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Tuesday, June 18, 2024 | Back issues
Courthouse News Service Courthouse News Service

Trump Served a Double|Whammy in New York

(CN) - In a rough court week for Donald Trump, one court found the property magnate personally liable for operating an investment school without a license, just as one of his former models brought a labor class action.

The Wednesday decision comes in a case New York Attorney General Eric Schneiderman brought against Trump last year for fraud, claiming Trump Entrepreneur Initiative - formerly Trump University - had cheated students out of $40 million.

Beginning in 2004, Trump operated the school with entrepreneur Michael Sexton. Students who signed up for a free seminar were encouraged to sign up for another seminar on real estate investment strategies, but this one cost $1,500, the decision by the New York County Supreme Court states.

The court found that Trump's school also encouraged students to participate in "Trump Elite Programs" that cost upwards of $20,000 and involved a year of one-on-one mentoring.

Schneiderman said Trump lied about having handpicked the school's instructors. Further, promises the students would receive extensive support were not fulfilled, and the Elite programs provided little or no additional assistance, according to the complaint.

Even a special appearance by Trump himself turned out to be a sham, the lawsuit states, noting that students had their picture taken with a life-size photograph of "The Apprentice" star.

New York previously wrote Trump University to cease operation without an education license, the decision states. This led the school to remove the word "university" from its name but continue operating as usual, the court found.

Though Justice Cynthia Kern found that the statute of limitations had elapsed on some of the attorney general's requests, she held Trump Entrepreneur Initiative liable for operating without a license.

Trump and Sexton, who served as the school's president, knew that the school's continued operation was against the law, the decision states. The court also dismissed a counterclaim by the Trump defendants for malicious prosecution.

A determination of damages will follow further proceedings on the state's remaining claims.

Just as the state court was issuing its decision, a model filed a federal class action in Manhattan against Trump Model Management, claiming she was paid just $3,880 for 21 modeling jobs over three years, despite being promised $225,000.

Alexia Palmer says she was charged so much for expenses that she took home less than 2 percent of her base salary of $75,000 yearly.

"The lure of a higher wage of $75,000, well above the legally required prevailing wage of $45,490 per year, was done merely to get models to agree to work for the defendants while the defendants would later 'offset' such outlandish wage offer [sic] by directly withholding money from the plaintiff for obscure expenses," the complaint states.

Palmer was allegedly sent to a dermatologist, asked to take walking lessons, forced to travel in expensive limousines and "constantly supplied with numerous unnecessary makeup kits," the complaint states. Trump made her foot the bill each time, she claims.

Trump Model Management then lied on Palmer's H1-B visa applications and Labor Condition Application for Nonimmigrant Workers, stating it was paying her the agreed-upon amount, the complaint states.

Palmer hopes to represent a class seeking damages and an injunction for fraud and violations of federal anti-racketeering law and federal labor law.

She is represented by Naresh Gehi with Gehi & Associates.

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