Diane S. Blodgett - Page 4

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               It is a matter of public record that Mr. Blodgett operated             
          the business as a ponzi scheme.  Stoebner v. FTC, 1997 U.S. Dist.           
          LEXIS 4639 (D. Minn. Apr. 7, 1997).1  There were both civil and             
          criminal consequences for this behavior.  Mr. Blodgett was                  
          charged with and convicted of several counts of fraud, for which            
          he served a prison sentence from 1993 to 1999.  United States v.            
          Blodgett, 1994 U.S. App. LEXIS 21564 (8th Cir. Aug. 15, 1994).              
          Petitioner was not charged with criminal wrongdoing.  In addition           
          to the criminal case, the Federal Trade Commission (FTC)                    
          initiated a civil action (FTC case) against the business and Mr.            
          Blodgett, alleging deceptive trade practices and seeking                    
          permanent injunctive relief and consumer redress.  See 15 U.S.C.            
          sec. 45(a)(2), 53(b) (1988).  In the FTC case, Mr. Blodgett, the            
          business, and the FTC reached a settlement that was memorialized            
          in a Final Judgment and Order (consent order) entered by the U.S.           
          District Court for the District of Minnesota in March 1992.  FTC            
          v. T.G. Morgan, Inc., 1992 U.S. Dist. LEXIS 3309 (D. Minn. Mar.             
          4, 1992).  Petitioner signed the consent order as a nonparty                
          spouse.                                                                     




               1    The U.S. Court of Appeals for the Eighth Circuit                  
          described Mr. Blodgett’s activity as follows:  “Blodgett * * *              
          was in the habit of selling single coins to multiple customers,             
          greatly overstating the value of such coins, and using coins he             
          had already sold as collateral to obtain loans for his personal             
          use.”  Hartje v. FTC, 106 F.3d 1406, 1407 (8th Cir.  1997).                 




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