CHICAGO - The controversial TV infomercial pitchman Kevin Trudeau is facing possible incarceration for his failure to pay a $37.6 million court-ordered sanction entered against him three years ago over misleading television ads for his weight-loss book.

Trudeau, an ex-felon who built an infomercial empire in the 1990s and went on to become a best-selling author, says he has no assets and cannot pay.

"I don't have $37 million hidden someplace," Trudeau tells Bill Weir in tonight's premiere episode of ABC's "The Lookout." "If they can find $37 million, pop the Champagne. Good luck."

Yet the Federal Trade Commission - the consumer watchdog agency that has tangled with Trudeau frequently over the past two decades - argues that he simply cannot be trusted to give a full accounting of his assets. The FTC is seeking to have a judge hold Trudeau in contempt for his failure to pay the penalty, and argues that Trudeau should be jailed until he does.

"We think it is the only appropriate option," says Jim Kohm, the associate director of enforcement of the FTC's consumer protection bureau. "He should be placed in jail until he repatriates his money and pays off the debt he has to consumers."

Over the past several months, the FTC has subpoenaed the records of dozens of banks, corporations, individuals and law firms to bolster its allegations that Trudeau is engaged in lucrative business ventures and spending freely. The government contends Trudeau has masked his ownership and control of companies that are funding a lavish lifestyle, replete with luxury automobiles and stately homes.

IN SEARCH OF MAN AND MONEY

A team from ABC's "The Lookout" set out this spring in search of Trudeau and his allegedly hidden wealth, visiting corporate offices and knocking on the doors of a mammoth mansion in suburban Chicago. After our initial request to interview Trudeau was declined by his lawyers, we set off to find him ourselves, ultimately locating Trudeau living quite well in a lakeside apartment in Zurich, one of the world's most-expensive cities.

"I have to live someplace," a nattily dressed Trudeau told Weir in a good-natured conversation near the shore of picturesque Lake Zurich. "Should I live on the street? Should I sleep on a park bench?"

Trudeau is under no travel restrictions and has appeared at court hearings in the United States whenever his presence has been required. But it does appear that Trudeau has made himself comfortable in Zurich, at least judging by his credit card records subpoenaed by the FTC. Late last year, he dropped more than $30,000 on an oriental carpet and more than $110,000 at furniture boutiques.

The FTC cites those credit card bills in its allegations that Trudeau is burning through cash while paying almost nothing toward the court-ordered judgment. According to those records, Trudeau has been averaging about $1 million a year in new charges, and the bills, the FTC says, are being paid mainly by the very corporations the government says Trudeau effectively controls. Trudeau "continues to spend money at a remarkable pace … with complete disregard" for the court's orders, the FTC wrote in a February court filing.

Trudeau's defense team says the government's focus on the credit card expenses is misguided, and they characterize the payments as business expenses associated with Trudeau's speaking engagements and worldwide travel. They say the expenses are paid by separate companies that Trudeau neither owns nor controls, in connection with services he is providing to them.

"Trudeau is a New York Times best-selling author and motivational speaker who is hired by various entities," writes Trudeau's attorney Kimball Anderson in a court motion in opposition to the FTC. "He travels on behalf of these businesses … charges his travel-related expenses on his personal credit card, and those charges are later expensed to the company."

The FTC counters that Trudeau's credit card charges include tens of thousands of dollars on items of a clearly personal nature - furniture, cigars and clothing - and smaller amounts on more mundane items such as groceries and draperies.

Given those circumstances, the government argues Trudeau's claims that he has no assets and is unable to pay the sanction are a charade.

"When you look at the totality of what's going on, it's impossible to believe," says Kohm.

Trudeau was first sued by the FTC in 1998 and then again in 2003. The FTC alleges that, in a series of infomercials, Trudeau made false and misleading claims for products and remedies that he said could, among other things, lead to dramatic weight loss, prevent cancer and enable users to develop photographic memories. Trudeau settled those suits, without admitting wrongdoing, and agreed to pay a total of $2.5 million in consumer redress.

The $37 million dollar penalty now at issue was handed down in 2007 by U.S. District Court Judge Robert Gettleman in Chicago. Gettleman held Trudeau in contempt, ruling he violated the previous settlement terms by making misleading claims in the infomercials for his best-selling book, "The Weight Loss Cure They' Don't Want You to Know About."

The FTC's complaint in that case alleged that Trudeau had deceived hundreds of thousands of consumers with claims that the diet - which calls for prolonged periods of extreme calorie restriction, off-label injections and high-colonic enemas - was "easy." The judge ruled for the FTC and ordered Trudeau to pay $37 million to compensate consumers who bought the book after viewing one of the ads.

"I have an insane, ridiculous, $37 million personal judgment against me because I wrote a book and said the diet was easy," Trudeau tells Weir. "That's a ridiculous, insane order. It's like something out of communist China, not free America, free enterprise, free speech America."

Trudeau twice appealed the judgment to higher courts and unsuccessfully attempted to have the case heard by the U.S. Supreme Court. The penalty was officially entered against him in June 2010.

The FTC contends that Trudeau, while fighting on all legal fronts, was also embarking on a sophisticated plan to hide his wealth and income, working with a Chicago law firm, it says, that specializes in asset protection.

"Trudeau has gone to extraordinary lengths to shelter or conceal significant assets," the FTC writes in court documents, by "transferring them offshore…keeping his name off corporate records and bank accounts" and "transferring funds through multiple bank accounts to conceal their origin."

THE INFOMERCIAL KING TAKES A BRIDE

One of the keys to Trudeau's alleged asset-protection plan, according to the government, is his wife, Nataliya Babenko, a native of the Ukraine currently studying film at New York University. They were married when she was 22, in June 2008, just five months before Trudeau was first hit with the $37 million penalty. The government alleges that Trudeau then proceeded to install her as an owner or executive of several companies.

Among the companies that Babenko directly or indirectly owns, the FTC alleges, is a multi-layered marketing foundation called the Global Information Network, known by the acronym GIN. It is billed as private wealth, health and success- building club, boasting of thousands of members in more than 150 countries. The foundation was created in the Caribbean nation of St. Kitts and Nevis in 2009.

Trudeau claims he's just a member of GIN and has no control over its assets. The foundation, he says, has no owners. Trudeau is, however, the organization's chief promoter and the star attraction at GIN events worldwide. Pitching the club in Internet videos, Trudeau says GIN offers paying members secret information heretofore available to only the elite. GIN was conceived, he says, by a secret council of 30 people, including billionaires, royals, high-level members of secret societies, and Kevin Trudeau. All of those council members, the club says, have chosen to remain anonymous, except one: Kevin Trudeau.

Over the past three years, GIN has sponsored dozens of seminars, leadership cruises and gatherings in such places as Nashville, the Bahamas and Las Vegas. ABC News, after its encounter with Trudeau in Zurich, received hundreds of testimonial emails from GIN members extolling the virtues of the club.

Then, at Trudeau's invitation, ABC News attended GIN's Dream Weekend meeting in Dallas last month, where 2,000 attendees enthusiastically cheered Trudeau as he took center stage. And afterward his devotees mobbed our cameras with praise for Trudeau.

"I find him the bravest person in the world right now," said one GIN member .

She and many others among the attendees expressed the belief that the government is targeting Trudeau because his books and public appearances challenge big business, the medical establishment and the government. "They are only singling him out and not anybody else," she said, before adding that she believed the government "should pay Kevin Trudeau the $37 million for the work he's doing for humanity."

The FTC remains focused on one key question: Who controls GIN and its money? On that issue, the government contends in court filings that "the evidence that Trudeau controls the Global Information Network and the various associated entities is overwhelming."

Trudeau's wife, Babenko, is the president, secretary and treasurer of GIN's American subsidiary. A financial statement filed with the court shows that GIN USA, which was incorporated in South Dakota, has reported more than $62 million in gross revenue over the past three years and, as of March 2013, more than $14 million in net income.

Babenko is also an officer or owner of two related U.S. companies, and the sole director of an international business entity in Belize, which the FTC contends ultimately owns the Global Information Network.

"She appears to be being used as the head of those companies," says the FTC's Kohm. Trudeau, Kohm says, "appears to own and control GIN and use it as a piggy bank so that he can hide money from the victims of his deception."

ABC News found Babenko outside NYU's film school earlier this month. She politely declined to answer questions, referred us to her attorneys and headed back to class. At a court-ordered deposition a few days later, Babenko invoked her Fifth Amendment rights, declining to answer all but a few questions, according to an FTC attorney's recent statements in court.

When pressed by Weir about his wife's role in these companies, Trudeau brushed the questions aside. "She is not a party to any of this," Trudeau said. "This is about me. Please leave the family out."

According to the government, credit card records demonstrate that the corporate entities owned or directed by Babenko have been paying almost all of Trudeau's American Express and Diner's Club bills. Her companies, the authorities say, have also paid for Bentley automobiles, private jet travel and the rent on a 14,000-square-foot mansion in Illinois.

Trudeau and his attorneys, while not disputing the expenditures were made, maintain these were business expenses and not for his exclusive personal use, and could not be used to satisfy the judgment. They argue the FTC is illegitimately focused on punishing Trudeau, when they should be working with him on a plan for consumer remediation.

At a hearing last week in federal court in Chicago, Trudeau was called to the stand to answer questions posed by an FTC attorney. After confirming that he was living in Switzerland, he then invoked his Fifth Amendment rights hundreds of times during more than three hours of questioning.

He was confronted with questions about email communications he had with an attorney discussing the establishment of the Global Information Network, which the FTC contends are in direct conflict with Trudeau's assertions that he doesn't own or control GIN.

After seeing the content of those emails and others, Judge Gettleman said from the bench that the documents raised serious questions about whether Trudeau and that attorney had "engaged in a rather elaborate scheme to try to put [Trudeau's] assets beyond the reach of the FTC," and then ordered the attorney to appear for testimony at a hearing next month.

Later this summer, Gettleman will decide whether to hold Trudeau in contempt and, if he does, whether to jail Trudeau to force him to reveal his allegedly hidden wealth.

Tonight on ABC's "The Lookout," Trudeau tells Bill Weir that he has done nothing wrong. "I'm screwed. I can't own anything for the rest of my life. So I'm not going to start a company and put it in my own name. It'd be dumb," he says.

Of his troubles with the government, Trudeau says, "the people who bought that book, "The Weight Loss Cure," it changed their life, and I don't care what the government says."

Sending him to jail, Trudeau says, won't do any good because he can't pay money he hasn't got.

"I don't have $37 million buried in a treasure chest someplace," he says. "And guess what? If I did, I would give it to the government and pay the judgment and call it a day."