Judge shoots down attempt by Trump family to keep lawsuit on pyramid scheme hidden from public view
Donald Trump and three of his children have been accused of promoting a multilevel marketing company in exchange for millions of dollars in secret payments
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.An attempt by former US president Donald Trump and three of his children to move a class action lawsuit from open court to arbitration was shot down by a federal court judge on Wednesday.
The lawsuit, if sent into arbitration, would have kept proceedings related to an alleged pyramid scheme and the family’s alleged links to it away from the public eye.
The lack of a “close relationship” between American Communications Network (ACN) – a multilevel marketing company – and the Trump family meant the plaintiffs had no reason to believe they agreed to arbitrate with the Trumps, wrote circuit judge Robert Sack, according to news agency Reuters.
He also said “there is no unfairness” in requiring the Trumps to litigate over alleged wrongful business practices, given the plaintiffs’ claim they were defrauded into thinking Mr Trump told the truth by endorsing ACN.
Mr Trump, his children Donald Jr, Eric and Ivanka and an affiliate of the Trump organisation have been accused of promoting ACN in exchange for millions of dollars in secret payments from 2005 to 2015.
The lawsuit, filed by four plaintiffs in 2018, has accused the Trumps of leveraging their family name to promote a marketing scam that has targeted the poor and working class.
The Trumps have been accused of fraud and false advertising by promoting ACN’s “get-rich-quick scheme” that conned victims. The plaintiffs said Mr Trump’s endorsement, including on episodes of his TV show “The Celebrity Apprentice”, conned them into thinking their investments would pay off.
The lawsuit alleges that the former president and his children claimed investing in the venture, known as ACN Opportunity, LLC “offered a reasonable probability of commercial success”.
It also says while the Trumps allegedly collected millions of dollars for the promotion of the venture, they “failed to conduct due diligence about the likelihood of economic losses and the slim probability of commercial success from such schemes.”
The Trump family claim they had no control over ACN and that the former president’s endorsement was his opinion. They have dubbed the lawsuit to be politically motivated.
“The truth or falsity of the plaintiffs’ allegations is not before us,” Judge Sack wrote in his opinion. “We neither express nor imply any views with respect to them. The only question before us is whether this case should be resolved before the district court or an arbitrator,” he added.
This is one of several lawsuits Mr Trump faces.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments