FTC: Cleanup of Trudeau's $110 Million Pyramid Scheme Continues27 Aug, 2014 By: Doug McPherson
WASHINGTON – Here’s something else infamous infomercial pitchman Kevin Trudeau may not want you to know: the Federal Trade Commission (FTC) says while he was being investigated for false health and diet claims from one of his books, he had another scheme brewing.
The FTC’s Jonathan Cohen told CNBC that while the FTC was investigating the book case in 2007, Trudeau was courting investors for a $110 million pyramid scheme with more than 35,000 members called the Global Information Network (GIN), which investigators believe he may have used to conceal millions of dollars in assets from the government.
Investors paid for access to expert financial advice and promises of wealth that never came. And as Trudeau sits inside a federal prison in Alabama, serving a 10-year sentence, investigators continue to search for GIN revenue.
Ryan Kath, a TV reporter in Kansas, has been following the GIN scam and says GIN membership has dwindled to 4,000 – but some of the more ardent members are pooling their money to buy GIN for $200,000, for which they’ll get GIN’s intellectual property, a membership database and office furniture at its Chicago-based headquarters. Kath says GIN owes members $9.5 million in commissions and bonuses.
Cohen told CNBC, “It’s likely a significant portion of the [GIN] assets remain stashed overseas in corporations or trusts that Kevin Trudeau controls.” CNBC reports Trudeau’s attorneys are not retuning phone calls or E-mails for comment.
According to Trudeau’s former online radio show KTRN, GIN was a secret society that would generate a “money-making machine virtually overnight” and guarantee millionaire status. Trudeau added he and a council of 29 other unnamed “millionaires, billionaires, multibillionaires” would tell potential investors how to get rich quick.
Abe Hussein is an alleged GIN victim who invested more than $30,000. Hussein told CNBC he believed the council members were his key to riches. “He was telling people we were going to have GIN yachts. We were going to have GIN clubhouses across the world. I even thought President Obama was in the GIN council.”
Hussein said spending more money in the network earned him more rewards and status. “If you make it to level 12, you get a Ferrari – each level kept getting more expensive. You have to pay $100,000 to see Kevin and touch his skin because he’s basically a glowing god – and we believed that.”
Investigators say most GIN members never saw a dime, with only Trudeau getting richer.
Trudeau, 51, was imprisoned in March for failing to pay a $37 million FTC fine for false claims in his book, “The Weight Loss Cure ‘They’ Don’t Want you to Know About.”
Cohen added that Trudeau’s diehard followers are helping to pay the $37 million fine.