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09/20/2018

Dennis Cupo Officially Dismissed from FTC v. Vylah Tec LLC

WASHINGTON D.C. In a major victory, Cause of Action Institute (CoA Institute) today, celebrated the decision by a federal district court to dismiss, with prejudice, all claims against Dennis Cupo in an ongoing case, FTC v. Vylah Tec LLC. The Federal Trade Commission moved to dismiss Mr. Cupo from the case after the U.S. District Court Middle District of Florida ruled the FTC had failed to produce any evidence linking him to any alleged wrongdoing and denied the FTC’s motion to re-freeze his assets.

“We applaud today’s decision to dismiss Mr. Dennis Cupo from this case so he can rebuild his life after being unfairly targeted by the government,” said John Vecchione, president and CEO of Cause of Action Institute. “While we celebrate today’s dismissal, the FTC is still casting overbroad nets to freeze the assets of Americans and illustrates the urgent need to reform the agency from the top down.”

After obtaining a secret court order, Vylah Tec, a family-run tech support company owned by Dennis’ brother Robert Cupo, was targeted by the Federal Trade Commission as part of “Operation Tech Trap” because it bore a superficial resemblance to other companies with illegitimate practices. Failing to take into account Vylah Tec’s substantial well-regarded services, the Government sought to shut the company down, depriving thousands of customers of pre-paid technical support services. The FTC aggravated that overreach by implicating Dennis Cupo, for whom the FTC failed to establish any meaningful relationship to the business. Despite this, it took a year of litigation and a court order to motivate the Federal Trade Commission to finally dismiss an innocent bystander from the case.

The case highlights much-needed reform in the FTC due to its aggressive, overbearing, and unfair enforcement process. Cause of Action Institute recently filed more than 15 pages of recommended changes that can read here.

About Cause of Action Institute

Cause of Action Institute is a 501(c)(3) non-profit working to enhance individual and economic liberty by limiting the power of the administrative state to make decisions that are contrary to freedom and prosperity by advocating for a transparent and accountable government free from abuse.

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09/14/2018

Cause of Action files lawsuit against DOJ relating to Lois Lerner-IRS data scandal

WASHINGTON, D.C. – Sept. 14, 2018 – Cause of Action Institute (CoA Institute) has filed a lawsuit against the Department of Justice (DOJ) seeking records relating to the infamous Lois Lerner-IRS scandal. In 2010, the Internal Revenue Service (IRS) improperly released 21 CDs of confidential taxpayer information to the DOJ. This illegal release of confidential tax information resulted in several internal investigations, but the government has refused to release any of its internal reports or communications relating to the scandal.

“Taxpayers deserve to a have a full and clear picture of what took place nearly a decade ago when the U.S. Department of Justice and Internal Revenue Service were partnering in an effort to target nonprofits,” said Ryan Mulvey, counsel at Cause of Action Institute. “We have repeatedly requested the release of the internal investigation reports and the records revealing when and what the DOJ shared with Congress about this improper release. Taxpayers deserve a clear picture of who knew what and what really took place in the targeting of nonprofits by the DOJ and the IRS.”

In its investigation of this matter, CoA Institute has engaged with various DOJ components and Treasury Inspector General for Tax Administration (TIGTA), filed multiple unanswered Freedom of Information Act (FOIA) requests, and sought records regarding the potentially illegal access to and disclosure of this confidential taxpayer information.

Background:

  • In 2013, the public learned that the IRS Exempt Organizations Section, led by then-Director Lois Lerner, had been involved in unfairly targeting nonprofits, allegedly for political purposes.
  • Before then, the IRS and DOJ met on several occasions to discuss targeted prosecutorial efforts.
  • At one of those meetings, the IRS improperly provided the DOJ with 21 CDs containing statutorily protected confidential taxpayer information. That information could have been disclosed to the DOJ pursuant to statutory exemptions, none of which applied to this disclosure.
  • DOJ returned to the IRS, the CDs contained 1.1 million pages of confidential information regarding tax return information of various tax-exempt groups.
  • CoA Institute wrote to both the TIGTA and the DOJ Office of Inspector General (DOJ OIG) to request investigations into this illegal access to and disclosure of confidential taxpayer information. TIGTA and DOJ OIG both opened investigations of this matter.
  • TIGTA refused to release its findings.
  • DOJ OIG, in a letter to CoA Institute, explained that, “[b]ased upon [its] initial inquiries, it appears that some protected taxpayer information was included on compact disks (CDs) that the IRS provided to the Department in response to a Department request.” Once “the Department learned of this, it returned the CDs to the IRS and informed Congress about it.” Citing “the absence of available information,” DOJ-OIG “determined that [CoA Institute’s request] does not warrant further investigation.”
  • In October 2016, CoA Institute sent a FOIA request to the DOJ-OIG seeking records of its communication with Congress relating to this unauthorized disclosure.
  • In October 2017, CoA Institute sent two additional FOIA requests to various DOJ components to ensure that CoA Institute received all relevant records pertaining to the IRS’s unlawful disclosure, particularly regarding the DOJ’s communications with Congress.
  • DOJ has refused to respond to any of the CoA Institute FOIA requests for this matter.
  • On Thursday, Sept. 13, 2018 Cause of Action Institute filed the following complaint against the U.S. Department of Justice, Cause of Action Inst. v. U.S. Dep’t of Justice, 18-2126 (D.D.C.)

Full complaint can be viewed below.

About Cause of Action Institute

Cause of Action Institute is a 501(c)(3) non-profit working to enhance individual and economic liberty by limiting the power of the administrative state to make decisions that are contrary to freedom and prosperity by advocating for a transparent and accountable government.

Media Contact:

Matt Frendewey

matt.frendewey@causeofaction.org

202-699-2018

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09/12/2018

Court to FTC: Effort to freeze assets goes too far

In the ongoing Cupo case (FTC v. Vylah Tec LLC), Court denies FTC’s motion to re-freeze CoA Institute’s clients’ assets, including a house and personal bank accounts

Washington, D.C. Cause of Action Institute (CoA) successfully defeated the Federal Trade Commission’s (FTC) efforts to re-freeze some personal assets of CoA client Dennis Cupo and marital assets of Robert Cupo. The assets were frozen at the outset of the case, but upon appeal, the 11th Circuit Court of Appeals unfroze the assets and remanded the case back to the District Court. Judge Sheri Polster Chappell’s order, published yesterday evening, is a major victory for the defendants, especially Dennis Cupo – the Court agreed with CoA’s argument that the Government failed to tie Dennis Cupo’s personal assets to any of the allegations. Much of the case, FTC v. Vylah Tec LLC, centers on the FTC’s aggressive action, including seizing the now-freed assets, securing a temporary restraining order in secret, and using aggressive policing tactics – such as raiding the defendant’s office with armed police officers.

“Yesterday’s ruling and this case are broader than a simple enforcement action by the FTC – it’s about an agency that routinely exceeds its authority to crack down on businesses with aggressive tactics that are meant to scare, intimidate, and bully companies and individual entrepreneurs,” said John Vecchione, president and CEO of Cause of Action Institute. “The Court’s opinion makes clear that the FTC cannot charge Americans with wrongdoing and seize assets, while failing to prove a defendant’s connection to the case or justify the asset seizure. This is a significant victory for the defendants and an important victory in our effort to curb the FTC’s abuse of power.”

Importantly, the Court found that the Government has failed to produce any evidence of wrongdoing about one of the named defendants, Dennis Cupo.  As the Court said, “For one thing, it only works if Dennis is a ‘wrongdoer.’ The evidence above clearly suggests otherwise.”

The case involves a small family-run tech support company, Vylah Tec, LLC (“V-Tec”). After obtaining a secret court order, the Federal Trade Commission targeted the company and conducted an hours-long raid of the company’s headquarters on suspicion of “deceptive” sales practices. The raid was initiated as part of a politically-hyped campaign known as Operation Tech Trap headed by the FTC in conjunction with the Florida Attorney General’s office. Despite the hostile raid and seizure of all computers and records, FTC investigators were unable to produce evidence tying any alleged improper conduct to the unfrozen assets, or wrongdoing of any kind to Dennis Cupo.

Not only did the FTC demand a freeze of assets of the defendants, but they also went so far as to demand a freeze of the jointly held marital assets of the wife of one of the defendants. After the 11th Circuit Court of Appeals reversed this freeze – the FTC filed a new motion to recapture the same personal assets without the evidence needed in equity. Judge Chappell strongly rebuked the motion.

“The FTC often lives in a world of its own reality and tries to summarily dictate the law to businesses,” Vecchione added. “In these cases, the FTC plays with a stacked deck as they are granted a much lower bar to proving wrongdoing or seizing assets. The Court found that the FTC did not meet even the lower standard. The Court’s order means a Florida couple can proceed with their lives without a Government threat to leave them homeless, and we hope will lead to Mr. Dennis Cupo being dismissed from the case. We are gratified by this ruling, denying the FTC’s lawless effort to seize assets without following the process every American is due.”

The case highlights much-needed reform in the FTC due to its aggressive, overbearing, and unfair enforcement process. Cause of Action Institute recently filed more than 15 pages of recommended changes that can read here.

About Cause of Action Institute

Cause of Action Institute is a 501(c)(3) non-profit working to enhance individual and economic liberty by limiting the power of the administrative state to make decisions that are contrary to freedom and prosperity by advocating for a transparent and accountable government free from abuse.

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08/14/2018

Cause of Action Applauds Settlement in Qualified Immunity Case

Washington, D.C. (Aug. 14, 2018) – Cause of Action Institute (CoA Institute) today applauds the settlement in the case of Allah v. Milling. The case revolved around the prison officials denying an inmate named Almighty Supreme Born Allah, due process and holding him in solitary confinement. The District Court ruled in favor of the inmate. That decision was overturned by the Appellate Court, citing the broad definition of “qualified immunity,” even though the Appellate Court recognized that the inmate was denied due process. Qualified immunity is a legal doctrine that shields public officials from civil suits. Cause of Action supports narrowing the scope to ensure citizens who are harmed by corrupt public officials can have relief in court.

John J. Vecchione, president and CEO of Cause of Action Institute issued the following statement:

“We are pleased to see the state of Connecticut recognize that Mr. Allah was harmed and has settled this case. Although we were anxious to see an overbroad application of qualified immunity redressed in the United States Supreme Court, we hope this case serves as a reminder that public officials are accountable to the citizens they serve, and an overbroad definition of qualified immunity undermines the trust we place in those who choose a path of public service by providing far too much protection to individuals who violate their commitment and the public’s trust.”

The case was unique for many reasons, most notably, the diverse coalition that came together in defense of Mr. Allah and to challenge qualified immunity. Cause of Action Institute signed an amicus brief alongside American Civil Liberties Union, American Association for Justice, Alliance Defending Freedom, Americans for Prosperity, The Institute for Justice, Law Enforcement Action Partnership, National Association of Criminal Defense Lawyers, among many others and led by the Cato Institute.

Allah v. Milling Background:

While awaiting trial on a drug charge, Mr. Allah was kept in solitary confinement for seven months because he had once asked a question to a guard during a previous period of incarceration. Both the District Court and Appellate Court agreed that the defendants had denied Mr. Allah due process. However, the Appellate Court ultimately reversed the lower court’s ruling citing qualified immunity.

Qualified immunity has become a broad legal doctrine that protects government employees from civil lawsuits. In the amici, we argued, “qualified immunity denies justice to victims of unconstitutional misconduct.” We had hoped the United States Supreme Court would recognize that the defendants constitutional right to due process had been violated and therefore narrow the legal doctrine of qualified immunity to ensure defendants like Mr. Allah receive the justifiable relief they’re owed.

 

About Cause of Action Institute

Cause of Action Institute is a 501(c)(3) non-profit working to enhance individual and economic liberty by limiting the power of the administrative state to make decisions that are contrary to freedom and prosperity by advocating for a transparent and accountable government free from abuse.

Media Contact:
Matt Frendewey
matt.frendewey@causeofaction.org
202-499-4231

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08/7/2018

Cause of Action Institute Files Suit Against DOJ for Emails Relating to Daniel Richman: Second lawsuit in six days against DOJ for failing to comply with FOIA

WASHINGTON, D.C. – August 7, 2018 – Cause of Action Institute (“CoA Institute”), on behalf of the Daily Caller News Foundation (“DCNF”), filed a complaint against the Federal Bureau of Investigation (“FBI”) seeking access to all communication records relating to Daniel Richman, a “Special Government Employee” (SGE) hired by former FBI Director James Comey. Richman gained notoriety when James Comey admitted to using Richman to leak memos to the media.

John J. Vecchione, president and CEO of Cause of Action Institute issued the following statement:

“For the second time in less than a week, we are compelled to sue DOJ, in this case on behalf of our client, the Daily Caller News Foundation, for failing to follow the law and release emails relating to former FBI Director James Comey and other high ranking and controversial DOJ employees. These are matters of high public concern. This is an unacceptable pattern of behavior and we will not back down in our pursuit of government transparency and accountability.”

In April 2018, DCNF filed a Freedom of Information request (FOIA) requesting “…all communications between the bureau and Mr. Richman concerning his SGE work assignments, all intra-bureau communications about Mr. Richman and his assignments and activities, as well as all work product delivered to Director Comey or to others within the bureau … additionally all of Mr. Richman’s work product whose messages were conveyed to the public in FBI comments, speeches and printed material.”

The FBI confirmed receipt of the FOIA and granted DCNF a media waiver concerning fees. However, since May 7, the FBI has refused to produce the documents or provide an update on the status of the FOIA.

Mr. Richman played a significant role in a contentious matter of government accountability and the records pertain to both the conduct and communications between two high-profile and controversial government officials. Consistent transparency and the subsequent production of these records by the FBI are imperative to maintaining the trustworthiness and integrity of the government.

The full complaint can be viewed below.

Last week CoA Institute filed a lawsuit against the U.S. Department of Justice due to their failure to release Comey’s personal emails that were used in his official capacity.

About Cause of Action Institute

Cause of Action Institute is a 501(c)(3) nonprofit, dedicated to providing government oversight, transparency and advocating for economic freedom and individual opportunity advanced by honest, accountable, and limited government.

Media Contact:

Matt Frendewey
matt.frendewey@causeofaction.org
202-499-4231

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08/2/2018

New Website Documents Fraud & Corruption from EB-5 Immigration Program

WASHINGTON, D.C. – Aug. 2, 2018 – Today, Cause of Action Institute (“CoA Institute”) launched a new website www.EndEB5.org, documenting  questionable investments and investigations relating to the EB-5 Immigrant Investor Program (“EB-5”) and the Regional Center Program. As the Cause of Action’s website reveals, the EB-5 program is ripe for fraud, corruption, can pose a national security threat, and provide questionable value to taxpayers and the U.S. economy. The website launched with more than a dozen examples of questionable investment. The organization has identified more than 50 examples and will release more troubling investments over the next two weeks.

CoA Institute created the website in response to Sen. Diane Feinstein asking the director of the program for a list of “shady programs.” The director didn’t have a list of “shady programs,” so CoA Institute put one together. As Congress weighs whether to extend or allow the Regional Center Program component of the EB-5 program to expire, CoA Institute urges Congress to review this website and recognize the severe flaws in the EB-5 program and let it expire on Sept. 30.

John J. Vecchione, president and CEO of CoA Institute, issued the following statement:

“The EB-5 Program faces legitimate scrutiny due to allegations that it’s become ripe for fraud and corruption and become a pay-to-play scheme. As our research illustrates, EB-5 and the Regional Center Program amounts to a pay-to-play scheme that enriches questionable actors who defraud investors and visa seekers and poses a threat to national security. We urge Congress to review the cases we have identified and allow this program to expire.”

BACKGROUND & HOW IT WORKS:

  • The Immigration Act of 1990 created EB-5 and permits foreign nationals to apply for a conditional visa by making a $1,000,000 investment in an American business that creates at least 10 jobs.
  • Alternatively, a visa-seeker can invest $500,000 in a “targeted employment area” (rural or area of high unemployment) to satisfy the visa requirement.
  • In 1992, the “Regional Center Program” was created to allow pre-approved third parties to pool EB-5 investments from foreign nationals toward American development projects.
  • The Regional Center Program is a source of much of the fraud in EB-5 Immigrant Investor program.
  • CoA Institute has found numerous cases where individuals who controlled a pre-approved Regional Center Program, use the program to collect huge sums in “investments” and fees from individuals seeking a visa, only to use the funds not to create jobs in the U.S. but to fund their lavish lifestyle.

On June 19, 2018, the U.S. Senate Committee on the Judiciary held a hearing on EB-5 with Lee Francis Cissna, Director of the U.S. Citizenship and Immigration Services (“USCIS”), the agency responsible for the program. In this hearing, when Senator Feinstein asked Director Cissna for a list of “shady investments” the agency has found while investigating fraud in this program, Cissna stated he was unable to produce one.

In response, CoA has begun tracking and identifying examples of fraud or other questionable investments made through the EB-5 program. The website includes 13 examples and CoA Institute expects to release as many as 50 examples of questionable investments under the EB-5 project files page, detailing projects that have been proven to be fraudulent and failed to provide the proposed economic benefit.

The countless documented instances of fraud and corruption developed through this program have pushed the EB-5 program far beyond the point of corrective legislative reform. CoA Institute will continue to publish findings on this website as Congress decides whether to allow the program to expire on September 30.

About Cause of Action Institute

Cause of Action Institute is a 501(c)(3) nonprofit, dedicated to providing government oversight, transparency and advocating for economic freedom and individual opportunity advanced by honest, accountable, and limited government.

Media Contact:

Matt Frendewey
matt.frendewey@causeofaction.org
202-499-4231

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08/1/2018

Cause of Action Institute Sues DOJ for Refusing to Release Comey Emails

WASHINGTON, D.C. – Aug. 1, 2018 – Cause of Action Institute (“CoA Institute”) today sued the U.S. Department of Justice (DOJ) for failing to respond to three FOIA requests pertaining to the use of personal email by former FBI Director James Comey, former FBI Chief of Staff James Rybicki, and DOJ’s Director of Public of Affairs Sarah Isgur Flores.

The recent Office of Inspector General (OIG) report on the Hillary Clinton email scandal disclosed that Comey had used his personal email to conduct official business, but that OIG was, “never given access to all the work-related emails.” Comey claimed he either forwarded emails from his personal account to his official account or to Chief of Staff Rybicki. In an unrelated incident last year, Flores was cited as using her Gmail account to issue a statement on behalf of the Attorney General in response to a Washington Post article. CoA Institute filed three FOIAs relating to these matters, and in each case, DOJ failed to respond within the statutory timeframe.

Cause of Action Institute Counsel Ryan Mulvey:

“There is no reason for the U.S. Department of Justice to stonewall and ignore these FOIA requests. The requested emails, even though created or received on personal devices or in personal accounts, are agency records and the public has every right to access them. It should never have been necessary for us to sue the DOJ, the nation’s chief law enforcement body, to force it to abide by its obligations under the FOIA.”

The three FOIA requests include:

  • June 14, 2018 – Office of Inspector General FOIA request for “all emails sent or received by former FBI Director James Comey or former FBI Chief of Staff James Rybicki on a personal email account … conducting official government business, that were acquired or reviewed by” OIG.
  • June 14, 2018 – FBI FOIA request for, “all emails sent or received by former FBI Director James Comey or former FBI Chief of Staff James Rybicki on a personal email account … conducting official government business…”
  • March 2, 2017 – Office of Information Policy FOIA request for, “any email, including attachments, sent by Sarah Isgur Flores on or about March 2, 2017 from a non-governmental email account, containing a statement in response to news reports that Attorney General Jeff Session met with the Russian Ambassador during the 2016 Presidential Election.” CoA Institute also asked for, “all other emails, including attachments, sent or received by Sarah Isgur Flores on a non-government email account that were for the purpose of conducting official government business.”

The full complaint can be viewed below.

About Cause of Action Institute

Cause of Action Institute is a 501(c)(3) non-profit working to enhance individual and economic liberty by limiting the power of the administrative state to make decisions that are contrary to freedom and prosperity by advocating for a transparent and accountable government free from abuse.

Media Contact:

Matt Frendewey
matt.frendewey@causeofaction.org
202-699-2018

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