Professional Documents
Culture Documents
)
)
) Case No.: 03-C-3904
)
) Hon. Robert W. Gettleman
)
)
)
)
)
Respectfully submitted,
ROBB EVANS & ASSOCIATES LLC,
RECEIVER
By: /s/ Blair Zanzig
(One of Its Attorneys)
Blair R. Zanzig (No. 6273293)
John Hiltz (No. 6289744)
Kathy Wantuch (No. 6294034)
HILTZ WANTUCH & ZANZIG LLC
53 West Jackson Blvd., Suite 205
Chicago, Illinois 60604
Telephone: 312.566.9008
Fax: 312.566.9015
bzanzig@hwzlaw.com
jhiltz@hwzlaw.com
kwantuch@hwzlaw.com
Counsel for Robb Evans & Associates, Receiver
CERTIFICATE OF SERVICE
I, Blair R. Zanzig, an attorney, hereby certify that, on the 28th day of January, 2014, I
caused a true and correct copy of the foregoing Receivers Second Report to be served through
the Courts Electronic Case Filing System on the following:
Receiver of
The Assets of Kevin Trudeau, the Trudeau Entities, et al.
REPORT OF RECEIVER'S ACTIVITIES
November 19, 2013 through January 28, 2013
This report covers the activities of the Receiver1 since the Third Supplemental Report dated
November 18, 2013. This is the second Report to the Court. It does not constitute an audit
of financial condition and is intended only to provide information for use by the Court in
assessing the progress of the receivership.
Reference to the Receiver in this report means the Receivers deputies, its staff, and its counsel.
Page 1 of 4
As previously reported, the Receiver laid off a number of employees resulting in a significant
reduction in overhead expense. As a result of evolving changes to daily operations, the
Receiver has subsequently laid off additional employees.
The Westmont office size was reduced by about 45%. If the landlord is able to sublet the
office space, it will result in a reduction of the monthly lease obligation.
Effective November 30, 2013 the Receiver terminated the Affiliate program and ceased
paying commissions for recruiting new members. The last commission payments were made
in December 2013 for commissions earned in November 2013. Not surprisingly, the
number of members paying dues has decreased since the inception of the receivership and
continued to decrease after the announcement of the termination of the Affiliate program.
In August 2013 there were 7,153 dues paying members. At December 31, 2013 there were
4,736 dues paying members. Preliminary data for January 2014 indicates there are 3908 dues
paying members. Despite this decrease in dues paying members of approximately 45%,
GIN is operating profitably.
In conjunction with management, the Receiver reduced the cost to join GIN and the cost of
upgrades within the GIN educational training program.
Financial Status
Under Exhibit 1 is a report on the financial status of the receivership estate through
December 31, 2013.
The receivership estate has cash of approximately $2.5 million, net of accrued and unpaid
expenses and credit card reserves. This amount does not include an additional $1.5 million
in credit card reserve accounts at St. Kitts-Nevis-Anguilla National Bank. These reserves
were accumulated from GIN revenues Kevin Trudeau (Trudeau) directed to be sent
offshore under the control of Lee Kenny beginning in December 2012. As previously
reported, the Receiver was able to re-direct the income stream to domestic accounts. The
amount currently held by the Receiver also does not include the $2 million posted as a bond.
That $2 million also originated from GIN revenues Trudeau directed be routed offshore to
Valartis Bank in Liechtenstein.
For the three month period ending December 31, 2013, operating revenue was $2,249,428
and operating expenses2 were $1,894,5013. This amounts to a monthly profit of
approximately $118 thousand.
2
3
Page 2 of 4
Forensic Accounting
The forensic accounting is continuing, although not as rapidly as the Receiver had hoped.
The Receiver is still awaiting discovery responses for certain financial transactions and is
attempting to locate additional accounting information and bank statements that predate
2006. The Receiver estimates the forensic accounting will be completed in about 30-45 days
and a detailed report will be filed with the Court thereafter.
The Receiver has analyzed thousands of transactions dating back to at least 2006 for the
Trudeau entities and Trudeaus personal bank accounts. There are a number of transactions
in some of the Trudeau entities that appear irregular and the Receiver is attempting to verify
the accuracy of these transactions.
It is clear that Trudeau had the ability to generate millions of dollars in revenue over many
years. While a substantial amount of those revenues funded different types of overhead and
Trudeaus life style, significant amounts were also directed offshore. For example, KT Radio
sent $1,074,624 to the GIN Foundation Liechtenstein account at Valartis Bank after the
bond was funded. Those funds were subsequently routed to the GIN Foundation account
under Lee Kennys control in the United Kingdom.
The table below lists the status of assets that have been identified to date:
US $ using 1/27/2014
Exchange Rate
Not Recovered
Brandy Burkhardt
I-Payout Systems Inc. - K. Trudeau
THE GORDON LAW GROUP LTD
Law Offices of Debra A. Buettner, P.C.
St. Kitts-Nevis-Anguilla National Bank
Gold Purchased on 10/10/2008 @ Appx 849.90
Future Transactions Company
Global Sales Solutions AG Zurich
Office Pool GmbH
Website Solutions GmbH
Migros Bank AG - K. Trudeau
William Hill - K. Trudeau
St George Bank - K. Trudeau
Ukraine Real Property
Outstanding Cashier's Check for N Bakenko #1917752
Mellon Brokerage - N. Babenko
Chase - N. Babenko
Bank of America - N. Babenko
Global Bank of Commerce in Antigua - N. Babenko
US $
5,307.50
US $
1,687.34
US $
11,335.50
US $
10,664.50
US $ 1,529,170.46
US $ 100,000.00
GBP 120,391.88
CHF
587.22
CHF
27,358.12
CHF 341,034.40
CHF
2,916.10
CHF
73,041.26
AUS
12,729.57
US $ 378,143.00
US $
20,582.27
US $
47,635.59
US $
414.59
US $
219.64
US $
16,305.79
Total
5,307.50
1,687.34
11,335.50
10,664.50
1,529,170.46
148,558.65
198,927.77
656.32
30,577.37
381,164.12
3,259.24
81,636.07
11,087.20
378,143.00
20,582.27
47,635.59
414.59
219.64
16,305.79
2,827,755.80
Page 3 of 4
Recovered
49,577.11
With the exception of Ms. Babenkos account in Antigua, all other bank account balances are
based on the latest bank statements available to the Receiver. Ms. Babenkos account
balance in Antigua is based on a wire transfer previously reported to the Court.
As noted above, the Receiver anticipates the funds at Anguilla National Bank will be
repatriated next month. That will leave a balance of $1,298,585.34 that Trudeau has not
returned to the receivership estate.
Page 4 of 4
EXHIBIT 1
Previously
Reported and
Approved
Corporate Account Funds
Brandy Burkhardt
Global Information Network
Global Info Network Foundation
GIN FDN Event Account
I-Payout Systems Inc.
K.T. Corporation Limited
K.T. Radio Network Inc.
Marc J. Lane Wealth Group
Natural Cures Health Insurance
Natural Cures Inc.
Baytree National B&T
Cardflex Payment Solutions Inc.
Meritus Payment Solutions
National Bank of California
Merchant #
Merchant #
Merchant #
Merchant #
Total National Bank of California
Oct 31, 13
Nov 30, 13
Dec 31, 13
10/1/1312/31/13
TOTAL
0.00
225,000.00
262,116.42
0.00
2,687.11
2,617.02
0.00
0.00
50,304.26
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
5,307.50
0.00
1,687.34
1,435,373.80
0.00
0.00
9,133.35
18,846.41
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
5,307.50
0.00
1,687.34
1,435,373.80
0.00
0.00
9,133.35
18,846.41
0.00
5,307.50
225,000.00
263,803.76
1,435,373.80
2,687.11
2,617.02
9,133.35
18,846.41
50,304.26
30,618.28
35,880.20
0.00
0.00
1,839.00
5,000.00
0.00
60.00
0.00
0.00
0.00
0.00
0.00
1,899.00
5,000.00
30,618.28
37,779.20
5,000.00
52,870.26
10,719.00
5,613.14
8,932.17
78,134.57
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
52,870.26
10,719.00
5,613.14
8,932.17
78,134.57
144,633.05
6,839.00
60.00
0.00
6,899.00
151,532.05
0.00
804.01
101,377.04
1,376.72
422,249.48
1,213,165.11
0.00
0.00
5,007.19
0.00
0.00
11,846.19
13,657.54
0.00
0.00
0.00
0.00
1,484,065.94
0.00
0.00
0.00
0.00
0.00
0.00
13,657.54
0.00
5,007.19
0.00
0.00
1,495,912.13
13,657.54
804.01
106,384.23
1,376.72
422,249.48
2,709,077.24
Incoming Receipts
Global Information Network
Receiver Account
Copyright Royalties
Event Commissions
9,374.88
2,426.25
4,057.04
0.00
0.00
0.00
1,311.71
4,494.70
5,368.75
4,494.70
14,743.63
6,920.95
Page 1 of 7
Previously
Reported and
Approved
Membership Dues & Upgrades-Chk
Membership Dues & Upgrades - CC
Membership Dues & Upgrades - CC
Reserves Balance - Not Available
Refunds & Returns
Chargebacks
Total Membership Dues & Upgrades - CC
Oct 31, 13
Nov 30, 13
Dec 31, 13
10/1/1312/31/13
TOTAL
29,242.81
14,595.76
7,915.81
18,701.93
41,213.50
1,933,567.44
(485,641.86)
(6,100.00)
(3,107.81)
1,438,717.77
1,166,347.49
(291,586.87)
(24,880.00)
(3,628.17)
846,252.45
973,063.33
(241,698.33)
(22,290.00)
(3,313.55)
705,761.45
810,293.33
(202,235.83)
(8,910.00)
(2,257.13)
596,890.37
2,949,704.15
(735,521.03)
(56,080.00)
(9,198.85)
2,148,904.27
4,883,271.59
(1,221,162.89)
(62,180.00)
(12,306.66)
3,587,622.04
1,479,761.71
864,905.25
713,677.26
621,398.71
2,199,981.22
3,679,742.93
13,261.15
13,261.15
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
13,261.15
13,261.15
1,493,022.86
864,905.25
713,677.26
621,398.71
2,199,981.22
3,693,004.08
4,851.83
0.00
(1,212.94)
(199.85)
3,439.04
36,474.84
0.00
(9,064.11)
(1,408.85)
26,001.88
13,708.02
0.00
(3,426.94)
(199.85)
10,081.23
18,923.15
(685.92)
(4,571.82)
(1,954.17)
11,711.24
69,106.01
(685.92)
(17,062.87)
(3,562.87)
47,794.35
73,957.84
(685.92)
(18,275.81)
(3,762.72)
51,233.39
3,439.04
26,001.88
10,081.23
11,711.24
47,794.35
51,233.39
Non-Receiver Account
Bankcard MTOT Dep
SBC VSMC Deposits
Total Non-Receiver Account
6,547.61
9,067.56
15,615.17
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
6,547.61
9,067.56
15,615.17
19,054.21
26,001.88
10,081.23
11,711.24
47,794.35
66,848.56
0.00
0.00
(3,540.15)
(2,602.50)
(6,142.65)
(6,142.65)
70,456.31
Page 2 of 7
Previously
Reported and
Approved
GIN FDN Event Registration
Total GIN FDN Event Registration
Sale of Inventory Stock
Total Incoming Receipts
Interest Income
Miscellaneous Income
Refunds
Tax Refunds
Other
Total Miscellaneous Income
Total Funds Collected
Expense
GIN FDN Event Expenses
Bank Fees
Authnet Gateway Fees
Credit Card Discounts
Credit Card Fees
Event Management Expenses
Event Management Fees
Gift Cards
GIN Family Reunion Event Exp
Recording/Production Costs
Speaker Fees
Speaker Gifts
Ticket Sales Commissions
Travel Expenses
Total GIN FDN Event Expenses
Business Operation Expenses
Alarm & Security
Bank Fees
Cellular Services
Oct 31, 13
Nov 30, 13
Dec 31, 13
10/1/1312/31/13
TOTAL
0.00
0.00
0.00
0.00
0.00
(3,540.15)
49.00
(2,553.50)
49.00
(6,093.65)
49.00
(6,093.65)
0.00
1,512,077.07
7,746.50
898,653.63
0.00
720,218.34
0.00
630,556.45
7,746.50
2,249,428.42
7,746.50
3,761,505.49
78.81
154.38
116.87
129.27
400.52
479.33
0.00
0.00
1,003.65
1,003.65
0.00
0.00
189.41
189.41
0.00
0.00
435.33
435.33
1,644.29
1,560.55
5.50
3,210.34
1,644.29
1,560.55
630.24
3,835.08
1,644.29
1,560.55
1,633.89
4,838.73
2,726,324.64
910,843.61
2,204,836.48
633,896.06
3,749,576.15
6,475,900.79
0.00
0.00
0.00
0.00
0.00
100,000.00
215.35
340,239.70
0.00
0.00
0.00
0.00
4,978.55
445,433.60
0.00
0.00
0.00
0.00
6,667.74
0.00
0.00
279.80
0.00
0.00
0.00
0.00
0.00
6,947.54
0.00
79.00
55.98
0.00
0.00
50,000.00
0.00
0.00
0.00
0.00
0.00
0.00
508.40
50,643.38
15.00
47.94
129.87
46.86
0.00
50,000.00
0.00
259,461.23
0.00
1,258.00
0.00
710.50
0.00
311,669.40
15.00
126.94
185.85
46.86
6,667.74
100,000.00
0.00
259,741.03
0.00
1,258.00
0.00
710.50
508.40
369,260.32
15.00
126.94
185.85
46.86
6,667.74
200,000.00
215.35
599,980.73
0.00
1,258.00
0.00
710.50
5,486.95
814,693.92
105.00
321.78
0.00
0.00
0.00
0.00
0.00
0.00
0.00
105.00
0.00
0.00
105.00
0.00
0.00
210.00
321.78
0.00
Page 3 of 7
Previously
Reported and
Approved
Colocation Server Services
Contest Winner Vehicle Lease
Credit Card Discounts & Fees
CC Fees
Authnet Gateway Fees
Meritus Merchant
NMC Credit Card Fees
Verifi
Total CC Fees
Oct 31, 13
Nov 30, 13
Dec 31, 13
10/1/1312/31/13
TOTAL
5,050.00
14,500.00
5,050.00
7,250.00
5,050.00
7,250.00
5,050.00
7,250.00
15,150.00
21,750.00
20,200.00
36,250.00
1,606.55
39.90
17,721.04
267.95
19,635.44
2,628.65
75.00
34,532.17
0.00
37,235.82
3,215.00
0.00
36,136.66
0.00
39,351.66
1,013.00
0.00
23,003.06
0.00
24,016.06
6,856.65
75.00
93,671.89
0.00
100,603.54
8,463.20
114.90
111,392.93
267.95
120,238.98
96,678.38
1,931.42
98,609.80
58,317.38
1,823.85
60,141.23
48,653.17
685.43
49,338.60
40,514.67
946.17
41,460.84
147,485.22
3,455.45
150,940.67
244,163.60
5,386.87
249,550.47
118,245.24
97,377.05
88,690.26
65,476.90
251,544.21
369,789.45
290.80
3,070.19
22,048.95
520.34
12,500.00
258,000.00
47,337.35
44,657.08
7,200.00
0.00
597.68
4,085.00
251.90
0.00
0.00
455.51
22,164.16
0.00
418.44
58.16
2,241.67
8,498.28
181.72
12,500.00
191,000.00
23,093.91
17,488.00
0.00
565.00
1,654.32
1,250.00
0.00
0.00
6,000.00
236.27
23,109.79
0.00
313.73
0.00
819.71
11,411.67
118.27
12,745.40
149,000.00
37,212.91
15,476.00
0.00
0.00
334.48
0.00
0.00
263.83
0.00
1,484.49
22,186.67
0.00
242.83
0.00
0.00
6,617.82
632.20
12,746.03
147,495.40
33,978.98
16,170.00
0.00
0.00
334.48
1,400.00
0.00
0.00
0.00
0.00
22,221.84
1,996.43
135.43
58.16
3,061.38
26,527.77
932.19
37,991.43
487,495.40
94,285.80
49,134.00
0.00
565.00
2,323.28
2,650.00
0.00
263.83
6,000.00
1,720.76
67,518.30
1,996.43
691.99
348.96
6,131.57
48,576.72
1,452.53
50,491.43
745,495.40
141,623.15
93,791.08
7,200.00
565.00
2,920.96
6,735.00
251.90
263.83
6,000.00
2,176.27
89,682.46
1,996.43
1,110.43
CC Discounts
GIN CC Discounts
Trudeau App Product CC Discount
Total CC Discounts
Page 4 of 7
Previously
Reported and
Approved
Oct 31, 13
Nov 30, 13
Dec 31, 13
10/1/1312/31/13
TOTAL
Payroll Expenses
Payroll Processing Fees
Phone & Internet Services
PO Box Rent
Postage & Delivery
Prior Period CC Return
Promotional Expenses
Sales & Use Taxes
Security Services
Shipping & Packaging
Software Support Service
Storage Unit Rent
Transportation Services
Unspecified Business Expenses
Website Services
Total Business Operation Expenses
300,615.58
863.20
3,531.69
0.00
0.00
450.00
5,096.80
27.36
960.00
9,394.15
3,894.00
0.00
772.59
0.00
3,706.08
891,130.87
131,038.54
384.10
2,233.98
0.00
0.00
0.00
0.00
1,078.16
0.00
3,171.67
0.00
841.00
0.00
0.00
3,029.81
539,645.16
180,711.66
581.15
8,470.52
396.00
46.00
0.00
0.00
75.00
0.00
4,138.89
2,596.00
875.00
0.00
0.00
1,884.55
552,061.29
104,711.70
379.10
2,750.37
0.00
0.00
0.00
0.00
75.00
0.00
575.51
1,298.00
935.00
0.00
0.00
1,198.61
433,533.80
416,461.90
1,344.35
13,454.87
396.00
46.00
0.00
0.00
1,228.16
0.00
7,886.07
3,894.00
2,651.00
0.00
0.00
6,112.97
1,525,240.25
717,077.48
2,207.55
16,986.56
396.00
46.00
450.00
5,096.80
1,255.52
960.00
17,280.22
7,788.00
2,651.00
772.59
0.00
9,819.05
2,416,371.12
0.00
1,303.22
1,121.83
0.00
280.83
120.00
0.00
0.00
4,358.98
0.00
1,299.81
8,484.67
0.00
3,328.75
300.00
295.00
97.22
120.00
0.00
447.85
0.00
0.00
0.00
4,588.82
0.00
602.65
300.00
0.00
0.00
160.00
0.00
0.00
0.00
176.22
1,199.97
2,438.84
800.00
494.78
332.47
0.00
0.00
120.00
0.00
0.00
0.00
85.73
0.00
1,832.98
800.00
4,426.18
932.47
295.00
97.22
400.00
0.00
447.85
0.00
261.95
1,199.97
8,860.64
800.00
5,729.40
2,054.30
295.00
378.05
520.00
0.00
447.85
4,358.98
261.95
2,499.78
17,345.31
33,128.28
0.00
0.00
0.00
0.00
33,128.28
9,352.00
0.00
0.00
0.00
0.00
9,352.00
Page 5 of 7
Previously
Reported and
Approved
Receiver Fees & Expenses
Receiver Fees
Receiver
R. Evans
B. Kane
K. Johnson
V. Miller
A. Jen
Total Receiver
Senior Staff
L. Lee
T. Chung
F. Jen
C. Callahan
E. Roop
C. DeCius
N. Wolf
J. Dadbin
Total Senior Staff
Support Staff
Total Receiver Fees
Receiver Expenses
Bank Fees
Investigative Search Costs
Office Telephone & Supplies
Postage & Delivery
Subpoena/Document Reproduction
Travel Expenses
Website Support
Total Receiver Expenses
Oct 31, 13
Nov 30, 13
Dec 31, 13
10/1/1312/31/13
TOTAL
573.75
31,747.95
65,304.90
29,727.90
40,069.35
167,423.85
0.00
11,065.05
17,818.65
15,828.75
14,773.50
59,485.95
0.00
6,904.35
5,607.90
35,788.05
11,276.10
59,576.40
0.00
4,733.55
8,984.70
15,738.30
7,929.45
37,386.00
0.00
22,702.95
32,411.25
67,355.10
33,979.05
156,448.35
573.75
54,450.90
97,716.15
97,083.00
74,048.40
323,872.20
21,014.55
33,255.45
47,124.45
6,390.00
3,064.50
8,136.00
30.00
819.50
119,834.45
3,738.60
301.50
4,612.95
1,372.50
189.00
6,939.00
24.00
2,029.50
19,207.05
2,261.25
3,527.55
18,270.90
180.00
1,282.50
6,786.00
12.00
1,078.00
33,398.20
4,341.60
7,477.20
9,949.50
1,012.50
999.00
5,985.00
36.00
1,023.00
30,823.80
10,341.45
11,306.25
32,833.35
2,565.00
2,470.50
19,710.00
72.00
4,130.50
83,429.05
31,356.00
44,561.70
79,957.80
8,955.00
5,535.00
27,846.00
102.00
4,950.00
203,263.50
2,147.10
289,405.40
1,984.60
80,677.60
2,144.30
95,118.90
2,309.20
70,519.00
6,438.10
246,315.50
8,585.20
535,720.90
0.00
582.82
149.05
653.80
131.57
16,352.68
0.00
17,869.92
0.00
7.78
121.18
487.16
1,401.18
3,290.99
474.65
5,782.94
35.00
0.00
116.67
671.59
136.73
1,144.84
26.62
2,131.45
(35.00)
0.00
119.61
323.69
0.00
6,671.94
35.49
7,115.73
0.00
7.78
357.46
1,482.44
1,537.91
11,107.77
536.76
15,030.12
0.00
590.60
506.51
2,136.24
1,669.48
27,460.45
536.76
32,900.04
Page 6 of 7
Previously
Reported and
Approved
Legal Fees & Costs
Hiltz Wantuch & Zanzig
Legal Fees
Legal Costs
Total Hiltz Wantuch & Zanzig
Oct 31, 13
Nov 30, 13
Dec 31, 13
10/1/1312/31/13
TOTAL
42,336.00
150.00
42,486.00
39,384.00
772.09
40,156.09
9,936.00
58.73
9,994.73
17,028.00
171.35
17,199.35
66,348.00
1,002.17
67,350.17
108,684.00
1,152.17
109,836.17
Holzhacker
Legal Fees
Legal Costs
Total Holzhacker
0.00
0.00
0.00
0.00
0.00
0.00
7,783.20
11.84
7,795.04
0.00
0.00
0.00
7,783.20
11.84
7,795.04
7,783.20
11.84
7,795.04
Meridian Lawyers
Legal Fees
Legal Costs
Total Meridian Lawyers
0.00
0.00
0.00
891.00
0.00
891.00
297.00
436.95
733.95
0.00
0.00
0.00
1,188.00
436.95
1,624.95
1,188.00
436.95
1,624.95
42,486.00
41,047.09
18,523.72
17,199.35
76,770.16
119,256.16
349,761.32
127,507.63
115,774.07
94,834.08
338,115.78
687,877.10
1,737,290.74
678,689.15
720,917.58
841,870.26
2,241,476.99
3,978,767.73
232,154.46
1,483,918.90
(207,974.20)
1,508,099.16
Total Expense
Net Transactions
Fund Balance
989,033.90
2,497,133.06
Page 7 of 7