CHICAGO, Ill. - An infamous TV pitchman’s secret club is off the market, sold to the highest bidders for $200,000, according to recently-filed federal court documents.
The Global Information Network (GIN), which was the focus of a 41 Action News undercover investigation in 2011, has been under the control of a court-appointed receiver since last July.
The club was the brainchild of infomercial king Kevin Trudeau, who promoted big money-making opportunities and the secrets to success.
Trudeau is now serving a 10-year sentence in an Alabama federal prison for his misleading infomercials about his best-selling weight-loss book.
He also repeatedly defied court orders to pay an enormous $37 million fine, earning the ire of a federal judge for continuing to live a lavish lifestyle .
The Federal Trade Commission, which had been trying to recoup the $37 million to refund consumers, argued Trudeau formed GIN as a way to shield his assets from government collection efforts.
Court documents filed by the receiver , Robb Evans & Associates, asked the federal judge to approve the $200,000 sale to an investment group consisting of current GIN club members. The deal also includes a percentage of membership dues received over the next year.
For the price, the purchasers will get GIN’s intellectual property, training materials, membership databases, along with office furniture and equipment from the Chicago area headquarters.
Since the 41 Action News investigation, GIN membership has seen a dramatic decline. It peaked at nearly 38,000 members in 2011, but has dropped to around 4,000 people, the receiver reported.
The membership numbers have also had a major impact on the club’s revenue. Earlier court documents revealed the club generated a stunning $100 million in revenue since its inception in 2009. That same receiver’s report also showed the vast majority of members lost money on GIN.
In fact, the receiver estimates GIN members claim to be owed $9.5 million in unpaid bonuses and commission payments.
After taking control, the receiver removed questionable statements and income claims from the web site. It also informed members that the mythical group of 30 billionaires known as the “GIN Council” did not exist.
In conclusion, the receiver determined the club’s business model “likely amounted to an illegal pyramid scheme.”
As a result, the up-front cash payment offered by the remaining GIN loyalists represented the best offer.
“Taking into account the declining membership of the GIN Club and its limited operational history following the discontinuation of its improper affiliate program and misleading marketing, the proposed sale more than adequately reflects the fair market value of the GIN Club assets,” the receiver reported.