Kevin Trudeau: the receiver finds some plunder Down Under, FTC not pleased, nudges judge to jail Katie

This past Friday (September 13, 2013), I reported on the September 12 response by serial scammer Kevin Trudeau's lawyers to the Federal Trade Commission (FTC) motion for a modification of the August 7 receivership order. The FTC wanted the court to take Kevin's modest (by his standards) monthly living allowance away unless he gets a real job and earns his keep. Kevin's attorneys lamented that Katie is just a poor boy and he needs that allowance, darn it, and besides, he is unemployable because he's a convicted felon and all that. Here's the scoop on that, if you need to catch up. (That post also contains links, at the end, to all of my previous posts on Trudeau.)

Today, September 16, was the day that the FTC's reply to Trudeau's lawyers' response was due. And boy, did the FTC give the court an earful (or an eyeful). They are not-so-subtly nudging the judge to throw Katie in jail for, among other things, the fact that Katie has an account in Australia that he forgot to disclose to the receiver. Oops! 

(As it happens, he did mention its existence to the FTC back in January 2013, but gave no information beyond that; see PS below. At best his handling of the account in re the Feds and the receiver seems like a fib by omission.)
 
I'm not all that surprised by the assets Down Under. Katie has roots in Oz, having done business there with, among others, the late lamented Rene Rivkin. They were good buddies before Rivkin killed himself in 2005. I have a half-finished blog post about that very topic. I need to finish it.

Anyway. Katie has not exactly been living like a poor boy since his assets were frozen. In fact, he has been living large. According to today's document:

As the Court will recall, on July 26, the Court sternly warned Trudeau regarding what would happen if he did not comply with the receivership and asset freeze. As the Court put it, 'I would be absolutely within reason and the law and the facts of this case to incarcerate [you] today,' PXA:3 at 30:20-22, but the Court wanted to give Trudeau a chance to cooperate with a receivership. However, if that 'doesn’t work,' then incarceration 'will be the next thing that happens.' Id. at 31:8. As the Court explained to Trudeau, 'instead of putting you in prison, or incarcerating you, I’m giving you the key to open that [jailhouse] door. I’m giving you the key to keep you out of that door. And it’s the last time I am going to do that.' Id. at 40:17-20.

The next day, July 27, Trudeau spent $185 at the Dalia Salon & Spa in Hinsdale. See PXA:2 at 3; see also www.salon-spadalia dot com. And the following day (July 28), Trudeau spent $357.21 at Whole Foods in Hinsdale, $559.52 on cigars in Westmont, and transferred 20,000 Australian dollars (approximately $18,642) from his Australian account to an unknown location.

Grouses the FTC, "The Australian account is almost certainly not the only source of funds that Trudeau is using to maintain his lifestyle. It is merely the only one for which the Receiver has obtained statements thus far."

It should be noted that the receivership order did not go into effect until August 7, and some of Katie's livin'-large expenditures were incurred before then. Even so, his assets were technically frozen on July 26, so...

At any rate, here is what the FTC wants:

Although the Court may elect to incarcerate Trudeau now (and the FTC reserves the right to seek such relief in the future), the FTC asks the Court to:
(1) modify the Writ Ne Exeat (June 25, 2013) (DE699) to prevent Trudeau from leaving the Northern District of Illinois until he: (A) repays everything he spent in violation of the Court’s orders ($8,679.43);7 (B) disgorges the remaining balance in his Australian bank account to the Receiver; and (C) provides the $18,642 that he transferred from that account on July 28 to the Receiver; and
(2) modify the Receivership Order to clarify that Trudeau may only receive money for 'ordinary and necessary' living expenses from amounts he contributes to the Receivership Estate through legitimate employment.

All righty, then! There are numerous other tidbits in that document. We learn, among other things, that Kevin's lovely bride Nataliya Babenko has returned to Ukraine (footnote 6, page 5 of document 749). I am crushed, for I had such high hopes for that marriage. If a serial scammer and his young mail-order bride can't make a go of a marriage, is there any hope for the rest of us? The FTC makes note of this because the formerly approved allowance for Katie was for two adults, one of whom was presumably his wife. But now she's no longer living with him (and actually has not been for months), so the FTC is also suggesting that his paltry allowance should be made even more paltry.

So... will Katie finally end up in jail, at least until he can scare up some money that the FTC and the receiver are satisfied does not belong to the receivership estate? Or will the judge decide again not to incarcerate Katie, leaving him open to accusations of running a...um... kangaroo court? Stay tuned. Meanwhile, here again is the link to the latest court documents (also see below). 

PS ~ Here is another court document that was filed later on September 16, 2013. This is the receiver's supplemental report (Document number 750, and attached exhibits, comprising Document 750-1). The report covers items discovered or clarified since the receiver's first monthly report (September 6, 2013). Some of these exhibits were also attached to Document 749, linked to above. If you read the document you will see that the receiver (footnote 2, page 1) says Kevin did apparently alert the FTC to the existence of the Australian account back in January of 2013 during his financial disclosures, but the FTC said they did not have any info beyond that at the time. Also, after the receiver began the investigation, they confronted Kevin with questions about the account, and at first he said he had no access to it, but later he provided access. Kevin will probably try to argue that he was NOT concealing the existence of this account, which technically is true. However, it also seems that the investigators had to coerce him to give them the details, and that he lied to them a few times in the process.

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