In the Matter of the Complaint Against

WORLDWIDE PROMOTIONS CORPORATION,
a corporation,
KEVIN J. THOREN,
individually and as
President of said corporation
P. O. Box 8013 at
Des Moines, IA 50301-8013

P.S. Docket No. 20/31;

06/20/85

Grant, Quentin E.

APPEARANCES FOR COMPLANANT:
H Ti La Un Wa

APPEARANCE FOR RESPONDENT:
Ralph R. Brown, Esq.
P. O. Box 250
Dallas Center, IA 50063-0250

INITIAL DECISION

In a Complaint filed on November 16, l984, the General Counsel for the United States Postal Service, Complainant, filed a Complaint in which it charged that Worldwide Promotions Corporation and Kevin J. Thoren, individually and as president of that corporation, are engaged in conducting a scheme or device to obtain money through the mail by means of false representations within the meaning of Section 3005 of Title 39, United States Code.

Specifically, the Complaint alleges that Respondents, using certain promotional materials offering free gifts, seek remittances of money through the mails by means of a false representation that one of the gifts, i.e., a five foot Bentley Grandfather Clock, has a retail value of $249.00.

Worldwide Promotions Corporation did not file an Answer to the Complaint. Respondent Kevin J. Thoren's Answer was not timely filed. Accordingly, the Judicial Officer, on December 21, l984, found both Respondents to be in default and issued a mail stop order against Worldwide and a cease and desist order against Worldwide and Thoren. Subsequently, the Judicial Officer set aside the finding of default against Thoren, deleted his name from the cease and desist order and remanded the matter for appropriate action.

Kevin Thoren's answer denies the allegations of false represen tation and affirmatively alleges that since signing a Consent Agreement on April 17, l984, in P.S. Docket No. 19/85 he has not violated its terms which, among other things, contained an agree ment that there would not thereafter be a reference to retail value of the five foot Bentley Grandfather Clock in promotional materials disseminated by Respondent. Thoren also affirmatively alleges that he resigned as president and director of Worldwide on August 6, l984, and since that time has had no connection with Worldwide, has received no compensation therefrom, and has had no involvement with any of its promotions.

A hearing was held in Des Moines, Iowa on March 14, l985. Com plainant's witnesses were David Lowe, manager of an Amana General Store; Larry Rozeboom and John Lynch, "victim" witnesses; Nancy DeVinay, service representative for Northwestern Bell; Jeff McLaughlin, assistant cashier of the East Des Moines National Bank; and Postal Inspector Robert Lee Thompson. Respondent's witnesses were Kevin J. Thoren and Rebecca Lynch, a former employee of World wide.

The parties have filed proposed findings of fact, conclusions of law, and written argument all of which have been considered in arriving at this decision. To the extent indicated they have been adopted. Otherwise they have been rejected as irrelevant, imma terial, or contrary to the evidence.

FINDINGS OF FACT

1. Respondent Kevin J. Thoren was a director and president of Respondent Worldwide Promotions Corporation until he resigned as such on August 6, l984 (Tr. 141, 162). Since that date he has received no compensation from Worldwide and has played no part in the operation of Worldwide, including promotions conducted by World wide (Tr. 145, 147).

2. On April 17, l984, Respondent Thoren executed a Consent Agreement in P.S. Docket No. 19/85 wherein he agreed, as owner or principal officer of Worldwide Promotions, that it would discontinue using, in its promotional literature, the representation that one of its gift items, a 5 ft. Bentley Grandfather Clock, has a retail value of $249.00 (CX-10).

3. Immediately thereafter Respondent Thoren changed the promo tional literature to eliminate statement or indication of any retail value for such clock, removed from promotional packets on hand the original "congratulations" letter which stated the $249.00 retail value, and substituted the revised letter. He also contacted promo ters around the country who had purchased packets containing the original letter and made reasonable efforts to stop their use of that letter by supplying them with the revised letter to be substituted therefor (Tr. 126-129, 158, 159, 164).

4. For a brief period following the date of the Consent Agree ment at least a few persons received packets from promoters with the original letter containing the retail value (Tr. 119, 120). I find this to be consistent with failure to stop or retrieve all the old "congratulation" letters despite reasonable efforts by Respondent Thoren to do so.

5. After his resignation from the Company Respondent Thoren for a short time permitted his former associates at Worldwide to use his personal telephone number to receive business calls on an answering device (Tr. 142). Also, he was dilatory in seeing that his name was removed from the corporate bank account with the result that some corporate checks issued after his resignation were signed, without his consent, with his signature applied with a rubber stamp (Tr. 146, 163). These files, however, do not prove Thoren's personal involvement in the scheme alleged in the Complaint.

6. The 5 ft. Bentley Grandfather Clock distributed as a gift by Respondent Worldwide Promotions Corporation has a retail value of between $59.00 and $89.00 (Tr. 16). Therefore, the representation of a $249 retail value in the previous promotional literature was false. The revised literature does not contain a false representa tion as to retail value.

DISCUSSION

On the basis of the foregoing findings, the most that can be said against Respondent Thoren is that while he was still an officer and director and active in Worldwide Promotions a few of the old "congratulation" letters containing the $249.00 retail value for the clock leaked through to the public despite his good faith and prompt efforts to stop them. The evidence falls short of proving that since the execution of the Consent Agreement in 19/85 on April 17, l985, Thoren has personally engaged in a scheme as alleged in the instant complaint using promotional materials containing a misrepresentation in any form that the grandfather clock has a value of $249.00.

CONCLUSIONS OF LAW

1. Complainant has failed to sustain its burden of proof that Respondent Thoren since he signed the Consent Agreement in P.S. Docket No. 19/85, has been engaged in the scheme alleged in para graphs 2 through 5 of the Complaint.

2. The Complaint is dismissed as to Respondent Kevin J. Thoren.