Federal Trade Commission v. Ideal Financial Solutions, Inc., 2:13-cv-00143

Background

The FTC sued Ideal Financial Solutions, related corporate shells, and individual controllers for a long-running scheme that purchased consumer bank/credit-card data and charged consumers for financial services that were not provided, violating Section 5 of the FTC Act.
Clerk’s defaults were entered against six corporate defendants; summary judgment on liability was previously granted against individual defendants Jared Mosher, Christopher Sunyich, Melissa Sunyich Gardner, Michael Sunyich, and Steven Sunyich (with consent judgments for Kent Brown and Shawn Sunyich).
The FTC sought equitable monetary relief (~$43.08 million) based on defendants’ own customer database (OrangeCRM) and payment-processor records; damages were recalculated using an authenticated expert report after the court declined to consider an earlier unsworn report.
The court found the FTC’s damages methodology reasonably approximated consumer net losses: joint-and-several liability of $43,083,720 for most defendants and $36,575,542 as to Mosher (who joined later). Defendants failed to rebut the calculations.
The court entered default judgment against the corporate defendants under the Eitel factors and granted summary judgment on relief against individual defendants in part, imposing a permanent injunction tailored to prevent similar future violations and monitoring obligations.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Monetary relief — amount of consumer loss	FTC: OrangeCRM + processor records + expert report reasonably approximate net consumer loss (~$43.08M; Mosher liable for $36.58M).	Defendants: generally denied liability; offered no admissible evidence disputing damages.	Court: Adopted FTC’s approximation; awarded $43,083,720 jointly and severally (Mosher: $36,575,542).
Default judgment against corporate defendants	FTC: Corporate defaults and admitted allegations support entry of default judgment and monetary relief.	Corporate defendants: failed to appear or retain counsel; no opposing evidence.	Court: Eitel factors favor default; default judgment entered consistent with monetary findings.
Scope — ban on collecting/using consumer account info	FTC: Permanent bar on collecting/disclosing consumer account identifiers is reasonably related to misconduct.	Defendants: did not meaningfully contest scope.	Court: Granted permanent ban on collecting/disclosing consumer account information (narrow exceptions; destruction requirement).
Scope — ban on certain payment methods, broad disclosure/misrepresentation prohibitions, and consumer-authorization rule	FTC: Broad prohibitions (remotely created checks, cash-reload payments) and strict pre-charge disclosures will prevent recurrence.	Defendants: argued injunction inappropriate; generally contested relief as overbroad.	Court: Denied prohibitions on remotely created checks and overly broad disclosure/misrepresentation/authorization provisions (sections II, IV, V) as not reasonably related or unnecessarily restrictive; granted targeted bans (credit-related products for three individuals) and 10-year compliance/reporting requirements.

Key Cases Cited

Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100 (9th Cir. 1986) (summary-judgment standard)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary-judgment and standard for genuine issue of material fact)
Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (allocation of burden on summary judgment)
F.T.C. v. Stefanchik, 559 F.3d 924 (9th Cir. 2009) (FTC may recover consumer loss rather than limiting to defendant profits)
F.T.C. v. Cyberspace.com LLC, 453 F.3d 1196 (9th Cir. 2006) (personal liability for corporate FTC violations requires participation or control and scienter)
Litton Indus., Inc. v. F.T.C., 676 F.2d 364 (9th Cir. 1982) (injunction must reasonably relate to unlawful practice)
John Beck Amazing Profits, LLC, 888 F. Supp. 2d 1006 (C.D. Cal. 2012) (factors and scope in crafting FTC injunctions)
Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (factors governing default-judgment entry)