By Michael Howell
Lawyers for the Federal Trade Commission filed a civil complaint in January of this year against Stevensville couple Steven Sann and Terry Lane (Sann), their son Nathan Sann and their accountant Robert Braach, both from Missoula, accusing them of unfair and deceptive acts and practices for “cramming” $70 million worth of unauthorized charges onto unsuspecting people’s telephone bills. The complaint alleges they netted over $26 million in net revenues from those charges and funneled them through a non-profit religious organization, using some of the funds to buy land and to provide legal services for Sann in an unrelated case in which he was charged with funding the illegal operation of two medical marijuana businesses.
The complaint filed by the FTC alleges that the defendants, through a network of interrelated companies, placed charges for voice mail services, electronic fax services or other non-call related services on unsuspecting customer’s phone bills. They allege that since December 2009 the defendants have transferred substantial sums and real property to a non-profit they established called Bibliologic.
In the civil suit against the four individuals, nine companies formed and operated by one or more of them were also named as defendants including American Evoice, Ltd., Emerica Media Corporation; Foneright, Inc.; Global Voice Mail, Ltd.; Hearyou2, Inc.; Network Assurance, Inc.; Securatdat, Inc.; Techmax Solutions, Inc.; and Voice Mail Professionals, Inc.
The FTC is seeking a preliminary injunction and an order freezing assets to preserve the possibility of effective final relief as well as a permanent injunction to prevent future violations. They also seek rescission or reformation of contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten assets. They ask the judge to order the disgorgement of all monies and assets of Bibliologic that are traceable to the defendants’ unlawful acts. They also seek attorney’s fees.
The defendants have denied the charges against them, claiming their business practices are fair and they acted in good faith. They claim that Nathan and Terry Sann never acted as individuals. They claim the actions requested by the FTC are blocked by various legal doctrines as well as by a statute of limitations. They claim that there was no harm to the plaintiffs and that if any customers suffered damage it was due to their own failure to mitigate the problem.
According to FTC Attorney Richard McKewen in the Seattle office, the defendants also asked the judge to put the case on hold due to the fact that Sann was already under investigation by the U.S. Attorney’s Office in Missoula. The defendants claim that the civil case should not continue at the same time a criminal investigation is underway.
According to McKewen, a hearing date has been set for May 9 at the Federal Courthouse in Missoula and the judge has indicated that he will hear about the request for a stay due to the parallel criminal investigation, and consider the FTC’s request for a preliminary injunction.