Receivership Appointments Ecom Genie Hoffman Law Group Berger Law Group, P.A./The Resolution Law Group, P.C. Loyal Financial & Credit Services and Life Management Services of Orange County MOBE First Choice Horizon LLC, d/b/a CSG Solutions and Second Choice Horizon Inmate Magazine Service, Inc. C Lee Enterprises LLC, d/b/a Grant Bae Vision Online / Ganadores Legion Media LLC Complaint For Permanent Injuction Temporary Restraining Order - Signed Receiver's Interim Report Receiver's Second Interim Report Receiver's Motion to Extend Receivership and Confirm Receivership Authority

Legion Media LLC

On June 17, 2024, the Federal Trade Commission, an agency of the United States of America, filed a lawsuit against Defendants Harshil Topiwala, Manindra “Manin” Garg and Kirtan “Kits” Patel (the “Individual Defendants”), as well as Defendants Legion Media, LLC, KP Commercial, LLC, Pinnacle Payments, LLC and Sloan Health Products, LLC (together the “Company Defendants”), alleging that all of the Defendants operated as a “common enterprise” to commit violations of various provisions of federal law, including:

Section 5 of the FTC Act, prohibiting unfair or deceptive acts or practices in or affecting commerce;
Sections 3 and 4 of the Restore Online Shoppers’ Confidence Act (ROSCA), prohibiting merchants from charging consumers for goods or services sold in internet transactions through a “negative option” feature absent specific material disclosures and consumers’ express consent; and
The Electronic Fund Transfer Act and associated Regulation E, prohibiting preauthorized transfers of funds from consumers’ accounts without consumers’ express written authorization.

On June 18, 2024, the district court entered a Temporary Restraining Order (TRO) that, among other things, enjoined all of the Defendants from violating the federal laws and rules listed above. The TRO also appointed Mark J. Bernet ("Receiver") as a temporary receiver to take control of the Company Defendants to examine their business practices and suspend their business operations unless the Receiver determined they could be continued legally and profitably. The Court has extended the TRO through September 9, 2024, by its orders dated June 28, July 15, and August 5, 2024.

The Defendants allegedly operated as a common enterprise to deceive consumers with ads for “free” CBD and Keto-related personal care products, billing many for products they did not consent to purchase, signing many up for unwanted continuity plans, and debiting money from their bank accounts without prior authorization. The FTC also alleged that some of the Defendants laundered credit card payments by setting up bank accounts for shell companies using straw signers.

The FTC's Complaint names two related groups as defendants: 1) U.K. resident Harshil Topiwala, Florida resident Kirtan "Kits" Patel, and the three companies they operate, Legion Media, LLC, KP Commerce, LLC, and Pinnacle Payments, LLC; and 2) Jamaican-native and now Florida resident Manindra "Manin" Garg and a company he operates, Sloan Health Products, LLC.

According to the Complaint, the Legion Media defendants have operated two types of unauthorized billing scams. In the first, the Legion Media defendants allegedly marketed products that supposedly promoted weight loss, clear skin, or other health benefits. They then allegedly defrauded consumers who bought the products by charging them more than the advertised price and enrolling them in continuity plans without their consent, and they allegedly charged consumers for products they never intended or agreed to buy.

The Legion Media defendants also allegedly participated in business impersonation scams where consumers received communications appearing to be from known businesses inviting them to pay a small shipping fee for a supposedly free “gift” online. However, after consumers used their credit and debit cards to pay a fee, they incurred recurring unauthorized charges on their cards. The Legion Media defendants allegedly facilitated the scams by securing numerous merchant accounts using shell entities to process the unauthorized online charges.

The FTC alleged Sloan Health worked together with Legion Media by labeling and shipping the deceptively marketed personal care products and handling the large volume of customer returns. The complaint states that Sloan shared in the profits of the scheme and distributed the products without providing any information that would reveal their identity to consumers, using only the generic name “Fulfillment Center” and a post office box address in Smyrna, Tennessee.

A copy of the FTC's Complaint can be found here.

The Receiver has now filed his Receiver's Interim Report, a copy of which can be found here. In it, the Receiver outlines his actions in taking control of the Company Defendants and discovering that Sloan and a sister company, F & B Cosmetics, LLC employed 130 people and manufactured skin and health care products, cosmetics, and health and diet supplements. The Receiver further discusses his determination to expand the receivership to include several non-party affiliates (including F & B), and his decision to suspend the operations of the Legion Media Defendants but continue to operate Sloan and F & B after determining that, with certain modifications, they could be operated legally and profitably.