1990-1991: Larceny and credit card fraud

In 1990, Kevin Trudeau posed as a doctor in order to deposit $80,000 in false checks, and in 1991 he pled guilty to larceny. Trudeau had used the credit cards of eleven customers of the mega memory product to fraudulently charge approximately $122,735.68. He spent two years in federal prison because of this conviction (Choi, 2005). Later, in Kevin Trudeau's book Natural Cures, Trudeau claimed that he has since learned from his experience, and is now motivated to help people rather than merely to make money for himself.

1996: SEC and various states

Kevin Trudeau began working for Nutrition For Life, a multi-level marketing program in the mid 1990s. However, in 1996, his recruitment practices were cited by the states of Illinois and Michigan, as well as the U.S. Securities and Exchange Commission. Illinois sued Trudeau and Jules Leib, who was his partner, accusing them of operating an illegal pyramid scheme. They settled with Illinois and seven other states for $185,000 after agreeing to change their tactics. Michigan forbade him from operating in the state. A class action lawsuit was filed by stockholders of Nutrition for Life for violations of Texas law including misrepresenting and/or omitting material information about NFLI's business. In August 1997, the company paid $2 million in cash to common stockholders and holders of warrants during the class period to settle the case. The company also paid the plaintiffs' attorney fees of $600,000.

1998: FTC fine

In 1998, Kevin Trudeau was fined $500,000 to be used for consumer redress by the FTC, relating to six infomercials he had produced and in which the FTC determined he had made false or misleading claims. These infomercials included "Hair Farming," "Mega Memory System," "Addiction Breaking System," "Action Reading," "Eden's Secret," and "Mega Reading." The products included a "hair farming system" that was supposed to "finally end baldness in the human race," and "a breakthrough that in 60 seconds can eliminate" addictions, discovered when a certain "Dr. Callahan" was "studying quantum physics."

2004: FTC contempt of court and injunction

In June 2003, the FTC filed a complaint in the Northern District of Illinois against Kevin Trudeau and some of his companies (Shop America (USA), LLC; Shop America Marketing Group, LLC; and Trustar Global Media, Limited), alleging that disease-related claims for Coral Calcium Supreme were false and unsubstantiated. In July 2003, Trudeau entered into a stipulated preliminary injunction that prohibited him from continuing to make the challenged claims for Coral Calcium Supreme and Biotape.

In the summer of 2004, the court found Kevin Trudeau in contempt of court for violating the preliminary injunction, because he had sent out a direct mail piece and produced an infomercial making prohibited claims. The court ordered Kevin Trudeau to cease all marketing for coral calcium products.

In September 2004, Kevin Trudeau agreed to pay $2 million ($500,000 in cash plus transfer of residential property located in Ojai, California, and a luxury vehicle) to settle charges that he falsely claimed that a coral calcium product can cure cancer and other serious diseases and that a purported analgesic called Biotape can permanently cure or relieve severe pain. He also agreed to a lifetime ban on promoting products with infomercials. However, that did not restrict his right to promote books via infomercials.

2005: Kevin Trudeau v. FTC

On February 28, 2005, Kevin Trudeau filed a complaint against the FTC in the United States District Court for the District of Columbia, seeking declaratory and injunctive relief. Trudeau also filed a motion for preliminary injunction, which the court denied.

The complaint charged that the FTC had retaliated against him for his criticism of the agency by issuing a press release that falsely characterized and intentionally and deliberately misrepresented the 2004 Final Order. That conduct, Trudeau asserted, exceeded the FTC’s authority under 15 U.S.C. § 46(f) and violated the First Amendment. The Federal Trade Commission responded with a motion to dismiss the complaint for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), and for failure to state a claim for which relief can be granted under Rule 12(b)(6).

The district court granted the FTC’s motion to dismiss. First, the court concluded that it lacked subject-matter jurisdiction because the press release was not “a ‘final agency action’” under “section 704 of the [Administrative Procedure Act]”, 5 U.S.C. § 704. Second, the court held, “in the alternative, that Trudeau’s claims failed to state a viable cause of action as a matter of law.”

Kevin Trudeau later filed an appeal which resulted in the unsuccessful attempt to reverse the previous court's ruling.

2005: Trudeau v. New York Consumer Protection Board

Kevin Trudeau filed a lawsuit on August 11, 2005, accusing the New York State Consumer Protection Board of violating his First Amendment rights by contacting television stations in New York state and urging them to to pull Trudeau's infomercials promoting his book Natural Cures "They" Don't Want You to Know About. Kevin Trudeau won a temporary restraining order on September 6, 2005 prohibiting the Board from sending letters to the television stations. The temporary restraining order was replaced by a preliminary injunction. However, Trudeau lost a motion to have the Board send a "corrective letter" to the television stations and subsequently dropped all claims for monetary damages. The case is still in litigation.

2007: FTC contempt of court action

The FTC has filed a contempt of court action against Kevin Trudeau and the companies that market his book (“The Weight Loss Cure ‘They’ Don’t Want You to Know About”) alleging that Trudeau is in contempt of a 2004 court order by "deceptively claiming in his infomercials that the book being advertised establishes a weight-loss protocol that is “easy” to follow." The action was filed in the U.S. District Court for the Northern District of Illinois on September 17, 2007. According to a FTC Press Release, Trudeau claims that the weight loss plan outlined in the book is easy, can be done at home, and readers can eat anything they want. When consumers buy the book, they find it describes a complex plan that requires intense dieting, daily injections of a prescribed drug that is not easily obtainable, and lifelong dietary restrictions.

On November 19, 2007, Kevin Trudeau was found in contempt of the 2004 court order for making "patently false" claims in his weight loss book. U.S. District Court Judge Robert W. Gettleman ruled that Trudeau “clearly misrepresents in his advertisements the difficulty of the diet described in his book, and by doing so, he has misled thousands of consumers.” A penalty will be determined at a later hearing.

Source: Wikipedia.org

Federal Court Finds Kevin Trudeau in Civil Contempt

On November 16, 2007, a U.S. District Court judge found Kevin Trudeau in contempt of court for violating a 2004 permanent injunction. The Court found that Trudeau violated the permanent injunction when he misrepresented the contents of his book, “The Weight Loss Cure ‘They’ Don’t Want You to Know About,” in several infomercials. The permanent injunction banned Trudeau from using infomercials to sell any product, service, or program. The ban contained a narrow exemption for infomercials for books and other publications, but specifically required that Trudeau not misrepresent the content of the books. Judge Robert W. Gettelman ruled that Trudeau “...has misrepresented the contents of his book by stating in his infomercials that his diet protocol was ‘easy’ and that it allowed dieters to ‘eat whatever they want,’ and he has misled thousands of consumers.”

The 2004 permanent injunction settled the Federal Trade Commission’s charges that Trudeau had falsely claimed that his calcium product could cure cancer and other serious diseases, and that a purported analgesic called Biotape could permanently cure or relieve severe pain. The appropriate contempt remedy for violating the permanent injunction is still to be determined by the Court.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

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