Donald Trump said to be close to settling real-estate school suits

Donald Trump is in talks on a deal that would require him to pay $20 million to $25 million to settle a fraud suit 10 days before a California trial is set to start and a related racketeering case


Donald Trump had asked New York’s highest court to overturn a ruling from March reinstating a fraud claim in Schneiderman’s suit that allowed the attorney general to seek certain monetary penalties against the school. Photo: Reuters
Donald Trump had asked New York’s highest court to overturn a ruling from March reinstating a fraud claim in Schneiderman’s suit that allowed the attorney general to seek certain monetary penalties against the school. Photo: Reuters

New York: President-elect Donald Trump is preparing to settle lawsuits accusing his defunct university of ripping off thousands of students with bogus real-estate seminars, a person familiar with the matter said.

The billionaire real-estate mogul is in talks on a deal that would require him to pay $20 million to $25 million to settle a class-action fraud suit 10 days before a California trial is set to start and a related racketeering case, according to the person, who asked not to be identified because the settlement isn’t public.

The deal, which could be announced as soon as Friday, will also resolve a civil fraud suit filed in 2013 by New York attorney general Eric Schneiderman on behalf of hundreds of New York victims, the person said.

Schneiderman, a Democrat, has said Trump “bilked people out of millions of dollars” by promising them insight into his real-estate secrets. Students paid as much as $35,000 for sessions that were sold with high-pressure sales tactics, according to the suits. Schneiderman claims students lost as much as $40 million and that Trump may have personally made as much as $5 million from the school.

Trump had little involvement in the school, Schneiderman claimed. Despite touts that Trump “handpicked” instructors, some had little training and were former fast-food or retail workers, according to Schneiderman.

Trump’s lawyers were set to head to court Friday to convince US district judge Gonzalo Curiel in San Diego to put the case on hold until next year. That’s the same Indiana-born judge whom Trump attacked during the campaign as being biased against him because of his Mexican heritage.

Curiel has said he thinks the best option would be for Trump and the former students to settle and avoid what would be the first trial in US history to feature testimony from a president-elect.

Curiel this month tentatively denied a request by Trump’s lawyers for a broad ruling excluding his campaign statements from the upcoming trial. Trump’s lawyers had argued it would be unfair for the jury to hear about his campaign trail comments, which they said are irrelevant to the question of whether Trump defrauded students.

Trump’s lawyer Daniel Petrocelli didn’t immediately return a message seeking comment. Alan Garten, general counsel for the Trump Organization, and Rachel Jensen, a lawyer for the plaintiffs in the California case, also didn’t immediately respond to requests for comment.

In depositions of Trump taken in December and January in the California case by a lawyer for the former students, the real-estate mogul wasn’t able to identify any of the instructors who worked for Trump University and admitted they were selected by an associate who ran the program.

Jury selection

On Wednesday, Petrocelli began challenging the process by which nine people were to be chosen as jurors. Citing Trump’s right to a jury reflecting “a fair cross section of the community,” the attorney asked the court for granular details on how 100 prospective jurors were summoned and selected.

The attorney had previously attempted to delay the trial until next year, saying Trump “must receive daily security briefings, make executive appointments—ultimately, thousands—and establish relationships with appointees, members of Congress, governors, and foreign leaders.”

Trump had asked New York’s highest court to overturn a ruling from March reinstating a fraud claim in Schneiderman’s suit that allowed the attorney general to seek certain monetary penalties against the school.

The New York case is The People of the State of New York v. Trump Entrepreneur Initiative Llc, 451463/2013, New York State Supreme Court (Manhattan). The California case is Low v. Trump University Llc, 10-00940, US district court, southern district of california (San Diego). Bloomberg

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