Controversial TV pitchman Kevin Trudeau, who in July was found in contempt for failing to pay a $37.6 million sanction against him for deceptive marketing, was ordered to jail today and remains in federal custody in Chicago.
In August, a federal judge sided with the Federal Trade Commission in granting a court-appointed receiver broad authority to marshal assets and take over businesses the judge ruled were controlled by the infomercial king.
Appearing before U.S. District Court Judge Robert Gettleman today, Trudeau was found in contempt for violation of the asset freeze and receivership by transferring nearly $20,000 from an Australian account and for using a debit card tied to that account to buy things beyond what is ordinary and necessary living expenses.
The specific expenditures from the Australian account that led to the contempt finding, meaning money Trudeau allegedly spent after the asset freeze, included $894 at a liquor store, $359 for two haircuts at Vidal Sassoon, $1,057 for meats ordered online and $920 on cigars. There was also an $18,642 transfer from the Australian account that was paid to a lawyer who worked on Trudeau's taxes, which happened without the judge's approval.
Trudeau said he spent the money because he had no cash or credit cards and hadn't yet received his monthly allowance from the receiver.
"I thought I was following the order," he said today in court. "I would ask the court to let me work with the receiver. I can be helpful."
Gettleman also heard impassioned pleas from Trudeau and his attorneys for more time to prove his cooperation, and offered to pay back any money spent on things the judge deemed inappropriate expenditures.
Trudeau's lawyer Thomas Kirsch maintained, as his client and legal team have throughout the investigation into Trudeau's finances, that there "isn't a pot of gold at the end of the rainbow" and that the receiver will not find hidden assets anywhere in the world.
But Gettleman rejected the pleas, saying "This isn't an infomercial, Mr. Trudeau. You can't talk your way out of this one."
After the judge's ruling, Trudeau was turned over to the custody of two U.S. Marshals, who waited somewhat impatiently while the pitchman removed his belt, cufflinks and the shoelaces of his wingtips. He was then led out a side door of the courtroom and taken to the Metropolitan Correctional Center, where he will spend the night, and the receiver will meet with him to determine his level of cooperation.
Trudeau's next court appearance will be Thursday morning at 11 a.m. He can purge the contempt and get out of jail if he satisfies the judge that he's being forthcoming, candid and honest.
The government, however, remains deeply skeptical of Trudeau's promises. After all, for the better part of the past 14 months, Trudeau has been locked in an acrimonious dispute with the FTC over the agency's allegations that he was concealing assets that should have been used to pay the sanction.
The contempt finding was the fourth of Trudeau's career, which is also dotted with $2.5 million in prior settlements with the FTC for allegedly misleading claims for a host of products he pitched in infomercials. The 50-year-old Massachusetts native's record also includes two felony fraud convictions from the early 1990s, for which he spent nearly two years in federal prison.