In early 1998, the Federal Trade Commission ("FTC") filed a lawsuit against Tom
Maher, former President of IBB, Audrey Reed, and Mr. Reed for failure to refund
money to customers and allegedly misleading investors about the potential return
on their investment. In April 1998, Mr. Reed filed an answer to the FTC
complaint, pro se, denying all the allegations, and did not receive any
subsequent correspondence from the government.
Mr. Reed says he was unaware any case was pending against him until stories
appeared in the press and he was served with a default judgment at the
Hitsgalore.com office in Rancho Cucamonga, CA on May 11, 1999. The judgement
served on Mr. Reed informed him that a federal judge in Baltimore issued an
order in April, 1999 for he and his co-defendants to pay $613,110 to 100
customers of IBB.
After being served on May 11, 1999, Mr. Reed immediately and pro-actively
contacted the FTC through counsel regarding the matter. As of November 30, 1999,
Mr. Reed is actively negotiating with the FTC to reach an amicable settlement of
this matter. The FTC has acknowledged that it did in fact receive pleadings in
this case in April 1998, from both Audrey and Dorian Reed in response to the FTC
Complaint. However, said pleadings sat in an FTC office without having been
opened for over a year. Mr. Reed and the FTC are now exchanging information
about the facts that gave rise to the lawsuit, so that the FTC can have a more
realistic view of what actually happened. Although a mere employee of the
subject company, Mr. Reed is stepping forward to get this matter resolved and is
not waiting for the FTC to find the management who actually ran the corporation.
It is anticipated that a settlement will be reached in the near future.
from the 10k/a filed Dec. 11, 1999
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