Registered Agent: David Desormeau 1603 Mowbray Ct Henderson NV
COMMONWEALTH OF KENTUCKYNELSON CIRCUIT COURT NO. ___03-CI-00190_____ COMMONWEALTH OF KENTUCKY ex rel.ALBERT B. CHANDLER III, ATTORNEY GENERALPLAINTIFFVS. COMPLAINTB & B WORM FARMS, INC. RR1 BOX 163BMEEKER, OK 74855 Serve: Secretary of State Registered Agent: David Desormeau 1603 Mowbray Ct Henderson NV 89014 and LYNN BRADLEY, IndividuallyDEFENDANTSRR1 BOX 163BMEEKER, OK 74855Serve: Secretary of State* * * * * * * * * Comes the Plaintiff Commonwealth of Kentucky ex rel. Albert B. Chandler III, AttorneyGeneral, and for its claim for relief states as follows: I. Parties, Jurisdiction, Venue1. Plaintiff Albert B. Chandler III is the duly elected Attorney General of the Commonwealth of Kentucky and is authorized by KRS 367.817 and KRS 367.190 to bring thisaction in the name of the Commonwealth. The Attorney General has reason to believe that theDefendant is using, has used, or will continue to use acts or practices described by KRS 367.170
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and KRS 367.805 to be unlawful. The Attorney General has determined these proceedings to bein the public interest. 2. Defendant B & B Worm Farms, Inc. (hereinafter “B&B”) is a NevadaCorporation with a business address of RR1 Box 163B, Meeker, Oklahoma 74855 and, as morefully set forth hereafter, has engaged in the practice of selling or offering to sell businessopportunities throughout Kentucky including but not limited to Nelson County without registering with Plaintiff or posting surety bond as required by law. Accordingly, jurisdiction and venue are proper pursuant to KRS 367.190 and KRS 367.817. 3. Upon information and belief, Defendant Lynn Bradley is the acting President, Secretary, Treasurer and is a Director of Defendant B&B and has an address of RR1 Box 163B,Meeker, Oklahoma, 74855. 4. Service is through the Secretary of State pursuant to KRS 454.210. 5. Claims stated against Defendant arise from the transactions of business within the Commonwealth of Kentucky. II. Conduct6. Defendant B&B through its late President Greg Bradley and his wife, DefendantLynn Bradley and others, have offered for sale to Kentucky consumers and farmers a “business opportunity” as defined in KRS 367.801(5). The business opportunity involves the sale byDefendants of live worms to investors who pay a required minimum consideration in excess of$500.00 and execute a contract with B&B, an example of which is attached hereto as Exhibit Aand incorporated by reference. The essential terms of the contract include the following provisions: A. A minimum required purchase price paid by the consumer/farmer in the range of$2,000.00 to $60,000.00 in exchange for a large number of “breeder worms”;
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B.A “buy back” policy in which B&B commits to purchase any amount of live worms per month from the consumer/farmer (minimum of 100 lbs.) at aguaranteed minimum price ranging from $7.00 to $9.00 depending on thecontract.7. Defendants, their agents and employees have represented, directly or indirectly,that they have knowledge of the market and market demand will enable the consumer/farmer to earn a profit from the business opportunity. 8. Defendant has failed to register with the Attorney General as a businessopportunity and provide the information required by KRS 367.805 (see affidavit of Angela M.Rhodes, attached hereto as Exhibit “B” and incorporated by reference). Therefore, a businessopportunities registration number has not been assigned to Defendants and such could not be displayed in any advertisements. 9. Defendants has failed to furnish to the Attorney General the bond required byKRS 367.815 prior to offering for sale a business opportunity (see Rhodes affidavit, exhibit “B”hereto) 10. Defendants were aware of the requirement to register and bond with the AttorneyGeneral as there had been correspondence from the Attorney General. Nevertheless, Defendants but sold hundreds of contracts to Kentucky consumers in willful disregard of the law. (seeRhodes affidavit, exhibit “B” hereto). 11. Upon information and belief, Defendants have sold to more than 561 Kentuckyconsumers and possibly as many as 800 or 900. 12. Upon information and belief, Defendants have made false, misleading and ordeceptive representations concerning the business opportunity which have been relied upon byconsumers/farmers who have paid Defendants to participate in the business opportunityincluding the following:
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A: That Defendants have obtained commitments or contracts for the sale ofworms to “end users” other than other consumers/investors sufficient to provide financial resources to honor their commitments to allconsumers/farmers that entered into contracts with Defendants, when infact the only purchasers of other worms appear to be otherconsumers/farmers or to be extensions of B & B but not independent end users. 13. Upon information and belief, Defendants induced consumers/investors intobuying worms by offering to paid a commission to any enrolled worm grower whoreferred another Kentucky consumer who signed a contract. The commission wasapproximately 10% of the amount paid by the new enrollee to Defendants. Suchpayment for referral of additional purchasers is illegal pursuant to KRS 367.350. III. Violations of the Consumer Protection Act14. Paragraphs 1-13 are incorporated herein. 15. KRS 367.805(1) states: It is unlawful for any person to engage in the sale of business opportunities unless prior to the offering the offeror has registered with the [consumer protection]division and has furnished a bond pursuant to KRS367.815(2) and provided all of the following [registrationinformation] . . . 16. KRS 367.170 provides that “Unfair, false, misleading, or deceptive acts orpractices in the conduct of any trade or commerce are hereby declared unlawful.” 17. KRS 367.350 states: With respect to a credit sale, cash sale or lease to aconsumer, the seller or lessor may not give or offer to givea rebate or discount or otherwise pay or offer to pay valueto the buyer or lessee as an inducement for a sale or lease inconsideration of his giving to the seller or lessor the namesof prospective purchasers or lessees, or otherwise aiding the seller or lessor in making a sale or lease to another
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person, if the earning of the rebate, discount or other valueis contingent upon the occurrence of an event subsequent tothe time the buyer or lessee agrees to buy or lease. If abuyer or lessee is induced by a violation of this section to enter into a cash or credit consumer sale or consumer lease,the agreement is unenforceable by the seller or lessor and the buyer or lessee, at his option, may rescind theagreement or retain the goods delivered and the benefit ofany services performed, without any obligation to pay forthem. 18. The conduct of the Defendants described in paragraphs 6 through 13 above is in violation of KRS 367.805(1) and such violation is willful as Defendant knew or should have known of its obligation to register and post a bond but failed to do so. 19. The conduct of the Defendant described in paragraphs 6 through 13 aboveis unfair, false, misleading, or deceptive in violation of KRS 367.170 and such violation is willful as Defendant knew or should have known of its obligations to register and post a bond but failed to do so and knew or should have known that the representations made to consumers/farmers were false, misleading and/or deceptive; and knew or should haveknow that referral commissions were illegal. WHEREFORE, Plaintiff respectfully requests the Court to grant the following relief:A. For a judgment that Defendant has engaged in the conduct described in paragraphs 6 through 13 of the Complaint and that such conduct is in willful violation ofKRS 367.805; in willful violation of KRS 367.170; and in willful violation of KRS 367.350 B.For a restraining order, temporary injunction, and permanent injunction restraining and enjoining Defendant, directly or indirectly, its agents, employees, and anyand all others acting in active concert or participation with it from selling or offering to sell business opportunities to consumers/farmers in the Commonwealth of Kentuckyunless and until such time as Defendant has registered with the Attorney General and
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provided the information required by KRS 367.805, has displayed the registration number on all advertising as required by KRS 367.809, and has posted the surety bond as required by KRS 367.815(2); C. Pursuant to KRS 367.990, that a civil penalty be assessed against the Defendant in the amount of $2,000.00 for each willful violation of KRS 367.170; D. For cancellation of any contracts for sale of a business opportunity madein Kentucky and return of funds to consumers pursuant to KRS 367.819 and 367.816(6)at the election of each consumer/farmer who entered into any such contract and elects tocancel their contract and seek a refund; E. For court costs expended by Plaintiff, including costs of investigation and reasonable attorney fees; and F.For all other relief to which Plaintiff may be entitled. RESPECTFULLY SUBMITTEDALBERT B. CHANDLER IIIATTORNEY GENERALWanda R. DelaplaneAssistant Attorneys GeneralConsumer Protection Division 1024 Capital Center Drive Frankfort, KY 40602 (502)696-5389
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