Kevin Trudeau – one heck of a salesman or one heck of a liar?

Self-described “consumer advocate” and “exposer of corporate and government corruption,” this convicted felon lost the latest round in his decade long battle with the FTC.  On November 29, 2011, the 7^th Circuit Court of Appeals confirmed a $37.6 million contempt order and $2 million performance bond against Trudeau for his blatant disregard of a court order that prohibited him from making deceptive claims in infomercials.  Here’s a little history that led to this point:

1998

The FTC’s campaign against this con-man began in 1998 when the agency filed a complaint against Trudeau alleging that he made false claims in separate infomercials about 6 different products:

• Eden’s Secret Nature’s Purifying Product:  Trudeau stated that his “exclusive purifying program gives your body the added help it needs to clear out toxins that rob you of your energy and good health.”  He “guarantee[d] you’[d] feel energized and revitalized!”
• Sable Hair Farming System:  Billed as a hair follicle cleanser that would cure baldness permanently and painlessly.
• Jeanie Eller’s Action Reading:  A program guaranteed to teach anyone who can see, hear, think, and talk to read easily and quickly.
• Kevin Trudeau’s Mega Memory System:  Trudeau guaranteed that his breakthrough techniques would allow anyone to perfect their photographic memory effortlessly.
• Howard Berg’s Mega Reading:  A reading program that will release your own super reading speed and make books easier to comprehend.
• Dr. Callahan’s Addiction Breaking System: Trudeau claimed it could “eliminate” addictive urges in 60 seconds and would work on “any type of addictive behavior, whether it be alcohol, drugs, cigarettes, food . . . .”

Trudeau settled this first suit with the FTC in January 1998, agreeing to a permanent injunction.  In this case, Trudeau agreed not to sell products, like the ones above, using deception or lies.

2003

Unfazed by his dealings with the FTC, Trudeau went on to sell two new products via infomercials:

• Coral Calcium Supreme:  Trudeau touted this product as an effective treatment and cure for cancer, multiple sclerosis, and other autoimmune diseases; and
• Biotape:  an adhesive pain relief product that Trudeau alleged to eliminate pain from migraines, arthritis, and sciatica.

The FTC once again filed suit against Trudeau in 2003 alleging that he was making false claims about coral calcium and biotape, and violating the previous injunction.  Trudeau again settled with the FTC agreeing to another permanent injunction, in which he once again agreed not to use deceptive marketing tactics when selling products.

2004

Undeterred by two permanent injunctions, Trudeau continued to sell his coral calcium claiming, among other things, that it (you guessed it) could cure cancer.  This led the FTC, in September 2004, to file a contempt motion against Trudeau.  The result?  Yet another settlement and permanent injunction.  This time around, however, Trudeau was required to pay $2 million for violating the previous injunction and agreed to a brand new permanent injunction. With this new injunction, Trudeau agreed not to sell anything through infomercials except books, but even with books, the injunction stated that he “must not misrepresent the content of the book.”

2007

In 2007, the FTC filed a motion in court claiming that Trudeau was in contempt for violating the 2004 injunction.  Specifically, the FTC argued that infomercials Trudeau started airing in December 2006 for his book, The Weight Loss Cure, “misrepresent[] that his book offers an easy weight loss plan that, upon completion, allows people to eat anything they want without regaining weight.”

In November 2007, the Court agreed with the FTC, found Trudeau in contempt, ordered him to pay $37.6 million to the FTC, and banned him from making infomercials for three years.  Trudeau didn’t like this result and appealed to the 7^th Circuit Court of Appeals.  On appeal, the circuit court affirmed the district court’s finding of contempt but wouldn’t allow the sanctions, explaining that the district court had to explain how it calculated the fine, and further explain what would be done with the money.  The circuit court also said that Trudeau couldn’t be banned from making infomercials because that would violate his First Amendment rights.

2011

So the case went back down to the district court.  This time the court explained how it calculated the $37.6 million fine, which represents the amount of money consumers, who called and bought Trudeau’s book after watching his infomercial, paid for the books plus shipping costs.  The court also established a $2 million performance bond in case Trudeau wants to make any more infomercials about books.  Which (finally) brings us back to where we started – the 7^th Circuit giving the two-thumbs up to the district court’s fine and performance bond.