Crime and Punishment

The 'deceitful' infomercial king and his pyramid scheme: Investigators

Pitchman called 'deceitful to the core'
Pitchman called 'deceitful to the core'

Infamous infomercial pitchman Kevin Trudeauonce referred to as "deceitful to the core" by a federal judge—in March was sent behind bars for 10 years. He failed to pay a $37 million judgment from the Federal Trade Commission for false health and diet claims in his book, "The Weight Loss Cure 'They' Don't Want you to Know About."

But convicted fraudster Trudeau wasn't just an author-pitchman. He had another scheme brewing—while he was in court facing book-related charges, according to investigators. While the FTC case on the book's claims was underway in 2007, Trudeau was in the middle of courting investors for the "Global Information Network," or GIN, investigators say.

GIN essentially was a $110 million pyramid scheme with more than 35,000 members, which the FTC's Jonathan Cohen tells CNBC was "largely for Trudeau's own benefit," and used to conceal millions of dollars in assets from the government.

Investors paid for access to expert financial advice and promises of wealth that never materialized, according to investigators. Now as Trudeau, 51, sits locked up inside Federal Prison Camp, Montgomery in Alabama, investigators are still searching for Trudeau's assets, including the revenue from GIN.

Multiple phone calls and emails to reach Trudeau through his attorneys were not returned.

Inside the 'Global Information Network'

Kevin Trudeau
Getty Images

According to Trudeau's online radio show KTRN, GIN was a "secret society" that would generate a "money-making machine virtually overnight" for any individual involved. GIN guaranteed members they would be millionaires in no time, and Trudeau added he and a council of 29 other unnamed "millionaires, billionaires, multibillionaires" would advise potential investors on how to get rich quick.

As a former member of GIN, Abe Hussein got hooked.

Hussein said he invested more than $30,000 in the network, even quitting his job. Hussein believed the promised 29 council members were his key to getting rich quick. "The way he talked about the council was, there were huge people in power and they run the world right now. I even thought the current President, President Obama was in the GIN council," Hussein said.

Money was flowing in as more and more investors bought into GIN and "the dream" Trudeau was selling. "He was telling people we were gonna have GIN yachts. We were gonna have GIN clubhouses across the world," Hussein told CNBC.

And Hussein says the more money you spent in the network, you earned rewards and a higher status in the network. "If you make it to level 12, you get a Ferrari, each level kept getting more expensive," Hussein said. "You have to pay $100,000 to see Kevin and touch his skin because he's basically a glowing god and we believed that."

Members like Hussein shelled out thousands to attend rallies across the U.S. They believed they were getting the opportunity of a lifetime, but investigators say most GIN members never saw a dime, with only Trudeau getting richer.

The FTC's Cohen tells CNBC, "It's likely a significant portion of the assets remain stashed overseas in corporations or trusts that Kevin Trudeau controls."

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And while Cohen says Trudeau has lied to consumers before, die-hard followers are still shelling out cash to help pay Trudeau's $37 million FTC fine, even while he is behind bars.

Mexico's most feared drug cartel
Mexico's most feared drug cartel

—By CNBC's Andrea Day and Valerie Patriarca