Whirled Musings

Across the Universe with Cosmic Connie, aka Connie L. Schmidt...or maybe just through the dung-filled streets and murky swamps of pop culture -- more specifically, the New-Age/New-Wage crowd, pop spirituality & religion, pop psychology, self(ish)-help, business babble, media silliness, & related (or occasionally unrelated) matters of consequence. Hope you're wearing boots. (By the way, the "Cosmic" bit in my moniker is IRONIC.)

Tuesday, September 03, 2013

Kevin Trudeau's opulent lifestyle in danger (maybe), while the Scamworld Express chugs along

Most of this post is taken from recent postings on Facebook by Yours Truly and a very close friend of Yours Truly named Armza Kimbo, whose blanket permission I have to re-post. So if you happen to be a member of those Facebook forums and have a feeling of deja vu, there's your explanation.

Times is tough* when a serial scammer can't continue to live the opulent lifestyle to which he has become accustomed. But that's what may be happening to Whirled fave Kevin Trudeau. Soon, he may not be able to spend any of his hard-scammed money for fine cee-gars and the other accoutrements of a successful billionaire way of life. He may even have to go out and get a real job somewhere. Well, maybe.

If all goes as scheduled on the docket, lawyers from the US Federal Trade Commission (FTC) will be in a Chicago court house again tomorrow, 4 September 2013, at 9:15 AM Central Daylight Time or thereabouts, to present a motion before the court to keep Trudeau's personal expenditures under even tighter control than they presumably already are (Case 1:03-cv-03904, the Honorable Robert W. Gettleman presiding).

The FTC is doing what they can to put a damper on what is left of Katie's lifestyle while the court-appointed receiver picks and scratches and digs through his business entities and personal assets, all in the service of scaring up the funds to pay that $37.6 million fine imposed on Katie for deceiving people with his weight-loss book.
Filed on August 30, 2013, Document 744 is a motion by the FTC, accompanied by an exhibit supporting the motion (Document 744-1).

The FTC wants a modification in the receivership agreement; they want to put more restrictions on Kevin's personal expenditures from the receivership assets. They don't want him spending money for a luxurious lifestyle when that money could (theoretically) be given to victims -- that is, the people who feel they have been scammed by his weight-loss book a few years ago. (Keep in mind that this has nothing to do with compensating the many people who say they have been scammed by
Trudeau's huge, elaborate, Ponzi-like Global Information Network (GIN).)

Now, whether or not that money really will go to victims remains to be seen. At least some of it is going to the receiver, and a lot of it has already gone to lawyers. But earmarking the funds to compensate the vics is the way the FTC is presenting the case.

Here's a little bit of recent history regarding the Trudeau court cases, just in case you haven't caught up over the past couple of months.)

Regarding Document 744 and several that came before it, the bottom line is that if the FTC has its way, their quarry is not only going to be compelled to live... gasp!... a middle-class lifestyle, which is quite a comedown for Katie, but that he's going to have to get a J-O-B to sustain it. As in: a real job, rather than an elevated position in Scamworld. What an insult.

But I look at it this way: even with that he will still be much better off, at least materially, than the majority of the world's people. As the late great Bob Marley (
and later, the late great Peter Tosh) sang in "Stop That Train," a long-time favorite of mine:
Some livin' big, but the most is livin' small:
They just can't even find no food at all.

And I'm guessing that the FTC-recommended budget would also leave Katie measurably better off than many if not most of his most faithful fans and followers -- particularly those who spent their life savings to advance in GIN, hoping that someday they could be rich and successful like their fearless leader.

As you'll see if you read the August 30 court doc, the FTC doesn't object to Trudeau having an allowance for personal expenses, but, as indicated above, they think he should earn it through "future legitimate employment" instead of just sitting on his butt getting it from the receivership estate. This is from the FTC's motion:

As noted above, the FTC does not object to the Receiver allowing Trudeau money for 'ordinary and necessary' living expenses from salary he earns through future legitimate employment (much as a debtor can retain portions of his income in other contexts). Put differently, if Trudeau adds to the receivership estate through his employment, he can enjoy the portion of that addition necessary to pay his personal expenses. However, if Trudeau chooses not to contribute to the estate, then—exactly like people who elect not work in other situations—he will have to rely on friends and family to support him. But he cannot simply sit idle and receive a monthly dole from a fund that isn’t his.

As indicated in the budget that the receiver prepared for Trudeau (one of the exhibits in Document 744-1)), the FTC believes that Trudeau's "ordinary and necessary" monthly expenses should only be $4,676. Why, that wouldn't even pay for his customary monthly cigar bill, much less his personal chef,
and the rent on that big McCastle. And then to add insult to injury, the FTC thinks he should either work at a legitimate job for the money, or else get help from family and friends, instead of having it handed to him from the receivership assets (which include but are not limited to GIN).

The FTC also thinks Katie's allowance should be the lesser of the "ordinary and necessary living expenses" and what he earns "legitimately." Beyond that, if he wants to continue living the really good life, he needs to get a little help from his friends. Now would be a really good time for some of those GIN Council brethren to step forward. Either that, or Katie is going to have to learn to smoke Swisher Sweets and start shopping at Walmart.

A Facebook friend of mine noted that Kevin probably has lots of rich pals who will gladly subsidize his ritzy lifestyle in exchange for being his bestie. "I think Kevin planned it all out in case the sh-t hit the fan, which it did," my friend wrote. "He'll be fine. Unfortunately GIN members will continue to fail."

Good points. And yet,
Kevin's folks had to put their home up just to raise his bond so he could go to Canada back in July. You'd think that some of his affluent besties would have stepped forward then to keep him from having to turn to his sweet middle-class folks. Because no matter what the story is behind that bond, you gotta admit that it looks pretty bad for a successful billionaire to have his aging parents risk their home of more than 60 years so their son can go catch some fishies in Canada, or whatever the heck he was doing there.

At any rate, in case you're not already convinced, the latest docs are further evidence that the FTC and the receiver really are calling the shots -- at least for now. That is something that even the hysterical "GIN-is-doomed" sensationalists got right, though they've generally over-stated, over-simplified, or otherwise distorted the matter.

This does not necessarily mean GIN will go away. I think that there still is a real possibility that may happen,
but the receivership agreement filed on August 7, 2013 also says the receiver has an obligation to keep Trudeau's business entities in operation as long as they are legal and -- this is important -- profitable (see Item 12 on page 11). What it does mean is that the FTC and receiver are going to do everything possible to squeeze every bit of money from Trudeau and his business entities -- including GIN. So far it appears that Kevin is NOT getting his way in this matter, no matter what he may be telling his followers, or what they may be telling each other. If you're still in GIN, keep that in mind and plan accordingly. Accept that GIN is not going to make you rich and that at some point you may simply need to cut your losses.

* * * * *
I also checked on the criminal case (Case # 1:10-cr-00886, United States of America v. Kevin Trudeau, the Honorable Ronald Guzman presiding), and there is little new information that is publicly available. No doubt both sides are busily preparing for the trial, which as far as I know is still scheduled to begin on November 4, 2013. According to the docket, the pre-trial conference is set to October 15, 2013 at 10:30 AM, and pre-trial motions are due by Friday, September 6. That is the case for which there is a possibility of a life prison sentence, but I seriously doubt that will come to pass -- and frankly, as much as I dislike KT and his scams, I don't think that would be justice. In fact, I wouldn't be surprised if some more paper shuffling resulted in the trial being canceled or at least continued. You just never know what will happen.

During a discussion about these matters on one of the Facebook forums, someone asked why there was even a possibility that Kevin would not get a life sentence. A better question might be: Why is there a possibility, however remote, that he will be thrown in prison for life? Frankly, I am still not clear on that myself. Kevin Trudeau is without doubt a lifelong scammer (and GIN is without a doubt a scam, in my opinion), and in a perfect world he would be forbidden from scamming for the rest of his life. Even so, it still boggles my mind that he could be caged for life, when
scam gurus such as James Arthur Ray served less than two years for cooking three people to death in his phony sweat lodge in Sedona, Arizona in 2009. (Moreover, caging scammers doesn't stop them from scamming; as reported here and elsewhere last year, James Ray was pushing Your Wish Is Your Command while he was still in prison!)

And let's not even get into the vile acts of some of KT's former compadres, who may not have been charged with anything formally, but around whom some pretty nasty allegations continually swirl (
Loony Coldwell, anyone)?

That said, I realize that the FTC has laid its case out very carefully and methodically, and what I think, or what Trudeau's fans think, really doesn't matter at the end of the day. Although KT's fans don't agree with the whole premise of the case, the FTC has been pretty thorough. And,
as noted on this Whirled before, the government actually used a specific formula to determine the potential punishment in the criminal case, should KT be found guilty by a jury of his peers. Originally the government recommended a range of 188-225 months in prison -- or between 15.66666666 and 18.75 years Document number 51, filed 04/12/13). Here are links to JPEGs of the individual pages of this document, which explains the government's reasoning:

Page 1:
Page 2:
Page 3:
Page 4:
Page 5:
Page 6:

At some point after that April 2013 filing, Judge Guzman ruled that the Court could impose a maximum sentence of life. To tell the truth, I have still not read the actual ruling, which presumably contains an explanation for this increase. Maybe I just overlooked it in all of my PACER retrievals and document perusals. But I know that there are some transcripts that, although entered on the docket, are not yet viewable through PACER.

However, the potential life sentence has been mentioned several times,
including in this document from the civil case (see page 2, paragraph 2). So it still could happen, although as I have said, I don't think it will.

By the way, unless documents have been filed in the past few days but just not uploaded to PACER yet, it appears that
the most recent Kevin Trudeau bankruptcy case, filed on April 22 of this year, is really dead. Although it was terminated on June 3, 2013 due to failure to file documents, the docket listed August 30, 2013 as the deadline for objecting to the discharge. August 30 has come and gone, and no new docket entries have been made since July 3 (that was trustee Phillip D. Levey's request to be discharged from any further duties as trustee.)

It seems clear to me that the government has Trudeau firmly in their grip for now, and I have no doubt that individual investigators and attorneys who have been on this case for years and years -- long before GIN existed -- will do everything in their power to secure the maximum punishment for KT's life of fraud and scams. But ultimately, I suppose, it will be up to the jury (and the judge, to a certain extent). Also keep in mind that Trudeau still has a lot of fans and supporters. Some of them think he can do no wrong, and some aren't convinced of his infallibility, but all will still choose him over the government any day. And if he does still have friends in Scamworld, presumably they might be able to raise some money for him too, through entities that are beyond the scope of the FTC, the receivership, and the courts.

So don't count Kevin Trudeau out of the game yet.

Scamworld and the larger problem
Another Facebook friend, Julie Daniel, re-posted a link to the now-classic
May 2012 Verge video on Scamworld, featuring my blogging colleague Salty Droid as one of the fighters against the scams and scammers. The accompanying Verge online article by Joseph Flaley is very good too, and really drives the point home.

Some of the comments on
Salty Droid's recent post re Chump U are pretty eye-opening as well. A person using the name InTheKnow is sharing some great insight into how leads are bought and sold and bought and sold repeatedly in Scamworld among the pros. We all know this goes on but this person seems to have experience in the boiler rooms, and goes into some detail about how leads are rated in order to determine how much they are worth.

(It occurred to me that Trudeau made one of his big mistakes by trying to pull kind of the same thing on a smaller scale with amateurs, i.e. GIN members, who for the most part were not used to dealing with this stuff on any scale, and for whom just a very few solid leads could have made a significant difference in their GIN business. People paid good money for questionable or bad leads, and matters were made worse by the fact that in many cases people paid for leads that were never even delivered.)

Another person using the name K. Chang is sharing insights on the Trump post and other recent Salty posts about the investigations of various scammers/scams and the revolving door/corruption of some of the regulatory agencies, including the Securities and Exchange Commission (SEC).

And my pal Tom Banjo, who probably knows more than he cares to know about Donald Trump's real estate and other operations, has some excellent comments as well. I urge you to read the post and the comments.
Here's that link again.

It is all rather depressing and once again provides perspective on the enormity of the problem. And of course it lends more validity to my favorite mantra re GIN: No neat and tidy endings.

But that doesn't mean we should ever, ever give up in the efforts to educate ourselves and others about these scams, and do what we can to fight them. We may not be able to stop the Scamworld train, but we might be able to prevent some people from hopping on board for a journey to nowhere fast.

PS ~ Speaking of Loony Coldwell, Bernie has done it again on
this hilarious -- and insightful -- GINtruth.com post about Loony's hubris.

* Re "Times is tough": in case you are wondering, that was a deliberate grammatical error.

Update, 5 September 2013:
The FTC apparently presented its case before the court yesterday, September 4. From the civil case docket:

MINUTE entry before Honorable Robert W. Gettleman: Motion hearing held on 9/4/2013 regarding motion 744 to modify the Receivership order. Response is due by 9/12/2013. Reply is due by 9/16/2013. Mailed notice (gds) (Entered:09/04/2013)
As you can see, a response to the FTC's motion to modify the Receivership order is due a week from today, and a reply to the response is due four days later, on September 16, 2013. So despite what some had predicted, yesterday was apparently no big deal, just court business as usual, and more than likely Kevin is still smoking his expensive cigars and living a relatively luxurious life, perhaps with a little help from his friends. (Are y'all getting bored with this yet? :-))

There is nothing new on the criminal case either since that 8/08/13 transcript was entered on the docket on August 26. However, that transcript is still not available through PACER.

Also, I checked the docket, and Kimball Anderson, Katherine Rohlf, and Thomas Kirsch of Winston & Strawn LLP are still listed as the attorneys on both the civil and criminal case. So it appears that Katie's present flock of attorneys have not abandoned him yet.

More True-dough on this Whirled:
* * * * *
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Anonymous Roger Willco said...

Connie, Connie, Connie:

How can you be so obtuse? Katie should call on his friends or even (gasp) members of the GIN Council to help him through the middle-class privation he may have to endure? No...that would be like piling on Jesus as he stood before Pilate.

If you'd paid attention to Katie's video solicitation for donations to fund his legal defense, you'd know that the man is really an altruistic messiah to victims of corrupt gubmet oppression. It's too much to ask of such a self-sacrificing hero to absorb all the expense of his crusade without the beneficiaries thereof making significant contribut...

Ouch! Gotta go...My tongue just punched clean through my cheek; and I'm hemorrhaging like a a GIN victim's wallet.


Wednesday, September 11, 2013 10:39:00 AM  
Blogger Cosmic Connie said...

Oh, Roger, I am so deeply, deeply ashamed that I have misunderestimated the tribulations of Saint Kevin... And now I find that my own cheek has been pierced. I have either eaten some of that trick candy from the old Monty Python sketch ("Crunchy Frog" -- I think this is a link: http://www.youtube.com/watch?v=Dy6uLfermPU), or I've caught your irony bug.

Good to see you here. I haven't forgotten "our" blog post. Still working on it, in between other things!

Wednesday, September 11, 2013 7:19:00 PM  

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