Blake Neff, DCNF
President-elect Donald Trump has reportedly decided to pay out $25 million to settle a class-action lawsuit concerning Trump University.
According to sources first cited by the New York Daily News, Trump was planning to pay out approximately $20 million to settle outstanding claims related to the program. The amount was later bumped up to $25 million in a follow-up confirmation made by Reuters.
Despite its name, Trump University was never an accredited school during its five years of operation. Instead, it was a series of real estate seminars where individuals could pay thousands of dollars to supposedly access the secrets of real estate success.
In 2013, a class-action lawsuit was filed against Trump, claiming the operation was a scam that relied on deceptive advertising practices to lure in vulnerable individuals for expensive but largely useless seminars taught by non-experts.
An employee guide submitted as evidence in the lawsuit show that Trump University staff were encouraged to use high-pressure sales tactics on potential customers.
“Money is never a reason for not enrolling in Trump University; if they really believe in you and your product, they will find the money,” the playbook said. “You are not doing any favor [sic] by letting someone use lack of money as an excuse.” At another point, the guide discusses how to get a sale from a person worried about going in debt to pay for a seminar.
The case became a political issue in the 2016 election, with Democratic nominee Hillary Clinton using it to hammer Trump as a dishonest fraudster. Trump, meanwhile, took self-inflicted damage when he argued that Judge Gonzalo Curiel was biased against him in the case due to his Mexican heritage. (RELATED: Trump University Case Judge Is Member Of La Raza)
Settling the case removes a major distraction from Trump’s ongoing transition to the presidency, and also spares the new president a potentially embarrassing courtroom defeat.
According to Reuters, $4 million of the $25 million settlement will go to the New York attorney general’s office, while the law firms representing former Trump University students will recover costs but not take a portion of the judgment. The settlement amount is just over half of the $40 million that was being sought in the original suit.
The settlement is a major reversal for Trump, who repeatedly vowed to fight the case to the end. In March, he dismissed the whole affair as a “phony lawsuit” that would be an “easy win” for him.
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