A federal judge has given preliminary approval to a deal in which President-elect Donald Trump will pay $25 million to settle fraud claims against his defunct Trump University real estate seminars days before he takes office.
Judge Gonzalo Curiel, whom Trump had accused of being biased during the campaign because of his Mexican heritage, on Tuesday declared the settlement agreement “fair,” “reasonable,” and “adequate,” paving the way for Trump to place money in escrow by Jan. 18, two days before he takes office. Former Trump University customers will then be able to seek access to the money, with some receiving refunds of up to 50 percent.
Curiel's sign-off follows the announcement of the settlement last month and comes as Trump appears to be wrapping up some vexing issues regarding his real estate and licensing company before taking office as president. He also last month dropped a lawsuit against Palm Beach County over airplane noise at his Mar-a-Lago Estate and on Wednesday settled labor agreements with worker's unions at two of his hotels.
Trump has not yet explained, however, how he will avoid conflicts of interest as president stemming from his business dealings all over the world.
The Trump University settlement ends two class action lawsuits that had been filed against the Trump seminars in California, as well as a lawsuit in New York filed by state Attorney General Eric Schneiderman. Former customers had alleged that the programs engaged in deceptive advertising, including by falsely promising that Trump had personally selected course instructors who would teach his personal tricks for succeeding in real estate.
Although Trump insisted most customers were satisfied with the program, which were held in hotel ballrooms around the country, other disgruntled students complained they had lost thousands of dollars. They said customers were pressured to sign up for more and more expensive courses, including a mentorship program that cost more than $35,000. The fraud claims had been a major campaign issue as Trump's Republican primary opponents and Democrat Hillary Clinton argued his businesses had conned people through the program.
Under terms of the settlement, Trump did not admit fault. With the judge's preliminary approval, notices will be posted seeking former Trump University customers who might qualify for refunds and asking if any object to the settlement. Of the $25 million, $4 million will be administered through Schneiderman's office. Curiel said he would hold a hearing in March to offer a final approval to the settlement. Trump has promised to restart Trump University in the future.
“Throughout the nearly seven years we've spent prosecuting this action, our overarching goal has always been to help class members put Trump University behind them,” said Amber Eck, co-lead counsel for the former students who sued. “We're obviously very pleased with Judge Curiel's ruling, which sets the stage for us to do just that, and we look forward to finalizing the settlement details over the coming months.”
A Trump Organization lawyer did not immediately respond to a request for comment.