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ACCELERATED MENTORING LLC (Collectively "Respondents")
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ORDER TO CEASE AND DESIST NOTICE OF INTENT TO FINE AND NOTICE OF RIGHT TO HEARING DOCKET NO. CF-13-8051-B |
I. PRELIMINARY STATEMENT
| 1. | The Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672c of the General Statutes of Connecticut, the Connecticut Business Opportunity Investment Act (“Act”). |
| 2. | Pursuant to Section 36b-71(a) of the Act, the Commissioner, through the Securities and Business Investments Division of the Department of Banking, has conducted an investigation into the activities of Respondents to determine if Respondents have violated, are violating or are about to violate provisions of the Act (“Investigation”). |
| 3. |
As a result of the Investigation, the Commissioner has reason to believe that Respondents have violated certain provisions of the Act. |
| 4. | As a result of the Investigation, the Commissioner has the authority to issue a cease and desist order against Respondents pursuant to Section 36b-72(a) of the Act. |
| 5. |
As a result of the Investigation, the Commissioner has the authority to impose a fine upon Respondents pursuant to Section 36b-72(b) of the Act. |
II. RESPONDENTS
| 6. | Internet Sales Institute LLC (“ISI”) is an Idaho limited liability company formed on January 22, 2009. On June 5, 2009, ISI changed its addresses on file with the Idaho Secretary of State from 1112 West Main Street, Suite 204, Boise, Idaho 83702 to: (a) P.O. Box 667, Boise, Idaho 83701; and (b) 3910 Hill Road, Suite 102-103, Boise, Idaho 83703. On December 9, 2010, ISI amended its Idaho Certificate of Organization to change its name to Accelerated Mentoring LLC. ISI n/k/a Accelerated Mentoring LLC was administratively dissolved in Idaho on April 9, 2012. |
| 7. | Clancey Braxton Yohman a/k/a Clancey B. Yohman and Clancey Yohman (“Yohman”) is an individual whose addresses last known to the Commissioner are: (a) P.O. Box 667, Boise, Idaho 83701; (b) 3910 Hill Road, Suite 102-103, Boise, Idaho 83703; (c) 3050 North Lake Harbor Lane, Suite 254B, Boise, Idaho 83703-6906; (d) 5276 North Quail Summit Way, Boise, Idaho 83703; and (e) 305 Iowa, Boise, Idaho 83706. At all times pertinent hereto, Yohman was the managing member of ISI. Yohman is also the managing member of the following active Idaho entities: (a) Accelerated Membership LLC, an Idaho limited liability company formed on October 10, 2012, and located at 5276 North Quail Summit Way, Boise, Idaho 83703; (b) FYPM Investments LLC, an Idaho limited liability company formed on February 21, 2012, and located at 305 Iowa, Boise, Idaho 83706; and (c) Online Education LLC, an Idaho limited liability company formed on February 21, 2012, and located at 305 Iowa, Boise, Idaho 83706. |
| 8. |
On January 7, 2013, Yohman was charged with alleged unlawful possession of a weapon by a convicted felon and with use of a controlled substance (State of Idaho v. Clancey Braxton Yohman; Case No. CR-FE-2013-0000406) and is awaiting a hearing on the allegations. |
| 9. | Josh Jensen (“Jensen”) is an individual whose address last known to the Commissioner is c/o Accelerated Mentoring LLC, 3910 Hill Road, Suite 102-103, Boise, Idaho 83703. At all times pertinent hereto, Jensen was a representative of ISI n/k/a Accelerated Mentoring LLC. |
III. STATEMENT OF FACTS
| 10. | ISI is in the business of selling Internet-based training, personal coaching and software to enable purchasers to establish their own “work at home” e-commerce business (“ISI Program”). |
| 11. | From at least 2010, Respondents offered and sold the ISI Program to one or more purchaser-investors in Connecticut, including an elderly Connecticut resident (“Investor 1”) who was in compromised health. Investor 1 paid ISI $10,886.36 (a substantial part of her life savings) for the ISI Program and incurred additional charges which were deducted from Investor 1’s bank account. |
| 12. | In its online marketing materials, ISI made the following claims: (a) “Can you earn a lot of money by utilizing our tools and strategies? Absolutely!”; (b) “[W]e created a time-tested system for your individual success – WE EVEN GUARANTEE IT!!!”; and (c) “see firsthand why our program was rated #1 in The Nation.” |
| 13. | There is no evidence that Respondents provided prospective purchaser-investors with documented data substantiating ISI’s claims of income or earnings potential or detailing who, if anyone, rated the ISI Program “# 1 in the Nation” and on what basis. |
| 14. | At no time was the ISI Program registered as a business opportunity under the Act, nor did ISI file a claim with the Commissioner that its business opportunity was excluded from the definition of “business opportunity” or exempt from registration under the Act. |
| 15. | Respondents failed to provide prospective purchaser-investors with a disclosure document containing critical information on the ISI Program and on the seller and its principals and affiliates, including, without limitation, background information on the seller; litigation involving ISI, its principals and affiliates; any risks associated with the purchase of the ISI Program; financial information on ISI; and the employment and disciplinary histories of ISI’s principals and representatives. |
| 16. | Despite repeated requests, Respondents failed to return to Investor 1, who ultimately was confined to a nursing home, the monies Investor 1 remitted to ISI for the purchase of the ISI Program. |
IV. STATUTORY BASIS FOR ORDER TO CEASE AND DESIST
AND ORDER IMPOSING FINE
a. The ISI Program Offered and Sold by Respondents
is a Business Opportunity
| 17. | Paragraphs 1 through 16, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 18. |
The products, equipment, supplies, and services described in paragraph 10 constitute a “business opportunity” within the meaning of Section 36b-61(2) of the Act in that they were offered and sold to purchaser-investors by Respondents to enable those purchaser-investors to start a work at home e-commerce business. |
| 19. | As described in paragraph 12, Respondents represented to prospective purchaser-investors that Respondents would provide purchaser-investors with the tools and strategies necessary to make the purchaser-investor’s e-commerce business a success. In so doing, Respondents represented that they would provide purchaser-investors with a sales program or a marketing program within the meaning of Section 36b-61(2)(D) of the Act. |
| 20. | As described in paragraph 12, Respondents guaranteed, either conditionally or unconditionally, that purchaser-investors would derive income from the business opportunity, thus bringing the ISI Program within Section 36b-61(2)(C) of the Act. |
b. Violation of Section 36b-67(1) of the Act by Respondents –
Offer or Sale of an Unregistered Business Opportunity
| 21. | Paragraphs 1 through 21 [sic], inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 22. |
Section 36b-67(1) of the Act provides, in pertinent part, that “[n]o person shall in connection with the sale or offer for sale of a business opportunity: (1) Sell or offer for sale a business opportunity in this state or from this state unless it has first been registered with the commissioner and declared effective by the commissioner in accordance with the provisions of section 36b-62.” |
| 23. | Respondents offered and sold ISI Program business opportunities more fully described in paragraphs 10 and 11. The offer and sale of such business opportunities absent registration constitutes a violation of Section 36b-67(1) of the Act, which forms a basis for an order to cease and desist to be issued against Respondents under Section 36b-72(a) of the Act, and for the imposition of a fine upon Respondents under Section 36b-72(b) of the Act. |
c. Violation of Section 36b-67(2) of the Act
by Respondents ISI and Yohman –
Unsubstantiated Earnings or Income Claims
| 24. | Paragraphs 1 through 24 [sic], inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 25. |
Section 36b-67(2) of the Act provides, in pertinent part, that “[n]o person shall in connection with the sale or offer for sale of a business opportunity . . . (2) represent that the business opportunity will provide income or earning potential of any kind unless the seller has documented data to substantiate the claims of income or earnings potential and discloses this data to the prospective purchaser-investor at the time such representations are made . . . .” |
| 26. | As described in paragraphs 12 and 13, Respondents ISI and Yohman failed to provide prospective purchaser-investors with documented data substantiating ISI’s claims of income or earnings potential or detailing who, if anyone, rated the ISI Program “# 1 in the Nation” and on what basis. |
d. Violation of Section 36b-67(6) of the Act
by Respondents ISI and Yohman –
Fraud in Connection with the Offer or Sale
of a Business Opportunity
| 27. | Paragraphs 1 through 26, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 28. |
The conduct of Respondents ISI and Yohman, as more fully described in paragraphs 12, 13, 15 and 16 constitutes, in connection with the offer or sale of a business opportunity, directly or indirectly employing any device, scheme or artifice to defraud; making any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person. Such conduct constitutes a violation of Section 36b-67(6) of the Act, which forms a basis for an order to cease and desist to be issued against Respondents under Section 36b-72(a) of the Act and/or the imposition of a fine upon Respondents under Section 36b-72(b) of the Act. |
V. ORDER TO CEASE AND DESIST, NOTICE OF INTENT TO FINE
AND NOTICE OF RIGHT TO HEARING
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, ISI has committed at least one violation of 36b-67(1) of the Act, at least one violation of Section 36b-67(2) of the Act, and at least one violation of Section 36b-67(6) of the Act;
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, Yohman has committed at least one violation of 36b-67(1) of the Act, at least one violation of Section 36b-67(2) of the Act, and at least one violation of Section 36b-67(6) of the Act;
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, Jensen has committed at least one violation of 36b-67(1) of the Act;
WHEREAS, the Commissioner further finds that the issuance of an Order to Cease and Desist and the imposition of a fine upon Respondents is necessary or appropriate in the public interest or for the protection of purchaser-investors and consistent with the purposes fairly intended by the policies and provisions of the Act;
WHEREAS, notice is hereby given to each Respondent that the Commissioner intends to impose a maximum fine not to exceed one hundred thousand dollars ($100,000) per violation upon each Respondent;
WHEREAS, the Commissioner ORDERS that ACCELERATED MENTORING LLC f/k/a INTERNET SALES INSTITUTE LLC CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation: (1) offering and selling unregistered business opportunities; (2) making unsubstantiated earnings or income claims; and (3) in connection with the offer or sale of any business opportunity, directly or indirectly employing any device, scheme or artifice to defraud, making any untrue statements of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person;
WHEREAS, the Commissioner ORDERS that CLANCEY BRAXTON YOHMAN CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation: (1) offering and selling unregistered business opportunities; (2) making unsubstantiated earnings or income claims; and (3) in connection with the offer or sale of any business opportunity, directly or indirectly employing any device, scheme or artifice to defraud, making any untrue statements of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person;
WHEREAS, the Commissioner ORDERS that JOSH JENSEN CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, offering and selling unregistered business opportunities;
THE COMMISSIONER FURTHER ORDERS THAT, pursuant Section 36b-72 of the Act, each Respondent will be afforded an opportunity for a hearing on the allegations set forth above if a written request for a hearing is received by the Department of Banking, Securities and Business Investments Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following each Respondent’s receipt of this Order. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If any Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”. Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a presiding officer and sets the date of the hearing in accordance with Section 4-177 of the General Statutes of Connecticut and Section 36a-1-21 of the Regulations of Connecticut State Agencies. If a hearing is requested, the hearing will be held on May 7, 2013, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
The hearing will be held in accordance with the provisions of Chapter 54 of the General Statutes of Connecticut. At such hearing, each Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
This Order to Cease and Desist shall remain in effect and become permanent against any Respondent that fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
| Dated at Hartford, Connecticut, | ______/s/__________ | |
| this 18th day of March 2013. | Howard F. Pitkin | |
| Banking Commissioner |
CERTIFICATION
I hereby certify that on this 18th day of March 2013, the foregoing Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing was sent by certified mail, return receipt requested, to: Accelerated Mentoring LLC f/k/a Internet Sales Institute, LLC at P.O. Box 667, Boise, Idaho 83701, certified mail no. 7012 1010 0001 7264 6356; and 3910 Hill Road, Suite 102-103, Boise, Idaho 83703, certified mail no. 7012 1010 0001 7264 6363; Clancey Braxton Yohman at P.O. Box 667, Boise, Idaho 83701, certified mail no. 7012 1010 0001 7264 6370; 3910 Hill Road, Suite 102-103, Boise, Idaho 83703, certified mail no. 7012 1010 0001 7264 6387; 2050 North Lake Harbor Lane, Suite 254B, Boise, Idaho 83703-6906, certified mail no. 7012 1010 0001 7317 3967; 5276 North Quail Summit Way, Boise, Idaho 83703, certified mail no. 7012 1010 0001 7317 3936; and 305 Iowa, Boise, Idaho 83706, certified mail no. 7012 1010 0001 7317 3943; and Josh Jensen, c/o Accelerated Mentoring LLC, 3910 Hill Road, Suite 102-103, Boise, Idaho 83703, certified mail no. 7012 1010 0001 7317 3950.
| ______/s/________ | |
| William C. Hall III | |
| Paralegal |