What Does Trump’s $25 Million Fraud Settlement Mean?

Last week, president-elect Donald Trump settled the pending Trump University case to the tune of $25 million.

The lawsuit has attracted a great deal of attention in recent months. It had been scheduled for November 28 before Judge Jeffrey Miller mediated an outcome that appears to have been mutually satisfactory for all parties.

While it should be noted that this settlement did not include an admission of guilt or liability – and Mr. Trump’s staffers insisted that they settled to allow them to focus on preparing for the presidency — it’s still important to examine what was at stake.

First, some background: Trump University operated from 2005 to 2010, though it was later renamed the Trump Entrepreneur Initiative in response to a complaint from the New York State Department of Education.

Officials noted that the organization lacked a charter, accreditation and licensing, making the “university” in the title potentially deceptive. Trump University offered real estate training, and like other Trump endeavors, it relied heavily on the real estate magnate’s name as an advertising point. That turned out to be one of the sticking points that landed the organization in legal hot water.

At issue were three separate lawsuits.

One, Low v. Trump University, LLC, was a class action lawsuit filed in 2010 against the organization, not Donald Trump himself — unlike Cohen v. Trump, which was filed in 2013. Also in 2013, the State of New York sued Trump University for fraud, calling the organization a “swindle.”

Litigation swirling around a presidential candidate is bound to attract attention, especially in light of his comments indicating a refusal to settle, and his attacks on the U.S. District Judge Gonzalo P. Curiel on the basis of his heritage.

While the case was scheduled for after the election to avoid any interference, Mr. Trump’s attorneys attempted to push it back to after the inauguration. Curiel denied the request, though he did encourage the parties to negotiate a settlement.

Two critical points were in question: the legality of the “university” and the promises made in marketing material.

The State of New York insisted that the organization had violated the law by labeling itself a university despite lacking the qualification to do so — and after warnings to stop advertising itself as such.

The other suits revolved around Mr. Trump’s level of involvement in the organization. Plaintiffs claimed that marketing materials suggested he was closely involved in the selection of staff and took a personal interest in the activities of the organization when this wasn’t the case. Former staffers maintained that the program resembled a bait and switch designed to entice participants to spend more money at each step of their involvement.

Some 7,000 former participants will receive payouts under the settlement, in some cases amounting to a full refund of what they spent on courses. The State of New York will receive one million dollars, and appears to be pleased with the outcome of the suit.

With the suits resolved, the matter is closed in the court of law, though the court of public opinion may have other ideas.

Trump U was a hammering point for Republicans and Democrats alike during the primaries, and it remains a popular subject of discussion. Mr. Trump’s business dealings are under particularly close scrutiny right now due to concerns about potential conflicts of interest when he arrives in the White House.

This resolution of some serious legal questions may prove to indicate how he and his team intend to move forward in addressing concerns about the linkage between the White House and the Trump Organization.

The bottom line in this case is that Donald Trump was accused of fraudulent activities in business dealings dating back to the early 2000s, in a civil court — which has a lower burden of proof than a criminal court. And he opted to settle after becoming president-elect, without admitting responsibility, rather than continue with litigation that had already been protracted over the course of many years. Trump did so after urging from the judge on the case — and possibly under advice from his attorneys, as well.

Whether Trump opts to take legal advice on the potential conflicts of interest between his business and his office remains to be seen.

Photo credit: Michael Vadon

85 comments

Siyus Copetallus
Siyus Copetallus2 years ago

Thank you for sharing.

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Quanta Kiran
Quanta Kiran2 years ago

noted

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Chad Anderson
Chad Anderson2 years ago

1. It means he was guilty but could not afford a trial.
2. It means he made a profit by paying off $125 million in damages for only $25 million.
3. The US is in for a rough ride.

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NitaNoMail L.
Nita L2 years ago

Disgusting man. I am really worried about my country and the rest of the world. I just hope the electorial college votes for HRC. That's the only glimmer of hope I have right now.

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Mike Kelly
Mike Kelly2 years ago

Hey David. Guess what? There is no great wall that Mexico is going to pay for. Hillary is not going to be prosecuted. Your orange-headed daddy is not going to repeal the Affordable Care Act.

Donald Trump just said all those things to give you a tingle up your leg. Now he can get down to the business of privatizing Social Security and Medicare.

You still don't see that you were played for a sucker, Duhvid. Trump's daughter is sitting in meetings with heads of State to figure out how to game the presidency for Trump empire gain, and you want me to "underline the word DIRECTLY" on an article that exonerates the Clinton Foundation of wrongdoing? Wow what a rube!

Clinton Foundation employees did their work as volunteers, and without pay. Unlike the Trump Foundation which was used to buy presents for Donald and pay bribes to the AG of Florida to get her to drop the investigation into Trump U. and you want me to "underline the word DIRECTLY"?

I have to admit, I didn't realize the depths of stupidity evident in Trump voters. Are you a Trump U. graduate, David?

Donald Trump said he would show us his tax returns, David. Have you seen them? I saw 40 years of Clinton tax returns. Where are you daddy's tax returns?

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David F.
David F2 years ago

Mike K, bamboozled again, underline the word DIRECTLY, that's the Modus Operandi of the Clintons and how they got so rich in such a short time.

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Mike Kelly
Mike Kelly2 years ago

Hey there David F. Thanks for proving to us all once again what rubes the Trump voters are. Your nazi loving daddy, Donald Trump, paid twenty five million dollars out to quiet the students he defrauded, and you're here to defend him. Perhaps you should enroll in Trump U.

Oh by the way Duhvid, I read the article that you suggested. Maybe you should read it. Here's a quote from the article:

"Laureate received no money directly from the U.S. State Department during or after Hillary Clinton's time as secretary.
And one of the years in which IYF received the most grants came under the Bush administration, when it was awarded about $19 million in 2008."

Please accept my apology, David F. I seriously underestimated your ignorance. I can assure you that it will never happen again.

Damn, Trump voters are stupid! Thank heaven they're in the minority by over two million votes.

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Vanna Rocha
Vanna Rocha2 years ago

He is evil and disgusting, poor USA and the planet , Big war is coming now that he wants to put as secretary a GENERAL OF WAR ! NOT A PEACE MAKER BUT A WAR MAKER TO BE HIS RIGHT HAND.

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chris b.
chris B2 years ago

It means he's a cheating DICK! And he has many many many more lawsuits pending. Has any other president elect been sued by so many people/companies??? Still a DICK! Maybe in a couple of years we can add COUNTRIES to those who want to sue him. DICK!

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Rose R.
Rose R2 years ago

Now that he'll be in the Oval Office, I expect we'll see more and more of his chicanery come to light.

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