A federal appeals court has upheld an agreement requiring the president to pay $25.0 million to former students of Donald Trump’s university venture, who have accused the defunct school of fraud.
Donald Trump’s university real estate seminar enterprise had drawn several long-running lawsuits claiming fraud. After he won the presidential election, Trump agreed to a $25.0-million settlement to resolve the court battles, but he did not admit to any wrongdoing.
In its February 6, 2018 decision, the 9th Circuit U.S. Court of Appeals rejected an effort by ex-student Sherri Simpson to opt out of the deal and sue Trump. She wanted to take him to trial over the $19,000 she paid for Trump University classes and a mentorship program.
In a unanimous decision, the three-judge panel said the district judge acted appropriately when he approved the $25.0-million settlement. In fact, they said U.S. District Judge Gonzalo Curiel had more than enough reasons to approve the deal.
Now that Simpson’s challenge has been rejected, around 3,730 people will receive payments from the settlement. Each student will get at least 90% of their tuition money back.
Donald Trump University Dogged by Problems
From the beginning, the now-defunct “university” was plagued by problems and accusations of fraud. Instead of learning about Trump’s “secrets of success,” students alleged they attended three-day seminars where they were urged to invest tens of thousands of dollars more for mentorship.
Ronald Schnackenberg, a former salesman for Trump University, testified that “while Trump University claimed it wanted to help consumers make money in real estate, in fact Trump University was only interested in selling every person the most expensive seminars they possibly could.”
He added, “Based upon my personal experience and employment, I believe that Trump University was a fraudulent scheme, and that it preyed upon the elderly and uneducated to separate them from their money.”
Even the term “university” was misleading. When Trump University first opened the doors of higher learning in 2005, it claimed it offered “graduate programs, post-graduate programs, doctorate programs.”
But it couldn’t—it wasn’t technically a university. The office of the New York attorney general repeatedly warned the company it was breaking the law by calling itself a university. In New York State, universities have to have a state charter.
On top of that, Donald Trump’s university claimed that Trump “hand-picked” instructors and promised to “turn anyone into a successful real estate investor.”
Unfortunately, Trump didn’t hand-pick the instructors, nor did he attend any seminars. According to a complaint, the curriculum was developed by a third-party company that creates material for motivational speakers and timeshare rental companies.
Commenting on the appeals court’s judgement, New York Attorney General Eric Schneiderman said, “We are pleased that the final settlement we negotiated with our co-plaintiffs ensures that members of the class will receive an even higher settlement than anyone originally anticipated.”