Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—M.D. Fla.: Self-incrimination immunity rejected in FTC action against fraudulent debt-relief scheme, (Dec 5, 2016)

By Edward L. Puzzo, J.D.

An individual defendant in an FTC action challenging an allegedly fraudulent telemarketing debt-relief scheme could not invoke Fifth Amendment privilege to protect the identity of another individual purportedly involved in the scheme. The privilege is personal and does not permit a witness to protect another person from incrimination (FTC v. Life Management Services of Orange County, LLC, December 2, 2016, Smith, T.).

The FTC and the Florida Attorney General brought an action against a number of individuals, including Chase P. Jackowski, and a number of their corporations, including Life Management Services of Orange County, alleging that they had engaged in a telemarketing scheme intended to defraud financially distressed consumers by selling them phony debt relief services, in violation of the Federal Trade Commission Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, and the Florida Deceptive and Unfair Trade Practices Act.

Receiver appointed. Previously, the federal district court in Orlando entered a preliminary injunction freezing the defendants' assets and appointed a permanent receiver for the corporate defendants. That receiver alleges that defendant Jackowski withdrew over $800,000 in cash and almost $2 million in wire transfers from defendant corporations in receivership. In his previous testimony, Jackowski stated that he took these actions at the direction of another individual, but, citing Fifth Amendment privilege, refused to reveal the name of that individual. The receiver now moved to compel Jackowski's complete testimony.

Fifth Amendment privilege. The court ruled that Jackowski's invocation of Fifth Amendment privilege was improper. The court noted that Jackowski had previously freely testified about the scheme and his role in it, thus waiving any Fifth Amendment privilege he could have invoked personally. Jackowski only invoked immunity to protect the identity of a long-time friend. Such a selective use of immunity is not permitted, nor is the invocation of the privilege to protect others, the court stated. The court therefore granted the receiver's motion to compel Jackowski's testimony and answer in full all of the receiver's questions concerning the identity of all other persons involved in the withdrawal and use of the defendant companies in receivership.

The case is No. 6:16-cv-00982-CEM-TBS.

Attorneys: Joshua A. Doan for the FTC.

Companies: Life Management Services of Orange County, LLC; Loyal Financial & Credit Services, LLC; IVD Recovery, LLC

Cases: ConsumerProtection StateUnfairTradePractices FederalTradeCommissionNews FloridaNews