Wednesday, August 07, 2013

Kevin Trudeau: things heat up as criminal trial approaches

[NOTE: See important update, 8 August, at the end of this post. ~CC]
 
It's been a while since I posted about serial scammer Kevin Trudeau, who is currently embroiled in a couple of lawsuits with the US Federal Trade Commission (FTC): a civil case (case number 1:03-cv-03904, United States District Court for the Northern District of Illinois, Eastern Division, the Honorable Robert W. Gettleman presiding) and a related criminal contempt case (number 1:10-cr-0086, with the Honorable Ronald A. Guzman). But I haven't been letting the grass grow under my feet. I've been keeping up with the paper shuffling via PACER.gov. And, via a publicly viewable page on Facebook (GIN Network Truth), I have been regularly sharing links to the court documents that have been generated since I last blogged about this matter on July 26. But it's high time for a Whirled update, don't you think? Particularly since not everybody is on Facebook.

The big news on the criminal case
First off, one of the biggest pieces of news is that Katie's lawyers have asked for a short continuance of his criminal trial, which was scheduled to begin August 26, 2013. However, in light of 17,000 more pages of evidence and exhibits and whatnot that KT's lawyers say the government informed them about at the last minute (this past Friday, August 2, to be exact), they say they're going to need a little more time to prepare. Or as the doc says, "These documents relate to litigation between the FTC and ITV, a company involved in the infomercial for the Weight Loss Cure book at issue in this case. As such, these documents have the potential to be central to the defense."

The motion to continue is unopposed. Here is that motion, which was filed on Monday, August 5.
http://www.scribd.com/doc/158747133/Trudeau-Criminal-Case-Document-78-Motion-for-Short-Continuance-of-Trial-08-15-13

(That's my typo in the filename. It should be 8-05-13. I'm not going to go back and re-upload a correction.)

Anyway. Can you say, "More delays," boys and girls? You have to wonder why those 17,000 pages were presented so late in the game.

UPDATE, 10 August 2013: I logged on to PACER at about 7:30 PM Central Time on Friday, August 9. At that time there was nothing new on the civil docket, but there was one new entry on the criminal docket. Trudeau has indeed been granted the motion for a continuance of the criminal trial, which as noted above was originally scheduled to commence August 26.

MINUTE entry before the Honorable Ronald A. Guzman as to Kevin Trudeau (1): Motion hearing held on 8/8/2013. Unopposed motion by Kevin Trudeau for Short Continuance of Trial Date 78 is granted. Jury Trial reset to 11/4/2013 at 09:00 AM. Pretrial Conference reset to 10/15/2013 at 10:30 AM. Pretrial motions due by 9/6/2013. Without objection, time to be excluded in the interest of justice for the complexity of the case, and for continuity of counsel under 18 U.S.C. Section 3161(h)(7)(A) − (B) and United States vs. O'Connor, No. 09−2476 (7th Cir.Sept. 1, 2011), from 8/8/2013 to and including 11/4/2013. Mailed notice (cjg, ) (Entered: 08/09/2013)
Notice that the complexity of the case is mentioned, as well as "the continuity of counsel."

The case was apparently made even more complex after those extra 17,000 pages of documents were presented to the government on August 2. And since the potential maximum sentence if convicted is currently life, the concern about justice becomes even more urgent.

I speculate that "continuity of counsel" either indicates that Trudeau has to have time to find new attorneys and get them up to speed, or he has to have time to secure another means to continue paying the ones he already has, since for now the court has restricted him from so many of his income streams.

And KT's attorneys had indeed previously raised the issue of pay, indicating that they might not be able to continue representing him if he could no longer pay them. (This was one of the matters touched on at the July 26 hearing, and addressed in some of the subsequent court docs.)

So far I have not yet seen any official documentation saying the attorneys definitely quit; I have heard buzz about that but have not verified it. The buzz has come from a couple of notoriously unreliable sources (see links at the end of this post), so you can understand my caution.

The civil case: as usual, more nuanced than video sensationalists present it
Now let's get up to speed on the civil case. Yesterday ex-GIN member Abe Husein posted a YouBoob video declaring, for the umpteenth time, that "THIS IS IT! THIS IS THE END! THIS IS REALLY THE END!" for what is arguably Trudeau's largest and most elaborate scam to date, the Ponzi-like Global Information Network (GIN). Abe claimed that the FTC has seized complete control of GIN's assets, that two receivers have already been assigned to KT's case and they now have control over all of the GIN money and all of Kevin's other money, and that KT can no longer even pay his lawyers. Well... um... not quite. Judging by the actual court documents, the parties are still hammering out the details.

On July 26, 2013, Judge Gettleman decided that it was okay to go with the receivership plan (which Katie's counsel had suggested) in lieu of throwing Katie in jail immediately to force him to pay the judgment.

This is the order signed by Judge Gettleman on July 26. The judge only upheld the FTC's motion in part, agreeing with the findings of the FTC, and once again declaring Trudeau in contempt -- but refusing to incarcerate Trudeau at that time. However, he ordered that Trudeau's assets be turned over to a receiver. But this is by no means the final word; as you'll see if you follow the links below to subsequent documents, Trudeau's attorneys continue to argue with the FTC attorneys over the details.
http://www.scribd.com/doc/158809420/Trudeau-Civil-Case-Document-729-07-26-13

The FTC did not like the idea of a receivership at all -- they want to toss Katie in a cage NOW -- but they are reluctantly going along with it, and as ordered by the court, they came up with two PROPOSED receivers to be appointed.

On July 29, 2013, the FTC filed this statement (Document 730) about the receivership:
http://www.scribd.com/doc/157698822/Trudeau-Civil-Case-Document-730-FTC-Statement-Re-Receiver-07-29-13

The FTC lawyers seem quite disgusted that money that could have been spent to satisfy Kevin's debt has been going to Kevin's lawyers and, of course, to furnish his lifestyle. The FTC's commentary on the whole idea of the receivership -- is really pretty snarky, as these things go. The FTC lawyers and investigators responsible for producing this doc were clearly not pleased about the receivership, which they said will just cause more delays and will make the possibility of redress even more remote.

(Yet for various reasons, which I've gone into on previous posts here and on Facebook, I think that their own plan to throw Katie in jail till he coughs up the dough seems equally lame.)

Attached to Document 730 was 730-1, a 41-page exhibit explaining the virtues of the two possible receivers the FTC recommended, Robb Evans and Associates, LLC (the ones who were ultimately chosen, according to a subsequent court order (see update below)), and BKD LLP. I didn't upload that doc because it just seemed boring and unnecessary for my purposes here.
 
The FTC, after pouting a bit in Document 730, apparently decided to accept their lot and made a proposal for freezing the assets of Katie's entities all over the globe. Document 731 was filed on August 1:
http://www.scribd.com/doc/157873182/Trudeau-Civil-Case-Document-731-08-01-13-PROPOSED-Order-to-Appoint-Receiver-and-Freeze-Assets

The day after the FTC filed their proposed order to tighten the choke chain on Katie's neck, his lawyers had something to say. They argued that the FTC proposal was grossly unfair and would hurt innocent KT employees and business partners the world over. They also filed a document saying that KT needs money so he can continue to pay his lawyers. They asked that the KT legal defense fund be exempted from any freeze order. They said this is particularly important now that KT's criminal trial is approaching. They also presented an alternative proposal for a receivership order. This was filed on Friday, August 2. It is actually two documents, but I spliced Document 735-1 on to Document 735 for your convenience:
http://www.scribd.com/doc/157874170/Trudeau-Civil-Case-Document-735-08-02-13-Trudeau-Response-to-Receiver-Order-Includes-Doc-735-1

Later the same day, a subsequent document was filed, in which Katie respectfully begged the court to release enough funds for him to pay his lawyers, particularly in light of the fact that he has that criminal trial coming up on August 26. That would be Document 736, which has an attachment, 736-1, an exhibit that includes, among other things, a declaration from KT's former financial guy, Michael Dow. Mr. Dow explains that Kevin's Natural Cures Health Institute (NCHI) was specifically set up to help defray Kevin's legal expenses, and that the NCHI web site is standwithkt.com. Here's the link to Document 736, with Michael Dow's declaration attached.
http://www.scribd.com/doc/158279997/Trudeau-Civil-Case-Document-736-Motion-to-Release-Assets-for-Payment-of-Attorney-Fees-With-Exhibit-1-Michael-Dow-Declaration-08-02-13

Mr. Dow said in his declaration that those funds are not under Trudeau's control (where have we heard that before?), and that Trudeau doesn't have direct access to them; the signatories are Dow himself, Tom Morter of the infamous Morters (long-time business partners and fishing buddies of KT), and another individual, Janine Nubani. (I believe this is the same Janine who is a former girlfriend of KT and a long-time business associate of his.) There are also several other exhibits to illuminate the points that the government should keep its mitts off of the Stand With Katie monies.

The FTC responded on August 5 with a document that pretty much scoffed at all of KT's lawyers' proposals, and argued that KT should not be allowed to pay his attorneys with money that they say rightfully belongs to his customers. Attached to that doc were nearly 300 pages of exhibits, including a transcript of what went on in Judge Gettleman's court July 26.

The document linked to below is actually a consolidation of two complete documents (737 and 737-1) and a portion of 737-2. The latter is nearly 300 pages, much of which contain redundant financial records already seen in previous documents. So I only attached the portion containing the transcript of the oral arguments on July 26, 2013, which resulted in Judge Gettleman refusing to incarcerate KT to force payment. The oral argument transcript is very interesting and should fill in the finer details about events that were fairly widely reported by the media on July 26.
http://www.scribd.com/doc/158746581/Trudeau-Civil-Case-Document-737-737-1-and-737-2-Partial-08-05-13

At any rate, as near as I can tell from perusing the recent documents, nothing has been set in stone yet. The sky has not yet fallen. Trudeau is cornered but not conquered. Meanwhile, lawyers for the plaintiff and the defendant are still duking it out on paper.

I will continue to visit PACER regularly and see if there is anything new. But from where I sit, with what I know from perusing the court docs, most of the things that Abe's latest vid describes as a done deal are anything but. All together now:
"No neat and tidy endings!"
My spin
I'm still trying to be as fair as possible, within the significant constraints of my role as a snarky blogger who has an unwavering opinion that Kevin Trudeau is a lifelong scammer and has only the most casual relationship with anything resembling "truth." But it's sometimes hard to be balanced where Scamworld is concerned.
First Amendment, my a$$
Katie's defenders are still echoing his own histrionics, saying this is nothing more than a First Amendment/freedom of expression issue and that the government is being tyrannical. I've written about this several times, including this August 2011 post, which still seems relevant.

Apropos of that, I found this August 2010 blog post in which Kevin scolds people who question why a billionaire like he should have to beg for money for his legal defense.

The real question should be, “Why do I have to pay tens of millions of dollars in my own money and go to jail, so YOU can have free access to information?” All of you have to understand is that I am fighting the government for YOU. They want ME in jail for sharing with YOU information about natural ways to cure and prevent disease.
Consider this…
I did not make one penny for any of the Weight Loss Cure books sold on TV.
I have not received one cent in salary from doing the radio show.
I know this stuff. I do NOT need to do this radio show and I do NOT need to continue writing books. I do NOT need to risk going to jail by exposing government and corporate corruption. If YOU want me to continue to do this, why should I have to go to jail and why should I have to pay millions of my own money in legal fees so YOU can get this information? I make NO money doing this!
Yeah, yeah, yeah. We've heard it before, Kevin. And on paper, it is probably true that Kevin himself did not personally and directly receive all of the money for the Weight Loss Cure book. He and his asset protection army are too clever for that. But you can bet your bottom dollar that he ended up spending most of that money anyway.

It's not all black-and-white, but some of it is
Despite the fact that I think True-dough is both a clever scammer, and alternately a braggart and a whiner as it suits him, I have to say it appears that his lawyers are holding their own as they continue to argue their case that the FTC and some of the court actions are arbitrary and unfair. This is from Document 736 (linked to above, but here it is again), which was filed on August 2:
On October 19, 2010, the Court transferred the criminal proceedings to another judge. (Docket No. 435.) The criminal case was subsequently reassigned to Judge Guzman. Judge Guzman then granted the government’s request (which was not made while this Court had the criminal case) to abandon the six-month cap imposed by this Court. (Case No. 10-cr-886, Docket No. 26.) As a result, the trial will no longer be a bench trial but will be a jury trial, adding considerable length and cost.
Judge Guzman recently ruled that the maximum term of imprisonment the Court could impose upon conviction is life. In other words – without any change whatsoever in the allegations or charges – the criminal case has changed from a bench trial and a maximum term of imprisonment of six months to a jury trial and a maximum term of imprisonment of life.

The jury trial is scheduled to commence on August 26, 2013 (exactly one month after the Court froze Trudeau’s assets and the assets of anyone working in concert with him, which is undefined in the Court’s order). [Note: This was written before the continuance issue came up again. ~CC] Given that the criminal trial is rapidly approaching (after pending for several years), the severity of the potential penalty, and the very recent imposition of a dramatically broad freeze order, the Court should exempt attorneys’ fees from that order as contemplated in that order such that Trudeau can afford a defense in what has become a major criminal trial.

Furthermore, in the instant case, the FTC continues to seek Trudeau’s immediate incarceration. It has become obvious that the FTC is more interested in incarcerating Trudeau than reimbursing consumers (why else would the FTC have refused to cash nearly $55,000 in checks from Trudeau and have failed to reimburse even a single consumer – a decision that the FTC has never explained).
In this May 2013 blog post I wrote about the government's formula for calculating a recommended prison sentence for Trudeau, which, at the time the document I wrote about was generated (Document 51, filed April 12, 2013 in the criminal case), was 188-225 months in prison -- or between 15.66666666 and 18.75 years. Increasing the potential sentence to life is obviously a more recent development. In the text I quoted above, Trudeau's lawyers did not cite a document number containing that more recent ruling by Judge Guzman. But even I think that things are getting a little extreme. Frankly, in light of the fact that KT has not to my knowledge killed anyone, whereas charismatic sociopath and star of The Secret James Arthur Ray has been directly responsible for the deaths of at least four people that we know of -- and yet Ray served less than two years in prison -- a life sentence, or even 15 years in prison, seems a bit steep even for a serial scammer such as Kevin Trudeau.

It's really not all black and white. I get that. Yet the FTC has clearly cornered Trudeau and has exposed lies and inconsistencies time and time again.

Kevin really should have stuck with MLMs all along if he just wanted to scam in peace. The FTC seems to be pretty cool with MLMs, as discussed here (among many other spots on Salty Droid's blog). But Kevin found himself an even more lucrative niche: "forbidden" misinformation (with a dash of real but far from secret or forbidden info thrown in for good measure).

With GIN he found a convenient and clever way to sell this info via an MLM, thus having the best of both worlds. But by the time he rolled out GIN, he was already in so much trouble that GIN was bound to get the attention of the Feds, and of course it has, despite his best asset-shuffling efforts.
Elephants in the room
My friend Julie Daniel wrote this on a recent Facebook discussion about Trudeau's legal troubles:

Another thing I want to point out... kt threw GIN under the bus when it came down to it, he agreed to hand over the private books of everyone who is a member in GIN rather than pay a fine, which he could have done instead, as indicated by the way he lives and the things he buys. He could have paid the fine, and been done with it. Instead he begged from his members to help pay his legal defense. He continued to buy six thousand dollar boxes of cigars, and was pleading for others to give up their five dollar pack of cigarettes and send him the money.

I can't believe you [the KT defenders] don't see that!
I agree with Julie. This is one of the elephants in the room where the KT defenders are concerned. It is in fact part of a whole herd of elephants (no offense intended to pachyderms of any kind).

Another one -- related to Julie's point above -- is that it has always been written into the fine print (the disclosures and the disclaimer pages), on both the GIN site and the Stand With KT site, that the respective entities have a right to share all members' and donors' personal info with marketers and other third parties of the entities' choice, and also the right to hand over the member info to authorities if required. Part of this is standard Web site disclaimer language, and part of it is KT's acute awareness of his legal troubles -- but it all adds up to GIN being far from a secret society or exclusive club. It is just another mundane money grab for Kevin. The people who join GIN are just another bunch of chumps as far as Katie is concerned.

Trudeau formed the Natural Cures Health Institute in 2005 with the stated purpose to disseminate health and nutrition info and to be an advocate for natural health issues. That's what it says on paper, but Michael Dow told the courts recently that Natural Cures was formed to defray KT's legal costs. Natural Cures oversees the Stand With KT legal fund web site, of course. That is one of the funds that KT's lawyers have been fighting to have exempted from any freeze order that may go into effect.

As I noted above, GIN too was cleverly structured as a personal ATM for KT, and if you read the correspondence between him and his "asset protection" buddies such as Marc Lane in the months before the launch -- correspondence which is viewable on some of the hundreds of pages of court documents that have been filed in the past couple of months -- it is plain to see that KT's first priority with GIN was not to offer participants wonderful benefits, and certainly not to preserve their privacy, but to squirrel away as many funds as possible from the US government.

Even Judge Gettleman said in that July 26 hearing that he found Marc Lane's conduct re the asset planning/hiding to be quite disturbing, adding that in his opinion Lane probably crossed the line. The judge said that he had not yet decided what to do about Lane.

I don't blame you for not wanting to go back through hundreds and hundreds of pages of court docs, not all of which I've linked to. But you'll get a great summary in that July 26 transcript. Here is that link again.

Despite my efforts to present a more balanced viewpoint than the YouTube hysterics provide, I still think Kevin Trudeau is a crook, and I thank Julie for the reminder of how he is willing to throw his customers and loyal supporters under a bus.

The sad thing is that many of these supporters will not see it that way and they will continue to applaud Katie's actions as part of the fight against tyranny -- even as he continues to pick their pockets.

As I said above, the FTC issues are not all black-and-white; even though they have made a good case against Trudeau, I have increasing doubts that their proposed remedies will constitute justice or will really solve any problems, either regarding Trudeau's scams or with Scamworld in general.

And as I've also said before, I recognize that the government is not necessarily the "good guy" and in fact has behaved tyrannically many times over the years. In fact, if Kevin Trudeau were any kind of real hero I might even be cheering him on.

But he is not a hero.

PS ~ As for Kevin Trudeau's (most recent) bankruptcy case (Number 13-16784, filed on April 22 of this year), I have regularly gone back to PACER and checked on that too, and as of yesterday (August 6, 2013), nothing has changed; it is still listed as dismissed, and the deadline for objecting to discharge is still August 30, 2013.
 
Important update, added 8 August 2013
Since I don't live on PACER.gov (appearances to the contrary), and am not online 24 hours a day, I was a bit behind the curve on this one, but only by a few hours. Those matters discussed above -- which the FTC and Kevin Trudeau's lawyers have been going back and forth about over the past couple of months, particularly since July 26 -- have indeed come to a head... sort of... maybe. Yesterday, August 7, Judge Gettleman finally did sign the order appointing a receiver for Katie's assets. As often seems to happen, it was filed hours after I signed out for the last time. But no big deal. The important thing is that it happened.

Here's that document:
http://www.scribd.com/doc/158957309/Trudeau-Civil-Case-Document-742-08-07-13-Order-Appointing-a-Receiver-and-Ancillary-Relief-Signature-Redacted

(This was not the only document filed yesterday, but the others were simply revised and redlined drafts of proposals that ultimately made it into order signed by Judge Gettleman.)

For me, the main takeaway from this latest document is that even though the receiver does indeed hold an enormous amount of power, nothing is a done deal yet, not even now. Sure, GIN is still a scam and a losing game for pretty much everyone involved, and Kevin is still a scammer... but I've been saying that all along. Even so, the amateur video stars who are crowing about this matter and doing victory dances on the MeToobs are not dancing on Kevin's grave or even on GIN's grave -- not yet. To say nothing of Scamworld's grave.

(Note: These latest documents had not yet been made available at the time the "video star" in question posted his first vid about this matter, so my comments in the original post above, regarding that particular video, still stand. The victory dance vid is a subsequent offering, uploaded after the latest docs were filed.)

What happens to GIN and the rest of Katie's assets (including his employees) depends upon what the receiver is willing and able to do. For instance, consider the matter of foreign asset repatriation (Item IX, page 14 of the signed order linked to above): "It is further ordered that Trudeau and each Trudeau Entity shall take the following steps, but only with the Receiver’s express prior authorization, and only pursuant to and in accordance with the Receiver’s express instructions..."

And even though it is true that the receiver can do all sorts of things, that is only with the Court's approval.

No matter what the outcome, all of this would have happened with or without the amateur video makers, victory dancers, and random attention whores* who populate the Tubes and the Facebooks. The FTC has been working on these cases for many years, and both judges -- Judge Gettleman and Judge Guzman -- have had plenty of time to grow ever more disgusted with Trudeau. And, for better or worse, it is the government who should be doing the victory dance. Maybe. We'll have to see.

In any case, the story isn't over yet, and whether this turns out to be any sort of "victory" for unhappy KT consumers or not remains to be seen.


* This isn't a pot-and-kettle situation, in case you're wondering. I am not a video maker (not yet, anyway), a victory dancer (I can't dance worth a crap), or an attention whore (I'm just a blogging slut, though a cosmic one, according to a certain not-doctor).


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1 comment:

Anonymous said...

Agan: Hussain against American man.
guess, who will win.

Saturday, August 31, 2013 12:15:00 AM

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