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United States Department of Justice v. Daniel Chapter One

United States District Court, D. Columbia.

March 31, 2015

UNITED STATES OF AMERICA DEPARTMENT OF JUSTICE, Plaintiff,
v.
DANIEL CHAPTER ONE, et al., Defendants

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For United States of America Department of Justice, Plaintiff: Jessica R. Gunder, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Washington, DC USA.

For Daniel Chapter One, James Feijo, individually, and as an officer of Daniel Chapter One, Defendants: Robert M. Sanger, LEAD ATTORNEY, SANGER SWYSEN & DUNKLE, Santa Barbara, CA USA; Stephen Kerr Dunkle, SANGER SWYSEN & DUNKLE, Santa Barbara, CA USA.

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MEMORANDUM OPINION

Emmet G. Sullivan, United States District Judge.

This case involved certain dietary supplements that defendants claimed could treat, cure, or prevent cancer, inhibit tumors, and ameliorate the adverse effects of radiation and chemotherapy. Plaintiff United States of America Department of Justice (" United States" or the " government" ) brought this action against Daniel Chapter One and James Feijo (the " defendants" ) under Sections 5(l), 13(b), and 16(a) of the Federal Trade Commission Act, 15 U.S.C. § § 45(l), 53(b), and 56(a), alleging that the defendants violated a final cease and desist order of the Federal Trade Commission (" FTC" or the " Commission" ).

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On September 30, 2011, the United States filed a motion for summary judgment on liability. On September 24, 2012, the Court granted the United States' motion, concluding that " there is no genuine issue as to any material fact and the United States is entitled to judgment as a matter of law on liability." See United States v. Daniel Chapter One, 896 F.Supp.2d 1, 17 (D.D.C. 2012).

Pending before the Court is the United States' motion for entry of final judgment. The United States requests that the Court enter a final order that includes injunctive relief, equitable monetary relief in the amount of $1,345,832.43 and a civil penalty award of $3,528,000. Upon consideration of the motion, the response and reply thereto, supplemental briefing by the parties, the applicable law, and the entire record in this case, the Court GRANTS the United States' motion.

I. Background

Defendant Daniel Chapter One is incorporated under the laws of the State of Washington, with its principal place of business in Portsmouth, Rhode Island. Id. at 2. Defendant James Feijo is the sole member and overseer of Daniel Chapter One. Id. The defendants advertise and sell dietary supplements, including BioShark, 7 Herb Formula, GDU, and BioMixx (the " Products" ), which they claim can treat, cure, or prevent cancer. Id.

On September 18, 2008, the FTC initiated an administrative proceeding alleging that the defendants' marketing of the Products constituted deceptive acts and practices in violation of Sections 5(a) and 12 of the Federal Trade Commission Act (the " FTC Act" ), 15 U.S.C. § § 45(a) and 52. Id. at 2-3. Following a trial, an administrative law judge concluded that the defendants had violated the FTC Act by making unsubstantiated claims that the Products prevented, treated, or cured tumors or cancer. Id. Defendants appealed this decision to the Commission, and on December 24, 2009, the Commission upheld the decision and issued a Final Order to cease and desist certain practices. Id.

On January 25, 2010, the FTC issued a Modified Final Order (" FTC Order" ). Id. at 3. Part II of the FTC Order prohibits the defendants (referred to in the FTC Order as " Respondents" ) from making " any representation, in any manner, expressly or by implication, including through the use of product or program names or endorsements" [1] that any product marketed by the defendants:

[P]revents, treats, or cures or assists in the prevention, treatment, or cure of any type of tumor or cancer, including but not limited to representations that:
1. BioShark inhibits tumor growth;
2. BioShark is effective in the treatment of cancer;
3. 7 Herb Formula is effective in the treatment or cure of cancer;
4. 7 Herb Formula inhibits tumor formation;
5. GDU eliminates tumors;
6. GDU is effective in the treatment of cancer;
7. BioMixx is effective in the treatment of cancer; or
8. BioMixx heals the destructive effects of radiation or chemotherapy;

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un less the representation is true, non-misleading, and, at the time it is made, Respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

Id. 3-4. In addition, Part V.B of the FTC Order requires that:

Within forty-five (45) days after the final and effective date of this order, Respondents shall send by first class mail, postage prepaid, an exact copy of the notice . . . to all persons [who purchased the Products between January 1, 2005 and the date of the order.]

Id. The notice, which is attached to the FTC Order, informs consumers of the FTC's conclusion that the defendants' advertising claims were deceptive because they were not substantiated by competent and reliable scientific evidence. Id.

Defendants filed an appeal with the United States Court of Appeals for the District of Columbia Circuit, contesting the legality and constitutionality of the FTC Order. See Petition for Review, Daniel Chapter One v. FTC, No. 10-1064 (D.C. Cir. Mar. 17, 2010). Defendants also applied to the FTC for a stay of the FTC Order pending the outcome of their appeal, but their request was denied. Daniel Chapter One, 896 F.Supp.2d at 3-4. Defendants then filed with the D.C. Circuit an emergency motion for a stay of the FTC Order. This motion was denied on April 1, 2010. See Per Curiam Order Denying Emergency Motion to Stay Case, Daniel Chapter One, No. 10-1064 (D.C. Cir. Apr. 1, 2010). Because the defendants failed to obtain a stay, the FTC Order became effective on April 2, 2010. See Daniel Chapter One, 896 F.Supp.2d at 3-4; 15 U.S.C. § 45(g)(2).

On August 13, 2010, the United States filed its complaint in this Court seeking civil penalties and other injunctive relief pursuant to Sections 5(l), 13(b), and 16(a) of the FTC Act. Simultaneous therewith, the United States filed a motion for a preliminary injunction seeking an order enjoining the defendants from violating the FTC Order. Daniel Chapter One, 896 F.Supp.2d at 3-4. The Court denied the United States' motion for a preliminary injunction without prejudice on September 14, 2010, finding that the Court lacked jurisdiction to enforce the FTC Order while defendants' appeal challenging the legality of the FTC Order was pending before the D.C. Circuit. See Order, Sept. 14, 2010, ECF No. 11.[2] The FTC then filed an emergency motion for an order of enforcement pendente lite with the D.C. Circuit. The D.C. Circuit granted the United States' motion on November 22, 2010. See Per Curiam Order, Daniel Chapter One, No. 10-1064, (D.C. Cir. Nov. 22, 2010) (" Daniel Chapter One is hereby enjoined to obey forthwith the modified final order of the Federal Trade Commission issued January 25, 2010, in Docket No. 9329, In the Matter of Daniel Chapter One and James Feijo." ). Defendants then filed a motion with the D.C. Circuit seeking a stay of the enforcement of Part V.B of the FTC Order. The D.C. Circuit rejected this request on December 7, 2010. See Per Curiam Order, Daniel Chapter One, No. 10-1064 (D.C. Cir. Dec. 7, 2010).

On December 10, 2010, the D.C. Circuit denied the defendants' petition for review of the FTC Order, concluding that " the Commission properly exercised jurisdiction over [Daniel Chapter One]," and that " [Daniel Chapter One]'s arguments based

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upon the Constitution and the Religious Freedom Restoration Act are wholly without merit." Daniel Chapter One v. FTC, 405 F.App'x 505, 505-06 (D.C. Cir. 2010) (emphasis added). Defendants then filed a petition for a writ of certiorari, which was denied on May 23, 2011. See Daniel Chapter One v. FTC, No. 10-1292, 131 S.Ct. 2917, 179 L.Ed.2d 1248 (2011).

Following issuance of the D.C. Circuit's mandate, the United States renewed its motion for a preliminary injunction in this Court. On June 22, 2011, the Court granted the United States' motion for preliminary injunction and enjoined the defendants from violating the FTC Order. See Order and Memorandum Opinion, ECF Nos. 31 and 32.

On July 29, 2011, the United States filed a motion for an order to show cause why Daniel Chapter One, James Feijo, and Patricia Feijo[3] should not be held in contempt of the Court's June 22, 2011 Order. The Court subsequently ordered the defendants to show cause why they should not be held in contempt. The Court held a contempt hearing on May 9, 2012. During that hearing, the United States presented evidence and testimony regarding the defendants' purported violations of the FTC Order. After receiving evidence and hearing argument, the Court found Daniel Chapter One, James Feijo, and Patricia Feijo in civil contempt. Specifically, the Court concluded that James Feijo, Patricia Feijo, and Daniel Chapter One (the " Contemnors" ) had continued to violate the FTC Order by (1) continuing to make representations on their radio show that their products treat or cure cancer without competent and reliable scientific evidence to substantiate those representations, (2) encouraging potential customers to visit websites containing Daniel Chapter One publications that contain prohibited information and endorsements of the prohibited supplements, (3) not removing certain representations from the websites within their control, which Contemnors conceded included www.danielchapterone.com, www.dc1ministry.com, and www.dc1freedom.com, and (4) failing to mail the required notice to all consumers who purchased the Products between January 1, 2005, and April 2, 2010. Daniel Chapter One, 896 F.Supp.2d at 5-6. The Court allowed the Contemnors two weeks to attempt to purge the contempt and scheduled another hearing in order to determine whether or not the contempt had been purged. Id.

On May 22, 2012, James Feijo submitted a certification of compliance with the Court's Order. In that certification, Mr. Feijo stated that all notices had been sent out in compliance with the Court's Order; that prohibited representations had been removed from www.dc1freedom.com, www.danielchapterone.com, the dc1 online store, and www.dc1ministry.com; that Contemnors had ceased answering health questions on their radio show or inviting other

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callers to answer questions; and that Contemnors were not mentioning other people's websites containing Daniel Chapter One information. See James Feijo's Certification of Compliance, ECF No. 51. At a subsequent hearing on May 23, 2012, the United States presented additional evidence that Contemnors had not purged the contempt, but the Court gave Contemnors until May 24, 2012 at 3:30 p.m. to make a showing to the Court sufficient to demonstrate their compliance with the Court's Order. Daniel Chapter One, 896 F.Supp.2d at 6-7. On May 24, 2012, the defendants filed a supplemental certification of compliance with the Court's Order, and the United States filed a notice of failure to purge. See Defs.' Supplemental Certification of Compliance with Order, ECF No. 52; Pl.'s Notice of Failure to Purge, ECF No. 53. The Court determined that Contemnors had taken sufficient actions to purge themselves of contempt, and therefore the Court vacated its Contempt Order. See Minute Order, May 24, 2012.

On September 30, 2011, the United States filed a motion for summary judgment on liability. On September 24, 2012, the Court granted the United States' motion, concluding that " there is no genuine issue as to any material fact and the United States is entitled to judgment as a matter of law on liability as to Counts I (Prohibited Representations) and II (Failure to Mail Notice)." Daniel Chapter One, 896 F.Supp.2d at 17. On November 27, 2012, the Court granted the United States' request for limited discovery concerning the defendants' ability to pay a civil penalty under the FTC Act. See Minute Order, Nov. 27, 2012. Discovery closed on June 4, 2013.

On April 14, 2014, the United States filed the pending motion for entry of final judgment. See Pl.'s Mot., ECF No. 68. The United States requests that the Court enter a final order that includes injunctive relief, equitable monetary relief in the amount of $1,345,832.43 and a civil penalty award of $3,528,000. On May 19, 2014, the defendants filed their opposition.[4] See Defs.' Opp., ECF No. 70. On June 6, 2014, the United States filed its reply. See Pl.'s Reply, ECF No. 72. The United States' motion is now ripe for determination by the Court.

II. The FTC Act

The FTC Act authorizes district courts to award civil penalties and to grant injunctions and other equitable relief where an FTC order or consent decree has been violated. See 15 U.S.C. § 45 (" United States district courts are empowered to grant mandatory injunctions and such other and further equitable relief as they deem appropriate in the enforcement of such final orders of the Commission." ); Id. (The district court is authorized to impose civil penalties upon " [a]ny person, partnership or corporation who violates an order of the Commission" ).

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Although the FTC Act " does not expressly authorize a district court to grant consumer redress (i.e., refund, restitution, rescission, or other equitable monetary relief), Section 13(b)'s grant of authority to provide injunctive relief carries with it the full range of equitable remedies," see FTC v. Freecom Communications, Inc., 401 F.3d 1192, 1202 n.6 (10th Cir. 2005), including disgorgement of profits. FTC v. Gem Merch. Corp., 87 F.3d 466, 468 (11th Cir. 1996); see also CFTC v. Wilshire Inv. Mgmt. Corp., 531 F.3d 1339, 1344 (11th Cir. 2008) (the FTC Act's " grant of authority to issue an injunction carried the full range of equitable remedies, among which 'is the power to grant restitution and disgorgement'" (internal citations omitted)). " An order for disgorgement may be considered an equitable adjunct to an injunction decree." FTC v. Bronson Partners, LLC, 654 F.3d 359, 365 (quoting Porter v. Warner Holding Co., 328 U.S. 395, 399, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946)); see also Freecom Communications, 401 F.3d at 1203 n.6 (" In cases where the FTC seeks injunctive relief, courts deem any monetary relief sought as incidental to injunctive relief." ).

In other words, a district court's authority to award monetary relief under Section 13(b) falls within its general equitable jurisdiction to " decide all relevant matters in dispute and to award complete relief." Porter, 328 U.S. at 399; see also FTC v. Cantkier, 767 F.Supp.2d 147, 160 (D.D.C. 2011) (" Every court that has considered the issue thus far appears to have ruled that Section 13(b) does entitle the FTC to seek equitable monetary relief, including courts in this district and multiple Courts of Appeals." (emphasis in original)); FTC v. Mylan Lab., Inc., 62 F.Supp.2d 25, 37 (D.D.C. 1999); FTC v. Pantron I Corp., 33 F.3d 1088, 1102 (9th Cir. 1994); FTC v. Sec. Rare Coin & Bullion Corp., 931 F.2d 1312, 1316 (8th Cir. 1991); FTC v. Amy Travel Serv., Inc., 875 F.2d 564, 571-72 (7th Cir. 1989).

III. Analysis

The United States requests that the Court enter a final order that includes injunctive relief, equitable monetary relief in the amount of $1,345,832.43 and a civil penalty award of $3,528,000. See Pl.'s Mot., ECF No. 68. The Court will address each requested form of relief sought in turn.

A. A Permanent Injunction Is Necessary to Protect The Public.

On June 22, 2011, the Court granted the United States' motion for a preliminary injunction. The Court ordered the following: " defendants are hereby enjoined to obey forthwith the Modified Final Order of the Federal Trade Commission issued on January 25, 2010, in Docket No. 9329, In the Matter of Daniel Chapter One and James Feijo." See United States v. Daniel Chapter One, 793 F.Supp.2d 157, 164 (D.D.C. 2011). In its motion, the United States asserted that the permanent injunction should encompass the preliminary injunction -- which required the defendants to comply with the FTC Order -- with " additional restrictions and requirements." See Pl.'s Mot., ECF No. 68 at 5. Specifically, the United States argued that " there is an overwhelming need to: (1) broaden coverage of the FTC Order provisions to ban the defendants from selling any dietary supplement and from marketing any product or service with disease claims; and (2) enhance the compliance monitoring provisions to help the FTC guard against order violations in the future." Id. In support of its motion, the government states that the defendants' " pervasive and flagrant order violations evidence that the

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FTC Order did not achieve its purpose of protecting the public and demonstrate that they likely will repeat their fraudulent activities and victimize consumers unless their practices are more significantly curtailed." Id.

This Court is " empowered to grant mandatory injunctions and such other and further equitable relief as [it] deem[s] appropriate in the enforcement of such final orders of the Commission." 15 U.S.C. § 45(l). " A federal court has broad power to restrain acts which are of the same type or class as unlawful acts which the court has found to have been committed or whose commission in the future, unless enjoined, may fairly be anticipated from the defendant's conduct in the past." Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 132, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969); NLRB v. Express Publ'g Co., 312 U.S. 426, 435, 61 S.Ct. 693, 85 L.Ed. 930 (1941). The breadth of the injunction must depend upon the circumstances of the particular case, " the purpose being to prevent violations, the threat of which in the future is indicated because of their similarity or relation to those unlawful acts . . . found to have been committed . . . in the past." Express Publ'g, 312 U.S. at 436--37. Courts in equitable actions may enjoin otherwise lawful conduct to ensure that the final relief ordered is effective. See United States v. Loew's, Inc., 371 U.S. 38, 53, 83 S.Ct. 97, 9 L.Ed.2d 11 (1962) (" Some of the practices which the government seeks to have enjoined with its requested modifications are acts which may be entirely proper when viewed alone. To ensure, however, that relief is effectual, otherwise permissible practices connected with the acts found to be illegal must sometimes be enjoined." ); EEOC v. Wilson Metal Casket Co., 24 F.3d 836, 842 (6th Cir. 1994) (" The proper scope of an injunction is to enjoin conduct which has been found to have been pursued or is related to the proven unlawful conduct." ); United States v. Holtzman, 762 F.2d 720, 726 (9th Cir. 1985) (" A federal court's equity jurisdiction affords it the power to enjoin otherwise lawful activity when necessary and appropriate in the public interest to correct or dissipate the evil effects of past unlawful conduct." ); Kentucky Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368, 390 (5th Cir. 1977) (" In fashioning relief against a party who has transgressed the governing legal standards, a court of equity is free to proscribe activities that, standing alone, would have been unassailable." ).

A " court's power to grant injunctive relief survives discontinuance of the illegal conduct," and because the " purpose . . . is to prevent future violations," injunctive relief is appropriate when there is a " cognizable danger of recurrent violation, something more than the mere possibility." United States, v. W.T. Grant Co., 345 U.S. 629, 633, 73 S.Ct. 894, 97 L.Ed. 1303 (1953). Once a violation is demonstrated, all that need be shown is that " there is some reasonable likelihood of future violations," and past unlawful conduct is " highly suggestive of the likelihood of future violations." Commodity Futures Trading Comm'n v. Hunt, 591 F.2d 1211, 1220 (7th Cir. 1979).

In addition, courts can order broad " fencing in" injunctive relief in actions brought under the FTC Act. See FTC v. Think Achievement Corp., 144 F.Supp.2d 1013, 1016 (N.D. Ind. 2000). Indeed, the Supreme Court has held that, when entering orders, the FTC " cannot be required to confine its road block to the narrow lane the transgressor has traveled; it must be allowed effectively to close all roads to the prohibited goal, so that its order may not be bypassed with impunity."

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FTC v. Ruberoid Co., 343 U.S. 470, 473, 72 S.Ct. 800, 96 L.Ed. 1081, 48 F.T.C. 1771 (1952); see also FTC v. Colgate--Palmolive Co., 380 U.S. 374, 395, 85 S.Ct. 1035, 13 L.Ed.2d 904 (1965) (" The Commission is not limited to prohibiting the illegal practice in the precise form in which it is found to have existed in the past. Having been caught violating the [FTC] Act, respondents must expect some fencing in." ); FTC v. Nat'l Lead Co., 352 U.S. 419, 429, 77 S.Ct. 502, 1 L.Ed.2d 438 (1957).

Further, courts may order record-keeping and monitoring to ensure compliance with a permanent injunction. See, e.g., FTC v. SlimAmerica, Inc., 77 F.Supp.2d 1263, 1276 (S.D. Fla. 1999) (holding that record-keeping and monitoring provisions were appropriate to permit the Commission to police the defendants' compliance with the order); FTC v. U.S. Sales Corp., 785 F.Supp. 737, 753--54 (N.D.Ill. 1992) (indicating that monitoring by the Commission may be necessary to ensure adequate compliance); FTC v. Sharp, 782 F.Supp. 1445, 1456--57 (D. Nev. 1991) (judgment included monitoring provisions).

In deciding whether to issue an injunction in light of past violations, courts consider " the totality of the circumstances surrounding the defendant[s] and [their] violations[,]" including: (1) the degree of scienter involved; (2) whether the infraction was isolated or recurrent; (3) whether the defendants recognize " the wrongful nature of [their] conduct; " (4) " the sincerity of [the defendants] assurance against future violations[; ]" (5) the degree of consumer harm caused by the defendants; and (6) " whether defendants are positioned to commit future violations[.]" SEC v. Murphy, 626 F.2d 633, 655 (9th Cir. 1980); FTC v. Medical Billers Network, Inc., 543 F.Supp.2d 283, 323 (S.D.N.Y. 2008).

The record in this case is crystal clear: From April 2, 2010, when the FTC Order went into effect, until May 24, 2012, when the defendants came into compliance with the FTC Order, the defendants intentionally and knowingly violated the FTC Order. From November 22, 2010, when the D.C. Circuit issued an Order enjoining the defendants to " obey forthwith the modified final order," until May 24, 2012, the defendants intentionally and knowingly violated the D.C. Circuit's Order. See Per Curiam Order, Daniel Chapter One, No. 10-1064 (D.C. Cir. Nov. 22, 2010). From June 22, 2011, when this Court issued a preliminary injunction, until May 24, 2012, the defendants intentionally and knowingly violated this Court's preliminary injunction. See Order and Memorandum Opinion, ECF Nos. 31 and 32. The defendants were well aware of what they were required to do to comply with the various orders, yet deliberately chose to continuously ignore and violate all orders. The record is replete with evidence that the defendants -- during the relevant dates noted above -- among other things, continued to make representations on their radio show that their products treat or cure cancer without competent and reliable scientific evidence to substantiate those representations and encouraged potential customers to visit websites containing Daniel Chapter One publications that contain prohibited information and endorsements of the prohibited supplements. See Daniel Chapter One, 896 F.Supp.2d at 17.

Rather than grapple with the mountain of precedent cited by the United States or the factual record in this case, the defendants, in a very cursory response -- which cites no authority -- asserted that the United States has not proffered any evidence that the defendants " have engaged in improper activities since the Court found they were in compliance with the FTC Order on May 24, 2012." See Defs.' Opp., ECF No. 70 at 2. It is

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well established, however, that current compliance does not preclude the entry of a permanent injunction, and a permanent injunction is justified if " there exists some cognizable danger of recurrent violation" or " some reasonable likelihood of future violations." W.T. Grant Co., 345 U.S. at 633; Hunt, 591 F.2d at 1220 (internal citations omitted); see also Am. Bar Ass'n v. FTC, 636 F.3d 641, 648, 394 U.S.App.D.C. 344 (D.C. Cir. 2011) (" [A] defendant's voluntary cessation of allegedly illegal conduct does not deprive [a court] of power to hear and determine the case." ).

Considering the fact that preliminary injunctive relief has already been ordered against the defendants in this case, the Court now determines, based on the factual record, that a permanent injunction is necessary and appropriate to protect consumers. The Court concludes that -- in order to protect the public -- the permanent injunction should encompass the preliminary injunction with the modifications suggested by the United States. Specifically, the permanent injunction will ban the defendants from selling any dietary supplement and from making disease claims. Additionally, the permanent injunction will enhance the United States' monitoring authority. See e.g., FTC v. Gill, 265 F.3d 944, 957-58 (9th Cir. 2001) (affirming the district court's order prohibiting defendant from engaging in the credit repair business).

Defendants' pattern of deceiving consumers in complete disregard of orders from the FTC, this Court and the D.C. Circuit raises serious concerns that the defendants would inflict further injury on consumers in the future without these modifications. Further, the defendants have made widely-disseminated efficacy claims for a multitude of products without possessing reliable scientific evidence to substantiate those representations. Undoubtedly, the defendants' dietary supplement marketing involves deliberate, deceptive strategies that are easily adaptable or transferable to other products, and the evidence in this case shows that -- in addition to their claims that the Products cure cancer -- the defendants also make health-related representations about their other products. See e.g., http://dc1store.com/products/apple-pectin-50-off (" This gentle and nourishing fiber also helps support healthy cholesterol levels and a healthy heart and gallbladder." (last visited March 12, 2015)); http://dc1store.com/products/carniplex-60-cap-2-or-more (" Carniplex can help support healthy liver, heart, and blood triglyceride levels. It may assist in fat loss and muscle health, and enhance the effectiveness of antioxidants C and E." (last visited March 12, 2015)).

In order to ensure enforcement of this Memorandum Opinion, and the accompanying Order, the Court adopts the enhanced compliance monitoring provisions recommended by the United States, which would require the defendants to: dispose of customer information, acknowledge receipt of the Final Order in this case and distribute it to certain company representatives, provide a written report on their business activities and periodic updates such as change of address notifications, maintain specified records in future businesses and produce information to the Commission upon request about their compliance. Stringent compliance monitoring provisions are appropriate to ensure the defendants' compliance in the future. FTC v. Neiswonger, 494 F.Supp.2d 1067, 1084 (E.D. Mo. 2007) (adopting enhanced compliance monitoring provisions in response to FTC defendant's order violations); see also Think Achievement Corp., 144 F.Supp.2d at 1018; FTC v. U.S. Sales Corp., 785 F.Supp. 737, 753 (N.D.Ill. 1992); FTC v. Sharp, 782 F.Supp. 1445, 1456-57 (D. Nev. 1991). The requested provisions

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will provide an oversight mechanism to better ensure that the defendants do not engage in future recidivism.

B. Equitable Monetary Relief Is Appropriate In This Case.

The defendants challenge this Court's authority to award a money judgment under Section 13(b) of the FTC Act. Because the Court concludes that Section 13(b) permits a district court to order ancillary equitable relief, including monetary relief, and that such relief may be calculated on the basis of proceeds that the defendants received from their unlawful activity, the Court will award equitable monetary relief in the amount of $1,345,832.43.

1. Ancillary Remedies Under Section 13(b) of the FTC Act

Section 13(b) of the FTC Act provides: " in proper cases the [FTC] may seek, and after proper proof, the court may issue, a permanent injunction." 15 U.S.C. § 53(b). While the provision's express text refers only to injunctive relief, courts have consistently held that " the unqualified grant of statutory authority to issue an injunction under [S]ection 13(b) carries with it the full range of equitable remedies, including the power to grant consumer redress and compel disgorgement of profits." Gem Merch. Corp., 87 F.3d at 468; see also Bronson, 654 F.3d at 365; Pantron I Corp., 33 F.3d at 1102; FTC v. Sec. Rare Coin & Bullion Corp., 931 F.2d at 1316; Freecom Communications, 401 F.3d at 1202 n.6; Amy Travel Serv., Inc., 875 F.2d at 571-72; FTC v. Sw. Sunsites, Inc., 665 F.2d 711, 718--19 (5th Cir. 1982); Cantkier, 767 F.Supp.2d at 160; FTC v. Swish Mktg, 2010 WL 653486, at *6-10 (N.D. Cal. Feb. 22, 2010); FTC v. Davison Assocs., 431 F.Supp.2d 548, 560 (W.D. Pa. 2006); FTC v. Five-Star Auto Club, Inc., 97 F.Supp.2d 502, 533 (S.D.N.Y. 2000); FTC v. Mylan Lab., Inc. 62 F.Supp.2d at 37; FTC v. Minuteman Press, 53 F.Supp.2d 248, 261-62 (E.D.N.Y. 1998). This Court joins with these courts and holds that Section 13(b) of the FTC Act permits district courts to grant ancillary equitable relief, including equitable monetary relief.

In Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946), the Supreme Court held that the Emergency Price Control Act of 1942 -- which permitted a federal administrator to seek a " permanent or temporary injunction, restraining order, or other order" --authorized the administrator to obtain not just injunctive relief but also a money judgment. The Supreme Court provided two independent reasons for its conclusion. First, the Supreme Court explained:

[An order for disgorgement] may be considered an equitable adjunct to an injunction decree. Nothing is more clearly a part of the subject matter of a suit for an injunction than the recovery of that which has been illegally acquired and which has given rise to the necessity for injunctive relief. . . . [W]here, as here, the equitable jurisdiction of the court has properly been invoked for injunctive purposes, the court has the power to decide all relevant matters in dispute and to award complete relief even though the decree includes that which might be conferred by a court of law.

Id. at 399.[5] Second, relying on the text of the Emergency Price

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Control Act, the Supreme Court reasoned that a money judgment could be an " other order" that is " appropriate and necessary to enforce compliance with the act." Id. at 400.

The Supreme Court subsequently made clear that the two bases for its holding in Porter were indeed independent. In Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960), the Supreme Court concluded that a provision of the Fair Labor Standards Act that authorized the district court to " restrain violations of [the statute]" carried with it the power to award backpay to employees who had been wrongfully discharged. After citing Porter's holding that a district court empowered to enjoin statutory violations may award such ancillary remedies as necessary to afford complete relief, the Supreme Court went on to note:

The applicability of this principle is not to be denied, either because the Court there considered a wartime statute, or because, having set forth the governing inquiry, it went on to find in the language of the statute affirmative confirmation of the power to order reimbursement.
Id.

Like the provision at issue in Mitchell, Section 13(b) contains no reference to " other orders." Nonetheless, the principle that " the comprehensiveness of [the district court's] equitable jurisdiction is not to be denied or limited in the absence of a clear and valid legislative command," Mitchell, 361 U.S. at 291 (quoting Porter, 328 U.S. at 398), applies with equal force to actions under Section 13(b). By empowering district courts to issue injunctive relief, Section 13(b) invokes the equitable jurisdiction of the Court. A money judgment is thus permitted as a form of ancillary relief because -- once its equitable jurisdiction has been invoked -- " the court has the power to decide all relevant matters in dispute and to award complete relief." Porter, 328 U.S. at 399.

Accordingly, Section 13(b) of the FTC Act permits this Court to award not only injunctive relief but also ancillary relief, including monetary relief. Bronson, 654 F.3d at 365.

2. Monetary Relief Under Section 13(b)

Equitable monetary relief is calculated using a " two-step burden-shifting framework . . . [that] requires a court to look first to the FTC to 'show that its calculations reasonably approximated the amount of the defendant[s'] unjust gains' and then shift the burden 'to the defendants to show that those figures were inaccurate.'" Id. at 364 (quoting FTC v. Verity Int'l, Ltd., 443 F.3d 48, 67 (2d Cir. 2006)).

At the first step of the burden-shifting analysis, the United States calculated the defendants' unjust gains as $1,345,832.43. This amount, the United States asserted, equals the amount consumers spent on the Products between April 2, 2010, when the FTC Order went into effect, and May 24, 2012, when the defendants purged itself of contempt. See Pl.'s Mot., ECF No. 68 at 9-10 (citing sales records provided by the defendants).

At the second step of the burden-shifting analysis, the defendants do not proffer any evidence to show that the United States' calculations were inaccurate. See Defs.' Opp., ECF No. 70 at 2-3. Therefore, the defendants concede that the United States' calculation of their unjust gains

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is accurate. McGinnis v. District of Columbia, 65 F.Supp.3d 203, 2014 WL 4243542, at *15 (D.D.C. Aug. 28, 2014) (when a party " fails to address [an argument] in its [opposition] . . . the Court will deem it abandoned" ).

Accordingly, the Court will award equitable monetary relief in the amount of $1,345,832.43.

C. Civil Penalty

Under the FTC Act, the Court is authorized to impose civil penalties upon " [a]ny person, partnership or corporation who violates an order of the Commission[.]" 15 U.S.C. § 45(l). The statute originally provided for " a civil penalty of not more than $10,000 for each violation; " that sum, however, was modified pursuant to the Federal Civil Penalties Inflation Adjustment Act, and is now $16,000 per violation. 15 U.S.C. § 45(l); 28 U.S.C. § 2461; 16 C.F.R. § 1.98(d). The FCT Act further provides that " [e]ach separate violation of such an order shall be a separate offense[.]" 15 U.S.C. § 45(l). Here, the defendants intentionally and knowingly violated the FTC Order from April 2, 2010, when the FTC's Order went into effect, to May 24, 2012, when the defendants came into compliance.

During each of these 784 days, the defendants committed multiple violations of the FTC Order. See generally Daniel Chapter One, 896 F.Supp.2d at 1-17. For example, the defendants promoted the Products as cancer treatments in multiple locations, including placing misrepresentations on several websites under their control and on online forums. Id. Further, the defendants represented to customers that the Products treat and cure cancer on their radio show, and would then post the shows online so that others could access the information. Id. In addition, the defendants neglected to send the required corrective notices to their prior customers. Id. Each individual misrepresentation is a separate violation, and every corrective notice they failed to send is a separate violation. See, e.g., United States v. Nat'l Fin. Servs. Inc., 98 F.3d 131, 141 (4th Cir. 1996) (finding that each letter sent was a separate violation). This adds up to thousands of violations and an enormous civil penalty sum.

Where the violation is a " continuing failure to obey or neglect to obey a final order of the Commission, each day of continuance of such failure or neglect shall be deemed a separate offense." 15 U.S.C. § 45. Under this provision, each day that the defendants failed to comply with the FTC Order should be deemed a separate violation. While the defendants would certainly be liable for a much higher penalty amount if the Court were to count each individual violation, the Court is of the opinion that the " continuing failure" calculation is the appropriate calculation in this case. At the statutory maximum of $16,000 per violation, the defendants would be liable for a civil penalty up to the amount of $12,544,000 for the 784 days they failed to comply with the FTC Order.

While the defendants are subject to a $12,544,000 statutory maximum civil penalty, which the defendants do not dispute, see generally Defs.' Opp., ECF No. 60, the Court determines the appropriate civil penalty to be imposed by considering five separate factors. See United States v. Danube Carpet Mills, Inc., 737 F.2d 988, 993 (11th Cir. 1984); United States v. Reader's Digest Ass'n, 662 F.2d 955, 967 (3d Cir. 1981). Specifically, courts consider: " (1) the good or bad faith of the defendants; (2) the injury to the public; (3) the defendants' ability to pay; (4) the desire to eliminate the benefits derived by the violations; and (5) the necessity of vindicating the authority of the FTC." Danube Carpet

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Mills, Inc., 737 F.2d at 994. The United States asserted that, based upon an analysis of these factors, a civil penalty award in the amount of $3,528,000 -- a sum which equals a $4,500 penalty every day in which the defendants failed to comply with the FTC Order -- is appropriate. See Pl.'s Mot., ECF No. 68 at 11-12. The Court agrees.

1. The Defendants Acted in Bad Faith.

There is no doubt that the defendants acted with " actual knowledge" that their conduct was unlawful and violated orders from the FTC, this Court and the D.C. Circuit. See 15 U.S.C. § 45. In other words, the defendants knew -- at the time they intentionally violated each order -- that their conduct was unlawful and yet continued to engage in that conduct. This is bad faith.

The FTC Order became effective on April 2, 2010. Rather than comply with the FTC Order, the defendants knowingly and deliberately continued to represent on websites, online forums, and their radio show that the Products would treat or cure cancer. Defendants' own statements demonstrate that their conduct was willful and deliberate. For example, as previously found by this Court,

[D]uring a radio show broadcast on June 23, 2011, the Feijos took a call from an individual who identified himself as Curtis, and who said that his daughter had cancer. James Feijo advised Curtis to go online and read the testimonies the Daniel Chapter One website to learn more, and stated that they support " God's way" of treating cancer through the use of 7 Herb Formula, BioShark, and GDU. In addition, James Feijo told Curtis that " the government is trying to stop us from helping you and your daughter . . . they want to not let us tell you about 7 Herb Formula, BioShark, and GDU, that God has given us to help people around the world." Patricia Feijo added:
[" W]e do care about your daughter . . . we just heard from our lawyer that a judge ruled in favor of the Trade Commission, and so, you know, basically we can be fined out of existence tonight or, or, put into prison, and we want people to know the reality that we're sitting here, willing to risk even our lives, to serve the lord and to serve you, right, but the situation is such that I would say get the product while you can, even stock up while you can, and if one day you won't be able to get our products then just, you know, try to continue to follow pretty much what those products are, the herbs, the enzymes, because that's what we have seen work for many years.[" ]
James Feijo then gave Curtis information on how to order the products, and directed Curtis to the healthfellowship.org website for more information. At other times during this same show, James Feijo stated that Daniel Chapter One's products, including GDU, were created and intended by God " for you, for your health and healing, as a prevention, to mitigate, to treat, to heal, to cure." Patricia Feijo told listeners that they did not share their experiences with the products had used it for a while and saw that it did indeed work, and then we began to share with people, hey, this is what works for this and that." Patricia Feijo stated that the testimonies the Feijos had received from their customers and placed on their website and in their BioGuide were a sampling of their customers' experiences and that the results in the testimonials were " very typical of what people experience." James and Patricia Feijo went on to

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describe how 7-Herb Formula had cured a man who had renal cancer.

Daniel Chapter One, 896 F.Supp.2d at 11-12.

Additionally, the defendants knowingly and deliberately ignored provisions in the FTC Order that required them to send a corrective notice to past purchasers. Id. Moreover, the defendants utterly failed to comply with the orders from the D.C. Circuit (for over one year) and this Court (for about a year) directing them to " obey forthwith" the FTC Order. The defendants did not send the corrective notice until, conveniently, five days before the contempt hearing in this case. See Pl.'s Mot., ECF No. 68 at 13.

Further, the defendants' own statements make it clear that they knew what they were required to do, and that they were deliberately not complying with the FTC Order. For example, after the D.C. Circuit issued its decision denying the defendants' petition for review of the FTC Order, the defendants posted the following message on their website:

Daniel Chapter One is being tortured right now for its opinion -- its knowledge -- about healing that is different from conventional medicine. Overseeer Jim Feijo has been threatened with bankrupting fines and incarceration for refusing to sign a government agency letter saying, in essense, the earth is flat. Literally, the letter denounces what Mr. Feijo knows to be true -- that Daniel Chapter One natural products are safe and effective in helping fight cancer and there is science supporting efficacy of their various ingredients -- and states what Mr Feijo and countless others know to be FALSE: that conventional cancer treatment has been proven safe and effective.

Pl.'s Mot., ECF No. 68 at Ex. D (typographic errors in original).

In addition, the introduction to the Daniel Chapter One Freedom website stated that:

They ordered that we sign a letter they wrote, a deceptive letter saying that only conventional cancer treatment has been proven safe and effective in humans, and send it to thousands of people.
But Daniel Chapter One cannot bear false witness...

Id. (emphasis in original).

Certainly, the defendants engaged in multiple violations over many years and their actions were intentional, willful and deliberate. Indeed, the defendants failed to demonstrate any intent to comply with the orders from the FTC, the D.C. Circuit or this Court; the defendants only agreed to comply with the FTC Order because they were facing significant civil contempt sanctions.

Accordingly, the defendants' bad-faith violations of the orders from the FTC, this Court and the D.C. Circuit warrant the maximum civil penalty.[6]

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2. Defendants Have Injured the Public.

The public harm in this case is significant and it occurred in several ways. First, consumers who purchased the Products suffered financial harm. Second, the defendants caused harm by publicizing deceptive information about their products and by failing to send the corrective notice to prior purchasers. Third, the defendants injured the public when they instructed consumers to stop using conventional, proven treatments and instead use the defendants' products.

Injury to the public can be found when consumers have lost money due to the defendants' violative conduct. See, e.g., United States v. Prochnow, No. 07-10273, 2007 WL 3082139, at *4 (11th Cir. Oct. 22, 2007) (" [C]ustomers [of a magazine telemarketer] were harmed by both the payments made for the magazine packages and the frustration, inconvenience, and expense involved in cancelling their subscription." ). The financial harm is easily calculated in this case. As previously discussed, the defendants collected $1,345,832.43 from the sale of the Products between April 2, 2010, when the FTC's Order went into effect, and May 24, 2012, when the defendants stopped violating the FTC Order.

In addition to the financial harm, injury to the public occurred whenever the defendants' deceptive and violative materials reached the public. See Danube Carpet Mills, 737 F.2d at 994; Reader's Digest, 662 F.2d at 969. Contrary to the defendants' assertion, the United States does not need to introduce " evidence of consumer confusion or deception" because " (t)he principal purpose of a cease and desist order is to prevent material having a capacity to confuse or deceive from reaching the public . . . (t)hus, whenever such promotional items reach the public, that in and of itself causes harm and injury." Reader's Digest, 662 F.2d at 969 (internal citations omitted). Undoubtedly, the defendants caused substantial public harm by using deceptive promotional information on websites, online forums, and their radio show. This injury to the public was further exacerbated because the defendants refused to mail the required notice informing consumers that the defendants' advertising claims were found by the FTC to be deceptive; such claims were not substantiated by competent and reliable scientific evidence.

Finally, after the D.C. Circuit ordered the defendants to " obey forthwith" the FTC Order, see Per Curiam Order, Daniel Chapter One, No. 10-1064, (D.C. Cir. Nov. 22, 2010), the defendants continued to advise people with cancer to stop conventional medical treatment and take the defendants' products instead. For example, as previously found by this Court,

During a radio show broadcast on February 22, 2011, Defendants accepted a call from a caller named Patricia, who stated that her doctor had found a mass on her breast. . . . James and Patricia Feijo instructed the caller not to get a biopsy, and Patricia Feijo stated that " if it is cancer, it can stir up the cells and can get them to spread[.]" . . . Patricia Feijo told the caller that she should take products " to treat it worst case scenario." . . . Defendants then asked someone to call in to help answer the caller's questions, and accepted a call from a

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caller named Greg, who said that, for " cancer . . . one thing I would add is BioShark to that." . . . Patricia Feijo confirmed this suggestion, stating, " yeah, definitely."

Daniel Chapter One, 896 F.Supp.2d at 11-12. This demonstrates the third way the public was harmed by the defendants' conduct; consumers suffered harm when they followed the defendants' advice, stopping conventional proven treatments to use the defendants' products. Accordingly, the Court finds that this factor weights strongly in favor of a substantial civil penalty.

3. A Civil Penalty Is Necessary to Eliminate Benefits Derived by the Defendants.

The third factor courts consider when entering a civil penalty is the need to eliminate any benefits a defendant received from the violation, and this factor is completely separate from any consumer redress or disgorgement ordered by the Court. " Elimination of the benefits of noncompliance is an essential element of the penalty, so that there is no incentive to violate the law[.]" United States v. Mac's Muffler Shop, Inc., 1986 WL 15443, *10 (N.D.Ga. Nov. 4, 1986); see also Reader's Digest, 662 F.2d at 969. Indeed, because a civil penalty should " be more than . . . an acceptable cost of doing business," the civil penalty should be higher than the amount the defendants benefited and the amount of any consumer redress award. FTC v. Onkyo U.S.A. Corp., No., 1995 WL 579811, at *4 n.6 (D.D.C. Aug. 21, 1995).

Defendants claim that if the Court imposes equitable monetary relief, no civil penalty should be imposed. This argument treats civil penalties and equitable monetary relief as mutually exclusive remedies. This is simply not correct. See Prochnow, 2007 WL 3082139, at *3 (affirming order of district court assessing civil penalties and disgorgement); FTC v. PayDay Fin. LLC, 989 F.Supp.2d 799, 2013 WL 5442387, at *17 (D.S.D. 2013) (imposing disgorgement remedy, and postponing a determination on an appropriate civil penalty until after trial); FTC v. Navestad, No., 2012 WL 1014818, at *9 (W.D.N.Y. Mar. 23, 2012) (entering judgment that included $20,000,000 in civil penalties and $1,105,078.96 as disgorgement). Therefore, the Court finds that this factor weighs in favor of a substantial civil penalty.

4. A Civil Penalty Is Necessary to Vindicate the Authority of the FTC.

" Since the Commission has no plenary power to enforce its own orders, it must enlist the aid of the federal district courts for that purpose. The penalty to be assessed must therefore be a significant one." FTC v. Consolidated Foods Corp., 396 F.Supp. 1353, 1357 (S.D.N.Y. 1975). Defendants' conduct has implications beyond this case. As the court described in Mac's Muffler Shop, " [i]f the regulated community perceives that violations of the law are treated lightly, the government's regulatory program is subverted." Mac's Muffler Shop, Inc., 1986 WL 15443 at *10. If a penalty is " [t]o have any deterrent effect, [it] must be large enough to be more than just . . . an acceptable cost of doing business." Onkyo U.S.A. Corp., 1995 WL 579811, at *4 n.6. For the penalty award to provide meaningful deterrence, it " 'should be large enough to hurt, and to deter anyone in the future from showing as little concern as [the defendants] did for the need to [comply].'" United States v. Phelps Dodge Indus., 589 F.Supp. 1340, 1367 (S.D.N.Y. 1984) ( quoting United States v. Swingline, Inc., 371 F.Supp. 37, 47 (E.D.N.Y. 1974)); United States v. ITT Continental Baking Co.,

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420 U.S. 223, 231-33, 95 S.Ct. 926, 43 L.Ed.2d 148 (1975).

The defendants have flouted the authority of the FTC, this Court and the D.C. Circuit by ignoring the FTC Order. Defendants continued to represent the Products as a treatment for cancer despite the FTC Order prohibiting them from doing so. Even after receiving orders from this Court and the D.C. Circuit, the defendants continued to make unsubstantiated claims that the Products treat cancer. Defendants' flagrant disregard for the FTC's authority merits a substantial penalty in order to vindicate the United States' authority and deter future violations.

5. The Defendants Are Able to Pay a Civil Penalty.

Courts look at a variety of data points when assessing a defendant's ability to pay. In Danube Carpet Mills, the Eleventh Circuit affirmed the district court's calculation of ability to pay based on the defendant's yearly profits and net worth, including both liquid and illiquid assets. Danube Carpet Mills, Inc., 737 F.2d at 994-95. However, other courts considering this factor have looked beyond the funds and assets currently in a defendant's possession. For example, in United States v. Lasseter, the district court imposed a civil penalty award after finding that the defendant received a " significant benefit" from the sale of his business, despite the defendant's assertion that he could not afford to pay a civil penalty because he was in Chapter 7 Bankruptcy. United States v. Lasseter, 2005 WL 1638735, at *6 (M.D. Tenn. June 30, 2005).

On November 11, 2012, the Court granted the United States' request for limited discovery concerning the defendants' ability to pay a civil penalty under the FTC Act. While the defendants acknowledged possessing assets and funds totaling $2,001,959.73, the United States argued that discovery revealed that the defendants have dissipated approximately $2.7 million dollars of proceeds and assets since commencement of the lawsuit. Pl.'s Mot., ECF No. 10-24. Specifically, the United States, very carefully, listed the defendants' assets and dissipated funds, which total $4,705.936.09. Id.

The United States requests that this Court consider both the listed assets and the dissipated funds in determining whether the defendants can pay a civil penalty. Id. The defendants do not dispute that the discovery conducted in this case supports the United States' calculations. See generally Defs.' Opp., ECF No. 70. Further, the defendants fail to respond to the United States' argument that the Court should consider both listed assets and dissipated funds in reaching a determination on whether the defendants can pay a civil penalty. Id. Thus, the defendants concede that the factual record, as detailed in the United States' motion, see Pl.'s Mot., ECF No. 19-24, including the United States' calculation of total assets and dissipated assets, is accurate and correct and that the Court should include the defendants' dissipated assets in determining the defendants' ability to pay a civil penalty. McGinnis, 2014 WL 4243542 at *15. Even assuming, arguendo, that the defendants did dispute the inclusion of their dissipated assets in the overall calculation in determining the defendants' ability to pay a civil penalty, the Court will not allow the defendants to benefit from their blatant attempt to dissipate their assets during this litigation. See SEC v. Metcalf, 2012 WL 5519358, at *8 (S.D.N.Y. Nov. 13, 2012) (discounting the defendants' claims of poverty where the defendant " knowing that he faced the very real possibility of civil financial penalties, chose to spend down his assets or failed to adjust his lifestyle" ). Accordingly, the

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Court finds that the defendants' known assets and dissipated funds total $4,705,936.09.

Rather than dispute the factual record developed by the United States, the defendants make the following blanket statement, without providing any reliable evidence: " Defendants' financial resources have been dissipated by the need to pay attorneys' fees to defend against [criminal charges filed against defendants]." See Defs' Supp., ECF No. 77 at 1. The defendants attempt to change previous discovery responses concerning its ability to pay by attaching an affidavit signed by Mr. Feijo. The defendants' supplemental filing, among other things, violates the " sham affidavit rule," which precludes a party from creating an issue of material fact by contradicting prior sworn testimony " merely by pointing to a self-serving, contradictory declaration[.]" Glass v. Lahood, 786 F.Supp.2d 189, 216 (D.D.C. 2011) ( citing Pyramid Sec. Ltd. v. IB Resolution, Inc., 924 F.2d 1114, 1123, 288 U.S.App.D.C. 157 (D.C. Cir. 1991)). A party must " 'offer persuasive reasons for believing the supposed correction' is more accurate than the prior testimony." Galvin v. Eli Lilly and Co., 488 F.3d 1026, 1030, 376 U.S.App.D.C. 330 (D.C. Cir. 2007) (quoting Pyramid Sec. Ltd., 924 F.2d at 1123).

The defendants provide no evidence to support any statement contained in the declaration, from the revised bank account information, to the attorneys' fees paid, to the transfer of real property, to the value of their inventory. The defendants could have easily provided evidentiary support. For example, the defendants simply could have attached bank statements, receipts from their attorneys, charitable gift receipts, or other similar documents. Instead, the defendants have provided absolutely no evidentiary support and have failed to " offer persuasive reasons for believing the supposed correction is more accurate than the prior testimony." Galvin, 488 F.3d at 1030. Therefore, the Court will not consider the defendants' supplemental filing in determining the defendants' ability to pay a civil penalty. In any event, the Court finds that the defendants' arguments raised in their supplemental filing unpersuasive because courts considering a defendant's ability to pay a civil penalty look beyond the funds and assets currently in the defendant's possession. See e.g., Lasseter, 2005 WL 1638735, at *6. Accordingly, the Court finds that this factor weighs in favor of a substantial civil penalty.

*****

Based on a careful consideration of each factor, the Court determines that a civil penalty in the amount of $3,528,000 is appropriate in this case.

IV. The Court Will Not Consider the Defendants' Cursory Eighth Amendment Argument.

The defendants raised the following cursory argument: " Defendants respectfully submit that imposing a civil penalty of $3,528,000 would violate the Eight Amendment's prohibition against cruel and unusual punishment. See United States v. Bajakajian, 524 U.S. 321, 336-37, 118 S.Ct. 2028, 141 L.Ed.2d 314 (1998)." See Defs.' Opp., ECF No. 70 at 6. That is the extent of the defendants' argument; they do not articulate any basis to support their argument and wholly fail to analyze Bajakajian. Specifically, the defendants do not address whether a civil penalty under the FTC Act is punitive or remedial in nature and whether, assuming the civil penalty is punitive and thus subject to the Eighth Amendment, the civil penalty requested by the United States in this case is " grossly disproportional to the gravity of [the] offense." Bajakajian, 524 U.S. at 334.

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The Court gave the defendants every opportunity to supplement their opposition. See October 6, 2014 Minute Order. Because the defendants raised this issue in " such a cursory fashion," the Court declines to resolve it. See Washington Legal Clinic for the Homeless v. Barry, 107 F.3d 32, 39, 323 U.S.App.D.C. 219 (D.C. Cir. 1997); Railway Labor Executives' Ass'n v. United States R.R. Retirement Bd., 749 F.2d 856, 859 n.6, 242 U.S.App.D.C. 178 (D.C. Cir. 1984) (declining to resolve issue " on the basis of briefing which consisted of only three sentences . . . and no discussion of the relevant statutory text, legislative history, or relevant case law" ).

V. Conclusion

For the foregoing reasons, the Court hereby GRANTS the United States' motion for entry of final judgment. An appropriate Order accompanies this Memorandum Opinion.

SO ORDERED.

ORDER

For the reasons stated in the accompanying Memorandum Opinion issued on this date, it is hereby

ORDERED that the United States' motion for entry of final judgment is GRANTED; and it is

FURTHER ORDERED as follows:

I. DEFINITIONS

For the purpose of this Order, the following definitions apply:

A. " Business" means any business, including a business carried on not for its own profit or the profit of its members.
B. " Defendants" mean the Corporate Defendant and the Individual Defendant, individually, collectively, or in any combination.
1. " Corporate Defendant" means Daniel Chapter One, and its successors and assigns.
2. " Individual Defendant" means James Feijo.
C. " Dietary supplement" means:
1. any product labeled as a dietary supplement or otherwise represented as a dietary supplement; or
2. any pill, tablet, capsule, powder, softgel, gelcap, liquid, or other similar form containing one or more ingredients that are a vitamin, mineral, herb or other botanical, amino acid, probiotic, or other dietary substance for use by humans to supplement the diet by increasing the total dietary intake, or a concentrate, metabolite, constituent, extract, or combination of any ingredient described above, that is intended to be ingested, and is not represented to be used as a conventional food or as a sole item of a meal or the diet.

II. MONETARY JUDGMENTS FOR EQUITABLE RELIEF AND CIVIL PENALTIES

It is FURTHER ORDERED that:

A. Judgment in the amount of $1,345,832.43 is entered in favor of Plaintiff against Defendants, jointly and severally, as equitable monetary relief.
B. Judgment in the amount of $3,528,000, is entered in favor of Plaintiff against Defendants, jointly and severally, as civil penalties.
C. Defendants are ordered to pay of $1,345,832.43 to the Commission within 7 days of entry of this Order by electronic fund transfer in accordance with instructions provided by a representative of the Commission.
D. Defendants are ordered to pay $3,528,000, to the Plaintiff, by making payment to the Treasurer of the United States. Such payment must be made within 7 days of entry of this Order by electronic fund transfer in accordance with instructions provided by a representative of Plaintiff.
E. Defendants are required to submit to Plaintiff and the Commission their Taxpayer Identification Numbers (Social Security Numbers or Employer Identification Numbers), which may be used for collecting and reporting on any delinquent amount arising out of this Order, in accordance with 31 U.S.C. § 7701.
F. All money paid as equitable monetary relief pursuant to this Order may be deposited into a fund administered by the Commission or its designee to be used for equitable relief, including consumer redress and any attendant expenses for the administration of any redress fund. If a representative of the Commission decides that direct redress to consumers is wholly or partially impracticable or money remains after redress is completed, the Commission may apply any remaining money for such other equitable relief (including consumer information remedies) as it determines to be reasonably related to Defendants' practices alleged in the Complaint. Any money not used for such equitable relief is to be deposited to the U.S. Treasury as disgorgement. Defendants have no right to challenge any actions Plaintiff, the Commission, or its representatives may take pursuant to this Subsection.

III. BAN ON DIETARY SUPPLEMENTS

It is FURTHER ORDERED that Defendants are permanently restrained and enjoined from advertising, promoting, or offering for sale, selling, or distributing, or assisting others in the advertising, promoting, offering for sale, selling, or distributing, of any dietary supplement.

IV. BAN ON DISEASE CLAIMS

It is FURTHER ORDERED that Defendants are permanently restrained and enjoined from making, directly or indirectly, in connection with the advertising, promoting, or offering for sale, selling, or distributing, of any product or service, or assisting others in the advertising, promoting, offering for sale, selling, or distributing, of any product or service any representation, expressly or by implication, that the product or service cures, treats, mitigates, prevents, or reduces the risk of any disease.

V. INJUNCTION AGAINST UNSUBSTANTIATED AND MISLEADING CLAIMS

It is FURTHER ORDERED that Defendants and their officers, agents, representatives, employees, and attorneys, and all persons in active concert or participation with any of them, who receive actual notice of this Order, are permanently enjoined from making, directly or indirectly, in connection with the advertising, promoting, or offering for sale, selling, or distributing, of any product or service:

A. any representation, expressly or by implication, about the health benefits, performance or efficacy of the product or service, unless the representation is true, non-misleading, and, at the time of making such representation, Defendants possess and rely upon competent and reliable scientific evidence, that is sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable evidence, to substantiate that the representation is true. For purposes of this Section, " competent and reliable scientific evidence" means tests, analyses, research, studies, that (1) have been conducted and evaluated in an objective manner by qualified persons and (2) are generally accepted in the profession to yield accurate and reliable results;
B. any representation, expressly or by implication, about the benefits, performance, or efficacy of any product or service, unless the representation is true, non-misleading, and, at the time of making such representation, Defendants possess and rely upon competent and reliable evidence, which when appropriate based on the expertise of professionals in the relevant area must be competent and reliable scientific evidence, that is sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable evidence, to substantiate that the representation is true. For purposes of this Section, " competent and reliable evidence" means tests, analyses, research, studies or other evidence based on expertise of professionals in the relevant area, that have been conducted and evaluated in an objective manner by persons qualified, using procedures generally accepted in the profession to yield accurate and reliable results. For purposes of this Section, " competent and reliable scientific evidence" means tests, analyses, research, studies, that (1) have been conducted and evaluated in an objective manner by qualified persons and (2) are generally accepted in the profession to yield accurate and reliable results; or
C. any misrepresentation of any fact material to consumers concerning the product or service, including its total costs, any material restrictions, limitations, or conditions, or its benefits, performance, efficacy, or other central characteristics.

VI. INJUNCTION AGAINST VIOLATING THE FTC ORDER

It is FURTHER ORDERED that Defendants and their officers, agents, representatives, employees, and attorneys, and all persons in active concert or participation with any of them, who receive actual notice of this Order, are permanently enjoined from violating, directly or indirectly, any provision of the Commission's Modified Final Order, In the Matter of Daniel Chapter One and James Feijo, issued January 25, 2010, a copy of which is attached as Attachment A.

VII. PROHIBITIONS CONCERNING INFORMATION ON PAST CUSTOMERS

It is FURTHER ORDERED that Defendants and their officers, agents, representatives, employees, and attorneys, and all persons in active concert or participation with any of them, who receive actual notice of this Order are permanently restrained and enjoined from directly or indirectly:

A. failing to provide sufficient customer information to enable the Commission to efficiently administer consumer redress. Defendants must, within 21 days after the date this Order is entered, deliver to the Commission a list, in the form of a sworn affidavit, of all consumers who purchased any of the following products: BioShark, 7 Herb Formula, GDU, Endo 24, BioMixx, on or after April 10, 2010. Such list shall include each consumer's name and address (and, if available, the consumer's telephone number and email address), the quantity of each such product purchased, the amount paid for each, the total amount paid, and the date of the purchase. If a representative of the Commission requests in writing any information related to redress, Defendants must provide it, in the form prescribed by the Commission, within 14 days.
B. disclosing, using, or benefitting from customer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a customer's account (including a credit card, bank account, or other financial account), that any Defendant obtained prior to entry of this Order; and
C. failing to destroy such customer information in all forms in their possession, custody, or control within 30 days after receipt of written direction to do so from a representative of the Commission. Provided, however, that customer information need not be disposed of, and may be disclosed, to the extent requested by a government agency or required by law, regulation, or court order.

VIII. ORDER ACKNOWLEDGMENTS

It is FURTHER ORDERED that Defendants obtain acknowledgments of receipt of this Order:

A. Each Defendant, within 7 days of entry of this Order, must submit to the Commission an acknowledgment of receipt of this Order sworn under penalty of perjury.
B. For 20 years after entry of this Order, Individual Defendant, for any business that such Defendant, individually or collectively with any other Defendant, is the majority owner or controls directly or indirectly, and each Corporate Defendant, must deliver a copy of this Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all employees, agents, and representatives who participate in conduct related to the subject matter of the Order; and (3) any business entity resulting from any change in structure as set forth in the Section titled Compliance Reporting. Delivery must occur within 7 days of entry of this Order for current personnel. For all others, delivery must occur before they assume their responsibilities.
C. From each individual or entity to which a Defendant delivered a copy of this Order, that Defendant must obtain, within 30 days, a signed and dated acknowledgment of receipt of this Order (including the attached Modified Final Order of the Commission).

IX. COMPLIANCE REPORTING

It is FURTHER ORDERED that Defendants make timely submissions to the Commission:

A. One year after entry of this Order, each Defendant must submit a compliance report, sworn under penalty of perjury. Each Defendant must: (a) identify the primary physical, postal, and email address and telephone number, as designated points of contact, which representatives of the Commission and Plaintiff may use to communicate with Defendant; (b) identify all of Defendant's businesses by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; (c) describe the activities of each business, including the products and services offered, the means of advertising, marketing, and sales; (d) describe in detail whether and how that Defendant is in compliance with each Section of this Order; and (e) provide a copy of each Order Acknowledgment obtained pursuant to this Order, unless previously submitted to the Commission.
B. For 20 years after entry of this Order, each Defendant must submit a compliance notice, sworn under penalty of perjury, within 14 days of any change in the following:
1. Each Defendant must: (a) identify the primary physical, postal, and email address and telephone number, as designated points of contact, which representatives of the Commission and Plaintiff may use to communicate with Defendant; (b) identify all of that Defendant's businesses by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; (c) describe the activities of each business, including the products and services offered, the means of advertising, marketing, and sales, and the involvement of the other Defendant (which Individual Defendant must describe if he knows or should know due to his own involvement); (d) describe in detail whether and how that Defendant is in compliance with each Section of this Order; and (e) provide a copy of each Order Acknowledgment obtained pursuant to this Order, unless previously submitted to the Commission.
2. Additionally, Individual Defendant must: (a) identify all telephone numbers and all physical, postal, email and Internet addresses, including all residences; (b) identify all business activities, including any business for which such Defendant performs services whether as an employee or otherwise and any entity in which such Defendant has any ownership interest; and (c) describe in detail such Defendant's involvement in each such business, including title, role, responsibilities, participation, authority, control, and any ownership.
C. Each Defendant must submit to the Commission notice of the filing of any bankruptcy petition, insolvency proceeding, or similar proceeding by or against such Defendant within 14 days of its filing.
D. Any submission to the Commission required by this Order to be sworn under penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by concluding: " I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on: " and supplying the date, signatory's full name, title (if applicable), and signature.
E. Unless otherwise directed by a Commission representative in writing, all submissions to the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580. The subject line must begin: U.S. v. DCO X100052.

X. RECORDKEEPING

It is FURTHER ORDERED that each Defendant must create certain records for 20 years after entry of the Order, and retain each such record for 5 years. Specifically, Corporate Defendant, in connection with the advertising, promoting, or offering for sale, selling, or distributing of any product or service, and Individual Defendant for any business that such Defendant, individually or collectively with the other Defendant, is a majority owner or controls directly or indirectly, must create and retain the following records:

A. accounting records showing the revenues from all products or services sold;
B. personnel records showing, for each person providing services, whether as an employee or otherwise, that person's: name; addresses; telephone numbers; job title or position; dates of service; and (if applicable) the reason for termination;
C. all records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Commission;
D. a copy of each unique advertisement or other promotional material containing any representation of the benefit, performance or efficacy of any product or service;
E. all materials that were relied upon in disseminating the representation; and
F. all tests, reports, studies, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

XI. COMPLIANCE MONITORING

It is FURTHER ORDERED that, for the purpose of monitoring Defendants' compliance with this Order, including any failure to transfer any assets as required by this Order:

A. Within 14 days of receipt of a written request from a representative of the Commission or Plaintiff, Defendants must: submit additional compliance reports or other requested information, which must be sworn under penalty of perjury; appear for depositions; and produce documents for inspection and copying. The Commission and Plaintiff are also authorized to obtain discovery, without further leave of court, using any of the procedures prescribed by Federal Rules of Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69.
B. For matters concerning this Order, the Commission and Plaintiff are authorized to communicate directly with each Defendant. Defendants must permit representatives of the Commission and Plaintiff to interview any employee or other person affiliated with any Defendant who has agreed to such an interview. The person interviewed may have counsel present.
C. The Commission and Plaintiff may use all other lawful means, including posing, through its representatives as consumers, suppliers, or other individuals or entities, to Defendants or any individual or entity affiliated with Defendants, without the necessity of identification or prior notice. Nothing in this Order limits the Commission's lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. § § 49, 57b-1.

XII. RETENTION OF JURISDICTION

It is FURTHER ORDERED that this Court retains jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order.

SO ORDERED.

Attachment A

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS: Jon Leibowitz, Chairman

Pamela Jones Harbour

William E. Kovacic

J. Thomas Rosch

In the Matter of

DANIEL CHAPTER ONE, a corporation, and

JAMES FEIJO, individually, and as an officer ofDaniel Chapter One

DOCKET NO. 9329

MODIFIED FINAL ORDER

The Commission has heard this matter on the appeal of Respondents from the Initial Decision and on briefs and oral argument in support of and in opposition to the appeal. For the reasons stated in the accompanying Opinion of the Commission, the Commission has determined to enter the following order. Accordingly,

I.

IT IS HEREBY ORDERED that for purposes of this Order, the following definitions shall apply:

A. " Competent and reliable scientific evidence" shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.

B. " Covered Product or Service" shall mean any dietary supplement, food, drug, or other health-related product, service, or program, including, but not limited to, BioShark, 7 Herb Formula, GDU, and BioMixx.

C. " Food" and " drug" shall mean " food" and " drug" as defined in Section 15 of the Federal Trade Commission Act (" FTC Act" ), 15 U.S.C. § 55.

D. " Advertisement" means any written or verbal statement, illustration, or depiction that is designed to effect a sale or to create interest in the purchasing of goods or services, whether it appears in a book, brochure, newspaper, magazine, pamphlet, leaflet, circular, mailer, book insert, letter, catalogue, poster, chart, billboard, public transit card, point of purchase display, packaging, package insert, label, film, slide, radio, television or cable television, video news release, audio program transmitted over a telephone system, infomercial, the Internet, e-mail, or in any other medium.

E. Unless otherwise specified, " Respondents" shall mean Daniel Chapter One and its successors and assigns, affiliates, or subsidiaries, and its officer, James Feijo, individually and as an officer of the corporation; and each of the above's agents, representatives, and employees.

F. " Commerce" shall mean " commerce" as defined in Section 4 of the FTC Act, 15 U.S.C. § 44.

G. " Endorsement" shall mean " endorsement" as defined in 16 C.F.R. § 255.0(b).

II.

IT IS HEREBY ORDERED that Respondents, directly or through any corporation, partnership, subsidiary, division, trade name, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of BioShark, 7 Herb Formula, GDU, and BioMixx, or any substantially similar health-related program, service, or product, or any other Covered Product or Service, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, including through the use of product or program names or endorsements, that such health-related program, service, product, or Covered Product or Service prevents, treats, or cures or assists in the prevention, treatment, or cure of any type of tumor or cancer, including but not limited to representations that:

1. BioShark inhibits tumor growth;
2. BioShark is effective in the treatment of cancer;
3. 7 Herb Formula is effective in the treatment or cure of cancer;
4. 7 Herb Formula inhibits tumor formation;
5. GDU eliminates tumors;
6. GDU is effective in the treatment of cancer;
7. BioMixx is effective in the treatment of cancer; or
8. BioMixx heals the destructive effects of radiation or chemotherapy;

unless the representation is true, non-misleading, and, at the time it is made, Respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

III.

IT IS FURTHER ORDERED that Respondents, directly or through any person, corporation, partnership, subsidiary, division, trade name, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any Covered Product or Service, in or affecting commerce, shall not make any representation, in any manner, directly or by implication, including through the use of a product name, endorsement, depiction, or illustration, about the efficacy, performance, or health-related benefits of any Covered Product or Service unless the representation is true, non-misleading, and, at the time it is made, Respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

IV.

IT IS FURTHER ORDERED that:

A. Nothing in this order shall prohibit Respondents from making any representation for any drug that is permitted in labeling for such drug under any tentative or final standard promulgated by the Food and Drug Administration, or under any new drug application approved by the Food and Drug Administration; and

B. Nothing in this order shall prohibit Respondents from making any representation for any product that is specifically permitted in labeling for such product by regulations promulgated by the Food and Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990.

V.

IT IS FURTHER ORDERED that:

A. Respondents shall, within seven (7) days after the final and effective date of this order, deliver to the Commission a list, in the form of a sworn affidavit, of all consumers who purchased BioShark, 7 Herb Formula, GDU, and/or BioMixx, on or after January 1, 2005 and until the date this order becomes final and effective. Such list shall include each consumer's name and address, the product(s) purchased, and, if available, the consumer's telephone number and email address;

B. Within forty-five (45) days after the final and effective date of this order, Respondents shall send by first class mail, postage prepaid, an exact copy of the notice attached as Attachment A to all persons identified in Part V.A., above. The face of the envelope containing the notice shall be an exact copy of Attachment B. The mailing shall not include any other documents; and

C. Except as provided in this order, Respondents, and their officers, agents, servants, employees, attorneys, and representatives shall not sell, rent, lease, transfer, or otherwise disclose the name, address, telephone number, credit card number, bank account number, e-mail address, or other identifying information of any person who paid any money to any Respondent, at any time and until the date this order becomes final and effective, in connection with the purchase of BioShark, 7 Herb Formula, GDU, and/or BioMixx. Provided, however, that Respondents may disclose such identifying information to the FTC pursuant to Part V.A., above, or any law enforcement agency, or as required by any law, regulation, or court order.

VI.

IT IS FURTHER ORDERED that for a period of five (5) years after the last date of dissemination of any representation covered by this order, Respondents shall maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All advertisements and promotional materials containing the representation;

B. All materials that were relied upon in disseminating the representation; and

C. All tests, reports, studies, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question such representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

VII.

IT IS FURTHER ORDERED that Respondents shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondents shall deliver this order to current personnel within thirty (30) days after the final and effective date of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities.

VIII.

IT IS FURTHER ORDERED that Respondent Feijo, for a period of ten (10) years after the date of issuance of this order, shall notify the Commission of the discontinuance of his current business or employment, or of his affiliation with any new business or employment. The notice shall include the individual Respondent's new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities. All notices required by this Paragraph shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

IX.

IT IS FURTHER ORDERED that Respondent DCO and its successors and assigns shall notify the Commission at least thirty (30) days prior to any change in the corporation(s) that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which Respondent DCO learns less than thirty (30) days prior to the date such action is to take place, Respondent DCO shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Paragraph shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

X.

IT IS FURTHER ORDERED that Respondents shall, within sixty (60) days after the final and effective date of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

XI.

IT IS FURTHER ORDERED that this order will terminate on January 25, 2030, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:

A. Any paragraph in this order that terminates in less than twenty (20) years;

B. This order's application to any Respondent that is not named as a defendant in such complaint; and

C. This order if such complaint is filed after the order has terminated pursuant to this paragraph. Provided further, that if such complaint is dismissed or a federal court rules that the Respondents did not violate any provision of this order, and the dismissal is either not appealed or upheld on appeal, then the order will terminate according to this paragraph as though the complaint was never filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

By the Commission.

Donald S. Clark, Secretary

ISSUED: January 25, 2010

ATTACHMENT A

LETTER TO BE SENT BY FIRST CLASS MAIL

[To be printed on letterhead of Daniel Chapter One]

[Name and address of recipient] [Date]

Dear [Recipient]:

Our records show that you bought [names of products] from our website [name of website] or through a call center using our toll-free number. We are writing to tell you that the Federal Trade Commission (" FTC" ) has found our advertising claims for these products to be deceptive because they were not substantiated by competent and reliable scientific evidence, and the FTC has issued an Order prohibiting us from making these claims in the future.

The Order entered against us by the FTC requires that we send you the following information from the FTC about the scientific evidence on these products:

Competent and reliable scientific evidence does not demonstrate that any of the ingredients in BioShark, 7 Herb Formula, GDU or BioMixx, are effective when used for prevention, treatment or cure of cancer.
It is important that you talk to your doctor or health care provider before using any herbal product in order to ensure that all aspects of your medical treatment work together. Some herbal products may interfere or affect your cancer or other medical treatment, may keep your medicines from doing what they are supposed to do, or could be harmful when taken with other medicines, or in high doses. It is also important that you talk to your doctor or health care provider before you decide to take any herbal product instead of taking cancer treatments that have been scientifically proven to be safe and effective in humans.

Sincerely,

ATTACHMENT B

Daniel Chapter One1028 East Main RoadPortsmouth, Rhode Island, 02871

[name and address of purchaser]

GOVERNMENT ORDERED NOTICE


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