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11/26/2018

FTC v. Vylah Tec: Magistrate Orders FL AG to Produce 30(b)(6) Witness for Second Time

Court cites improper behavior and objections in first depositions, allows for new deposition in ongoing “Cupo Case”

A Federal District Court ruled partially in favor of Cause of Action Institute’s motion for sanctions against the state of Florida, instructing a Florida assistant attorney general to re-appear for the second time at a new deposition due to the improper and invalid objections made during the first deposition.

“Nobody is above the law. Even lawyers working at the Florida Attorney General’s Office who appear as witnesses in depositions must follow the same rules as any other witness,” said Cynthia Crawford, senior counsel at Cause of Action Institute. “This case boils down to government officials who aggressively used their powers to unfairly crackdown on a family business by using questionable techniques and procedures and then tried to stonewall questions about the case they have brought. We hope the government will be more forthcoming and cooperative in the second deposition as we seek to defend our client and resolve this dispute.”

In August 2018, a Federal Court denied Florida’s motion for a protective order in which it tried to prevent Cause of Action from examining Florida’s role in the raid and prosecution of Vylah Tec LLC. In September, a senior assistant attorney general was selected to sit as the “30(b)(6)” witness for the state of Florida.

The Court ruled that the Florida Office of Attorney General “improperly instructed [the witness] not to answer numerous other questions posed by defense counsel.” In some instances, the Florida Office of Attorney General refused to cite a reason for their objection, as required. The Court also noted that instructions to the witness not to answer on the basis that “the document speaks for itself,” were improper.

As a result, the Court granted the defense a new deposition on limited topics, instructing the State to re-appear.

Parties have until Friday, Dec. 14, 2018, to hold a new deposition.

 

The Vylah Tec case demonstrates the vast power of the federal government and the ability of the Federal Trade Commission (FTC) to use a court order obtained in secret to deny a family-run company due process by swooping in and seizing assets—including the money they need to hire a lawyer and mount a defense. Cause of Action Institute firmly believes a prosperous society allows all individuals, entrepreneurs, and companies an opportunity to succeed, but far too often when facing the FTC, companies or individuals have their livelihoods threatened and must defend themselves against a regulatory authority with near endless resources and no motive to render justice.

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03/9/2018

Appellate Court Unfreezes Small Business Owner’s Assets After Being Wrongly Targeted by FTC

Washington, D.C. – The 11th Circuit Court of Appeals has ruled to unfreeze in part the assets of our client, Robert Cupo, who owns a small family-run tech support company, Vylah Tec, LLC (“V-Tec”), after the Federal Trade Commission (“FTC”) used misleading evidence to convince the lower court to grant a damaging injunctive order against his company. The ruling rejects the government’s clear overreach in not only freezing assets of the company, but also the joint marital assets of Mr. Cupo and his wife, and the assets of his brother who had no business connection to V-Tec.  Cause of Action Institute (“CoA Institute”) filed an appeal of the district court’s order in September 2017.

CoA Institute Senior Counsel Cynthia Crawford: “The Government attempted to bulldoze Mr. Cupo and his family with punitive financial penalties before they had an opportunity to defend themselves. The preliminary injunction was granted based on faulty and mischaracterized evidence. That’s not due process, and it certainly is not justice. After nine long months of financial hardship, a large portion of the burden has finally been lifted, allowing our client to continue to fight to clear his name.”

The 11th Circuit found that the district court “did not make sufficient factual findings to support freezing these assets.”

Case Background:

V-Tec provides tech support to customers and also sells third-party antivirus and other data security software. In May 2017, the company’s headquarters was raided by FTC regulators, in conjunction with the Florida Attorney General’s office, on suspicion of “deceptive” sales practices.

To obtain the injunctive order that froze the Cupos’ assets, the FTC in court cited two examples of recorded calls that were both mischaracterized. The Government conceded that it submitted false evidence. Nonetheless, a Florida district court judge granted the injunctive order turning V-Tec’s operation over to a third-party receiver and freezing the assets of Mr. Cupo and several of his family members.

The 11th Circuit ruling vacates the asset freeze imposed against the assets held jointly by Mr. Cupo and his wife, as well as the asset held by his brother.

The full opinion can be found here.

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org.

 

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10/3/2017

The FTC Raided My Office, Found Nothing, And Is Destroying My Business Anyway

The FTC Raided My Office, Found Nothing, And Is Destroying My Business Anyway

ROBERT CUPO

Without due process or conviction in a court of law, the government is destroying my family’s business.

In early May, federal investigators raided my small tech-support company, Vylah Tec LLC, d/b/a “V-Tec,” on suspicion of “deceptive” sales practices. The raid was part of a politically hyped campaign by the Federal Trade Commission with the Florida Attorney General’s office, dubbed Operation Tech Trap, to “crack down on tech-support scams.” The problem: My business is not a scam.

Read the full article at Investor’s Business Daily.

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09/25/2017

Family Business Fights Back Against FTC, Files Appeal After Lower Court Wrongly Granted Injunctive Order

Washington, D.C. – Cause of Action Institute (“CoA Institute”) today filed its opening brief in the 11th Circuit Court of Appeals on behalf of a family-run tech support company, Vylah Tec, LLC (“V-Tec”), after the Federal Trade Commission (“FTC”) used misleading evidence to convince the lower court to grant a damaging injunctive order against the company. V-Tec is a small start-up, owned by Robert Cupo, that provides tech support to customers who have purchased electronic devices from the Home Shopping Network and other shopping channels. V-Tec also generates revenue from selling third-party antivirus and other data security software.

In May, the FTC, in conjunction with the Florida Attorney General’s office, raided the company’s headquarters on suspicion of “deceptive” sales practices, but were unable to uncover any concrete evidence of wrongdoing. In court, the FTC cited two examples of recorded calls that were both mischaracterized. A Florida federal judge granted the government’s request for a preliminary injunctive order (“PI”) that turned the company’s operation over to a third-party receiver and froze the assets of Mr. Cupo and several of his family members. In August, CoA Institute filed a motion to stay the district court’s order. While that decision is still pending, today’s brief is the first in CoA Institute’s appeal of the district court’s decision.

The brief states:

“The PI was granted without benefit of an evidentiary hearing, without application of the proper legal standard for issuing a preliminary injunction, and without application of the proper legal standard for analyzing the likelihood of success on the merits. It was based on untested and facially inadequate factual allegations.

“The Government has conceded that it submitted false evidence and mischaracterized other evidence it offered to the trial court, but it has done nothing to correct the record. To the contrary, the Government insists that the lower court and this Court condone its false evidence to crush a small business and to personally destroy its managers… The Government is seeking to bulldoze V-Tec before this Court can even rule on this appeal. That is not due process, and it certainly is not justice.”

CoA Institute Senior Counsel Cynthia Crawford: “The FTC’s facts in this case are either incomplete or patently false. Without evidence, it was wrong for the district court to grant an order that is draining V-Tec’s finances and destroying its reputation. We urge the 11th Circuit Court of Appeals to reexamine the flawed evidence and allow the Cupo family the due process they deserve, before their company is destroyed.”

The full brief can be found here

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org

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