Trump earned $450,000 each for three speeches he gave for ACN, according to his government disclosure form, but in marketing videos he told potential investors that the opportunity came “without any of the risks most entrepreneurs have to take” and that his endorsement was “not for any money.”
The plaintiffs allege that the investments were a sham and that Trump and his family promoted them — including twice on his TV show “Celebrity Apprentice” — despite knowing they were fraudulent.
In a 164-page complaint filed with the Southern District of New York, the plaintiffs ask for damages including financial relief and a ruling barring the Trumps and their company from promoting such offers in the future.
The White House referred questions to the Trump Organization, which issued a statement calling the suit “clearly just another effort by opponents of the President to use the court system to advance a political agenda.”
“Not only are the allegations completely meritless, but they all relate to events which took place nearly a decade ago and are well past the statute of limitations,” the company said.
North Carolina-based ACN, which is not named as a plaintiff in the suit, issued a statement saying that Trump was a “paid keynote speaker” beginning in 2006.
It said it has been praised for its ethical standards and touted its A-plus rating from the Better Business Bureau.
Despite having collected at least $1.35 million from the company and promoting its products over two years, Trump told the Wall Street Journal in 2015 that he didn’t know how the company operated.
“I do not know the company. I know nothing about the company other than the people who run the company,” he told the paper. “I’m not familiar with what they do or how they go about doing that, and I make that clear in my speeches.”
Trump resigned from his business when he entered the White House but still owns it and can benefit from it financially. Two other defendants, his sons Donald Trump Jr. and Eric Trump, now run the company. His daughter Ivanka, also a defendant, is a former company executive who is now a senior White House adviser.
Trump’s relationship with ACN came at a time when he was rehabilitating his image after failed casino ventures in Atlantic City. Through the “Apprentice” franchises and licensing deals with makers of products from neck ties to chocolate bars, Trump brought in new revenue without putting his own wealth at risk, the way he had in previous real estate ventures.
Plaintiffs allege that the company did not intend for the investors to make money. They say the Trumps not only promoted a faulty opportunity and lied about why they supported it but that they knew it was fraudulent at the time, part of “a pattern of racketeering activity” and consumer fraud on the part of the president’s company.
In promotional spots, Trump called ACN’s video phone a “great product.”
“The absolute truth is that this technology will be present in every home within the next several years,” Trump said in a company promotional video.
In fact, the video phone, announced by ACN in 2008, was quickly obsolete. Users could make calls only to other owners of the product. At the time, Skype, software that is free to most users with an Internet connection, had more than 300 million registered users.
The plaintiffs — whose names weren’t included in the court filings for fear of retribution — are described as people of modest means who stretched their savings to invest with ACN at Trump’s behest. One is a food delivery driver in Columbia, Md., who watched an ACN appearance on “Celebrity Apprentice” online and saved up for the $499 registration fee over several months.
He then paid a number of additional fees before realizing “he was not making any money from ACN and that Trump’s message was false,” according to the complaint.
“These are very poor people, so we’re talking, for them, about amounts that were huge,” said Roberta A. Kaplan, one of the plaintiffs’ attorneys.
The suit adds to a growing number of active legal disputes and investigations targeting Trump.
Two federal lawsuits allege that Trump violated the Constitution’s emoluments clause, which bars presidents from taking payments from foreign states without Congress’s consent.
One woman has sued the president for defamation in connection with her allegation that he groped and kissed her without her consent. Adult-film actress Stormy Daniels has brought two legal actions against the president, one of which has been dismissed.
Special counsel Robert S. Mueller III has subpoenaed Trump Organization documents as part of his investigation into Russian interference in the 2016 presidential campaign. And last week, in another case, a federal judge appeared skeptical of the Trump Foundation’s spending, which plaintiffs allege was not for charitable purposes.
In its statement, the Trump Organization said it was “telling that the plaintiffs and, more importantly their political activist attorneys, each of whom have long-standing and deep ties to the Democratic party, waited until just over a week before the midterm elections to file this suit even though they have been obviously planning and working on this for months.”
Kaplan is known for her role arguing before the Supreme Court in favor of same-sex marriage. She helped found a legal-defense fund for those experiencing sexual misconduct.
“The motivation for this lawsuit is getting justice for our clients,” Kaplan said.
Although it is not a defendant in this case, ACN has come under fire before for allegedly duping people into faulty investments. Regulators in Montana issued a cease-and-desist order against ACN in 2010, in which the state said that 312 Montanans paid a collective $235,000 in fees to the firm and earned less than $17,000 in return. A class-action lawsuit in North Carolina, filed on behalf of plaintiffs in 18 states, alleged in 2014 that ACN had participated in a faulty utility scam.
It is also not the first time Trump has been targeted by a class-action suit. In 2016, he agreed to a $25 million settlement to end fraud cases against his Trump University real estate seminars brought by more than 6,000 former students. Trump admitted no fault regarding the claims.
Alice Crites contributed to this report.