IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS

_____________________________________ 

 ) 

FEDERAL TRADE COMMISSION ) 

 ) 

Plaintiff, ) 

 ) 

 v. ) Case No. 03-C-3904 

 ) 

KEVIN TRUDEAU, ) 

 ) 

 Defendant. ) 

 ) 

BRIEF IN SUPPORT OF MOTION TO HOLD DEFENDANT TRUDEAU IN 

CONTEMPT FOR VIOLATING THE JUNE 2, 2010 ORDER, INCARCERATE HIM, 

AND ORDER HIM TO PROVIDE AN ACCOUNTING OF AND TURNOVER ASSETS

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Table of Contents 

I. Introduction .............................................................................................................................. 1

II. Statement of Facts ................................................................................................................. 2

A. Prior Proceedings and the Court’s Findings Regarding Trudeau’s Lack of Credibility .. 2

B. Trudeau Has Failed to Pay the Sanction Despite Considerable Wealth. ......................... 3

1. Trudeau Uses Nominees to Hide His Control of Numerous Business Entities. .............. 5

2. Trudeau Owns or Controls Five Corporations With Nearly $190 Million Total Cash 

Flow Since 2007 That He Uses to Conceal Assets. ................................................................. 6

3. Trudeau Also Used a Casino to Conceal His Assets. ..................................................... 11

4. Trudeau Dissipates Significant Assets and Maintains an Extravagant Lifestyle. .......... 12

5. Trudeau Has Other Real and Personal Property Available to Pay the Sanction. ........... 13

III. Argument ............................................................................................................................ 14

A. Clear and Convincing Evidence Establishes that Trudeau Has Violated the Order By 

Failing to Pay the Contempt Sanction. ...................................................................................... 14

B. Trudeau Cannot Support an Inability to Comply Defense While Holding Assets 

Offshore, Attempting to Conceal Substantial Assets, and Maintaining a Lavish Lifestyle. ..... 15

C. Only a Sanction of Incarceration Can Possibly Coerce Trudeau to Comply With the 

Court’s Order. ............................................................................................................................ 16

D. Trudeau Should Remain Incarcerated Until He Pays in Full or Provides a Full 

Accounting and Complete Turnover of Assets. ........................................................................ 17

IV. Conclusion .......................................................................................................................... 18

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Table of Cases 

Autotech Techs. LP v. Integral Research & Dev. Corp., 499 F.3d 737 (7th Cir. 2007) ............... 14 

Central States Fund v. Wirtz, 155 F.3d 868 (7th Cir. 1998) ......................................................... 14 

Chicago Truck Drivers Union Pension Fund v. Brotherhood Labor Leasing, 207 F.3d 500 (8th

Cir. 2000) ............................................................................................................................... 4, 15 

Commodity Futures Trading Comm’n v. Wellington Precious Metals, Inc., 950 F.2d 1525 (11th 

Cir. 1992) ............................................................................................................................. 15, 17 

FTC v. Affordable Media, LLC, 179 F.3d 1228 (9th Cir. 1999) ................................................... 15 

FTC v. Trudeau, 572 F. Supp. 2d 919 (N.D. Ill. 2008) .................................................................. 2 

FTC v. Trudeau, 579 F.3d 754 (7thCir. 2009) ............................................................................. 14 

FTC v. Trudeau, 662 F.3d 947 (7th Cir. 2011) ......................................................................... 2, 13 

FTC v. Trudeau, 708 F. Supp. 2d 711 (N.D. Ill. 2010) .................................................................. 3 

FTC v. Trudeau, Case No. 1:12-MC-022 (S.D. Ohio) ................................................................... 9 

Huber v. Marine Midland Bank, 51 F.3d 5 (2d Cir. 1995) ...................................................... 14-15 

Jones v. Lincoln Elec. Co., 188 F.3d 709 (7th Cir. 1999) ............................................................ 14 

Maggio v. Zeitz, 333 U.S. 56 (1948) ............................................................................................. 17 

In re Resource Tech. Corp., 624 F.3d 376 (7th Cir. 2010) ....................................... 1, 3, 14, 15, 17 

SEC v. Custable, No. 94 C 3755, 1999 U.S. Dist LEXIS 1776, (N.D. Ill. Feb. 10, 1999) ........... 17 

SEC v. Hyatt, 621 F.3d 687 (7th Cir. 2010) .................................................................................... 1 

Shillitani v. United States, 384 U.S. 364 (1966) ..................................................................... 14, 16 

Trudeau v. FTC, Case No. 12-C-574 (N.D. Ill.) ............................................................................. 5 

United States v. Lippitt, 180 F.3d 873 (7th Cir. 1999) ............................................................. 2, 16 

United States. v. United Mine Workers of Amer., 330 U.S. 258 (1947) ....................................... 16 

United States ex rel. Thom, 760 F.2d 736 (7th Cir. 1995) ............................................................ 17 

United States v. Rylander, 460 U.S. 752 (1983) ........................................................................... 15 

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I. Introduction 

On June 2, 2010, the Court ordered Trudeau to pay a contempt sanction of $37,616,161. 

To date, he has not paid a penny and so – once again – Trudeau is in contempt of this Court. In 

re Resource Tech. Corp., 624 F.3d 376 (7th Cir. 2010) (finding contempt for failure to comply 

with order to pay). Incredibly, Trudeau claims an inability to pay while at the same time 

orchestrating a web of domestic and off-shore entities through which he has funneled millions of 

dollars and maintained a lavish lifestyle. This extensive asset concealment and dissipation 

vitiates his ability to establish “clearly, plainly, and unmistakably that compliance is 

impossible.” Id. at 387 (italics and citation omitted). Moreover, Trudeau’s complete failure to 

pay, his extensive history of failing to obey court orders, and his total lack of credibility, 

demonstrate that he will not comply with the Court’s Order unless he is coerced to do so by 

incarceration. United States v. Lippitt, 180 F.3d 873 (7th Cir. 1999) (affirming order coercively 

incarcerating defendant for failing to pay criminal fine). Accordingly, the FTC moves to: (1) 

hold Trudeau in contempt for failing to pay the $37,616,161 contempt sanction; (2) immediately 

incarcerate him to coerce his compliance; and (3) order that he remain incarcerated until he 

purges his contempt by paying the sanction in full, with interest, and failing that, until he 

“clearly, plainly, and unmistakably” accounts for and turns over all assets directly or indirectly 

held by him or for his benefit.1

 

1 The FTC moves for Trudeau to be held in contempt by notice and motion. An order to show 

cause is unnecessary. SEC v. Hyatt, 621 F.3d 687, 694-95 (7th Cir. 2010). 

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II. Statement of Facts 

A. Prior Proceedings and the Court’s Findings Regarding Trudeau’s Lack of 

Credibility 

 

The Court is very familiar with Trudeau’s long history of deception and contumacious 

conduct. The FTC will only briefly summarize those proceedings relevant to this motion. In 

September 2007, the FTC filed a motion to hold Trudeau in contempt for violating the Stipulated 

Final Order in the underlying action with blatantly deceptive infomercials for his diet book, 

Weight Loss Cure. ECF No. 62. In November 2007, the Court held Trudeau in contempt. 

ECF No. 93. 

The Court imposed a $37.6 million compensatory contempt sanction against Trudeau, 

based on the total amount of consumer loss he caused. Specifically, the Court stated: 

“Trudeau is ordered to pay forthwith to plaintiff the sum of $37,616,161.” Corrected 

Supplemental Order at 13-14, ECF No. 372 (emphasis added). The Seventh Circuit affirmed the 

Supplemental Order in November 2011. FTC v. Trudeau, 662 F.3d 947 (7th Cir. 2011). 

Over the course of the sanction proceedings, the Court “[did] not credit much of Mr. 

Trudeau’s testimony,” finding that “Trudeau is not a credible witness.” FTC v. Trudeau, 572 F. 

Supp. 2d 919, 924 (N.D. Ill. 2008). Rejecting Trudeau’s claim that he was unable to pay a 

significant compensatory sanction, the Court also found that the unaudited balance sheet he 

presented was “not worth the paper it is written on,” because “[v]irtually all of the numbers on 

[it] were put there (or omitted, as in the case of significant assets) at Trudeau’s direction.” Id. at 

925. The Court further noted that “Trudeau is a very creative person who is likely to maintain 

the lifestyle to which he has become accustomed.” Id. As discussed below, the Court’s 

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observations were prescient. Moreover, rejecting Trudeau’s plea for a lesser sanction based on 

his purported earnings from the infomercial sales of his diet book, the Court reiterated: 

“Trudeau has little credibility with this court. Based on his demeanor and conduct, the court has 

found, and continues to find, that Trudeau cannot be trusted.” FTC v. Trudeau, 708 F. Supp. 2d 

711, 716 (N.D. Ill. 2010).

B. Trudeau Has Failed to Pay the Sanction Despite Considerable Wealth.2

It is undisputed that Trudeau has failed to comply with the Court’s order to pay the 

contempt sanction. To date, he has refused to pay anything, claiming poverty.3

 But his claim 

is a charade, flatly contradicted by the facts. Trudeau is engaged in multiple, lucrative business 

ventures and lives a life of luxury. Trudeau, his wife Nataliya Babenko, and the many 

corporations he owns or controls have held more than eighty (80) bank accounts at five different 

 

2 Citations herein to FTC’s exhibits and attachments are abbreviated as “PX__, Att. __.” In 

accordance with Fed. R. Evid. 1006, the attachments include summaries of voluminous corporate 

and financial records that cannot be conveniently examined in court. The FTC has made these 

records available to Trudeau, and will produce them to the Court upon request. 

3 See Defendant’s Motion to Stay, June 7, 2010, ECF No. 378 (claiming inability to pay 

sanction). Trudeau flatly told a reporter “I’m never going to pay it.” Mitch Lipka, The 

Unstoppable Kevin Trudeau, Dec. 3, 2009, dailyfinance.com (emphasis added), Lewis Decl., PX 

1, Att. A. More recently, Trudeau falsely claimed that he was so poor he would have to drive 

from Chicago to Washington, D.C. to attend a meeting with the FTC. Mora Decl., PX 4, Att. A 

(October 2011 emails from Trudeau counsel Marc Lane).

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banks over the past five years,4 through which $220 million has flowed.5 Luceri Decl., PX 2, 

Att. B. Indeed, rather than making any reasonable effort to pay the sanction, Trudeau has gone 

to extraordinary lengths to shelter or conceal significant assets by, inter alia: transferring them 

offshore or to his wife, Babenko; keeping his name off corporate records and bank accounts by 

using Babenko and his long-time confidant Suneil Sant as his nominees; and in the case of his 

corporate affiliates, by “layering” or transferring funds through multiple bank accounts to 

conceal their origin. In addition to using his companies as a means to conceal his assets, 

Trudeau also has used a casino to launder funds, purchasing hundreds of thousands of dollars in 

chips, mostly with corporate funds, and then cashing out almost the same amount of chips later 

after relatively minimal gambling. 

 

4 The time period since 2007 is relevant to Trudeau’s ability to pay the contempt sanction 

because the FTC initiated contempt proceedings against him in September 2007. Since that 

time, and certainly since the Court first entered the $37.6 million sanction in November 2008, 

Trudeau has been on notice that his assets could be subject to a compensatory contempt sanction. 

See In re Resource Tech. Corp., 624 F.3d at 387 (contemnor’s past ability to comply with order 

triggers presumption of present ability to comply). As discussed below, with this knowledge in 

hand, Trudeau has been engaged in a systematic effort to conceal and dissipate assets – thereby 

vitiating any inability to pay defense. Chicago Truck Drivers Union Pension Fund v. 

Brotherhood Labor Leasing, 207 F.3d 500, 506 (8thCir. 2000) (inability to comply cannot be 

self-induced). 

5 The bulk of the information cited herein comes from third party sources such as banks because 

information sought from Trudeau is of limited value. He is simply evasive and lacks credibility. 

For example, Trudeau claims that: he resides in the Ukraine 

 and he does not 

own or control any of his corporate affiliates that were created post-judgment. See PX 4, Att. B, 

(Nov. 2011 sworn compliance report from Trudeau reporting that he resides in Ukraine); Att. C , 

Items 1, 9, and 24 (April 2009 sworn financial statement from Trudeau); Att. D, p. 3 (May 2012 

letter from Kimball Anderson). As discussed below, the evidence shows otherwise. 

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Trudeau also has dissipated assets at an alarming rate, as have his affiliates, on expenses 

such as: credit and charge card usage at the rate of 

buying a $340,000 Bentley and two other vehicles for cash with corporate funds; renting a 

multi-million dollar luxury home for $12,000 per month; traveling by private jet; and employing 

a live-in domestic worker and a personal chef. This substantial dissipation amply demonstrates 

that Trudeau has the ability to comply with the Court’s order. 

Sections II.B.1–5 below discuss in greater detail how Trudeau has concealed and 

dissipated assets.6

1. Trudeau Uses Nominees to Hide His Control of Numerous Business Entities. 

Trudeau keeps his name off corporate and bank records to conceal his assets. 

Specifically, he uses his wife Nataliya Babenko and his long-time associate Suneil Sant, aka 

Neil Sant, to serve as nominee officers and directors for the many corporations he owns or 

controls. Trudeau married Babenko, a native of the Ukraine, in May 2008, shortly before the 

Court originally entered the contempt sanction against him. PX 1, Att. C. Babenko is the 

named officer and director of two Trudeau affiliates that were incorporated post-judgment, KT 

Radio Network (“KTRN”) and GIN USA, and she is a signatory on the bank accounts of KTRN,

 

6 Moreover, Trudeau has used dubious litigation tactics to impede the FTC’s discovery of his 

assets: (1) he and his affiliates moved to quash numerous FTC subpoenas for bank records; 

(2) his counsel Kimball Anderson sent letters to the Illinois Attorney Registration and 

Disciplinary Commission accusing FTC counsel Michael Mora of violating ethics rules by 

supervising an undercover investigation of Trudeau’s marketing activities, as expressly 

authorized by the Court’s Stipulated Final Order, PX 4, Att. D; (3) his multilevel marketing 

scheme, Global Information Network (discussed infra at Section B.2), invoked arbitration 

against the FTC and its investigator in St. Kitts and Nevis, alleging that the FTC’s investigation 

violated its “wishes to remain outside of government review,” id. at Att. E; and (4) he sued the 

FTC under the Freedom of Information Act for withholding documents in response to his 

demand for the FTC’s “investigative files.” See Trudeau v. FTC, Case No. 12-C-574 (N.D. Ill.).

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GIN USA, and Global Information Network FDN.7 Luceri Decl., PX 2, Att. A, B. Neil Sant 

has been a nominee officer for Trudeau’s other business entities since 2004, and he is a signatory 

on bank accounts for those entities. Id. at Att. B; PX 4, Att. F (deposition of Neil Sant in 

underlying contempt proceeding, testifying that his duties as officer for Trudeau’s business 

entities are merely “administrative” and that he takes directions from Trudeau).

2. Trudeau Owns or Controls Five Corporations With Nearly $190 Million Total 

Cash Flow Since 2007 That He Uses to Conceal Assets. 

Trudeau directly or indirectly owns or controls five corporations with total cash flow 

from bank deposits of nearly $189 million:8

 International Pool Tour (“IPT”); (2) Natural 

Cures; (3) KTRN; (4) Website Solutions, USA (WSU), and (5) GIN USA. PX 2, Att. B. 

Each has the same office address, phone number, nominee officers and bank signatories 

(Babenko and Sant); banks where they maintain accounts; and incorporator and corporate 

counsel (Marc Lane). PX 2, Att. A, B. 

a. Trudeau Owns or Controls IPT, Natural Cures, KTRN, WSU and GIN USA 

Trudeau directly owns 100% of IPT, a failed company that once promoted billiards 

tournaments but has been defunct since 2006. PX 1, Att. A (news article describing IPT’s 

demise); PX 4, Att. I (Trudeau affiliates chart as of 2007). Sant identifies himself as the 

president of IPT in bank records and is IPT’s bank signatory. See PX 2, Att. A, B. 

 

7 As discussed infra at Section B.2.a and B.3, Trudeau has also used Babenko’s personal bank 

account and casino account to conceal assets. 

8 PX 2, Att. B. Trudeau also owns or controls at least 10 other corporations that had an 

additional $31 million in cash flow since August 2007. See id. at Att. A, B.

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Trudeau owns 97.7% of Natural Cures through an offshore trust,9 and three intermediate 

holding companies.10 Natural Cures promotes Trudeau’s books, has a subscription-based 

website, and distributes a newsletter to subscribers. See www.naturalcures.com. Sant is the 

officer, director, and bank signatory for Natural Cures. PX 2, Att. A, B. 

Trudeau also beneficially owns or controls KTRN, WSU, and GIN USA, each of which 

was created after the Court first entered the contempt sanction. PX 2, Att. A (entities 

incorporated in June 2009, March 2010, and June 2011, respectively). These companies are 

affiliated with Global Information Network (“GIN”), a purported wealth building program and 

multilevel marketing scheme in which members pay $1,000 to join and $150 monthly dues 

($1,800 per year), and earn compensation by recruiting new members, i.e., from their 

“downline.” See PX 1, Att. V (web pages from GIN website).11 PX 2, Att. B. Babenko is an 

 

9 Trudeau’s offshore trust, the KMT Fiduciary Trust (Mauritius),

 Moreover, 

Trudeau recently notified the FTC that he intended to sell Natural Cures to “a newly formed 

United Kingdom Limited Liability Partnership” that Trudeau purportedly has no connection 

with. PX 4, Att. H (April 2012 notice of sale).

10 The convoluted ownership structure of Natural Cures is as follows: Trudeau is the sole 

beneficiary of his offshore trust; the trust wholly owns K.T. Corporation Ltd. (“KT Corp.”), an 

offshore company registered in Isle of Man; KT Corp. wholly owns Trucom LLC; and Trucom 

owns 97.7% of Natural Cures Holdings, Inc., which wholly owns Natural Cures, Inc. See PX 4, 

Att. B, H, I (documents showing ownership connection). 

11 Trudeau denies that he is an “owner, officer, or director” of GIN, see PX 4, Att. D at p. 3 (May 

2012 letter from Kimball Anderson), but as discussed below, the evidence shows he beneficially 

owns or controls the entities through which this get-rich-quick scheme is financed: GIN FDN, 

KTRN, WSU, and GIN USA. 

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officer and bank signatory for KTRN and GIN USA. Id. at Att. A, B. Sant is an officer and 

bank signatory for KTRN and WSU. Id.

As the Court may recall from a declaratory judgment motion Trudeau filed in July 2010, 

he began promoting GIN in 2009 through, inter alia, his audio book “Your Wish is Your 

Command, How Anyone Can Make Millions!,” and infomercials for the book. Trudeau asked 

the Court to rule that he did not have to post the $2 million performance bond required by the 

Supplemental Order for these infomercials. The Court denied his motion, finding that he was 

promoting the purported wealth-building program contained in the Your Wish/GIN book in his 

infomercials. See ECF Nos. 401-02, 407, 412, 424. 

On its website, GIN claims that it is a “multiform foundation” (known as Global 

Information Network FDN (“GIN FDN”)) registered in the notorious asset haven of St. Kitts and 

Nevis,12 whose founders “will always remain anonymous.” PX 1, Att. V. In fact, Trudeau has 

repeatedly admitted that he is the founder of GIN, and there is ample evidence that he 

beneficially owns or controls GIN FDN, KTRN, WSU, and GIN USA: 

 Both in a radio interview and in a recent promotional video he did for GIN, Trudeau 

admitted that he is a founder of GIN and a member of its council. PX 1, Att. X, Y. 

 Since its inception, Trudeau has been the chief spokesperson for GIN and has heavily 

promoted it through his Your Wish publication, through KTRN on “The Kevin Trudeau 

Show” and its website, www.ktradionetwork.com, and at GIN promotional seminars. 

See id. at ¶¶ 20-28, Att. Y, Z (video broadcasts of Trudeau promoting GIN, and 

describing how he founded it and promoted it through seminars). 

 In a recent video addressed to his stable of paid speakers for GIN seminars, Trudeau 

announces major changes in GIN’s operations, and explains in detail how he started GIN 

in 2009 by soliciting customers who purchased his Natural Cures and Debt Cures books 

 

12 As GIN admits on its website, however, it is actually “headquartered in Chicago,” i.e., where 

Trudeau and his affiliates are located. PX 1, Att. V (“FAQ” page from GIN website).

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to join the program. Id. at Att. Z Trudeau further recounts how he conducted the initial 

GIN seminars in Zurich, Chicago, and Cancun. Id.

 A testimonial on the web site of a consulting firm Trudeau has used bears his electronic 

signature as “Founder & Owner, Trudeau Approved Products, Global Information 

Network, Kevin Trudeau Radio Network.” Id. at Att. W (McClain Companies web 

pages) (emphasis added).13

 Trudeau and his affiliates also control GIN’s finances and conduct its operations. In 

GIN’s first year of operation from 2009-2010, his wife Babenko was the signatory for two bank 

accounts that GIN FDN maintained in the U.S. PX 2, Att. B. Moreover, the start-up costs for 

GIN, as well as the initial deposits to set up the accounts, were paid from Babenko’s personal

bank account. PX 2, Att. D, p. 1 (“GIN Set Up” check to corporate counsel Marc Lane); Van 

Wazer Decl., PX 3, Att. I (initial deposits to GIN FDN accounts). Subsequently, GIN’s 

operating expenses – advertising, seminars, GIN member commissions, refunds, etc. – have been 

paid from bank accounts held in the names of KTRN and WSU. PX 2, Att. C, p. 2-3. 

b. IPT, Natural Cures, KTRN, WSU and GIN USA Commingle Their Assets, and 

Trudeau Uses Corporate Funds to Pay His Personal Expenses 

Although IPT has been defunct since 2006, more than $13 million has flowed through its 

bank accounts since 2007, PX 2, Att. B, including funds transferred to and from other Trudeau 

affiliates. For example, in August and September of 2011, $405,000 was transferred from a 

 

13 Trudeau’s ownership and control of GIN through WSU and his web of other companies is 

further corroborated by a June 2010 letter from Trudeau counsel Daniel Hurtado to the FTC on 

behalf of Trudeau, on WSU letterhead, PX 4. Att. J, and a statement by Peter Wink on his 

Linkedin resume, listing his title as “Director of Sales and Marketing at Website Solutions/Kevin 

Trudeau.” PX 1, Att. U (emphasis added). Despite the overwhelming evidence of Trudeau’s 

control of the GIN-related entities, in their pending motion to quash FTC’s subpoena for 

GIN-related bank records, FTC v. Trudeau, Case No. 1:12-MC-022 (S.D. Ohio), GIN FDN 

unabashedly takes the position that Trudeau has no control over it, arguing that “Mr. Trudeau is 

not, and never has been, an owner, manager, officer or director of GIN.” Id., ECF No. 1, p.3. 

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GIN USA bank account to IPT’s account. PX 3, Att. A. Thereafter, IPT transferred $500,000 

to an entity called Asia Capital Markets, LTD. Id.

Since 2007, $65.8 million has flowed through Natural Cures’ bank accounts. Id. at Att. 

B. From June 2010 to September 2011, $16 million passed through a Natural Cures account, of 

which over $2.6 million was deposited by IPT, KTRN, and WSU. Id. During this same period: 

$5.2 million was transferred from this account to IPT, KTRN, and WSU; $1 million was wired to 

international destinations (the recipients are unknown to the FTC); and more than $300,000 was 

used to pay Trudeau’s personal credit card expenses. Id. 

Since 2009, a total of $110 million has flowed through the bank accounts of the 

GIN-related entities: KTRN, WSU, and GIN USA. See PX 2, Att. B. Much of this cash flow, 

however, is attributable to intercompany transfers among those accounts and accounts held by 

other Trudeau affiliates. For example, from August 2011, when a WSU account was opened, to 

October 2011, when it was closed, over $4.3 million flowed through the account. PX 3, Att. C. 

Three million dollars of those funds came from GIN USA and KTRN, and $1.2 million was 

transferred to KTRN, Natural Cures Holdings, and Trudeau Approved Products. Id. Similarly, 

from June 2010 to September 2011, $24.1 million flowed into a KTRN account, of which $10.3 

million was transferred to IPT, Natural Cures, and WSU. PX 3, Att. D. Also, from June to 

July 2011, GIN FDN transferred over $2.9 million from its bank account in Liechtenstein – 

another notorious asset haven jurisdiction – to WSU’s bank account.14 PX 2, Att. F. 

 

14 Furthermore, in August 2009, checks were written on a GIN FDN account in the amounts of 

$150,000, $103,000, and $8,000 on two different dates. These amounts correspond exactly to 

deposits made in IPT and KTRN bank accounts on the same dates. PX 3, ¶ 11, Att. F. 

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Also beginning in 2009, Trudeau used a KTRN account to pay the $12,000 monthly rent 

for his multimillion dollar Chicago abode, and the expenses for his domestic worker and a 

personal chef. See PX 2, Att. C, pp. 1-2; PX 1, Att. H (zillow.com estimated value of subject 

property). 

Finally, in February 2012, Trudeau funded the escrow account he established under Part 

III of the Supplemental Order by transferring $2 million from a WSU bank account to a GIN 

USA account, and then wiring those funds to the Trudeau escrow account.15 PX 3, ¶ 13, Att. H. 

3. Trudeau Also Used a Casino to Conceal His Assets. 

In addition to his own companies, Trudeau used a casino to conceal assets. Between 

November 2011 to January 2012, Babenko and Trudeau purchased $285,500 in casino chips, 

$200,000 by Babenko and $85,500 by Trudeau. They ultimately cashed out $282,375 in chips, 

$124,000 by Babenko and $158,375 by Trudeau. See PX 1, Att. M (casino account records). 

Significantly, Babenko purchased all of her $200,000 in chips on December 29, 2011, with funds 

transferred from a WSU bank account to the casino for her benefit. Id. at Att. O, p. 5 (casino 

wire transfer record). She withdrew the entire $200,000 in chips on that same day. Id. at Att. 

O. Video surveillance records show that she handed the chips to Trudeau while they were still 

at the cashier window. Id. at Att. R. 

Moreover, Trudeau and Babenko were involved in a series of incidents at the casino 

illustrating his proclivity for concealing assets, particularly with Babenko’s assistance: 

 

15 While Trudeau has made substantial use of corporate accounts to move assets, after the 

contempt sanction was entered, his use of his personal bank account decreased dramatically. 

From August 2007 to January 2009, he deposited $8.6 million in his account. PX 3, Att. G. 

After January 2009 (the Court initially entered the contempt sanction in November 2008), he 

deposited only $218,442.65 into his account over the next 14 months until it was closed. Id.

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 On his first visit to the casino on November 20, 2011, Trudeau attempted to avoid federal 

currency transaction reporting requirements by cashing in over $10,000 in chips but 

refusing to provide his social security number. He claimed that reporting was not 

required, he was not carrying any identification, and he resided in Italy. He later 

returned with an Italian passport. Casino personnel had to look up his social security 

number in a database. Id. at Att. N, Q. (incident report, surveillance video excerpt) 

 Similarly, on December 29, 2011, before Trudeau and Babenko purchased $200,000 in 

chips with the wire transfer from WSU, they first tried to open a credit account in 

Babenko’s name. Casino personnel explained that Babenko could not open a credit 

account without a social security number, which she did not have. Eventually, Babenko 

cashed in the wire transfer for $200,000 in chips, and handed them to Trudeau. Id. at 

Att. O, R (incident report, surveillance video excerpt). 

 Finally, on April 6, 2012, Trudeau’s domestic worker Matthew Green visited the casino 

by himself, driving a Jeep Rubicon titled to KTRN. See infra at Section B.4. He went 

directly to a cashier to cash in $124,000 in chips. Casino records state that he was acting 

as an agent for Babenko. He received the cash in a brown paper bag and left the casino. 

Id. at Att. P, S (incident report, surveillance video excerpt). 

4. Trudeau Dissipates Significant Assets and Maintains an Extravagant Lifestyle.

Trudeau’s and Babenko’s personal bank and credit card account records evidence 

millions of dollars in lavish spending. 

 As noted above in 

Section B.2.b, Trudeau also pays for his lavish housing and domestic staff expenses through one 

of his corporate accounts. Further, records show that Trudeau leases a 2008 Bentley co-titled in 

his name. PX 1, Att. I. 

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Babenko’s personal bank account was funded by Trudeau and his entities. From 

November 2008 to September 2010, $619,956.12 was deposited into her account, PX 3, Att. I, of 

which at least $562,000 came from Trudeau’s companies, Sant, or Trudeau himself. PX 2, Att. 

D. Babenko wired much of this money overseas to accounts in the Ukraine (including an 

account in the name of her mother, Olga Babenko), Cyprus, and Liechtenstein. She also wrote 

two checks to purchase Dodge vehicles before finally closing her account by obtaining an 

$87,404.75 bank check, which to the FTC’s knowledge, has not yet been cashed. Id. 

Finally, Trudeau also spends enormous sums on attorney fees. Most recently, he filed a 

petition for certiorari on which he is represented by no less than seven attorneys from two law 

firms. FTC v. Trudeau, 662 F.3d 947 (7th Cir. 2011), pet. for cert. filed, __ U.S.L.W. __ (U.S. 

June 28, 2012) (No. 12-6). 

5. Trudeau Has Other Real and Personal Property Available to Pay the Sanction. 

Trudeau’s offshore holding company, KT Corp., holds legal title to a home located at 60l 

Del Oro Drive, Ojai, California, in which Trudeau formerly resided. PX 1, Att. D. Trudeau is 

the beneficial owner of this property, but he did not disclose it in the sworn financial statement 

he provided to the FTC. See PX 4, Att. C at Item 18. The property has an estimated value of 

$1.3 to $1.5 million. Id. at Att. G (trulia.com estimated value of subject property). In 2007, 

Trudeau refinanced a $942,500 first mortgage on the property, and took out a $145,000 second 

mortgage. PX 1, Att. E, F. 

Trudeau and his affiliates also own multiple vehicles that should be liquidated to pay the 

contempt sanction. In 2011, WSU paid $340,000 cash for a 2011 Bentley registered in its name. 

See PX 1, Att. J; PX 2, Att. C. WSU also has a 2012 Bentley titled in its name. PX 1, Att. J. 

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In 2010, Babenko purchased a 2010 Dodge Challenger titled in her name for approximately 

$60,000, using a personal bank account funded by Trudeau and his affiliates. PX 1, Att. K; PX 

2, Att. D, pp. 1-2. Finally, KTRN purchased a 2011 Jeep Rubicon registered in its name for 

$36,000, which is driven by Trudeau’s domestic worker Matthew Green. PX 2, Att. C; PX 1, 

Att. L. 

III. Argument 

A. Clear and Convincing Evidence Establishes that Trudeau Has Violated the 

Order By Failing to Pay the Contempt Sanction. 

 

This Court has the inherent power to enforce its orders through civil contempt 

proceedings. Shillitani v. United States, 384 U.S. 364, 370 (1966); Jones v. Lincoln Elec. Co., 

188 F.3d 709, 737 (7th Cir. 1999). See also In re Resource Tech. Corp., 624 F.3d at 377 

(holding company in contempt for violating order to pay $500,000 into escrow account); Central 

States Fund v. Wirtz, 155 F.3d 868 (7th Cir. 1998) (holding company owner in contempt for 

violating order to pay employee pension liability payments); Huber v. Marine Midland Bank, 51 

F.3d 5 (2d Cir. 1995) (holding attorney in contempt for failing to pay court-ordered fines). 

Contempt is established if the Court finds “by clear and convincing evidence that [Trudeau] has 

violated the express and unequivocal command of a court order.” In re Resource Tech. Corp., 

624 F.3d at 387; Autotech Techs. LP v. Integral Research & Dev. Corp., 499 F.3d 737, 751 (7th 

Cir. 2007). Specifically, Trudeau is in contempt if: (1) the order sets forth an unambiguous 

command; (2) Trudeau violated that command; (3) his violation was significant, meaning he did 

not substantially comply with the order; and (4) he failed to take steps to reasonably and 

diligently comply with the order. FTC v. Trudeau, 579 F.3d 754, 763 (7thCir. 2009). 

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The FTC has clearly and convincingly proven Trudeau’s contempt. The order in 

question sets forth an unambiguous command that is simple and direct: as a compensatory 

sanction for his contempt, “Trudeau is ordered to pay forthwith to plaintiff the sum of 

$37,616,161, representing the consumer loss resulting from Trudeau’s contumacious and 

deceptive infomercial marketing of the Weight Loss Cure book.” Supplemental Order at 13-14 

(emphasis added in italics). It is undisputed that Trudeau has violated this command in its 

entirety, and thus, significantly. Moreover, he has failed to diligently and reasonably comply 

with the order. Trudeau has not paid even a penny despite overwhelming evidence of 

substantial assets held by him or for his benefit. Instead, he has gone to great lengths to conceal 

his assets and dissipate them on his extravagant lifestyle. Supra at II.B.1-5. Accordingly, the 

FTC has demonstrated Trudeau is in contempt, shifting the burden to him to demonstrate that he 

is unable to comply. United States v. Rylander, 460 U.S. 752, 757 (1983); In re Resource Tech. 

Corp., 624 F.3d at 387. 

B. Trudeau Cannot Support an Inability to Comply Defense While Holding 

Assets Offshore, Attempting to Conceal Substantial Assets, and Maintaining 

a Lavish Lifestyle. 

Trudeau must do more than simply assert an inability to pay. A contemnor like Trudeau 

who has made no effort whatsoever to comply with an order has the burden to credibly show: 

(1) a “complete inability” to pay by establishing “clearly, plainly, and unmistakably that 

compliance is impossible,” In re Resource Tech. Corp., 624 F.3d at 387 (citing Marine Midland 

Bank, 51 F.3d 5, 10 (2d Cir. 1995); italics omitted); (2) that his inability to comply was not 

self-induced; and (3) that he has made in good faith “all reasonable efforts” to comply. Chicago 

Truck Drivers Union Pension Fund v. Brotherhood Labor Leasing, 207 F.3d 500, 506 (8th Cir. 

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2000) (citing FTC v. Affordable Media, LLC, 179 F.3d 1228, 1239 (9th Cir. 1999), and 

Commodity Futures Trading Comm’n v. Wellington Precious Metals, Inc., 950 F.2d 1525, 

1527-29 (11th Cir. 1992)). 

Trudeau cannot meet any of these factors. First, he cannot “unmistakably” show that 

compliance is “impossible” when he has concealed substantial assets. Second, he cannot show 

that his inability to comply is not self-induced when he has transferred assets to his spouse, holds 

them offshore, or holds them in the name of corporations that he actually or beneficially owns. 

Finally, he cannot show that he has in good faith made “all reasonable efforts to comply” when 

he has dissipated significant assets on his lavish lifestyle, while paying nothing. 

C. Only a Sanction of Incarceration Can Possibly Coerce Trudeau to Comply 

With the Court’s Order. 

A court may apply sanctions in a civil contempt proceeding “to coerce the defendant into 

compliance with the court’s order.” United States. v. United Mine Workers of Amer., 330 U.S. 

258, 303-04 (1947). In such instances, the court must “consider the character and magnitude of 

the harm threatened by continued contumacy, and the probable effectiveness of any suggested 

action in bringing about the result desired.” Id. (footnotes omitted). Available coercive 

sanctions include imposition of fines and incarceration. See Shillitani, 384 U.S. at 368 

(imprisonment); United States v. Lippitt, 180 F.3d 873 (7th Cir. 1999) (same); United Mine 

Workers, 330 U.S. at 304 (fine). 

Here, immediate incarceration is the only viable option. Trudeau’s failure to pay 

anything thus far, his meritless claim of poverty, the lengths to which he has gone to his conceal 

and dissipate substantial assets, and his history of contumacious violations of the Court’s prior 

orders show that it is highly unlikely he will ever comply with the Court’s order unless he is 

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coerced to do so by incarceration. The lesser sanction of a coercive fine – as evidenced by his 

failure to pay to date – would be wholly ineffective in facilitating compliance. 

D. Trudeau Should Remain Incarcerated Until He Pays in Full or Provides a 

Full Accounting and Complete Turnover of Assets. 

Finally, if he persists in not paying in full even after being incarcerated, Trudeau should 

remain incarcerated until he pays in full or provides a credible accounting of all assets held by 

him or for his benefit, and has turned over all such assets to the FTC. Self-serving statements of 

financial hardship or indigence, without corroboration by third parties or detailed financial 

records such as tax returns, canceled checks, or bank statements, do not satisfy the burden of 

production to purge contempt. SEC v. Custable, No. 94 C 3755, 1999 U.S. Dist. LEXIS 1776, 

at *6 (N.D. Ill. Feb. 11, 1999) (citing Wellington Precious Metals, Inc., 950 F.2d at 1529, and 

United States ex rel. Thom, 760 F.2d 736, 739-40 (7th Cir. 1995). Self-serving denials are 

particularly inadequate where, as here, the Court has found that the contemnor lacks any 

credibility. Id. at *8 (citing Maggio v. Zeitz, 333 U.S. 56, 76 (1948)) (finding insufficient the 

alleged contemnor’s “own denials which the court finds incredible in context”). Again, a 

contemnor such as Trudeau must produce credible evidence showing “clearly, plainly, and 

unmistakably” that “compliance is impossible.” In re Resource Tech. Corp., 624 F.3d at 387. 

Accordingly, the FTC requests that the Court order Trudeau to purge his contempt to 

secure his release by paying the sanction in full, with interest, and failing that, to provide a full, 

credible accounting of all assets held by him or for his benefit, and turning over all such assets. 

Only then should he be released from confinement. At a minimum, if he fails to pay the 

sanction in full, Trudeau should be required to: 

(1) credibly identify and provide documentation for all assets in which Trudeau has or had an 

ownership or beneficial interest, directly or indirectly, from August 2007 through the present 

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(the “Relevant Period”), including all assets of entities held by Trudeau, held for his benefit, or 

that he directly or indirectly controls (the “Trudeau Entities”); 

(2) Create and produce credible comprehensive annual and year-to-date balance sheets and 

income statements for himself and each of the Trudeau Entities, for the Relevant Period; 

(3) For each liability in excess of $500.00, produce credible documentation sufficient to identify 

the amount of the liability, the nature of the liability, and the individual or entity to which the 

liability is owed; 

(4) For each asset over $500.00 that is not cash or cash equivalent, produce documents sufficient 

to credibly identify the nature of the asset and to support his valuation of the asset; 

(5) Create and produce a credible ledger identifying all financial transactions greater than 

$500.00 for Trudeau and the Trudeau Entities that occurred during the Relevant Period; and 

(6) Turnover all assets held by him or for his benefit. 

IV. Conclusion

Trudeau has violated the Court’s June 2, 2010 Order to pay the $37,616,161 contempt 

sanction. Although he claims an inability to pay, the evidence plainly shows otherwise, and he 

has made no effort to even partially comply with the Court’s Order. After going to great lengths 

to conceal substantial assets and dissipate others at a rapid rate, he cannot meet his heavy burden 

of “clearly, plainly, and unmistakably” demonstrating that “compliance is impossible.” 

Accordingly, the FTC moves the Court to: (1) hold Trudeau in contempt; (2) immediately 

coercively incarcerate him; and (3) order that he remain incarcerated until he purges his 

/ 

/ 

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contempt by paying in full, or failing that, until he fully accounts for and turns over all assets 

held by him or for his benefit. 

Dated: July 13, 2012 Respectfully Submitted, 

/s/ Michael P. Mora 

Michael Mora (mmora@ftc.gov) 

Stephen Dowdell (sdowdell@ftc.gov) 

Federal Trade Commission 

600 Pennsylvania Ave., N.W. M-8102B 

Washington, DC 20580 

Phone: 202-326-3373; -2814 

Fax: 202-326-2558 

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