More on the matter of Charles J. Givens Jr.

NEW YORK — NEW YORK -- On May 8, a California jury brought in a verdict of fraud against financial huckster and best-selling author Charles J. Givens Jr.

That's the second jury to find against the flamboyant pitchman who made his fortune by doling out financial advice. (Givens settled the previous case in 1993, before it was tried to conclusion but after preliminary findings of fraud. He sued me for libel when I reported the story but eventually walked away from the suit.)


The recent case, a class action, was brought on behalf of 29,000 California members of the Charles J. Givens Organization (CJGO). Members bought the master's get-rich tapes and books, attended seminars, consulted personal "coaches" and purchased other financial products.

Cella Gutierrez, 35, who initiated the case, attended a CJGO seminar in 1991. Yearning to improve her modest lot, she fell under the spell of the seminar speaker who, she says, made her believe she could easily buy and sell real estate with little or no money down. She squeezed her credit card for nearly $1,000 to join the Givens organization and paid another $2,000 for a real estate course. Eventually she sued, charging misrepresentation and fraud. The jury awarded her and other CJGO members $14.1 million in damages. That included punitive damages, awarded for what California calls "reprehensible conduct."


Givens says "nothing, in my opinion, was misleading." He plans to appeal.

For those who haven't followed his career, Charles Givens became perhaps the most successful get-rich guru ever. While his colleagues languished in the ghetto of late-night cable TV, Givens won uncritical acceptance in legitimate forums -- wowing the audience and the hosts on such widely watched programs as "Larry King Live" and the "Today" show. His book, "Wealth Without Risk," has sold more than 1.3 million copies. The organization he founded boasts some 120,000 current members.

But complaints began to accumulate, from disaffected members who failed to get the refunds that they thought they were guaranteed. Florida, Iowa, Maryland, North Dakota and Wisconsin have all challenged the organization's business practices but their efforts don't affect other states. The successful lawsuit in California has opened a much wider avenue of attack -- not just for recovering Givens addicts but for anyone rooked by a high-pressure TV or seminar speaker. Givens attracted his members with a TV infomercial that, in the jury's opinion, contained a number of misleading claims.

"This case shows that class actions can be successful when someone goes on TV and lies to sell the product," says Gutierrez's lawyer. Edward Gergosian of the San Diego law firm, Barrack, Rodos & Bacine. "I'm not aware of any precedent for that."

The jury split 9-3 on the case, with the "nays" opining that Gutierrez had been too gullible. Everyone thought that the financial advice offered by CJGO was "incomplete and misleading," juror Arnold Garza says, "but not against the law."

Givens lost the case on his personal credibility -- by lying about his past, Garza says, and by "claiming that five to 10 minutes a night will put $300 to $1,000 in your pocket and anyone can do it, it's easy and safe." Givens says that his strategies aren't "meant for college professors," they're "written for the purpose of getting people to act."

Givens folded CJGO in early 1995 and says that he's not involved in the business anymore. The successor company, International Administrative Services (IAS), was selling its members five-year renewals, payable upfront, until early this month, IAS President David Phillips says.

Now, he says, IAS is likely to file for reorganization in bankruptcy within 30 days. Cash-flow problems afflict other parts of the former Givens empire. The IRS has been probing for unreported income.


Could the redoubtable Givens bounce back despite the jury finding of fraud? The companies that were spun out of the old Givens organization aren't using his name, he says. But his book -- with his trademark mix of good, bad and strange advice -- remains in the stores to attract a new generation of followers. Simon & Schuster, Givens' publisher (and mine), is leaving it there.

Givens has said that I write about him because I'm jealous that his book outsold mine. Sure, I'd love his royalties. But I'd rather have him fade away so I'd never have to write about this issue again.

Write to Jane Bryant Quinn at: Newsweek, 444 Madison Ave., 18th floor, New York, N.Y. 10022.

Pub Date: 6/03/96