should not Issue (hereafter the “TRO”).  Copies of the Complaint and TRO may be viewed at www.bernet-receiver.com.  Among other things, the Court froze all of the Defendants' assets and enjoined the Defendants from:

• Misrepresenting any material facts, particularly as they pertain to magazine deliveries and the timing of magazine deliveries;
• Failing to provide notices to purchasers of magazine subscriptions that the purchasers would have an option either (i) to consent to a delay in shipping the magazines beyond the promised delivery date, or (ii) receive a prompt refund;
• Failing to cancel orders and provide consumers a prompt refund where Defendants had not shipped properly completed orders within the promised time, or when Defendants were notified of an order cancellation;

In the TRO  the Court also appointed Mark J. Bernet as the receiver for each of the five business organizations identified in the first paragraph above (collectively, the five business organizations are the "Receivership Entities"), as well as "any other entity that has conducted any business related to Defendants' marketing and sale of purported money-making opportunities to consumers, including [entities] that the Receiver determines is controlled or owned by any Defendant."  The Court directed the Receiver, among other things, to "[a]ssume full control of [the] Receivership Entities," "[t]ake exclusive custody, control, and possession of all Assets and Documents" of the Receivership Entities, and "[s]uspend business operations of the Receivership Entities" if the Receivers believes the business cannot be continued "legally and profitably."  The TRO since has been converted into a Preliminary Injunction containing the same substantive terms.

Based on the provisions of the TRO and Preliminary Injunction, the Receiver has opted, for the time being, to suspend the business operations of the Receivership Entities while he evaluates the legality and viability of their business operations.  Further details will be reported on the Receiver's website, www.bernet-receiver.com, as they become available.