Trump Signs $25M Deal to Snuff Fraud Suits

By ADAM KLASFELD, with contributing reporting by BIANCA BRUNO in San Diego

MANHATTAN (CN) — “I never settle lawsuits,” Donald Trump has said, but the president-elect did just that on Friday, committing $25 million as part of a global deal to resolve fraud and racketeering claims against Trump University.

The deal is $5 million higher than the anticipated settlement that was widely reported this morning. It is expected to be made public.

New York Attorney General Eric Schneiderman celebrated the settlement.

“In 2013, my office sued Donald Trump for swindling thousands of innocent Americans out of millions of dollars through a scheme known at Trump University,” Schneiderman said in a statement. “Donald Trump fought us every step of the way, filing baseless charges and fruitless appeals and refusing to settle for even modest amounts of compensation for the victims of his phony university. Today, that all changes. Today’s $25 million settlement agreement is a stunning reversal by Donald Trump and a major victory for the over 6,000 victims of his fraudulent university.”

Three years have passed since the AG sued Trump and his so-called university for fraud. The deal allots $4 million to New York’s case, with the bulk of the money going to a class action that had been on its way to trial in San Diego.

Schneiderman’s 2013 lawsuit said that Trump’s bait-and-switch operation bilked students out of $40 million with sham promises about following “The Donald’s” model. “Just copy exactly what I’ve done and get rich,” the reality star promised entrepreneurs-in-waiting.

From describing his conference-room lectures as a “university” to claiming that he “handpicked” his instructors, the next president of the United States duped his students into paying upwards of $35,000 to attend “Trump Elite” seminar classes, the lawsuits said.

While Schneiderman’s case simmered on the back burner, the suit Low v. Trump came to a boil in San Diego. This class included Trump University students in New York, California and Florida. This case was unrelated to the 2010 case Cohen v. Trump, also in San Diego, which involved a much larger, nationwide class, and a more complex set of claims that includes racketeering.

Apart from a press conference after a hearing in San Diego last week, the attorneys there have refused to talk to the media. The parties met at the San Diego courthouse Friday for a hearing at 1:45 p.m. local time, initially meant to focus on Trump’s bid to postpone the Low trial.

Class counsel in both San Diego class actions had waived attorneys’ fees, working on the lawsuits pro bono.

Ahead of the official announcement Friday, a spokesman for Attorney General Schneider noted that the state was happy eager to make a deal.

“As Attorney General Schneiderman has long said, he has always been open to a settlement that fairly compensates the many victims of Trump University who have been waiting years for a resolution,” spokesman Eric Soufer said in a statement Friday.

University of Utah professor Christopher Peterson has argued that racketeering charges against Trump could be grounds for impeachment.

In an interview, Peterson said a settlement would diminish Trump’s chance for impeachment, but the president-elect is not yet in the clear.

“Legally, it does not affect whether Congress would impeach him,” the professor said on the phone Friday.

Peterson explained that impeachment proceedings are separate from judicial ones, which a settlement would leave unresolved.

“That doesn’t mean the underlying events that the plaintiffs were complaining about did not occur,” the professor added, referring to the settlement.

Beyond political self-preservation, Trump has many other reasons to want to reach a global settlement now, including economic, reputational and even geographic.

“He’s facing a jury pool in San Diego,” Peterson noted. “That’s not Trump territory.”

Defeat could have cost Trump automatically tripled damages under federal anti-racketeering law, and Peterson said that Trump’s pretrial setbacks meant that the evidence would not look good for him.”

Peterson’s 23-page scholarly study said that Congress would be “well within its legal rights to insist upon a president who is not a fraudster or a racketeer.”

Congress has the sole authority to authorize impeachment with support from at least two-thirds of the Senate. The professor said senators have broad discretion to decide whether fraud and racketeering claims, even in a civil case, meet those standards.

Trump’s attorney Alan Garten did not respond to a telephone request for comment.

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