Trudeau Criminal Case Document 204 Sentencing 03-17-14 Filed 05-28-14

GIN Network Truth (the smart group)
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Nancy C. LaBella, CSR, RMR, CRR
Official Court Reporter
219 South Dearborn Street, Room 1222
Chicago, Illinois 60604
(312) 435-6890
Nancy_LaBella@ilnd.uscourts.gov
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
v. ) No. 10 CR 886
)
KEVIN TRUDEAU, ) Chicago, Illinois
) March 17, 2014
Defendant. ) 2:00 p.m.
TRANSCRIPT OF PROCEEDINGS - SENTENCING
BEFORE THE HONORABLE RONALD A. GUZMAN
APPEARANCES:
For the Plaintiff: HON. ZACHARY T. FARDON
United States Attorney
BY: MR. MARC KRICKBAUM
MS. APRIL M. PERRY
Assistant United States Attorneys
219 South Dearborn Street
Suite 500
(312) 353-5300
For the Defendant: WINSTON & STRAWN LLP
BY: MR. THOMAS LEE KIRSCH II
35 West Wacker Drive
(312) 558-5600
MS. CAROLYN PELLING GURLAND
Attorney at Law
2 North LaSalle Street
17th Floor
(312) 420-9263
Case: 1:10-cr-00886 Document #: 204 Filed: 05/28/14 Page 1 of 91 PageID #:5150
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THE CLERK: 10 CR 886, United States of America v.
Trudeau.
MR. KRICKBAUM: Good afternoon, your Honor. Marc
Krickbaum and April Perry on behalf of the United States.
MR. KIRSCH: Good afternoon, your Honor. Tom Kirsch
and Carolyn Gurland for the defendant, Kevin Trudeau.
THE PROBATION OFFICER: Good afternoon, your Honor.
Sarah Kieckhafer from Probation.
THE COURT: Good afternoon, everyone.
Are we prepared to proceed to sentencing?
MS. PERRY: Yes, Judge, we are.
THE COURT: Defense?
MR. KIRSCH: Judge, we are. I'm not sure exactly
what the government's intentions are. They just handed me
some paperwork ten minutes ago, which I had not seen before.
I haven't completed reading it, but I'm not sure what they're
intending to --
THE COURT: Do you want to complete reading it before
we commence?
MR. KIRSCH: Well, if they would just -- I -- I'm not
sure what they -- what they're going to do with it. If
they're just going to submit it to the Court --
THE COURT: Neither am I.
MR. KIRSCH: Pardon?
THE COURT: Neither am I.
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MR. KIRSCH: So maybe we could just hear that. If
they're just going to submit it to the Court, that's fine.
MR. KRICKBAUM: Judge, Mr. Kirsch and I spoke about
this a few minutes ago. We have an individual, Mr. Frank
Bowden, who would like to make a victim impact statement to
the Court. He has written that statement out and would like
to read it to the Court.
He also brought with him today letters from a few of
his family members on the same topic, which he would like the
Court to consider at sentencing.
So what we've tendered the defense and to the
probation office, I think it's perhaps three letters in
addition to Mr. Bowden's statement. But Mr. Bowden would like
to speak to the Court. He traveled here today from California
for that purpose.
MR. KIRSCH: Your Honor, we would -- I think there
are five or six letters that I just received. But, in any
event, we would object to his testimony. He -- he claims in
his letter that at some point in time, his brother read the
book Natural Cures, one of -- a book written by the defendant;
and that his brother then stopped taking his heart med- --
THE COURT: Is that one of the books that was
advertised in the infomercial?
MR. KIRSCH: No. It has nothing to do with the
infomercial. It's just censorship, Judge. They want -- they
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want this man to testify that he read a book written by
Trudeau; and at some point in time, his brother stopped taking
heart medication and then at some point in time, his brother
had a heart attack and died.
And so the government's argument is the things that
Trudeau wrote in the book are not true. And that's just
censorship. And it has nothing to do with the Weight Loss
Cure. It has nothing to do with Judge Gettleman's order. It
has nothing to do with misrepresenting the content of the book
in the infomercial. It has nothing to do with anything that
we're here to do today.
THE COURT: Does it have to do with the 3553
considerations --
MR. KIRSCH: No.
THE COURT: -- your defendant's background and
history and character?
MR. KIRSCH: No. I don't -- I don't even think
that's the argument that they make. When they make the
argument in their -- in their sentencing memo, they say --
they talk about him in one sentence. And they talk about, In
addition to the obvious monetary loss associated with the
above-described schemes, defendant has also hurt people who
relied upon his advice.
But we're not -- in the book, we're not -- I mean, in
the 3553, we don't argue that his -- we don't argue his
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advice. They talk about his -- his -- their -- anyway, they
talk about -- in their sentencing memorandum, they talk about
how they don't like the things that he wrote in his book. And
that's what this guy is going to talk about. But we don't --
in our 3553, we don't argue that you should somehow depart
because the things he says in his book --
THE COURT: Well --
MR. KIRSCH: We don't argue the truth or falsity of
the book. I mean, that's just censorship, your Honor. You
repeatedly told the jury throughout the trial that the truth
or falsity of the book is not at issue. And he has a First
Amendment right to write whatever he wants.
Now, if the government wants to submit the letters, I
guess they could submit the letters and the Court can view
them. But full-blown testimony -- I mean, Judge, I walked
into court. I just got a 302 five minutes ago that was
drafted on February 20th, 2014. That's 3500 material. They
just produced it to me five minutes ago. The letters -- I
haven't even read all the letters. I just got them.
THE COURT: I --
MR. KIRSCH: So we would object.
THE COURT: I started out by asking you if you want
time to read the letters.
MR. KIRSCH: Well --
THE COURT: I would like an answer to that question.
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MR. KIRSCH: Well, your Honor, I object. If the
Court sustains my objection, there is no point in me reading
the letters. The objection really has nothing to do with the
letters.
THE COURT: Well, I have here some 75 -- no. More.
MR. KIRSCH: 87.
THE COURT: Thank you. 87 letters that you have
submitted on behalf of your client -- which I assume are 3553
material factors, correct?
MR. KIRSCH: Well, yes. We provided those to the
government I think --
THE COURT: Which talk about --
MR. KIRSCH: -- weeks ago, maybe a month ago.
THE COURT: Which talk about things that have nothing
to do with the book or the infomercials. They talk about his
public service as a community activist, his praying, his being
a benevolent angel. They talk about he's personally involved
in the learning and services of helping his rabbi. They talk
about things that have nothing to do with anything except his
character. Should the government not be allowed to do the
same?
MR. KIRSCH: Your Honor, if this person has met
Mr. Trudeau and can testify about his character, I have no
objection.
THE COURT: Some of these people testify in your
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letters merely from hearsay and from reading his books and his
videos.
MR. KIRSCH: Your Honor, this man never read
Trudeau's book. I have no objection to you reading the letter
to see what he has to say. But I think full-blown testimony
in this issue is -- is just a little bit too far. And, your
Honor, that's my objection.
THE COURT: Government?
MR. KRICKBAUM: Judge, I don't think this is a
particularly complicated matter. Mr. Bowden wants to offer
testimony about the impact of the Natural Cures book on his
family. He wants to read you a statement on that topic.
Now, the defense has stated in their sentencing memo
that Mr. Trudeau's ideas are unconventional but they are not
harmful, which is an issue that we are in dispute about. In
the government's view, much of the content of the Natural
Cures book, much of the advice or the instructions the
defendant provides in that book is harmful, is dangerous. And
that is something that the Court can consider as part of the
3553(a) factors.
This has nothing to do with censorship. Mr. Trudeau
is free to give whatever advice he wants. But if he gives
people dangerous advice, then he should -- the Court should at
least be allowed to hear the consequences or the possible
consequences of that advice. So we think Mr. Bowden should be
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permitted to read his statement to the Court, and there's no
basis for the objection.
MR. KIRSCH: Judge, that is exactly the definition of
censorship. He wrote a book, they don't like what he says,
and you should punish him for it. That is censorship. That's
what it is. That's the definition.
THE COURT: Okay. Anything else?
MR. KIRSCH: No, your Honor.
THE COURT: Since there is no objection, I'll allow
the letters into evidence. At this point I'm not prepared to
allow his testimony, given the rather lack of prior disclosure
in this case.
MR. KRICKBAUM: Judge, could I speak to that briefly?
THE COURT: Sure.
MR. KRICKBAUM: We did state in our sentencing memo,
which was filed a week ago, that we were planning on offering
victim impact testimony from Mr. Bowden.
Now, today at around noon, Mr. Kirsch asked whether
there were any reports out of our interviews with Mr. Bowden,
which we provided him within the hour. It's a one-page 302.
I'm not even sure, Judge, if we're required to produce that
under 3500, but we did as soon as Mr. Kirsch asked for it.
And we informed the defense at least a week ago in our public
filing that he would be speaking today. So I'm not sure what
else we were supposed to do.
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We received many of the letters from the defense side
last week. So I don't think there's a notice issue here, your
Honor.
THE COURT: I understand. But letters are letters
and testimony is testimony. Preparing for testimony is
different than preparing for letters. So I will allow the
letters. I will consider the letters. I believe I have them
in the binder that you submitted; is that correct?
MR. KRICKBAUM: Yes, your Honor.
THE COURT: Along with the photographs. I will give
them full consideration. But live testimony I think would be
unfair to counsel, even though it would, it seems to me, be
appropriate in determining the character issues that are
required by the 3553 considerations. And the testimony would
be no different or further or further afield than some of the
letters -- the 80-some letters that we've received and I have
read regarding Mr. Trudeau's exploits that have nothing to do
with books or infomercials. But I think, given the issue of
live testimony, that will be the Court's ruling.
MR. KRICKBAUM: Yes, Judge.
THE COURT: Prepared to go to sentencing at this
point then?
MR. KIRSCH: Yes, your Honor, we are.
MR. KRICKBAUM: Yes, your Honor.
THE COURT: You don't need more time to read the
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letters?
MR. KIRSCH: No, your Honor.
THE COURT: Finally we --
MR. KIRSCH: By the way, can I just ask a question?
THE COURT: Oh, you want to equivocate on your
answer?
MR. KIRSCH: No, I just want to verify --
(Counsel conferring.)
MR. KIRSCH: Okay. I didn't get a binder. I just
got these -- I just wanted to make sure I got everything that
you had, your Honor. That's all.
THE COURT: Very well.
Mr. Trudeau, have you had an opportunity and have you
reviewed the presentence investigation report with your
attorneys?
THE DEFENDANT: Yes, your Honor.
THE COURT: After doing that are you satisfied that
you understand the information in the report and you are
prepared to go forward with sentencing?
Objections to the guideline calculation?
MR. KRICKBAUM: None from the government, your Honor.
MR. KIRSCH: Your Honor, we've made -- we have made
objections -- we made objections to the presentence report.
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And, your Honor, we filed quite a bit on this. And my
intention today was not to just -- my intention is not to
repeat all the arguments that we've made in our filing.
Of course if the Court has questions on those
objections, we would be happy to address any questions the
Court may have.
But we object, your Honor, to the $37 million loss
figure.
THE COURT: Okay.
MR. KIRSCH: And we object to the number of victims.
THE COURT: Well, why don't you tell us briefly what
your objection to the $37 million loss calculation figure is.
MR. KIRSCH: Yes, your Honor.
THE COURT: First, to make sure we have the issue
framed correctly, the loss calculation is important because it
impacts the total offense level calculation and the sentencing
guidelines, which, in turn, impacts significantly the
sentencing guideline range.
The government and the presentence investigation
report by the Probation Department have both concurred that
the appropriate loss calculation in this case is $37,616,161.
And I believe that the defense has calculated the loss
calculation at somewhere around $2 million; is that correct?
(Brief pause.)
THE COURT: So if you have an objection to that, why
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don't you explain it briefly.
MS. GURLAND: Your Honor, if I might? Carolyn
Gurland on behalf of Kevin Trudeau.
Our objection is that -- starting off with the
$37.6 million loss figure from the --
THE COURT: Don't touch the mike. Adjust yourself
instead. And by that I mean, sir, you could move over and
allow counsel to stand in front of the mike.
MR. KIRSCH: That's fine. We'll share the same
podium.
MS. GURLAND: Your Honor, the $37.6 million loss
figure comes from the civil case, as your Honor is aware.
There's a bit -- there's a different standard when one is
calculating the advisory guideline calculation. And there is
law that we have cited in detail in our filing which
establishes that the government must prove loss by a
preponderance of the evidence.
THE COURT: Not so in the civil case?
MS. GURLAND: In a civil case -- I guess you're
talking about damages rather than loss so --
THE COURT: But must it be proven by a preponderance
of the evidence?
MS. GURLAND: Also in a civil case, yes, your Honor.
But guidelines loss is, I think, a different concept than
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civil damages. And guidelines loss demands that the
government established by a preponderance that there are
individuals who were victims and that they were victimized by
the particular misrepresentations that the jury found to have
existed in this case. But there's simply not any evidence of
it.
THE COURT: How is that different from the
guideline -- from the calculation that the Seventh Circuit
made?
MS. GURLAND: Of -- the --
THE COURT: As I understand it, the Seventh Circuit's
calculation was based upon the fact that your client sold,
through his 1-800 number advertised in his infomercials, some
$37.6 million worth of books, after subtracting the value of
the books that were returned and without taking into account
all of the books that were sold through other means that were
related to the infomercials. Why is that not a valid place to
commence the loss calculation in this case?
MS. GURLAND: I think the reason that's not a valid
place to commence, your Honor, is because we know that the
$37.6 million figure cannot possibly be right. And that's
because in the binders that you have, amongst the 87 letters,
are numerous people that would tell your Honor, I watched the
infomercial for the weight loss book and I bought the book;
and I found the book valuable; and I bought many copies of the
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book for other people; and I gave those copies of the book
to -- to those people; and I found the book -- book to be
valuable; I enjoyed the book; I am not victimized by this
book.
So we know that whatever the number is, it can't
possibly be $37.6 million. That's for a start, your Honor.
But basically we have no concept because there's not
been any evidence since this was charged -- and it was tried
as a contempt case and not a fraud case -- we don't have any
idea whether or not victims would take the stand and say, I
saw, I heard, I relied on the particular misrepresentations
that the jury found in this case; that's why I bought the
book; I bought the book relying on those misrepresentations;
and I derived no value from the book.
There's been not a single piece of testimony -- and,
indeed, in a case that I cited in the 3553 submission, your
Honor, FTC v. Freecom, in that case -- it was a civil fraud
case, but the court decided that they weren't going to hear
from three witnesses because the particular witnesses weren't
able to say that they actually watched the particular
misrepresentation with which the defendant was charged. And
the court said we're not going to -- we're not going to hear
from them because they aren't able to tell me that they relied
on the things that the FTC said in their complaint.
So in this situation, your Honor, we have zero
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evidence that a single person relied on the particular
misrepresentations that the jury found. Indeed, because of
our jury form, we don't even know the -- whether or not there
was one or more than one. And we don't know what the
misrepresentation was that they did find.
But we certainly don't have any idea --
THE COURT: That doesn't matter, does it, which
misrepresentation it was, does it?
MS. GURLAND: Well, he would -- he would --
THE COURT: If it was a misrepresentation, it was a
misrepresentation, right?
MS. GURLAND: Not from the standpoint of the
conviction, your Honor, it wouldn't matter. But from the
standpoint of being able to establish $37.6 million of loss,
it would matter because we would have to know what the
misrepresentation was. And then there would have to have been
an effort to say to each of the individuals who bought the
book, Okay, why did you buy it. Because I think some of the
people bought it because of his reputation. And, indeed, in
the 87 letters, many of the people say, I didn't even care; I
bought it from the infomercial because it was easy; but I
didn't buy it because of that; I bought it because I own
Natural Cures, More Natural Cures, Debt Cures; I own his
memory tapes, his audiotapes; I was going to buy anything the
guy wrote; and it had nothing to do with what he said in the
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infomercial.
THE COURT: As a matter of curiosity, do you know how
many of these 87 letters were written by people who did, in
fact, buy the book?
MS. GURLAND: As a number, your Honor? No. I know
that a substantial portion were written by people --
THE COURT: What does substantial mean?
MS. GURLAND: If I -- I think more -- more than a
dozen, more than 20 --
THE COURT: 20?
MS. GURLAND: -- of the 87 were people who watched
the infomercial for The Weight Loss Cure book and bought it.
But of those, your Honor, many talked about the fact that they
liked it so much that they bought multiple copies and gave
them out as gifts.
THE COURT: But just to be sure of what we have here,
you were able to find some 20 persons out of a total sale of
some 37, almost $38 million worth of books who have --
MS. GURLAND: Well, your Honor, it wasn't --
THE COURT: -- indicated that they liked the book?
MS. GURLAND: Well, I think, first of all, your
Honor, with -- I think the basis that we proceed from in our
filing is that it's the government's burden to establish
loss --
THE COURT: I understand that. I'm just --
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MS. GURLAND: -- by a preponderance and not our --
THE COURT: I understand that. I'm just inquiring
about what you're presenting now and --
MS. GURLAND: What I'm presenting --
THE COURT: -- the exact significance it has.
MS. GURLAND: Of course, your Honor.
THE COURT: And so far what I understand is that you
have submitted to me 20 letters from people who say they like
the books; some of whom said they bought the book for other
people.
MS. GURLAND: Yes. But, your Honor, as a point of
clarification, I think it's important that I didn't go out
seeking people to establish what the loss was or wasn't
because it wasn't my burden to do it.
What we did was ask people who were willing to write
letters for Mr. Trudeau -- in his support at sentencing -- to
come forward. And of -- of those people that wanted to write
letters and wanted to come forward -- and I didn't even -- I
mean, I believe that there were, you know, hundreds and
thousands more people who are writing to Trudeau and writing
to people close to Trudeau expressing their support of him.
But I didn't think it appropriate to, you know, pile this up
on your Honor at the -- in the context of a sentencing.
THE COURT: Why not?
MS. GURLAND: To have thousands of Facebook postings
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and other things? Because I wanted to restrict it to things
that were -- that were pertinent and not just go for sheer
numbers. But there are thousands of people.
THE COURT: As a matter of curiosity, how did you ask
people who were willing to come forward on behalf of
Mr. Trudeau?
MS. GURLAND: Somebody who is a close friend of
Mr. Trudeau's took on asking people that she knew were
familiar with him whether or not they would write letters. So
she knew --
THE COURT: By word of mouth?
MS. GURLAND: I believe by word of mouth and probably
she e-mailed people as well to find out who was willing to
come forward for him. She --
THE COURT: Was there a database used for that
e-mailing?
MS. GURLAND: Were there?
THE COURT: Was there a database used for that
e-mailing?
I ask you these questions because Mr. Trudeau has in
the past confessed to sending out what he calls blast e-mails
to his database of followers asking them to send letters of
support in his court cases and has gone on his Web site and
used it essentially as an infomercial to ask for supporting
letters. And what I want to know is, was that done in this
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case?
MS. GURLAND: It's not my understanding that that was
done, but I wasn't the one who was doing it, so I -- what I
know is that what we -- what the lawyers asked for was to have
people who wanted to and were willing to write for
Mr. Trudeau; and the only further instruction that we gave is
that we'd like them to be people who are personally familiar
with him to the largest extent possible because that's what we
found that your Honor might find the most relevant, are people
who knew him well.
MR. KIRSCH: Your Honor, if I could just add one
thing on that point.
The last time Trudeau did something like that, as far
as I'm aware of -- I don't believe that was done. The last
time he did something like that was on a radio show asking for
people to write Judge Gettleman in support of him in saying
that their books actually helped him. And for that Trudeau
got 30 days in jail. Judge Gettleman's e-mail crashed. Judge
Gettleman held him in contempt, sentenced him to 30 days in
jail.
THE COURT: I think that --
MR. KIRSCH: And that was reversed by the Seventh
Circuit. So I don't think there was any e-mail blast here
asking for letters.
THE COURT: I don't know if there was or not --
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MR. KIRSCH: I don't think so.
THE COURT: -- but I think somebody should know. And
if anyone should know, it should be, I think, Mr. Trudeau's
lawyers.
MR. KIRSCH: Yeah. I'm not -- well, I don't know
what everybody does who is associated or friends with Trudeau.
But I'm not aware of any --
THE COURT: But in preparation for the material
you're presenting to this Court, you don't know?
MR. KIRSCH: Well, your Honor, just from reading
those letters, they're not -- they're not in -- they're not
the result of any blast e-mail that I'm aware of. But if
somebody were -- if somebody sent an e-mail or posted
something on Facebook, I might not necessarily aware of it.
But I suspect that if that had happened, we would have
received hundreds or thousands of letters, as Judge Gettleman
did.
THE COURT: Well, I think your co-counsel has said
you have.
MS. GURLAND: Mr. Trudeau has received them directly.
MR. KIRSCH: These are Facebook postings and things
like that, of supporters of his, wishing him support. And
we -- I'm not -- I don't have access to his Facebook page,
Judge, so I see some of it, but I don't see it all.
THE COURT: Okay. Go ahead.
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MS. GURLAND: So, your Honor, the -- what we had done
to try to come up with some kind of calculation of loss in
this case that was provable rather than speculative, we went
through -- and the government produced to us a CD at the
time -- early on in the time that we were preparing for our
submissions to the probation office in advance of the
presentence report.
And I went through all of those complaints. There
was not any way to really make sense of the ones that were
just sort of postings and chat rooms and discussion because a
lot of times, you wouldn't even know were they the same person
who is making multiple posts; were they talking about some
other book. Some of these people were supporters. You
couldn't -- you couldn't really get your hands around any of
that.
So I stepped back and thought, all right, what would
be a way to analyze this then that would be fair. If you take
the -- all of the complaints that came in to the Federal Trade
Commission, plus all the complaints that came in to the Better
Business Bureau, those complaints have more of an indicia of
reliability because they're not just sort of somebody having a
conversation in a room. These are actual people who are
putting pen to paper and saying, I have a complaint about the
book. And you could tell whether or not it was the weight
loss book or some other book, and so you had some ability
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to -- to tell. Now, you couldn't tell if they made multiple
complaints and that they overlapped with each other, but you
could at least tell that they were -- what they were talking
about in some kind of coherent fashion.
And if you took the FTC complaints and took the
Better Business Bureau complaints and if you looked at those
and separated out people who complained about things like, It
took me too long to get the shipment, it took -- I didn't like
waiting so long, or there was some problem with delivery, or
it was damaged when it came to me, if you took out the things
like that -- if you focused only on the people who complained
and said, I didn't like the content of the book -- now not
that they didn't like the particular misrepresentation because
that we can't know, but we were overinclusive and we said, all
right, anybody who complained about the content of the book
should be construed as a victim. And that's how we did our --
our loss calculation that came to our guideline because
that -- I would submit, your Honor, that is what is provable
and establishable and it was done in a -- in as close to a
scientific way as could be done to show who are these people
that are -- that are actually complaining that they lost
something based on the contents of the book. And that's --
that's the number -- that's who they were.
THE COURT: Government?
MR. KRICKBAUM: Judge, the defense objection here is
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misplaced. And it is misplaced for several reasons, but I'll
start with intended loss.
So the issue -- as the Court is well aware, loss
amount for purposes of the guidelines is the larger of either
the intended loss or the actual loss. And in this case, I
think the Court can decide this issue by looking at intended
loss. So what is the pecuniary harm that the defendant
intended when he made these infomercials. And in order to
answer that question, you don't need to determine how many
actual customers relied on the defendant's representations,
did they believe the lies in the infomercials, which lie did
they believe. You don't have to decide any of those issues.
The issue is what did the defendant intend at the
time he committed the crime. And the answer is that Kevin
Trudeau intended to defraud every single person who was
listening at the time that he made those infomercials. And
that is why he told the lies that he did about the book. That
is --
THE COURT: And by that you mean that his intent was
that everyone who heard his infomercials rely upon his lies
and purchase the book?
MR. KRICKBAUM: Of course it was.
THE COURT: And if that was his intent, then the
value of the intended loss would be the value of the books
sold; is that correct?
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MR. KRICKBAUM: Yes.
THE COURT: And that would be $37.6 million, correct?
MR. KRICKBAUM: A number that is almost certainly
low, but it would be at least $37 million.
THE COURT: I think the Seventh Circuit put it this
way: "In fact, it is worth emphasizing that the district
court showed restraint in calculating the remedial sanction
based only on 1-800 number sales. Most of the sales caused by
Trudeau's violation of the court order may have been made
through the 1-800 number but not all. Out of an abundance of
caution, in order to avoid using questionable figures, the
district court decided not to include Internet sales or in-
store sales of The Weight Loss Cure, even though those books
were sold with a conspicuous, quote, As Seen on TV, end quote,
sticker, making the link between those sales and the
infomercial less than speculative. In the end, the district
court's careful approach has left us with a reliable and
conservative figure that is comfortably within its
discretion."
Go ahead. What else did you have to say?
MR. KRICKBAUM: I think I've covered the intended
loss issue. And what your Honor just read from the Seventh
Circuit also supports a finding that $37 million is a reliable
estimate of actual loss as well.
We don't dispute that there are some people who were
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happy with this book after watching the infomercial. But we
think the Court can reliably reach the conclusion that the
vast majority of people who bought this book after watching
the infomercial were defrauded because the lies that the
defendant told in the infomercials, as we said in our
sentencing memo, were not little footnotes to those
infomercials. They were at the heart of those infomercials.
And the reason the defendant lied, as we argued to
the jury, is so that he could sell more books. And the reason
he described this book as something very different than what
it was was because if he had told the truth about it, he would
have sold almost nothing because the actual book is something
that you probably wouldn't wish on your worst enemy. It's
impossible to follow, to begin with. It's impossible to
actually figure out what you're supposed to do as part of this
protocol. But if you are able to puzzle it out, the actual
protocol is -- to call it grueling, I think, would be an
understatement; to call these lifetime restrictions severe is
an understatement. And so the defendant lied about all of
that and sold it as something far better than it really was so
that he could defraud these consumers.
And even if you allow for the fact that there may
have been some people who were happy, this 37 million number
is already so low because it doesn't include sales through
stores, even though there's a "As Seen on TV" sticker on this
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book and even though in these very infomercials, the defendant
is saying, You can get this at Borders; You can get this at
Waldenbooks. So he's using the lies in the infomercials to
sell books in stores, but the 37 million doesn't count that.
And it doesn't count the people who returned the books after
they discovered that they had been lied to by the defendant in
these infomercials. Those people discovered the fraud. They
asked for a refund. Their returns should count for loss.
That's another $1.4 million. And if you count the books sold
in stores and on the Internet, it's $49 million.
And that's why the Seventh Circuit said -- and they
were answering the same question that this Court has to
answer, which is, what is consumer loss; what is the harm to
consumers based on this book. And they said $37 million is
not just reliable, but it is conservative. So we think that's
a number this Court can easily rely on either as actual loss
or as intended loss.
MS. GURLAND: Your Honor, can I respond briefly?
THE COURT: Sure.
MS. GURLAND: On the point of intended -- intended
loss, there's not been any evidence that Kevin Trudeau
intended that particular misrepresentation defrauded people.
There -- there certainly has been a finding by the
jury that he intended to say the things that he said and that
the things that he said were misrepresentations of the content
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of the book. But there has not been a finding that Kevin
Trudeau intended to make particular misrepresentations to
defraud individuals into buying the book. There's not -- the
government speculates that there has, but there --
THE COURT: I've had several trials since this one,
so I have to ask you to remind me. What was the requirement
of intent that the jury was instructed on in this case?
MS. GURLAND: Willfulness, your Honor.
THE COURT: So they had to find that he willfully
misrepresented --
MS. GURLAND: Yes, that he --
THE COURT: -- the book --
MS. GURLAND: Yes.
THE COURT: -- in his infomercial. Doesn't that mean
that he intended to fool, defraud and deceive them?
MS. GURLAND: Well, I don't think it means that he
intended that they rely on the particular misrepresentations
that --
THE COURT: Well, how do you defraud someone with a
misrepresentation if you don't intend for them to rely on it?
How does that happen?
MS. GURLAND: There certainly isn't a dispute that
they made a finding that he said the things that he said on
purpose. But the --
THE COURT: With the intent to defraud the consumers,
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correct? That's what willful means, doesn't it?
MS. GURLAND: I -- I don't believe that they made a
finding that he intended that they should lose money by
purchasing the book. I don't believe that that was part of
the jury's finding, your Honor. I don't.
MS. GURLAND: And I just wanted to draw the Court's
attention to the government's, again, you know,
characterization of The Weight Loss Cure, that they wouldn't
wish this book on their worst enemy. You know -- and again
and again in the government's filing, you know, it's infused
with their opinion of the book. And, respectfully, I think we
have to be -- we're getting into an area that's very dangerous
because I understand that what is at issue here is whether or
not Kevin Trudeau willfully violated a court order. The jury
found that he did. And now he's got to be punished for that.
But I think, your Honor, we're in a very dangerous area if we
start punishing him for the ways in which the government
disagrees with and dislikes his book.
THE COURT: Well, the problem is that your argument
as to how to calculate loss brings into consideration the
actual value of the book, doesn't it?
MS. GURLAND: Well, my argument would bring into
consideration that the government hasn't established
$37 million worth of loss because they haven't shown me a
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single victim who came in and said, I relied on the particular
misrepresentation that was charged and that's why I bought
this book. And what we don't have is any of that.
THE COURT: Okay. I think that there is a problem
with the government's description of the book, in that, it
tends to be somewhat colorful and I guess a bit personalized,
which happens during these cases. But I think at the bottom
of it is a very important point that is particular to this
case, in addition to the intended loss, which is, I think,
frankly, dispositive of the issue.
Simply put, your client's infomercials were so
saturated from beginning to end with fundamental
misrepresentations about the very core of the product he was
selling that having seen those infomercials and read the book,
all of which were in evidence in this case, neither I nor any
other court I know of would have any trouble concluding, as a
reasonable inference of that evidence, that it could only be
an extremely small number of persons who purchased the book in
response to that infomercial for some reason other than the
huge number of outright lies and misrepresentations about the
wonders of his miraculous weight loss program that was not a
diet.
It would indeed be a very small number -- very, very
small number -- of persons who would be happy or who would
have obtained some significant value from a product so
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drastically and significantly different from that which they
were promised when they made their purchase. They were
promised a painless, simple, no-hunger, safe and diet-free
method of losing weight which could be done at home with the
use of a miracle substance available almost anywhere and
which, after they finished, would allow them to eat literally
anything they wanted in the future without regaining any of
the lost weight. That's what he said he was selling.
What he sold was a grueling 500-calorie-a-day diet
requiring daily injections of a prescription hormone
medication not approved in this country for diet use, which,
after they finished, was to be followed by a lifetime of
drastic restrictions of foods that they could consume.
Reason and common sense alone tells us that the vast
majority of consumers who desire to purchase what your client
promised and instead received what he sold would be unhappy in
the extreme with what they received and would have perceived
no significant value from such a product. I have no trouble
drawing a reasonable inference to that effect from the
evidence in this case.
Mr. Trudeau has produced some letters, apparently a
dozen or maybe as many as 20, of people who claim they were
happy with the book and received some value from it. That is
not nearly significant. It does not in any way persuade me
that the reasonable inference I have described is
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inappropriate in this case.
I find your last argument the most perplexing of all.
Apparently the concept is that the book -- again, sold as this
painless, simple, no-hunger, safe, diet-free method of losing
weight forever, which fails to do any of that -- would
nevertheless have some unknown residual value of some sort
which the government is required to quantify and then deduct
from the pecuniary loss of the sale of the books, a sort of
accidental value that was not expected.
I find that concept overwhelmingly theoretical,
without any basis and providing no reason whatsoever to doubt
what the Seventh Circuit court concluded, which is that
$37.6 million is clearly a reasonable and conservative
estimate of the amount of pecuniary loss and, even more
clearly, a reasonable and conservative estimate of the amount
of intended loss in this case.
Why, in determining that figure, the amount of money
refunded to dissatisfied consumers was deducted, I don't know.
Because even there the law is clear that only -- only -- that
refund of monies which is made before the fraud is discovered
should be deducted from the calculation of loss. And every
single one of those refunds was done after the victim
discovered the fraud and demanded the return of the money.
None of it qualifies for a deduction.
The loss calculation in the presentence investigation
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report is accepted by the Court.
What other objections does the defense have to the
guideline calculation?
AN AUDIENCE MEMBER: Judge, I'm a former United
States congressman.
THE COURT: Well, you're going to have to sit down,
Congressman.
AN AUDIENCE MEMBER: I'm one of the --
THE COURT: You're going to have to sit down,
Congressman. You will have to sit down, please, sir. Do not
disturb the decorum of this court.
(Brief pause.)
MS. GURLAND: Your Honor, if you're asking for other
objections, we had put another objection in our papers, which
was on exactly the same basis -- we don't have to go into it
again -- and it was on the number of victims.
The calculation that we gave for them for victims was
consistent with the calculation that I discussed with your
Honor about relying not on all the -- not on every single
person who bought the book but rather on people who complained
to the FTC or Better Business Bureau. And so your Honor has
already made findings. But we would stand on our -- on our
papers on that issue, your Honor.
THE COURT: Does the government have anything it
wishes to say in that regard?
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MR. KRICKBAUM: No, Judge. I think you have, as a
practical matter, decided that issue based on your finding
about loss. There were clearly many multiples of 250 victims
here. So I think the Court has settled that matter.
THE COURT: Very well. The Court agrees with the
presentence investigation report in that respect as well.
Are there any other objections with respect to the
guideline calculation?
AN AUDIENCE MEMBER: Anywhere in the room?
THE COURT: Excuse me?
MS. GURLAND: No, your Honor, not to the -- not to
the guideline calculations, there are no other objections. We
included --
AN AUDIENCE MEMBER: I --
(Brief interruption.)
THE COURT: Excuse me, counsel.
AN AUDIENCE MEMBER: Leave him alone.
AN AUDIENCE MEMBER: I was responding to the question
of the judge here.
AN AUDIENCE MEMBER: The judge asked if anybody had
any other --
THE COURT SECURITY OFFICER: Sir, please --
AN AUDIENCE MEMBER: You should not be here.
AN AUDIENCE MEMBER: I was responding to the --
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AN AUDIENCE MEMBER: He responded to the question.
THE COURT SECURITY OFFICER: Sir, would you kindly
stand up and --
AN AUDIENCE MEMBER: It was a question that --
THE COURT SECURITY OFFICER: This is your last
request. Kindly stand up and --
AN AUDIENCE MEMBER: Don't touch him.
AN AUDIENCE MEMBER: Unbelievable.
THE COURT: Ladies and gentlemen, sit down and let
the marshals do their job.
You will sit down.
AN AUDIENCE MEMBER: Please don't.
AN AUDIENCE MEMBER: Come on. Really? You are fine
gentlemen.
AN AUDIENCE MEMBER: He's actually going to be
arrested.
THE COURT: Folks, this is a public courtroom. We
have a tradition in this country of public courtrooms. The
reason for that is so that you can see precisely what is going
on and to decide for yourselves whether you like it or not.
You're entitled to do that. But you are not entitled to
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disrupt the proceedings. If you do that, I will not hesitate
to clear the courtroom. You will then be without the
privilege of knowing precisely what is going on in a case in
which you seem very interested.
So I urge you -- I urge you -- to simply keep quiet
and listen. If you cannot do that, you will be removed. And
if that removal causes a disruption, you may very well be
charged and prosecuted as well. And that would be a tragic
thing.
I'm sorry, counsel. Were you saying something?
MS. GURLAND: Your Honor, I was.
You had asked whether or not there were any further
guideline objections. There are not further guideline
objections. The defense and the government are in agreement
with the rest of the calculations.
However, I wanted to bring your Honor's attention to
Exhibit A of our defendant's objections to presentence
investigation report, which contain a set of non-substantive,
from the standpoint that they don't affect the calculation,
objections to things in the report. It's on the record.
THE COURT: Is there anything in the non-substantive
objections that the government objects to?
MR. KRICKBAUM: Well, Judge, I think several of these
are just not a proper basis for an objection to the PSR. And
others don't require any change to the PSR. So I suppose in
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that sense, the answer is yes.
THE COURT: Is there anything you want the Court to
consider?
MR. KRICKBAUM: No, Judge. There's nothing further
we need to say about these objections.
THE COURT: Okay. Let's move on then to the 3553
factors and the government's position with respect to the
appropriate sentence in this case.
MR. KRICKBAUM: One moment, please, Judge.
(Brief pause.)
MS. PERRY: Thank you, Judge.
I'd like to start by responding to the sentencing
submissions that were received by the -- from the defense in
the middle of last week.
First of all, with respect to the defendant's letter
to this particular Court -- and the letter, like the
sentencing memo that was filed on the 3553(a) factors, is
replete with misstatements, with understatements and with
lies.
The defendant's letter begins, "This has never
happened before and will never happen again." It's hard to
know what he's referring to by that. If he's referring to the
contempt, that has happened before and is currently happening.
He is under a sentence of coercive contempt as we speak. If
he's speaking about the misrepresentation of products in order
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to sell things, by his own admission in the Weight Loss Cures
book, he has done that for decades. All of the defendant's
conduct has happened before.
The defendant's letter, as well as many of the
character letters and the defendant's sentencing memo on
3553(a) factors also speaks to the defendant's high character,
his loyalty, the fact that he is a good, ethical, moral
person, the fact that he would like to start a family with his
wife. Judge, to the extent he is relying on his good
character, his loyalty and his high moral conduct, those
traits too are highly, highly overstated.
And we've got a series of e-mails --
(Tendered.)
MS. PERRY: -- from the defendant over the last three
months. And I will let the Court read those on your own. But
suffice it to say that in his personal life, as well as in his
public one, he is not a good, loyal person of high moral
character. So even setting aside the lies, the frauds and the
contempts, he should not be relying on his high character in
this courtroom.
Similarly, his memo speaks to acts of charity.
Several of the letters talk about anonymous acts of charity.
And his memo itself states that it is impossible to know how
the people who wrote those letters possibly found out about
those acts of charity given that he has been so private about
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them.
But, your Honor, a simple Google search of Kevin
Trudeau and the word "charities" shows that on March 12th,
2011, he made a YouTube video -- well, he went on the radio,
which was later made into a YouTube video, in which he first
said that virtually all charities are set up as a fraud and a
scam; and if you give any money to a charity, you are a fool.
And he named specifically the American Cancer Society and the
American Heart Association. And then he went on to say, I
don't publicize my own good works, but -- and he talked about
those very same acts of charity that the people talked about
in their character letters.
So even to the extent that those acts of charity are
true and actually happened, which would, by the way, be the
very least he could do considering he's a multimillionaire,
they are, too, certainly not anonymous acts of charity.
He goes on in that YouTube video to say, I'm not on
the radio to pat myself on the back, but -- and then talks
about the same things that those letters spoke about.
With respect to the defendant's attempts to comply
with the order, he speaks first of the Natural Cures model he
supposedly followed and then of his continuous dealings with
the FTC showing his good faith.
Your Honor, we filed a memo on this prior to the
trial, and the Seventh Circuit has spoken on it as well. But
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with respect to Natural Cures, the Seventh Circuit said -- and
I quote -- The extent to which Trudeau could reasonably rely
on the FTC's approval of the Natural Cures infomercial ended
when Trudeau began uttering false statements and quotes that
mischaracterize the content of the weight loss book. Simply
put, there was no model for him there to rely on and he
didn't.
With respect to his continuous dealings with the FTC,
it is true that he was under daily contact with the FTC. It
is also true that there are about 30 infomercials that he
asked the FTC about after Natural Cures came out. Not one of
those was The Weight Loss Cure infomercial. And he never gave
the FTC The Weight Loss Cures book. Simply put, there is no
evidence that the defendant was trying to comply with the
order.
With respect to the definite statement in the
sentencing memo that the FTC didn't act for a year and a half
and that that is somehow a mitigating factor, first of all,
the book wasn't published until January of 2007. In the
Seventh Circuit opinion, it states that the defendant did not
give the FTC a copy of the order until March of 2007. The FTC
filed its contempt motion in September of that year. So, at
most, the FTC had six months to act in this case. Now, how
six months on the cold hard facts goes to a year and a half in
the defendant's sentencing memorandum I do not know. But the
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fact of the matter is that that is a reasonable amount of time
for the government to analyze a case and to act. It is not a
mitigating factor that the FTC did not act sooner here and
certainly not for a year and a half.
The defendant's sentencing memo also mentions his
personal experiences, and we've discussed that in our
sentencing memo. The e-mail traffic clearly shows that the
defendant did not have any personal experiences to share when
he decided to create an infomercial. He did not have any
personal experiences to share when he decided to create a
book. He did not go to Germany to try The Weight Loss Cure
until after both of those things were planned. So it's not a
matter of him getting excited about something he had
experienced himself. It was a matter of him deciding he
wanted to make money and then trying to figure out a way to do
it.
With respect to ITV's lawyers, the defense says in
their sentencing memo that it is clear that the defendant
relied upon the ITV lawyers when deciding he could do this.
Well, first of all, there is no evidence that the ITV lawyers
had the defendant's book and that they were judging the book
and the infomercials to see that they were in compliance with
the order.
If there was to be evidence presented on this matter,
the government could show, first of all, that at the time of
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the infomercials, ITV was being sued for deceptive acts and
false advertisements by the FTC.
Secondly, that in 2002, the defendant sued Donald
Barrett, the president and founder of ITV, for failing to
submit an infomercial for legal review before airing it.
Thirdly, that ITV's lawyer at the time had been
practicing law for approximately two years, which is in stark
contrast to the defendant's own lawyers who he had from Jenner
& Block and who Judge Gettleman told them -- him to rely on
before he did anything with any infomercials.
Additionally, ITV did not have the book at all until
December after the infomercial started airing. And the
defendant didn't speak to his own lawyers about this until
after the infomercial started airing.
So once again, whenever you look below the surface of
this argument that the defendant relied upon ITV's lawyers,
there's simply nothing to it.
Mr. Krickbaum spoke earlier to this idea that's in
the defendant's sentencing memo that the defendant's ideas are
unconventional but not harmful. And you will see from
Mr. Bowden and his family's letters, that is not true either.
In some cases the ideas are harmful and people are hurt by
this type of advertising and these comments about what people
should be doing and how they should be living their lives.
As we set forth in our own sentencing memo, the
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defendant has engaged in numerous fraud schemes dating back to
1984. His two fraud convictions have not deterred him.
Multiple civil settlements in multiple courts have not
deterred him. Millions of dollars in consumer remediation
payments have not deterred him. And numerous civil contempt
findings have not deterred him. Everything about the
defendant's past and present speaks to the need for a lengthy
term of incarceration in order to deter him, deter others and
to protect the public.
With respect to the seriousness of the offense, the
evidence has shown, as laid out in our sentencing memo, that
the defendant was running the show at ITV; that he hoped to
make millions of dollars off of this particular infomercial
and book; and that he hoped to defraud millions of people.
The defendant at the time did not care about his lengthy
history with the courts or his promises that he had made to
this particular Court when he went forward.
And up until this very moment, Judge, the defendant
has refused to acknowledge his guilt in this matter. Now, his
letter speaks to a certain amount of remorse for the
consequences that all of this has brought him, but still he
has not acknowledged that what he did was wrong.
And, as I mentioned at the very beginning of this, he
is a repeat contemnor. Both before and after his conviction,
up until this very moment when he is in jail under a sanction
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of contempt meant to purge him, he is a contemnor. He is a
habitual liar and a fraudster.
His sentencing papers contain even more lies about
who he is as a person and what his crime entails.
And for those reason, we are asking that your Honor
set as a base, a floor, a sentence of ten years imprisonment.
And certainly a sentence of far over ten years would be
reasonable in a case of this nature.
If the Court has any questions, I'm happy to answer
them. But, otherwise, the government would rest on its
papers.
THE COURT: My question is, why are you suggesting a
sentence below the guideline range?
MS. PERRY: Judge, we do feel in this case that a
$37.6 million loss is incredibly high, considering that there
are some people who appreciated the book. However, we do
think a sentence within the guidelines range would be
reasonable as well. But to the extent that your Honor feels
that the $1.4 million loss amount would be more appropriate,
we certainly would not say that is unreasonable.
THE COURT: Well, we're talking now about the 3553
factors. And my question to you is: To what extent does your
request for a below-guideline sentence take into account the
effect that the defendant's conduct has had on the respect of
the public in general for our system of justice?
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MS. PERRY: Judge, if it was purely a matter of the
respect for the justice system, I think, as we've seen today,
a guideline sentence would be appropriate. There are a number
of 3553(a) factors that are appropriate to consider however.
And one of those is the seriousness of the offense. And given
that we do not have people who have been defrauded to the tune
of their life savings, as you often have in large fraud cases,
that is largely what we were considering.
But your Honor is certainly correct that the
defendant has shown as much contempt for the justice system as
probably anyone in any contempt case that is out there.
THE COURT: Thank you.
MS. PERRY: Thank you, Judge.
THE COURT: Defense.
MR. KIRSCH: Thank you, your Honor.
Your Honor, I'm going to make some comments in
response to what Ms. Perry said. And then Ms. Gurland is
going to come and address our 3553 factors.
Your Honor, in its papers that it's filed -- I'm --
in its papers that the government filed, your Honor, they're
suggesting that a ten-year sentence is appropriate for
somebody who violated a court order. That's what Trudeau is
accused of doing, and that's what the jury found he did; he
violated a court order.
He wrote a book, which he's entitled to do. The
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First Amendment of the United States Constitution guarantees
every citizen the opportunity to write whatever they want.
There's no dispute about that, although that's been clouded
today. But he can write a book.
He then misrepresented the contents of the book in an
infomercial after Judge Gettleman not -- told him not to do
that; I'm going to talk a little bit about Judge Gettleman
today. And for that the government in its papers suggests
that a ten-year sentence would be appropriate.
Your Honor, the government's recommendation for a
ten-year sentence is based upon the assumption that's repeated
throughout its sentencing memo that most -- the vast majority
of the people who had bought the book were victims or, as the
government describes them in their sentencing memo -- and I
suspect that people in this room would probably disagree --
but the government describes them in their sentencing memo
as -- people who bought the books -- in their conclusion, as
vulnerable and unsophisticated.
The government argues that 850,000 vulnerable and
unsophisticated people bought the book simply because Trudeau
misrepresented the contents of the book in an infomercial.
And, your Honor, I'm not rearguing the guidelines. I accept
the Court's ruling on that. However, I note that the Court
ruled that an extremely small percentage of the people that
bought the book were for a reason other than the
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misrepresentation. And, your Honor, with that I must
respectfully disagree. There's no proof of that. Zero. Zero
proof.
If you look at Mr. Trudeau's Natural Cures book,
which the government has in court with it today, on the front
of the book, it says, Over 15 million copies sold. I suspect,
your Honor, that it was more than an extremely small
percentage of people that bought The Weight Loss Cures book
because they had read the Natural Cures book. I suggest to
you that the vast majority of the people that bought the
Weight Loss Cures book, that buy these types of books in the
first place, are repeat customers. But we don't know that
because it's all just guesswork and assumptions.
The government has not come forward with -- they've
come forward with 60 victims or so out of 850,000. And for
that, they say the Court should -- the Court should sentence
him to ten years in prison.
And, by the way, your Honor, you asked about the
databases and things like that. This is one point that I
forgot and my client reminded me. Your Honor, the government
receiver has access to the databases. The government receiver
is the one that controls the databases. So he's got it.
THE COURT: I don't understand. You think the
government receiver had those letters sent?
MR. KIRSCH: No. But I'm saying the government
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receiver certainly could have sent a letter out that said if
you feel you were victimized as a -- they had the burden of
proof -- okay -- not me. They could have sent a letter to the
database that they have. They know everybody that bought the
book. Every -- that's the whole premise of the FTC's
argument; they can reimburse 850,000 people $37 million
because they know them all. And if they did, they could have
sent them a letter and said, just -- just check yes or no,
were you a victim; yes or no. And then send 800,000 pieces --
they had the burden of proof. They didn't do it. They didn't
do it, Judge. They didn't. And that's got to count for
something.
Your Honor, a ten-year sentence -- the government
talked about this -- a ten-year sentence might be appropriate
for a defendant who destroyed lives financially. And I think
about a case, your Honor, where the -- you know, an individual
swindler who in -- who takes a hundred thousand dollars from
five individuals that may be their life savings and invests it
and financially ruins these individuals. Under the
guidelines, they would be looking at a loss of $500,000.
That's all that would matter. $500,000 of loss for destroying
the financial lives of five people. Trudeau, if he swindled
anybody, he swindled them out of $30. I suspect that if you
bought the book once and you didn't like it, you weren't
re-victimized by buying it again. So I suspect that the
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victims were swindled out of $30.
Your Honor, the government constantly through its
sentencing papers quotes the Seventh Circuit's opinion over
and over and over again to support its sentencing position.
Your Honor, that was a civil case with a civil fine. Nowhere
in Judge Tinder's opinion, nowhere, does he or any other judge
that handled this case or looked at it at all suggest that a
ten-year prison sentence is appropriate in this case. Nobody.
Your Honor, the only judge to have considered this --
and, your Honor, I don't -- by talking about Judge
Gettleman -- this Court has done a tremendous amount of work
on this case, and for that I'm grateful. There were a lot
of -- your Honor, I don't know that I've been involved in a
case where there were more pretrial hearings than this case.
In the weeks leading up to the trial, we dealt with numerous
pretrial motions, evidentiary issues, witness issues, jury
instruction issues. There were very complicated issues in
this case, and I'm grateful for the Court's time in listening
to our arguments with respect to those objections.
THE COURT: Well, I don't want this to be one-sided,
so let me make it clear that the Court has the highest respect
for all of the attorneys involved in this case. They are
clearly litigators of experience, enthusiasm and put in an
awful lot of hard work.
MR. KIRSCH: Thank you, your Honor.
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THE COURT: Go ahead.
MR. KIRSCH: Thank you.
But Judge Gettleman, he did -- he did -- Judge
Gettleman did consider this case. And the government
dismisses his opinion with a footnote. Judge Gettleman has
been a federal judge for almost 20 years and is -- and I think
in October or November of this year, he celebrates his 20th
anniversary on the bench. Maybe he wouldn't like me saying
that, but it's true. He does. And he's lived with this case
for over ten years. The FTC cause number, your Honor, is a
cause number from 2003.
THE COURT: That's the one he sent to me, didn't he?
MR. KIRSCH: He did. Well, that -- I'm getting to
that.
A local rule provides him the opportunity to recuse
himself in a case when he's taken senior status. And he did
that in this case. But, your Honor, the government says Judge
Gettleman is not familiar enough with this case to render a
meaningful opinion as to appropriate punishment because he
didn't have the presentence report. Well, let's talk about
the presentence report.
$37 million in loss, clearly based on that figure
there's over 250 victims. Judge Gettleman is a judge for
20 years. Even assuming Criminal History Category I, Judge
Gettleman knows under the guidelines what the guidelines would
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call for in an amount of loss that severe. But, yet, Judge
Gettleman's order, your Honor, set a maximum of six months.
That's what Judge Gettleman said, a maximum of six months.
And, your Honor, Ms. Gurland is going to get up here
and she's going to talk about the 3553 factors. And then I
think -- I hope at least the Court is going to allow the
defendant to allocute to the Court. And I think he has some
things that he'd like to say.
But, your Honor, I just respectfully suggest that
given Judge Gettleman's familiarity with Trudeau over the past
11 years, or maybe it's even been longer, and his familiarity
with the facts of this case, I respectfully request that you
consider his order, your Honor, and that you not afford it the
same treatment as the government in its sentencing papers.
MS. GURLAND: Your Honor, I'd like to begin where
Mr. Kirsch left off.
But before -- before I do that, the government -- I
wanted to just read to the Court what the government's
position was in its filing -- in its 3553 filing and
sentencing filing in this case as to why a guideline sentence
might not be appropriate and why a lesser sentence would be
appropriate. And this is at Page 13 of the government's
filing. And they wrote, While 37 million is the proper
measure of loss under the guidelines, it may overstate the
seriousness of the offense, period. Among other things, the
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guidelines are indifferent to whether defendant's crime caused
many victims to lose a relatively small amount of money, as
happened here, or whether defendant caused a smaller number of
victims to lose large sums, thereby causing those victims
catastrophic harm and perhaps even financial -- financial
ruin. Defendant's crimes did not cause such harm; and for
that and other reasons, the Court may choose to impose a
sentence below the advisory guideline range. And they went on
to ask for a minimum of ten years.
Your Honor, the law of sentencing is clear -- and
this Court is intimately familiar with it -- that the advisory
guidelines, wherever calculated, are nothing more than a
benchmark and an initial starting point. They are -- it is
from there that the Court is to take into consideration the
factors set forth in 3553(a) to determine a just sentence and
one that is sufficient but not greater than necessary to
achieve the purpose of sentencing.
There are two of the 3553(a) factors that will be my
focus in speaking to the Court today. The first is the nature
and circumstances of the defense -- of the offense; and the
second, the history and characteristics of the defendant.
Before that I just wanted to return briefly to the
place where Mr. Kirsch left off, which was that this case
started with an April 16th, 2010, order from Judge Gettleman
referring the case for criminal prosecution. And it was in
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that order that Judge Gettleman specified that a six-month
sentence would be appropriate. And Mr. Kirsch has explained
that he was intimately familiar with the case; and, of course,
he is the judge whose order was at issue. His was the
September 2nd, 2004, order. And it was he that presided over
a practically identical trial, although a bench trial, that
differed only in the standard that willfulness didn't -- had
to be proved in this courtroom but didn't have to be proved in
Judge Gettleman's courtroom, as it was a civil case. And it
was not after some glancing familiarity with the facts; it was
after presiding over the case for a decade and intimate
familiarity with all of the facts of this case that he decreed
that six months would be appropriate.
The first factor I want to talk to your Honor
about -- and it is in our filings; it's featured -- but I
think it's critical to remember that this is a contempt case
and it's not a fraud case.
And I believe that the reason that the guidelines are
so inappropriate and result in such a stratospheric sentence
is because they're fraud guidelines, not contempt guidelines.
This case wasn't charged as a fraud. It wasn't indicted as a
fraud. It wasn't proven up as a fraud. And, your Honor, it
shouldn't be sentenced as a fraud.
THE COURT: But you agree that the guidelines require
the Court to look to the fraud guidelines in order to
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establish the sentencing guideline range, right?
MS. GURLAND: I understand that it's a technical
matter. What you look for is the guidelines that are the most
closely akin.
THE COURT: Well, it's not a technical matter. It's
what the guidelines say, correct?
MS. GURLAND: I don't disagree that -- that if you
are -- that the guidelines that you are referred to are the
fraud guidelines. But I think, as we've said time and time
again in our filings, it doesn't mean that one can just
superimpose the fraud guidelines onto the proper punishment in
a contempt case because the proof would have been very
different.
And, in fact, the government doesn't charge cases
like this as fraud cases. There is -- there aren't cases in
which the Ab Roller and whatever the late-night infomercial
products that certainly are -- are likely misrepresented in
the infomercials, and likely there are scads of customers who
don't like what they get after they order something from an
infomercial, those cases are not brought in this district as
fraud cases, at least I'm not aware of any, your Honor. And I
think that that's important because this trial would have been
a very different trial if we had witnesses taking the stand
talking about some -- talking about the manner in which they
were defrauded.
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But your Honor knows better than anyone, the proof at
this trial was very simple. We listened to three
infomercials, played in great detail. And the question was
whether or not the book was -- truly represented those
infomercials or whether it wasn't.
THE COURT: I have to tell you, I like your
co-counsel's description of this case better. It was anything
but simple. But go ahead.
(Laughter.)
MS. GURLAND: Well, in terms of the order of proof,
your Honor, it was -- it was indeed focused on the three
infomercials and then it was focused on whether or not that
was a true representation of the book. But it didn't have to
do with the experience of the individuals who bought the book,
which is the basis of much of the argument on loss, which I
will not -- which I will not reiterate.
However, it is the case that people were happy with
the book. It is the case that people were repeat customers of
Mr. Trudeau's. It is the case that not all of these
individuals that the government claims were vulnerable victims
would feel that they were either vulnerable or unsophisticated
or victims.
Second, your Honor, the nature of the harm in this
case -- and that is why I started in the presentation to talk
about what the government said in its filing because the
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government, in recognizing that a guideline sentence might not
be appropriate in this case, very well understood that the
harm to any one individual victim, if, in fact, that person is
a victim, would be limited to either 29.95 or 14.95, depending
upon which infomercial they watched. And it is important
because in cases in which there will be an individual --
several retirees who have been bilked out of their whole life
savings in a fraud case, absolutely the government will stand
up and talk about the impact to these people, how it's ruined
their lives. And, your Honor, it's important that this is not
that case. It's important that there aren't any lives that
have been brought into financial ruin because of the conduct
in this case. It is important that there are not any people
that are not going to be able to finance their children's
college education. There are cases like that. I've seen
those cases on both sides of the aisle. Those cases are
heartbreaking, your Honor. And it is important that this is
not one of them.
Your Honor, another factor that I believe argues for
leniency in this case is the method in which -- is Kevin
Trudeau's attitude about the court order. And I think the
government's position, as I understand it, is that they
believe that Kevin Trudeau defiantly violated a court order.
And I'm not here to argue whether or not he did. The jury
found that he did. That's an argument for a different day.
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But when determining what the appropriate punishment
would be in this case, I think that it is important to look at
the facts that reveal Trudeau's attitude about the order. I'm
going to go through just two of them.
First of all, he did, in fact, at the time of the --
the very time that he was entering into the negotiation of the
September 2nd, 2004, order, his lawyers, the Federal Trade
Commission and the government all discussed that integral to
that process was the Natural Cures example. And I'm not here
to argue, your Honor, that the Natural Cures example justified
the conduct of which he's been convicted in this case. That's
not the argument.
But what I am suggesting, your Honor, is that it
wasn't the case that Trudeau exhibited a blatant disregard for
the order. In fact, the contrary is true. He wanted to have
and his lawyers wanted to have an example of what would be
appropriate conduct. And Natural Cures and The Weight Loss
Cure have parallels and they have -- there are similarities in
their representation. Maybe not identical, but they are
similar. And he cared to have an example. And I think that
that's important.
In addition --
THE COURT: Let me just interrupt you there for a
second.
At this point in time in his career, how many prior
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injunctive orders have been entered against your client?
MS. GURLAND: There have been a number of orders,
although my understanding is that there were never --
THE COURT: How many? How many orders, all of them
agreed to by him, have been entered against him before this
final order?
MS. GURLAND: But when you say "against him," your
Honor, I think that it's important to note that not in any of
those was there a finding of -- neither an admission nor a
finding of wrongdoing.
THE COURT: No, he agreed to them. But how many were
there enjoining him from being deceptive? How many? Give me
an answer.
MS. GURLAND: Three or four.
THE COURT: Okay. So by then he had already three or
four examples of things he shouldn't do, correct?
MS. GURLAND: I think he didn't have examples from
those injunctions of what the September 2nd, 2004, order
allowed and what it didn't.
THE COURT: He still didn't know what deception was
then, huh?
MS. GURLAND: Well, I think what we're talking about
is the interpretation of the September 2nd, 2004, order.
THE COURT: Which is "don't deceive people." That's
what it was, right?
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MS. GURLAND: Don't misrepresent the contents of a
book in an infomercial for that book.
THE COURT: Which means don't deceive people, right?
That's what it means.
MS. GURLAND: I guess it's more --
THE COURT: When you tear it all down to its very
basic form, he was told don't deceive people anymore. And it
was the fourth time a federal court had told him not to do
that. Is that correct?
MS. GURLAND: I think that the context differs.
MS. GURLAND: One of the parts of proof that the
defense tried to introduce in the trial and it was found that
it wasn't appropriate for the trial was what we called at that
time, your Honor -- when we were seeking its admission, we
called it a course of dealing between Trudeau's counsel and
the Federal Trade Commission. And I understand that your
Honor was focused at that time on whether or not Kevin Trudeau
was copied on all of the correspondence, thinking that maybe
it would be appropriate to introduce the correspondence if he
was copied.
But for purposes of the broader argument, your Honor,
the fact is that from the time of the September 2nd, 2004,
order, Kevin Trudeau engaged counsel, paid for counsel and
actively worked with counsel to interface with the Federal
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Trade Commission.
And there were numerous examples of instances in
which the Federal Trade Commission objected to something that
he might be thinking of doing, and it was -- and it differed
in all -- it differed in all types of contexts. And in many
instances, his lawyer would send an e-mail that said, well,
FTC, we actually disagree with your interpretation of the
order here; we think that this would be just fine to do. And
the FTC came back and said, well, we don't think so. And in
each of those instances, your Honor, what happened was Kevin
Trudeau and his counsel backed off and changed their conduct.
So there was a course of dealing with the Federal
Trade Commission in which they were communicating, sometimes
on a daily basis. These are volumes of correspondence, and
they were introduced in the civil case in front of Judge
Gettleman. And there were faxes. There were letters. There
were e-mails. There were references to conference calls. And
this is all daily, weekly communication between Trudeau's
counsel and the Federal Trade Commission.
And my point in telling your Honor about this
correspondence -- and I know your Honor is aware of it because
we did speak about it in the pretrial conferences -- is not to
say anything other than Kevin Trudeau did not defiantly
violate the court order. Kevin Trudeau tried to be in
correspondence. He engaged and paid counsel to be in
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correspondence with the Federal Trade Commission, telling them
what his plans were. And there were numerous infomercials
that were made before The Weight Loss Cure infomercial with
which the FTC had no problem. And there were numerous
infomercials made after The Weight Loss Cure infomercial with
which the FTC had no problem.
And I'm not going to stand up here, your Honor, and
try to make the argument, which would be a ridiculous one, to
say, well, the fact that he didn't do something wrong on many
occasions would justify his doing something wrong on one
occasion because that -- that's not a good argument for a
defense counsel to make. But I'm not making that argument,
your Honor.
What I'm suggesting is that when you are punishing a
contempt case, it's important to look at what is the -- what
was the defendant's attitude towards this order. Did the
defendant not care at all? Did the defendant want to just
trample on the order and never have any regard for trying to
stay within its bounds? Or did the defendant make efforts on
numerous occasions? Did the defendant hire counsel? Did the
defendant work with counsel in order to stay within the bounds
of the order? And I submit to your Honor that the voluminous
correspondence suggests that he did exactly that, and I think
that that needs to be taken in consideration in this case.
Now, the government argued that somehow the fact that
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the argument that was in defense papers that -- the fact that
the Federal Trade Commission waited six months or -- we had
said a year and a half from the time of the infomercials to
raise any objection to The Weight Loss Cure, they say it's
more like six months by the time that they had the book. But
it's important to recognize, these infomercials weren't
secret. I mean, he was a New York Times best-selling author.
The infomercials were ubiquitous. And whether or not the
government had the book or didn't have the book, within --
within the six-month period, it's not that they had to
commence an investigation and get authorization for an
investigation. It is that even if it was the six-month window
they're talking about after they had the book, what they had
to do was, while talking to Trudeau's counsel, which they were
doing anyway on -- on -- in exactly this time period, while
they were talking to them anyway, they could have said, as
they did in numerous other instances, we have a problem with
this; we don't like this.
And, in fact, Judge Gettleman in July 25th of 2008,
was troubled by the exact same thing. He said -- first
started off saying that the remedy, which I think was 37
million at that time, he called it draconian and ended up
saying of the FTC, "I don't mean to be hard on the FTC here.
I know they're a busy agency. But there was no reluctance in
having a dialogue with Mr. Trudeau and his counsel when other
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problems arose in connection with these other books. And to
say that everybody who bought the book should be given a
refund strikes me a bit as overdoing it."
Now, I understand that he ultimately came to a
different conclusion on damages, but I think it's important to
note that Judge Gettleman, when looking at the length of time
that went by between the first broadcast of the infomercials,
and even from the time that the FTC had the book, that there
was nobody who could pick up the phone and correspond with the
lawyers that they were talking to daily about an issue, I
think that that is something to be mindful of in this case,
your Honor.
I want to move on to the history and characteristics
of the defendant.
People who know Kevin Trudeau well, as are many of
the -- among the 87 letter writers in this case, would
describe him as generous, kind, compassionate, caring and a
person who wants to help people and make their lives better.
And this desire to help people and to make their
lives better was something that started when he was a very
young man, as was described in the letter of his parents. He
would go to nursing homes and to schools to visit sick
children. He was able to do magic tricks, and he would
entertain them with -- with what he was able to do.
He continued this into his 20s. One of the
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friends -- and I'm not going to call anybody by name, your
Honor, but you have the tab numbers. If you want the
references, I'll give you the tab numbers. One of the letter
writers at Tab 16 talked about visiting children's hospitals
with Mr. Trudeau. And that not only would he entertain the
children, not only would he perform for them, but he would
also talk to them about keeping faith and hope alive and he
would talk to them individually.
The same desire to help people as was on display when
he was a very young man, your Honor, continued on to his early
adulthood. And I think it's important to recognize that when
he became interested in personal development, health and
wellness, he didn't -- he educated himself about these things
first. Some of the letter writers talked about seminars that
he attended, programs that he went through to try to learn
about this. And those letters talking about what he did are
at Tabs 12 and 13 of your binder.
And when he did writing and speaking engagements, he
stayed focused on helping individuals. And it's interesting;
your Honor raised that many of these letter writers maybe
didn't -- some of them didn't know him personally, but they --
but a lot of them, as you go through the 87 letters, you'll
see that they felt that they came to have a personal
connection with him. And one of the reasons for this is that
he did, as described by many of the letter writers, go out of
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his way to cultivate a personal connection, to follow up with
people, to ask what their problems were, to talk to them about
them. And he did give generously of his time, and he did help
these people.
And I want to address something here, your Honor,
because I think -- and I can hear the argument -- you know, I
can hear it made in the closing arguments from the government.
I can hear it made in the rebuttal. I can hear it, you know,
made here today, which is that this -- the response that,
well, come on, you know, these people -- Trudeau is just
taking advantage of these people; they're just victims; he
just wants their money; he's just trying to separate them;
he's just preying on them. And I want, your Honor, to address
that very directly because I think it's important here.
The government's position is that Trudeau didn't have
anything valuable to say and he didn't have anything valuable
to write about. And what they really mean is that they
vehemently disagree with everything that he has written in his
books. And probably if they went to the seminars and attended
the speaking engagements, they'd agree with -- disagree with
everything that he said there too. And that's their right.
But it's also the right of the people that loved
Kevin Trudeau and loved the things that he said and loved the
changes that it helped them to make in their lives to derive
value and pleasure and gratification from that which they
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learned from him. And I think that's important. These people
are not victims, your Honor, because the government disagrees
with Trudeau's books. And these people don't want the
government to get involved in their decisions about what to
read and what to think. They want to make their own decisions
about this.
And I'm not going to belabor the point, your Honor,
but there are several examples of individuals who really wrote
compelling stories about real changes that they saw.
One is a mother -- this was at Tab 2. She talks
about the fact that her son was a drug user. He was
unemployed. He was overeating. He was not working. He never
left the house. And he listened to books or tapes that
Trudeau made and he turned his life around. He went back to
school. He improved his relationship with his father. And he
ended up being a sound engineer.
And there are other examples. There's a counselor at
Tab 5 who evidently because of the horrific things that she
had to listen to and sort of war veterans coming back, she
wrote about the fact that she wanted to take her own life.
She couldn't go on. She didn't want to live anymore. And she
listened to Trudeau's tapes, read his books. I think this one
said that she read Natural Cures. And she said that she was
able to deal with these things, to get back on track, to be
present again for her family. And then she went on to design
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a program to help people in emotionally abusive relationships.
So in that, we make the point that, you know, it's
not even just the individuals that he's affected -- and
there's dozens upon dozens of them -- but it's also the
individuals that those people go on to affect in their lives.
And, your Honor, none of these people were victimized
by Trudeau, these people that tell these stories, the people
who went through these life changes. And you don't have to
agree with a single word that Trudeau has ever said, has ever
spoken to accept that fact. And you don't have to agree with
any word that he's ever written. Because these stories speak
for themselves. These people underwent transformations. And
they are meaningful not only to them but to the people that
they work with and to the people that they love.
There are a number of letters, your Honor -- and I
will touch on just the highlights -- that describe Trudeau as
somebody who practiced what he preaches. They explained that
the things that he said to other people about how to live
life, that he did in his own life.
There was, at Tab 8, a letter from an individual who
described a circumstance in which Trudeau was involved in a
business. The business started to fail. The other partner in
the business said, you know what, let's declare insolvency;
we're going to walk away from this; this is too much trouble.
And Trudeau said, no, I'm not going to do that. And the
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individual carefully explained that Trudeau didn't want to do
business with these people again. It wasn't that he was
feathering a nest and looking down the road. He was done
doing business with them. What he cared about was the
employees of the supplier. And so he stayed for 18 months and
he made it right. He made sure that all the suppliers got
paid. He didn't declare insolvency, which would have been the
easier thing to do; and he put his money where his mouth was
because when he would tell people that it's important to do
the right thing and to not use people, he didn't do that. In
that particular circumstance, he had an opportunity to do that
as his business partner did, but he chose -- he chose a
different pathway.
Now, the government said that he evidently said
something on a radio show -- I don't know the context -- about
charities not -- I don't know -- certain medical charities not
being appropriate. I don't know about that. But what I do
know is that he did supply a homeless shelter and he did
supply them with hats and coats and gloves and made sure that
the things fit. And I don't know that we need to be cynical
about that, your Honor. You know, there's so much cynicism in
this world and I just don't know that we have to be cynical
about things like that.
Or that he went to a soup kitchen and not only served
the people on Christmas but that he wanted to speak with them
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individually and see if he could talk to them, see if he could
help them in some way. And I don't think we need to be
cynical about that.
Nor do I think we need to be cynical about the fact
that a rabbi who wrote on Kevin's behalf talked about the fact
that Kevin participated with his heart in programs for the
elderly and for children and that he was involved helping
financially but that he was also involved with his heart and
that he was genuinely happy when these people were happy.
And, your Honor, I don't think we need to be cynical about
that either.
There were other instances; buying a van for a friend
with a handicapped child, paying for heart surgery for a
friend who needed it. And incidentally that surgery, your
Honor -- surgery in a established medical hospital with
established medical doctors -- that's a surgery. So when push
came to shove, I think it's accurate that Trudeau recognizes
that there's a place and a time for alternative healing and a
place and a time for some of the more traditional mainstream
medical treatments.
Your Honor, I want to talk to you briefly about just
punishment for the offense. Your Honor has raised -- and
nobody is denying -- that contempt, even properly understood
as contempt, is a serious charge; disrespect for the court
system is a serious charge. And nobody is suggesting that
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Trudeau not be punished for it.
But there's been a pretty good job done of punishment
to date because he's been sitting over at the MCC since
November 12th. He's not getting credit for that time as
against this sentence because it's going to the course of
civil contempt portion of the case. He's lost his businesses.
They're all in the possession of the receiver. He doesn't
have any bank accounts. He doesn't have any possessions. He
doesn't have a home. So what he has is a suitcase containing
some personal effects that someone is nice enough to store for
him. And that's it. That's what he's got. That's what he's
got left. And now he's facing the punishment in this case.
And, your Honor, without denigrating in any way the
seriousness of violating a court order for a minute, I think
it's important to have a sense of proportionality in this case
in terms of what he did and what he needs to be punished for.
And I expect that Trudeau is going to address your
Honor after I'm finished and finally sit down. And I believe
that it's not going to be, as the government says, that he
doesn't acknowledge any wrongdoing and that he's not
remorseful for anything. I think that you're going to see
that the opposite is the case.
In the government's filing, your Honor, what we see
are vitriolic -- he's called a huckster and a fraudster. And
I understand that they dislike him, your Honor. And that's
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all right. They're entitled to their opinion. But I believe
that they're wrong about the person he is, for all of the
reasons stated in all of the letters and in our filing.
And I believe, your Honor, that even if they weren't
wrong about him, that their focus is wrong because what we're
here today to decide is what punishment is appropriate for
making misrepresentations about the content of a book in
infomercials for that book. This is not to be some referendum
on whether or not his books are right or appropriate or the
ideas are good or bad. That's not what this proceeding is
about, your Honor. It is about a much more limited task that
has to do with very limited behavior.
And I understand your Honor is going to tell me that,
yes, there were orders before and, yes, you know, his history
goes on. And I believe that that's part of the reason that
there's such vitriol against Mr. Trudeau in this case. But I
think that we have to focus on the punishment for the charge
in this case and not go far afield from that, your Honor,
because it's not anything other than misrepresenting the
content of a book in infomercials.
And I will end with this, your Honor: The PSI, on
the front cover -- it may be the only thing I agree with in
the PSI -- described this as a sui generis felony. And I knew
vaguely, as most lawyers do, what sui generis was; but I
looked it up to be precise. The Latin translation of sui
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generis is, "Of its own kind and unique in characteristics."
And I think, your Honor, that that is something in this case
that everyone can agree on. This is an unusual circumstance.
We've got a contempt case being punished as -- basically with
loss guidelines that are -- that are more to do with a fraud.
It's unusual in numerous aspects, as I think your Honor has
commented many times during the trial.
And I think since the sentence that Mr. Trudeau
receives today will be critical important -- of critical
importance for him as to what the remainder of his life will
be. And I respectfully ask the Court, for all of the reasons
set forth in our filings and for the reasons I've discussed
today, for leniency and mercy and for a sentence in line with
what Judge Gettleman, intimately familiar with the case,
decided would be appropriate.
Thank you.
MS. PERRY: If I could respond very briefly, Judge?
THE COURT: Sure.
MS. PERRY: I'd like to start by addressing the Judge
Gettleman issue. And counsel said several times that Judge
Gettleman specified a six-month sentence would be appropriate.
Your Honor has the referral. That is not what Judge Gettleman
said in any way, shape or form. That was a referral to this
Court. The six-month sentence has an administrative meaning
far beyond what the defense is trying to make of it.
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Beyond that, Judge, another judge's opinion, even if
he held that opinion, is not one of the 3553(a) factors that's
relevant for your consideration. And it's very unclear that
Judge Gettleman would hold that opinion today even if he held
it at the time. He didn't have the PSR. He didn't have the
full history and characteristics of the defendant. And he
certainly didn't have the benefit of the last four years of
contemptuous conduct that he now has. And now he has been
holding Mr. Trudeau in jail for the last four months and asked
that it not be considered against the criminal sentence. And
he has said that he may do that for an extended period of time
beyond this hearing. So put simply, Judge Gettleman has
rendered no opinion. And even if he had, it's unclear that it
would be the same today as it was four years ago.
With respect to counsel's characterization that these
cases are not charged as fraud cases, we have a footnote in
our brief where these cases have been charged as fraud cases.
And sentences of 292 months, 20 years, 17 years and ten years
have -- have been imposed in fraud cases of a similar nature.
Your Honor asked a question about how many different
settlements the defendant has entered into. Just a brief
rundown: In 1996 he was accused by the Illinois attorney
general, as well as the attorney generals from Hawaii, Idaho,
Kentucky, New Jersey, Michigan, Missouri and Pennsylvania of
running an illegal pyramid scheme. That case was settled.
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In January 1998, the FTC filed a complaint alleging
that he deceptively marketed six products. That ended in the
1998 stipulated order for permanent injunction, which he
promptly violated in June of 2003 when the FTC filed a motion
seeking to have him held in contempt of that order, as well as
a new complaint, alleging that he had again made false claims
in his advertising. That results in the stipulated
preliminary injunction of 2003, in which the defendant agreed
not to make false claims about Coral Calcium Supreme. He
promptly violated that. And by June 2004, he was found to be
in civil contempt for having violated the 2003 injunction and
ordered him again to cease all marketing for Coral Calcium
Supreme, which in 2004 we also have the stipulated order that
was at issue in this case. So I'm not sure how you would
count all those, but there is a very long string of them.
This is not a case about censorship. This is not a
case about whether or not the government likes what
Mr. Trudeau says or does not. It's not a case about the First
Amendment.
When you lie to make money, it's a fraud. And you
don't get to do it in a book or in an infomercial and then
wave the First Amendment around and claim that it is protected
speech. When you do it after having done it many times before
and having a Court order you not to do it, it is also a
contempt. And that is why the government is asking for a
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sentence of no less than ten years here.
MR. KIRSCH: Your Honor, can I just submit two
e-mails to you that go into the set that the government
submitted? I just want to hand them up. I have nothing to
say about these.
(Tendered.)
(Brief pause.)
THE COURT: The lawyers having finished, Mr. Trudeau,
you have an opportunity now to make a statement if you wish
to. You are not required to make a statement. It will not be
held against you if you do not. However, if there is
something you wish to say, this is your chance.
Thank you, your Honor. I sent you a letter, which I
hope you had a chance to read. And I want to say a few things
today in addition to what I said to you in that letter.
We also submitted, as you had mentioned, about 80
letters from people that -- written to you on my behalf. The
receiver has the database of all the customers. And I had
tried to get the lawyers to access or e-mail that database
asking those folks to write you as well, which I think would
have been a little bit overwhelming to the Court based on what
has happened in the past. I think you would have been maybe
surprised to get tens of thousands of positive letters from
people that have purchased my books and have positive things
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to say about them.
I'm very humbled today, more probably than you could
ever imagine. I want to first say that I'm deeply sorry for
all of this. I take 100 percent responsibility and accept
responsibility for this entire situation, both the civil and
this criminal case.
On November 12th of last year, when I was found
guilty of criminal contempt, my bond revoked and I was taken
into custody, everything changed for me that day. It was the
first day of a major awakening for me personally.
That night, my first night at MCC, as you could
probably imagine, I didn't sleep. I was awake the entire
night and I contemplated everything in my life, all my
choices, all my decisions, all my previous thoughts,
conclusions and ideas, not just about this case but for my
entire life. I knew for me to be incarcerated, there was
something I must be missing; and it must be something I must
not be seeing that everyone else is. This was more than just
a wake-up call for me. I had to open my eyes and my heart and
confront reality and the truth. And, your Honor, I did. And
it is an ongoing process. I realized and I knew that things
were not the way I wanted and that only I created them. And I
knew that if I wanted things to change in my life, I had to
change.
Your Honor, in the over seven years the civil case
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and this criminal case has been going on relating to The
Weight Loss Cure book -- and I think it's actually been
over -- closer to ten years now -- when I was at MCC, after
that conviction, for the first time, I begin -- began to see
things very differently. I could honestly see, really for the
first time, that along the way, I myself, me personally,
absolutely made mistakes. I made bad and wrong choices and
decisions. I made errors in judgment.
I am deeply sorry and regretful for this entire
situation. I do now have sincere and genuine remorse for it
all.
With the utmost humility and humbleness, I want to
say to you personally, Judge Gettleman, the court, the FTC,
the U.S. attorney's office, my parents, wife, family, all the
millions of supporters who have stood by me, including the
people here in the courtroom who have come on my behalf, all
of those affected in any way, and mostly to anyone who bought
The Weight Loss Cure book and felt misled, I am deeply and
profoundly sorry. I can only offer what I have; and that is a
complete, from-the-heart, genuine apology. Please forgive me.
I have absolutely learned a life-changing lesson from
all of this. For that, I am thankful. And I know going
forward, I will be and am a much better person than before.
It has been said that sometimes you have to hit rock
bottom and lose it all to really learn a permanent lesson that
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will stay with you forever. Your Honor, that is what's
happened to me. That's what this experience has done for me.
And it is a process and it is ongoing.
I have now lost everything. Between the civil and
criminal cases and the court-appointed receiver, I have been
completely wiped out financially, effectively homeless and
both my parents have had major health breakdowns. I have been
devastated at virtually every level of existence. I provided
more detail in the letter I sent you.
All I personally have left is the love and support of
my family and friends, my loyal customers in the millions and,
thankfully, I still have my personal health.
Being incarcerated at MCC over the last four months
has forced me on a daily basis to continually contemplate,
reflect, reevaluate and reprioritize what is important and of
value in my life. Losing your freedom is truly devastating
beyond words. I have learned it can, however, if you allow
it, create a situation where you can change yourself
permanently and for the better. And that is what's happened
to me. During the last four months, I have on a daily basis
meditated, prayed and reassessed the true significance of
everything I thought was important.
As I read Viktor Frankl's book, which I'm sure you're
familiar with, Man's Search for Meaning, he pointed out -- and
I'm paraphrasing -- trying and desperate circumstances push
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man to reconsider values, honesty, integrity, responsibility,
ethics and the true meaning of one's own existence.
That has happened to me. I have had a true and
significant awakening since being incarcerated at MCC four
months ago. I've experienced what I know to be life-changing
cognitions and new realizations. I do see my life very
different now, in a new way and from a new perspective. Your
Honor, I will come out of prison a new and better person who
has learned the lesson of a lifetime.
Your Honor, I do not wish to be incarcerated a day
more than I have to. I pray to be free again and as soon as
the Court sees appropriate. I desperately want to be back
with my family, mother and father, my brother and my dog. And
they desperately want to be with me as well.
Being incarcerated is one of the worst experiences I
could ever imagine anyone having to endure, for a large
variety of reasons. However, I have turned this into one of
the best, most positive experiences of my life.
There's a sign at MCC that asks, "Are you serving
time or making time serve you?"
I have worked very hard to make the most out of being
incarcerated and turned it into a positive experience and a
blessing for me. The last four months have been a time of
personal transformation and rebirth. They had to be, your
Honor. Again, as I realized, if things in my life were going
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to change, I had to change. And I have changed, and it is an
ongoing process.
I spend hours a day at MCC reading positive,
uplifting, inspirational self-improvement books, many focused
on spiritual enlightenment. I'm focused on improving my
personal ethics, honesty and integrity. I have completed a
home study course, a very significant one for me, called
Personal Values and Integrity, designed to improve a person's
personal ethics by focusing on taking personal responsibility
for everything in your life. And I do take personal
responsibility for all of this and my entire life.
I do now see clearly where I was wrong, and I am
focused on making sure that something like this will never
happen again. And I can assure the Court, something like this
will never happen again.
Please know this experience has truly shaken me at
the very core and, thankfully, with very positive results. In
the last four months, I have been stripped of all ego,
defiance, arrogance and pride. And for this I am very
thankful, as it has made me a better person.
I'm not the same person I was seven years ago when I
did the infomercials. And I'm certainly not the same person I
was even just four months ago at trial. And I'm not the same
person I was even a month ago. Still, I humbly believe that I
have been able to retain and improve on my personal honor,
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self-respect and dignity.
I wish you could talk to some of the correction
officers and staff at MCC, several of which, by the way, have
bought my books and told me how much they enjoyed them. I
believe you'd -- they could share with you how being
incarcerated has had a positive effect on me, seeing it
firsthand.
Your Honor, I wish I could turn back the clock and do
the infomercials at issue all over again. I wish I had never
made the statements that are at issue in this case. I wish I
was clear and accurate in the infomercials. I wish I
completely and accurately described the book in the
infomercial. Making those statements was a mistake. And I am
very, very sorry.
Although I have personally seen over a hundred
thousand comments from people who purchased The Weight Loss
Cure book at ITV, all positive, if I could do it all over
again, I would do things very, very differently.
I believe the past does not equal the future. I take
responsibility for my past and, more importantly, for my
future. I have made a promise to myself and my family that
the future will be different. And I'll make that promise to
the Court as well. I can assure the Court that I will never
misrepresent the contents of a book in the future.
If I ever write a book again and if I ever do an
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infomercial ever again, I promise the Court that I will only
100 percent accurately describe the content of the book I
promote. I've done over 500 infomercials since 1989, and I'm
so terribly sorry for this mistake with The Weight Loss Cure
book. I promise no embellishments, no puffery and absolutely
no lies and misrepresentative or misleading statements.
I promise to always diligently and fully obey and
comply with all court orders in the future, without exception.
I want to thank my wife and parents, family and
friends for all their continued unconditional love and support
during this entire case.
I want to thank all the people here in the courtroom,
many who have traveled from all across America, as well as
Europe and other parts of the world, for their constant love
and support. I want to thank all those who sent the thousands
and thousands of letters to me and e-mails offering me their
love, prayers and encouragement; and all the tens of thousands
of supportive postings and different communications
electronically that I have received from all over the world
encouraging me and uplifting me.
I humbly ask the Court to consider mercy, compassion
and leniency in your sentencing. I sincerely hope that you
will consider all sentencing options. I promise the Court
that I have learned my lesson in more ways and on more levels
than you could ever imagine.
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Your Honor, these have been my words and my words
alone. I wrote them. I am speaking from the heart with the
deepest sincerity. I hope you know that they are authentic,
genuine and the truth.
My life and that of my family is now in your hands.
Thank you very much for listening, your Honor.
THE COURT: Let me start out by saying that the Court
has reviewed the voluminous submissions of the parties in this
case, the letters, the e-mails, the stories. I am intimately
familiar with the facts of the case from the trial itself and
from the preparation for the trial, which included reviewing
and reading the dozens of prior court proceedings and orders
regarding Mr. Trudeau and his weight loss book.
This sentencing is no different than any other. It
involves the presentation of both sides of the same story.
And the sides are, it should surprise no one, quite different
depending on who you're listening to.
I want first to start out by pointing out some of the
difficulties the Court has in determining sentences in cases,
all cases, especially cases such as this.
The very first reference letter in Tab 1 of this
80-some reference letters written to me is two pages long
written by a clearly well-meaning gentleman who says in about
the third paragraph of his letter, "When I heard that he was
accused of not telling the truth in the book, I stopped and
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wondered exactly what I was that they were referring to in the
book." I'm reading it as he wrote it. "I don't find this to
be true from the average joe's viewpoint."
Well, as the defense has pointed out and the
government have both pointed out and the Court pointed out to
the jury during the course of the trial, the trial never was
about whether Mr. Trudeau was telling the truth in his book.
Many of these letters are full of such misconceptions, which
are unfortunate because they leave people with improper
impressions and, frankly, dilute the value of the letters
insofar as sentencing.
Some of them are just written by people who clearly
see only what they want to see. Tab 3 is a letter from a
person in Connecticut who writes, "I believe you get a good
understanding of someone's true character when you have known
them for almost three decades. Kevin was 21 when I first met
him. And one of my first observations was how much time he
invested in personal development, self-improvement,
professional development, health and wellness."
The fact of the matter is that four years later, he
pled guilty to fraud and was sentenced to five years in jail.
These misconceptions are, I think, truly tragic.
There's another letter at Tab 6 written by a former
congressman, in which he says, "Your stern, straightforward,
no-nonsense lectures to Kevin have helped him to become more
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responsible, aware and cognizant of his actions to become more
humble, sincere and a better person."
And that would be a wonderful thing if indeed I had
ever lectured Mr. Trudeau about anything. Obviously this
gentleman is confusing me with Judge Gettleman.
I can go on and on, having read all of these.
Tab 13 is written by a person who runs a health
system. In his last paragraph, he expresses thankfulness at
"how many patients Kevin has referred to me personally and to
my other health care professionals. In the last year alone,
he has referred patients to me from the United States, Canada,
Brazil, France, Switzerland, the UK, Australia, Poland,
Germany, Thailand, New Zealand and the Czech Republic, to name
a few." He ends up by saying he would feel very poorly if
Mr. Trudeau were to spend any substantial time in jail.
It is, I hope you can see from these examples, very,
very difficult to gauge the value of any of these
correspondence. We do our best. But after all is said and
done, these determinations come down mostly to one thing; and,
that is, the defendant and, even more so, what the defendant
has done. That's one of the reasons I asked how many times
Mr. Trudeau has been found to be in contempt of court. Now,
most of the people I know, most of the people you know, most
of the people the vast majority of citizens in the United
States of America know have never been found in contempt of
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court.
Mr. Trudeau started in 1996. Again in 1998 he was
enjoined. In 2003 he was enjoined. In 2003 again found in
contempt. In 2004 twice. That doesn't happen by accident.
And it doesn't happen from good intentions. It doesn't happen
to an ordinary, honest person. These are the things
Mr. Trudeau has done.
Mr. Trudeau has already been convicted, before coming
to this Court, of fraudulent conduct. How many people does
the average American know that has been convicted not once but
twice, not only in state court but in federal court, of
fraudulent conduct; been sentenced to jail twice already for
fraudulent conduct? Not very many. That does not happen by
accident. It is a reflection of a person's character.
Mr. Trudeau's case before this Court requires a
sentence that will deter him from future conduct of the same
type and also, more importantly, because he has so publicly
stated his case, provide deterrence in the general sense to
others -- and there are many others; all you have to do is
turn on your TV set late at night and listen to one
infomercial after another -- many, many others who would
follow in his footsteps.
He has treated federal court orders as if they were
merely suggestions or, at most, impediments to be sidestepped,
outmaneuvered or just plain ignored.
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He has publicly ridiculed court orders and the
court's ability to enforce its orders.
He has blatantly rejected many opportunities to
change his conduct and to show true remorse, not by fancy
speeches, but by his actions.
Since the age of 25, he has steadfastly attempted to
cheat others for his own personal gain.
He has engaged in fraudulent conduct using sometimes
as many as 9, 10, 13 different aliases; dozens of different
social security numbers. He has even used his mother's social
security number in one of his scams and used his father and
his brother's name in another.
He has no true recognition of his own blame. He
comes here today blaming the FTC for not catching him in time.
His argument is that telling the truth is such a
difficult concept that it requires vast amounts of negotiation
between his attorneys and government attorneys, who, by the
way, have more than just Mr. Trudeau to deal with.
Truth is, the government has spent probably hundreds
of thousands of dollars and who knows how many tens of
thousands of hours trying to police just Mr. Trudeau alone.
And even now, really on the eve of his sentencing, he
sends this Court a letter. It's a supplemental report sent to
the Court in aid of sentencing.
He starts out by telling us that he humbly and
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respectfully submits this letter. During the course of the
letter, he explains how his Weight Loss Cure book and
infomercial came about. He tells us, "I have been afflicted
with a weight problem my entire life. When I found the
Dr. Simeons' HCG weight loss protocol and was successful at
losing weight and keeping it off, I was ecstatic. I lost
45 pounds in 45 days and kept it off. I was cured of my
weight problem for the first time in my life. I was excited,
overjoyed and passionate about the protocol. I genuinely
wanted everyone who had a weight issue to know about and
experience the weight loss cure that changed my life. My
passion, excitement and zealousness overtook me."
Now, I quote that because, as the government has
previously pointed out here, although I think not quite with
sufficient emphasis, the chronology of events that that
paragraph portrays is not true.
The truth is that even as he was going off to Germany
to lose the weight, before he had even tried the program,
found that it worked, had any reason to be ecstatic, joyful
and wanting to share his experience, he was already planning
to shoot the weight loss show in Boston immediately upon his
return. If Mr. Trudeau was excited at that point, it could
only be about the idea of coming back to Boston to write his
book, shoot his infomercials and make millions of dollars. He
could not possibly have been excited about a plan, a protocol,
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a diet that he had not even yet tried.
These are the types of fundamental deceptions in
which he deals. He is deceitful to the very core. And that
type of conduct simply cannot stand. It exposes the public to
harm. His disrespect for the Court undermines respect for the
law, erodes faith in our judicial system, causes harm to
individuals and to society in general.
There is no doubt that along the way, some people
have been helped by something Mr. Trudeau has done. And for
this he deserves some credit. But this case was about his
latest in a history of refusals to follow court orders that
were nothing more than directions to tell the public the
truth. And that's just not so hard.
It is the Court's opinion that the guideline range is
appropriate in this case. That range allows for credit for
the defendant's good deeds and other factors because it is a
range. The Court, however, is swayed by the government's
request in this case in recommending a sentence that is below
the guideline range. And for these reasons, the Court intends
to enter the following sentence in this case:
Pursuant to the Sentencing Reform Act of 1984, it is
the judgment of the Court that the defendant, Kevin Trudeau,
is hereby committed to the custody of the Bureau of Prisons to
be imprisoned for a total term of 120 months on Count One.
The Court finds that due to the imposition of the
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civil sanctions he faces and the fact that he is now
incarcerated, he lacks the ability at this point in time to
pay a fine and hereby waives that fine.
He shall pay the mandatory special assessment of
$100.
Upon release from imprisonment, he shall be placed on
supervised release for a term of five years. While on
supervised release, he shall not commit any other federal,
state or local crime. He shall comply with the standard
conditions that have been adopted by this Court and the
following additional conditions: He shall refrain from any
unlawful use of a controlled substance. He shall cooperate
with the collection of a DNA sample. He shall not possess a
firearm or any other destructive device. He shall cooperate
in the collection of any civil judgments issued against him
and shall make full disclosure of all financial records and
information whenever required by his probation officer. He
shall abide by all court orders filed in any civil lawsuits in
which he is named. And he shall not frequent any
establishments where gambling occurs, including but not
limited to casinos.
Are there any questions about the Court's intended
sentence?
MS. PERRY: Not about the sentence, Judge. Given
that he's incarcerated, there is a bond exoneration form that
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we would be requesting.
THE COURT: Bond will be exonerated.
MR. KIRSCH: Your Honor, we would request that the
Court recommend Montgomery, Alabama, as the facility where the
defendant serves his sentence. He has family in Montgomery.
His parents are too ill and infirm to visit him in prison, but
he has some family in Alabama that would be able to visit him
if he was incarcerated there.
THE COURT: The Court will make no recommendation as
to where he should be incarcerated. The Bureau of Prisons is
almost always in a better position to make that determination
than the courts.
Sir, it's my duty to advise you that you can appeal
your conviction if you believe that there was some defect in
the proceedings during the course of your trial.
You also have a statutory right to appeal your
sentence itself, particularly if you think that the sentence
is contrary to the law.
You have the right to apply for leave to appeal in
forma pauperis, which means without having to pay the usual
fee that is required, and the clerk of the court will prepare
and file a notice of appeal for you if you request it.
With few exceptions, any notice of appeal must be
filed within 14 days of the entry of the judgment I have
announced I intend to enter in this case.
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Do you have any questions about your right to appeal?
MR. KIRSCH: Just one second, your Honor.
(Brief pause.)
THE DEFENDANT: No, your Honor.
THE COURT: Court stands adjourned.
* * * * *
I certify that the foregoing is a correct transcript from the
record of proceedings in the above-entitled matter.
/s/ Nancy C. LaBella May 20, 2014
Official Court Reporter

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