SAN DIEGO (CN) – Donald Trump must disclose how much money he made from Trump University, in the discovery phase of a RICO class action accusing him of defrauding students of millions of dollars, a federal judge ruled.
U.S. District Judge Gonzalo Curiel on Tuesday ruled that Trump’s financial transactions involving Trump University are relevant to lead plaintiff Art Cohen’s claims.
Curiel sustained Cohen’s objections to Magistrate Judge William Gallo’s discovery ruling this month that Cohen not be allowed to question Trump about the capital contributions he made directly or indirectly to Trump University.
In his October 2013 lawsuit , Cohen claims that Trump “devised and executed a scheme to make tens of millions of dollars” by misrepresenting that Trump University was an actual university taught by a faculty of professors at least partly selected by Trump himself.
Trump claimed that Trump University would teach some of his real estate investing secrets. The class was certified in October 2014.
To lure students, Trump spent up to $6 million a year on a national advertising campaign, which included YouTube, email, website and postal mail solicitations, the complaint states.
Cohen says he paid more than $36,000 for the program before realizing that Trump does not teach students his real estate investing secrets, contribute in any meaningful way to the curriculum, or handpick the instructors.
Judge Curiel found that evidence of Trump’s profits is relevant and discoverable.
Trump failed to show “that a broad federal right to financial privacy exists that bars discovery regarding any financial transactions of a defendant accused of defrauding large numbers of people,” Curiel ruled.
Cohen claims that Trump had substantial control over the university, provided the operating capital, participated in its operations and management, and made money from it.
“Thus, Trump’s payments to, and receipt of funds from, Trump University would be relevant to supporting plaintiffs’ claims,” Curiel ruled. He added that such information is not readily available to Cohen outside of discovery.
“In this case, plaintiffs seek more than just a figure of Trump’s net worth. Moreover, the court finds it is not fair to say that Trump’s net worth is equally available to plaintiff from publicly available sources. Publicly available figures of Trump’s wealth have been the subject of wild speculation and range anywhere from $4 to $9 billion. Simply stated, plaintiffs are entitled to answers made under penalty of perjury,” the judge wrote.
Curiel agreed with Cohen’s argument that evidence that Trump profited from the university is relevant to show motive and bias.
“(T)he amount of money Trump made from Trump University and the extent to which he controlled decisions about how the school was run and when distributions were made to him bear on Trump’s self-interest and represents evidence of possible bias,” the judge found.
A protective order on the discovery would adequately protect Trump’s confidential, financial information. Cohen is not entitled to information on contributions made, and benefits received, by Trump’s partners.
“Plaintiff rarely mentions these unnamed individuals in his argument and does not explain why discovery of these non-parties’ financial information is warranted,” Curiel wrote.
Attorneys for both sides did not immediately respond to requests for comment.
In October 2014, Trump lost a court battle against New York Attorney General Eric Schneiderman when a judge ruled that Trump was personally liable for running Trump University without a license.
Schneiderman accused Trump of fraud, claiming he had defrauded students of $40 million. New York Supreme Court Justice Cynthia Kern found that Trump and Michael Saxton, the school president, knew the university was being run without a license.
In April, another judge ordered Trump University to pay $798,000 in legal fees to a former student, against whom the school filed an anti-SLAPP suit .
Tarla Makaeff sued Trump University and Donald Trump in 2010 in a proposed class action alleging deceptive business practices. Trump University countersued, accusing Makaeff of defaming it in online postings and elsewhere.
Makaeff’s motion to strike was granted, leading to the attorney fee award.
That case is no longer a class action and Trump himself is no longer a defendant in it.
Trump is seeking the Republican nomination for president.
On June 30, the day Curiel ruled, Trump sued Univision for $500 million, claiming it cut ties with him illegally after he made inflammatory remarks about Mexican immigrants in his declaration for candidacy speech.
NBC Universal and Macy’s also cut ties with him, citing his remarks that Mexican immigrants are “criminals,” “rapists” and drug dealers.
Strangely, perhaps, the furor seemed to improve Trump’s standing in polls.
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