Infomercial king at the center of 41 Action News investigation pleads the Fifth almost 400 times
2:50 PM, May 22, 2013
8:45 AM, May 23, 2013
CHICAGO - The man who built an infomercial empire on his persuasive speaking style did not have much to say in a Chicago federal courtroom on Tuesday.
Infamous TV pitchman Kevin Trudeau invoked his Fifth Amendment right nearly 400 times during a contempt hearing.
Trudeau refused to answer about three hours of questioning from the Federal Trade Commission, which wants the infomercial king thrown in prison for failure to pay an enormous $37 million judgment.
During the hearing, the FTC produced a long list of emails and other documentation, trying to prove that Trudeau has the money to repay consumers for misleading them about the contents of his best-selling weight loss book.
During that November investigation, 41 Action News revealed controversy about the club, including complaints from former members who claimed they did not receive promised cash payouts. The investigation also detailed the thousands of dollars paid by members to attain higher levels of membership within the club.
Trudeau has maintained that he does not have the money to settle up with the federal government. He also argues that he has no control over the finances of companies like GIN.
However, evidence presented by the FTC suggested otherwise. A significant portion of the proceedings focused on communication between Trudeau, one of his personal attorneys, Marc Lane, along with other financial confidants.
Among the highlights:
• A December 2008 email in which Trudeau instructed Lane to create GIN and said, "No need to tell the FTC about GIN."
• A text message from Trudeau in which he bragged about hiring two personal chefs for $80,000 each.
• An email Trudeau sent last November after an appeal was denied: "Super A priorities: GIN must get money out of the USA and into banks overseas.... Never keep more money out of USA than needed... every company NEEDS account OFFSHORE!!!"
• A list of charges paid by those companies that the FTC contended were purely personal expenses for Trudeau, including trips to Whole Foods, purchases from a drapery company and monthly payments to a website which makes arrangements for men to meet Ukranian women.
Additionally, the FTC presented documentation that showed Trudeau has amassed nearly $10 million in personal and legal expenses since the $37 million contempt order several years ago.
"And not a penny went to the 800,000 consumers you misled," FTC attorney Jonathan Cohen argued.
Judge Robert Gettleman did not make any decisions about incarcerating Trudeau at the end of the hearing. The judge seemed to be wrestling with the merits of punishing him with prison time versus a different strategy that could coerce him into paying the multi-million dollar judgment.
Prior to making a decision, Gettleman said he wants to hear testimony from Lane. He ordered Trudeau to also appear at that court date on June 26.
"It is clear to me that the defendant and Marc Lane were engaged in a rather elaborate scheme to put the defendant's assets beyond the reach of the FTC," Gettleman said.
The contempt hearing was attended by Abe Husein, a former GIN member from Kansas City who is now a vocal critic of Trudeau and members of the club.
"It was just so funny because the FTC nailed him. They had so much evidence against him," Husein said.