The Trump family suffered a setback in their attempt to get out from under a lawsuit over another of their suspect dealings.
Yet again, Trump finds himself in court defending himself, his company, and his family over his long history of disreputable business practices.
This time, it's over a multilevel marketing (MLM) scheme that the Trump Organization was a part of beginning around 2005. Trump, the Trump Organization, Donald Trump, Jr., Eric Trump, and Ivanka Trump are all named as defendants. There has been a class-action lawsuit pending since last year, and on Wednesday a federal judge in New York ruled that most of the claims can go forward.
The Trumps had partnered with a company called ACN that theoretically sold internet plans and a comically out-of-date videophone, but it was really just a garden-variety pyramid scheme. The lawsuit describes a complicated scheme of "downlines" and "uplines" and "training events," and Trump was happy to hype it.
According to the complaint, Trump, his children, and the Trump organization got paid millions for that hype, but allegedly neither ACN nor the Trump defendants told the public that part. People who got duped into investing in the MLM scheme did so, they say, because they believed in Trump when he told them it was a spectacular opportunity. Instead, they lost a spectacular amount of money.
The Trumps didn't lose out, however. In fact, ACN hosted several charitable events at Trump golf courses, where they often paid so much to Trump properties that it wiped out most of the money raised for the charity.
This lawsuit is still in its early stages. However, Wednesday's ruling was a big leap forward. All but one of the claims survived the Trump attempt to get the lawsuit thrown out. The class — which the complaint says comprises thousands of people — gets to move forward on its claims of fraud, unfair competition, and deceptive trade practices.
One claim, racketeering, was dismissed. The judge ruled that the plaintiffs couldn't show that Trump, his company, or his children were directly responsible for their losses. That's because there could be a number of intervening factors, such as the "inherent challenges" of MLM schemes or the market for ACN's products, that contributed to the losses.
True to form, the Trump team is trying to spin this as a win, with their attorney saying they were "delighted" with the decision and "look forward to disposing with the rest of the case."
It's mind-boggling to realize the president of the United States is claiming victory when most of a lawsuit against him and his family over seamy pyramid schemes is still moving forward. But we've never had a president like this before.
Published with permission of The American Independent Foundation.