Federal Appeals Court Says Multimillion Dollar Fraud Suit Against The Trumps Will Proceed

An enormous class action lawsuit filed against former President Donald Trump and his three oldest children — Don Jr., Eric, and Ivanka — will move forward despite pleas from the Trumps that the case be allowed to go to arbitration.

According to Courthouse News, the Second Circuit Court of Appeals ruled Wednesday that the lawsuit, accuses the Trumps of running a pyramid scheme to hawk the services of American Communications Network, which allegedly ran a multilevel marketing scheme that bilked investors and never produced the financial returns it promised:

“Trump and three of his children — Donald Trump Jr., Eric Trump and Ivanka Trump — appeared from 2005 to 2015 in promotional television ads, at events and in magazines touting American Communications Network, a telecommunications company that offers business seminars and encourages enrollees to bring in new recruits.

“In a 2018 federal class action, four investors who said they lost hundreds or thousands of dollars investing with ACN sought damages from the then-first family and their corporate entity, the Trump Organization, saying they concealed that ACN paid them handsomely for their endorsements.”

Here’s how the scheme worked: ACN made investors pay $499 up front so they could register with the promise that they could then earn commissions by selling products at “motivational rallies.” At those rallies, family and friends were shown a DVD to encourage them to pony up money for their share of a massive payday promised in ACN’s promotional materials, many of which featured the Trumps encouraging people to pay money so the could reap the rewards, which never materialized.

In the lawsuit, investors reported they made back “less than 10%” of their initial investment.

Much like another illegal scheme, Trump University, the only people who made money in the ACN/Trump deal were the principals: ACN and the Trump family.

A class action judgement against the Trumps could put a massive dent in their bottom line at a time when the Trump Organization is reportedly hemorrhaging money and the former president is unable to lure investors to his struggling real estate business.

The Trump Organization is also under criminal indictment for engaging in tax fraud over the course of decades. Those indictments were handed down earlier this month.