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Trump settles Trump University lawsuits for $25m

President-elect Donald Trump, who faces dozens of lawsuits from his business dealings, has agreed to pay $25m to resolve claims brought by New York state and thousands of students alleging he ran a fraudulent real estate course.

The settlement includes a lawsuit filed by Eric Schneiderman, New York’s attorney-general, who sued Mr Trump, The Trump Entrepreneur Institute, formerly known as Trump University, and Michael Sexton, the former president of the school, in 2013 claiming they defrauded 5,000 students of $40m.

It also includes two lawsuits filed by thousands of students in San Diego alleging they were defrauded by the real estate courses which purported to be actively run by Mr Trump. One of those cases was set to go to trial on November 28 but, at a hearing last week, Judge Gonzalo Curiel urged both sides to settle. Mr Trump’s attorneys had sought to postpone the case saying he was busy with the transition.

“I am pleased that under the terms of this settlement, every victim will receive restitution and that Donald Trump will pay up to $1 million in penalties to the State of New York for violating state education laws,” Mr Schneiderman said. He added: “Donald Trump fought us every step of the way, filing baseless charges and fruitless appeal​s​ and refusing to settle for even modest amounts of compensation for the victims of his phony university.”

Mr Trump’s attorneys could not immediately be reached for comment. In February, Mr Trump tweeted: “Trump University has a 98% approval rating. I could have settled but won’t out of principle!”

The lawsuits alleged Trump University marketed $1,495 three-day seminars where they would learn “everything [they] need[ed] to know” from instructors “hand picked” by Mr Trump. The brochures also suggested Mr Trump would personally be involved in the programme. In reality, the lawsuits alleged, some students had their pictures taken with a life-size photo of Mr Trump.

The settlement will resolve one distraction for Mr Trump as he moves ahead with the transition to the White House. Mr Trump has been filling his cabinet in the week since he was elected, announcing his nominations for attorney-general, director of national security and CIA director on Friday.

Mr Trump and his organisation still face several dozen lawsuits that are in various phases of litigation. Some will not require much of his personal attention, lawyers say, and will probably be handled by corporate lawyers. As president he has no immunity from lawsuits involving personal matters.

Mr Schneiderman is also investigating whether Mr Trump’s foundation ran afoul of state laws. That investigation is continuing. Mr Trump had previously said it was politically motivated since Mr Schneiderman, a Democrat, publicly supported Hillary Clinton. The Internal Revenue Service is also auditing Mr Trump’s tax returns, he has said.

The Trump University lawsuit was one of the most personal cases facing the president-elect. Mr Trump had been expected to testify at the trial and had already sat for hours of deposition.

Via FT