IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

 

FEDERAL TRADE COMMISSION, 

 Plaintiff, 

 v. 

KEVIN TRUDEAU, 

 Defendant. 

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Case No. 03-C-3904 

Hon. Robert W. Gettleman 

FTC’S REPLY IN SUPPORT OF COERCIVE INCARCERATION 

The primary question before the Court is whether Trudeau should receive yet another 

“second chance” to disclose his assets voluntarily, or whether the Court should give coercive 

incarceration the opportunity to work so that his victims can obtain redress. Trudeau supports 

the former alternative with three legally meritless and factually fictional points addressed below. 

 

A. TRUDEAU HAS NOT BEEN COOPERATIVE OR CANDID WITH THE 

COURT OR THE RECEIVER. 

First, Trudeau claims to have “fully cooperated with the Receiver,” DE766 at 1 (Oct. 10, 

2013), notwithstanding the Court’s contrary finding that he “has not been fully cooperative or 

candid with the Receiver,” DE751 (Sept. 18, 2013) at 1, and also notwithstanding the mountain 

of evidence supporting the Court’s finding. At this point, it is beyond reasonable argument that 

Trudeau has not been fully cooperative and candid: (1) his most recent filing reflects a lack of 

candor; (2) his new order violations prove that he has not been fully cooperative; and (3) his 

implausible explanations concerning his assets further illustrate his continued refusal to be 

forthcoming. 

1. TRUDEAU’S MOST RECENT FILING ILLUSTRATES HIS LACK 

OF CANDOR. 

Two examples from Trudeau’s most recent filing demonstrate that, even now, Trudeau 

continues his dishonesty. First, Trudeau writes: “Throwing caution to the wind, however, the 

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FTC speculates without any factual basis that Trudeau may have received $4.2 million. But no 

evidence exists that Trudeau received such a transfer.” Trudeau’s Br. at 9 (Trudeau’s emphasis). 

But one need only look at Exhibit 9 to Trudeau’s filing to see that he received at least 

$4,305,452.43 for infomercials since 2007. Specifically, Exhibit 9 shows $4,305,452.43 in wire 

transfers from third party infomercial producers to Trustar Productions, Inc (“Trustar”). See Ex. 

9, DE766 (Oct. 11, 2013). The Court found that Trudeau controls Trustar,1 which is one of 

multiple entities Trudeau controlled through Isle of Man-based KMT Fiduciary Trust.2 See 

PXA:1. Amazingly, Trudeau still maintains that “no evidence exists” that he received this 

money. See Trudeau Br. at 9 (emphasis added). Through Trustar, however, he did receive the 

money. Trudeau’s claim that “no evidence exists” that he received more than $4 million is one 

of many bald assertions in his brief that are demonstrably false. 

Second, Trudeau dismisses his 2012 purchase of two pairs of cufflinks (for $12,470.99) 

by attributing the purchase to his wife, see Trudeau Br. at 11 n.2 (representing that the cufflinks 

“were purchased by [his] wife”), notwithstanding his 2013 sworn financial statement in which he 

denied any knowledge concerning his wife’s jewelry. See DE535 (Jan. 25, 2013) at 7.3 In any 

event, as part of his story, Trudeau refers to the cufflinks as “women’s cufflinks,” id. (emphasis 

added), although nothing in the Ebay invoice indicates they are “women’s cufflinks,” see 

PXA:27, DE764-3 (Oct. 4, 2013). In fact, simply looking at them strongly suggests that they are 

not “women’s cufflinks,”4 and Ebay sells them as “men’s jewelry.”5 Suffice it to say, Trudeau 

 

1 See DE729 (July 26, 2013) at 1; DE713 at 6 (July 15, 2013) (proposed findings of fact 

regarding Trustar Productions). 

2 TRUCOM owns Trustar Productions, which is owned by K.T. Corporation Limited, 

which is owned by KMT Fiduciary Trust. See PXA:1. 

3 Specifically, Item 17 on the sworn financial statement form (page 6 of the form) asks 

Trudeau to disclose “other personal property,” including “jewelry.” See DE535 (Jan. 25, 2013) 

at 7. With respect to his wife, he wrote: “UNKNOWN.” See id. 

4 See PXA:2 (webshots); www.christies.com/lotfinder/jewelry/patek-philippe-a-pair-of18k-white-5167196-details.aspx (viewed Oct. 12, 2013). Due to the government shutdown, the 

FTC will forward a copy of this filing (and the exhibits) to chambers via Federal Express. 

5 See PXA:3 at 2 (webshots); www.ebay.com/itm/Patek-Philippe-18K-White-GoldDiamond-Ellipse-Cufflinks-/151060790543 (viewed Oct. 12, 2013). 

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makes no attempt to explain why his wife needed Neil Sant (Trudeau’s right-hand man) to 

purchase two pairs of cufflinks for her through Trudeau’s Ebay account, see DE764-3 (Oct. 4, 

2013), or why she isn’t even copied on the email regarding “her” cufflinks (the email is from 

Sant to Trudeau, see id.). Moreover, no amount of forensic accounting will find $12,000 worth 

of easily-hidden cufflinks. The fact that this issue concerns only $12,000 does not detract from 

its significance: even now, Trudeau remains untruthful. 

2. TRUDEAU’S CONTINUED ORDER VIOLATIONS SHOW HIS 

LACK OF COOPERATION. 

Trudeau argues that he has corrected his five new order violations or, alternatively, they 

are not serious enough to warrant coercive sanctions. This misses the point. These violations 

demonstrate that Trudeau has not been honest and forthcoming. His dishonesty has ramifications 

beyond the individual lies and order violations that come to light. Specifically, the Receiver 

cannot marshal Trudeau’s assets if he is willing to lie and continue violating orders even with 

respect to relatively small amounts of hidden funds. For example: 

 The Non-Disclosure of the Australian Account. Trudeau could not have 

reasonably believed that his opaque reference to this account as having less than 

$1500 “net of liabilities” qualified as sufficiently candid—particularly when his 

purported “disclosure” did not include the account number, or the bank’s address, 

or even the country where the bank is located. See DE525 at 4 (Jan. 25, 2013). 

 Spending from the Australian Account. Trudeau could not have reasonably 

believed that it was acceptable to spend thousands from this account 

notwithstanding the Court’s asset freeze. Most important, he didn’t stop until he 

got caught. 

 Destruction of Documents. Trudeau could not have reasonably believed that 

deleting emails was consistent with order provisions prohibiting him from 

destroying documents. See DE742 (Aug. 7, 2013) at 13. The fact that he agreed 

to stop once he got caught does not lessen the violation’s significance.6

 The Non-Disclosure of the On-Line Gaming Account. Trudeau could not have 

reasonably believed that waiting six weeks to disclose the on-line gambling 

account was consistent with the receivership order. The fact that he eventually 

disclosed it (under questioning from the Receiver) does not make his prior 

nondisclosure any more honest. 

 6 Trudeau observes that “[t]he FTC is unable to identify any relevant or material 

documents that were destroyed.” Trudeau Br. at 6. This is true—most likely, no one ever will 

know what was lost precisely because Trudeau destroyed the documents. 

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 Lying to the Receiver. Trudeau’s claim that “there are no hidden assets 

anywhere in the world” was indisputably false. See Receiver’s Supp. Report 

(DE750-1) (Sept. 16, 2013) (attaching Sept. 7 email from Trudeau). Additionally, 

the fact that Trudeau later provided log-in information for his Australian account 

does not take away from the fact that he initially denied having it. See id. at 2. 

For the receivership to have any hope of working, Trudeau has to be fully cooperative—not 

simply admit to specific facts after he gets caught. In short, the Court correctly found that 

Trudeau “has not been fully cooperative or candid with the Receiver,” DE751 (Sept. 18, 2013) at 

1, and none of his halfhearted explanations regarding these incidents should change that 

conclusion. 

3. TRUDEAU’S IMPLAUSIBLE STORIES REGARDING HIS 

ASSETS ILLUSTRATE HIS LACK OF CANDOR. 

a. Trudeau’s Dubious Explanations Regarding Offshore Activity. 

Trudeau controls at least three active offshore bank accounts. After reviewing extensive 

evidence, the Court found that Trudeau controls the Global Information Network (“GIN”) and 

various affiliated entities, including Global Information Network FDN (“GIN FDN”) and 

Website Solutions Switzerland (“WSS”).7

 Based on information the Receiver obtained, between 

January 1 and September 6 of this year, nearly $16 million flowed into GIN FDN accounts, and 

nearly $17 million flowed out. See PXA:4, Receiver’s Supp. Report (DE750-1) (Sept. 16, 2013) 

at 25-26. There are at least two GIN FDN accounts: one at Valartis Bank (Lichtenstein), see

PXA:5 (wire information), and one at National Westminster Bank (U.K.), see PXA:6 (wire 

information). The Court may recall both accounts from the evidentiary hearing. For instance, 

Trudeau used the National Westminster account to pay Marc Lane, PXA:7, and when he was 

attempting to set up the Liechtenstein account, he gave instructions to Sant about how he should 

answer the bank’s likely questions regarding Babenko’s role, PXA:8. Later, in 2011, Trudeau 

asked Sant: “how much [money] is in Liechtenstein”? PXA:9. Sant responded: 

“$3,523,838.30.” Id. 

 7 See DE729 (July 26, 2013) at 1; DE713 at 14-16 (July 15, 2013) (proposed findings of 

fact regarding GIN FDN and WSS). 

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In addition to the GIN FDN accounts, WSS also has an account. Trudeau instructed Sant 

to wire money from Lichtenstein to WSS, PXA:10 (which means WSS must have had an 

account), and Trudeau received a supposed “salary” from WSS as recently as July, see Ex. 8, 

Trudeau Br. (which further establishes that WSS has a bank account).8 The money in GIN FDN 

and WSS accounts belongs to the Receivership, see DE742 (Aug. 7, 2013) at 4, and should be 

turned over immediately. Trudeau’s refusal to do so underscores his lack of cooperation. 

With respect to the many other offshore entities, Trudeau calls the FTC analysis “pure 

conjecture.” Trudeau Br. at 8. But the power of attorney Trudeau received from N.T. Trading 

S.A. is not conjecture—it is an exhibit to the FTC’s prior filing. See FTC Statement, PXA:9 

(also attached hereto as PXA:12). Trudeau’s refusal to allow Lane to have the power of attorney 

revoked is also not conjecture, see PXA:13, and strongly suggests that Trudeau was undertaking 

some sort of activity with N.T. Trading. In fact, with respect to Hong Kong entity NBT Trading 

Ltd., Trudeau gave this instruction to Sant less than a year ago: “[T]he ari deal should NOT be 

in my personal name...it should be with nbt trading limited...can you have ar[i] redo it under 

that name please[?]”9 PXA:15 (emphasis added). Nevertheless, Trudeau continues to maintain 

that he knows essentially nothing about NT Trading, NBT Trading, or various other offshore 

entities, and that they were created solely so that he would have shell companies he could use 

later. See FTC Statement at 7-8. Trudeau’s continued denials and fictional explanations 

regarding these entities further highlights his lack of candor. 

b. Trudeau’s Dubious Explanations Regarding Gold. 

Sticking with his refrain, Trudeau argues that the gold bars and coins “belong to Natalia 

Babenko.” Trudeau Br. at 8. However, Trudeau ignores the evidence that at least $100,000 used 

to pay for the gold bars came from an account in his name.10 PXA:16. On one invoice, Trudeau 

 8 When interviewed, Trudeau referred to WSS as a “legitimate company” that had little to 

do with him. PXA at ¶ 29. As the Court may recall, Website Solutions Switzerland was part of 

Trudeau’s original “vision” that he conveyed to Marc Lane’s firm in 2009. PXA:11. 

9 “Ari” apparently refers to Ari Wasserman, who produced and distributed various of 

Trudeau’s infomercials. See Trudeau Br., Ex. 9. 

10 Trudeau also ignores his sworn financial statement, in which he denied knowing 

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is listed under the “billed to” and “shipped to” name, PXA:17 at 1, and every invoice shows the 

bars (or coins) going either to Trudeau’s Ojai home or his 130 Quail Ridge Drive business 

address, see PXA:17. Trudeau also fails explain the email from Golden Lion Mint (“GLM”) 

referring to one gold shipment as “Kevin’s package.” PXA:18 (emphasis added). In fact, in 

another email, GLM writes to Trudeau: “I thought we could get the ball rolling on your gold 

and silver.” PXA:19 (emphasis added). Babenko is not copied. See id. With respect to the 

2011 exchange of GLM bars for more readily-transferable Scotia Bank bars, GLM sent Trudeau 

this email: 

Hi Kevin! 

 

We’re hoping to see your GLM bars soon. 

Like I mentioned, we have pre-sold five bars. 

 

Any ideas when we’ll see them? 

 

Thanks! 

PXA:20 (emphasis added).11 Again, Babenko isn’t copied (or even mentioned). See id. 

Trudeau then forwarded this email to Sant with the instruction: “Neil...work this out with the 

gold.” See id. Once again, Babenko is not copied or mentioned. See id. 

Put simply, Trudeau bought, controlled, and almost certainly continues to possess 

significant gold and other precious metals worth hundreds of thousands of dollars. Trudeau’s 

claim that these were his wife’s transactions is another instance in which he continues to deceive 

the Court and the Receiver. 

 

whether his wife had coins or other gold. Specifically, Item 17 on the sworn financial statement 

form (page 6 of the form) asks Trudeau to disclose “other personal property,” including “coins” 

and “bullion.” See DE535 (Jan. 25, 2013) at 7. With respect to his wife, he wrote: 

“UNKNOWN.” See id.

11 GLM managers Peter Lundell and Tony Balistreri have a close relationship with 

Trudeau. Trudeau apparently arranged for them to present a GIN seminar, see PXA:19 (“We’re 

excited about doing a GIN event too!”), and there are records reflecting a $1,994 payment for 

“event tickets” by Natural Cures to Roaring Lion Publishing, another company associated with 

Lundell and Balistreri. See PXA:21 (Natural Cures “Bills Due” printout); PXA:18 (email 

signature line “Roaring Lion Publishing/Golden Lion Mint”). 

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c. Trudeau’s Dubious Explanations Regarding Transfers. 

Trudeau does not even attempt to explain GIN’s books (which suggest both he and his 

wife received substantial transfers). These transfers include $149,051.82 to Babenko this year, 

PXA:4, and $16,305.79 to an account in Antigua as recently as August 20. See Receiver’s Supp. 

Report (DE750-1) (Sept. 16, 2013) at 2. Trudeau denies any knowledge about this transfer, but 

the problem is that these transfers to Babenko came from GIN FDN, see PXA:4—the Nevisorganized entity that the Court found Trudeau controls.12 There are other suspicious transfers as 

well, including $644,727.70 (this year) to Office Pool GmbH, PXA:4, a Swiss firm that helps 

people move to Zurich, obtain local driver’s licenses and bank accounts, and establish offices.13 

In fact, this January, Office Pool funneled money back to Lane from an account at Credit 

Suisse. PXA:24. Trudeau, however, informed the Receiver that he was “only an employee” and 

that he knows little about Website Solutions Switzerland, PXA ¶ 29—despite the fact that WSS 

was part of the original “vision” he conveyed to Marc Lane’s firm, see PXA:11, and despite the 

fact that Trudeau directed payments from GIN FDN to WSS, see PXA:10. Simply put, Trudeau 

has not been honest or forthcoming.14 

B. TRUDEAU WILL “HOLD THE KEYS TO HIS RELEASE.” 

Second, Trudeau suggests that the Court cannot coercively incarcerate him because the 

FTC, not the Court, “will hold the keys to Trudeau’s release,” DE766 at 1 (Oct. 10, 2013), but 

this ignores the purge conditions the Court identified would obtain if Trudeau failed to 

 12 See DE729 (July 26, 2013), DE713 at 14 (July 15, 2013) (proposed findings of fact). 

13 See PXA:22 (web shots); www.officepool.ch (viewed Oct. 13, 2013). Additionally, 

GIN FDN made significant payments this year to both Marc Lane and Winston & Strawn. See 

PXA:4. Notably, GIN FDN also disbursed $129,692.34 this year to W.P. Barlow, see id., a 

retired Texas attorney who lobbied “a former FTC Commissioner” and “a high ranking FTC staff 

member” to discourage the FTC from aggressively pursuing this litigation, PXA:23. 

14 This is the issue with the Ukrainian apartment as well. See FTC Statement at 8. 

Trudeau claims he was “not directly involved” with paying the mortgage on the apartment, see 

Trudeau Br. at 9. In reality, however, he was substantially involved. See PXA:25 (“[A]re we all 

square with [t]he kiev apartment? Natalie wants to sell it...GIN wants to buy it...thoughts?”) 

(Trudeau’s ellipses); PXA:26 (“[C]onfirm that we are paying off the apartment in Kiev.”). 

Trudeau argues that he cannot turn over the apartment, but the immediate issue is the fact that he 

has not been completely forthcoming with the Receiver or the Court about his role. 

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cooperate. The receivership order specifies the precise purge conditions that will govern 

Trudeau’s incarceration: 

It is further ordered that Trudeau’s failure to comply fully and timely with this 

order will result in Trudeau’s immediate incarceration until (A) such compliance 

is achieved; (B) Trudeau fully complies with this Court’s June 2, 2010 order 

(DE372); (C) Trudeau establishes that he has no present ability to comply with 

the Court’s June 2, 2010 order; or (D) Trudeau establishes that continued 

incarceration will not coerce him to comply with the Court’s June 2, 2010 order. 

DE742 (Aug. 7, 2013) at 20. Accordingly, if Trudeau persuades the Court that he has honestly 

disclosed everything he knows, and thus can do nothing further to comply, then the Court should 

release him immediately because he will have satisfied purge conditions (A) and (C). 

Significantly, this framework gives Trudeau the option to provide full cooperation at any 

time, and gives the Court (not the FTC or the Receiver) discretion to determine whether that 

cooperation has been achieved. In fact, other courts have used purge conditions similar to these 

when confronted with contumacious defendants like Trudeau. For instance, in CFTC v. Trimble, 

No. 09-154, 2009 U.S. Dist. LEXIS 102197 (W.D. Okla. Nov. 2, 2009), the Court stated that 

Trimble could obtain his release by complying with various orders, including an order that he 

“provide full and complete disclosure” regarding both his and his wife’s assets. See id. 

(emphasis added). Likewise, in Andrews v. Holloway, 256 F.R.D. 136 (D.N.J. 2009), the court 

found “that civil confinement is the only appropriate and effective sanction for Defendant’s 

contemptuous conduct,” and ordered the contemnor “to remain in custody until he provides 

complete and honest testimony” regarding his assets. Id. at 151 (emphasis added). The purge 

conditions here are essentially the same—Trudeau must satisfy the Court that he has been candid 

and forthcoming, and therefore there is nothing further he can do to comply. 

Importantly, the fact that it may be difficult for Trudeau to satisfy the Court is a problem 

Trudeau created. Trudeau has no one but himself to blame for his four contempts and lies to the 

Court stretching back to 1999. This history may make it more difficult for Trudeau to establish 

that he has candidly disclosed everything he knows about assets he controls, but it does not make 

it impossible (he might start by abandoning the fiction that assets ranging from gold bars to 

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cufflinks belong to his wife). Additionally, Trudeau spent several years (and millions of dollars) 

implementing various “asset protection” techniques designed to create the appearance of poverty 

while making the assets he controls as difficult as possible to locate and retrieve.15 Again, 

however, even if Trudeau’s decision to undertake these efforts makes it more difficult for him to 

establish that he has candidly disclosed everything he knows, it does not make it impossible.16 

Rather, after imposing coercive sanctions, the Court should judge whether Trudeau has said and 

done everything he can. If the Court is satisfied, then he should be immediately released. 

C. THE CONSUMER-FUNDED FORENSIC ACCOUNTING IS NOT A 

BASIS TO PROVIDE TRUDEAU WITH YET ANOTHER “SECOND 

CHANCE.” 

Finally, the Receiver’s proposed consumer-funded forensic accounting is not a basis to 

give Trudeau yet another “final opportunity” to avoid coercive sanctions. The proposed forensic 

accounting is, at best, a supplement to what Trudeau knows about assets he controls—it is not a 

new basis for him to defer the consequences of his deceit once again. Worse, not only will a 

forensic accounting take considerable time (which itself works to consumers’ substantial 

detriment), the forensic accounting will be funded with assets that would otherwise go to 

consumer redress. The notion that consumers should pay to find assets Trudeau hid from them is 

hard to accept and, most important, it is not what the Court ordered. Rather, the Court ordered 

that if Trudeau “fail[ed] to comply fully and timely,” it would result in his “immediate 

incarceration.” DE742 (Aug. 7, 2013) at 20. The Court did not allow him the luxury of waiting 

months until a forensic accounting is completed, nor should the Court do so. 

 15 The difficulty with untangling asset protection efforts is the primary reason why courts 

faced with contemnors like Trudeau use coercive incarceration: asking them to disclose their 

assets voluntarily doesn’t work, and untangling an intentionally-constructed web of obscure 

transactions and offshore entities is either impossible or prohibitively expensive. See, e.g., In re 

Lawrence, 279 F.3d 1294, 1296-97 (11th Cir. 2002) (affirming incarceration of defendant who 

used asset protection trust); FTC v. Affordable Media, LLC, 179 F.3d 1228, 1241-43 (9th Cir. 

1999) (same); SEC v. Solow, 682 F. Supp.2d 1312, 1334 (S.D. Fla. 2010) (incarcerating 

contemnor who engaged in various asset protection techniques). 

16 Notably, Trudeau is correct about one thing: the fact that the FTC doesn’t believe him 

is irrelevant. What matters is whether the Court believes him. 

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Dated: October 14, 2013 

David O’Toole (dotoole@ftc.gov) 

Federal Trade Commission 

55 West Monroe Street, Suite 1825 

Chicago, Illinois 60603-5001 

Phone: (312) 960-5601 

Fax: (312) 960-5600 

Respectfully Submitted, 

/s/ Jonathan Cohen 

Michael Mora (mmora@ftc.gov) 

Jonathan Cohen (jcohen2@ftc.gov) 

Amanda B. Kostner (akostner@ftc.gov) 

Federal Trade Commission 

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

Washington, DC 20580 

Phone: 202-326-3373; -2551; -2880 

Fax: 202-326-2551

 

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CERTIFICATE OF SERVICE 

I, Jonathan Cohen, hereby certify that on October 14, 2013, I caused to be 

served true copies of the foregoing by electronic means, by filing such documents through the 

Court’s Electronic Case Filing System, which will send notification of such filing to: 

Kimball Richard Anderson 

kanderson@winston.com 

Thomas Lee Kirsch, II 

tkirsch@winston.com 

Katherine E. Rohlf 

kcroswell@winston.com 

Blair R. Zanzig 

bzanzig@hwzlaw.com 

/s/ Jonathan Cohen 

Jonathan Cohen (jcohen2@ftc.gov) 

Attorney for Plaintiff 

Federal Trade Commission 

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