Part I of Trump University $25 Million Settlement - The RICO Complaint
Case No. 1 -- The RICO Claims -- Art J. Cohen, individually and on behalf of all others similarly situated v. Donald J. Trump
Art J. Cohen, a businessman and resident of the state of California, learned about Trump University in 2009 when he saw an advertisement in a newspaper. Mr. Cohen stated that he enticed by Donald J. Trump's name and reputation as a real estate expert. Based on representations that he would receive Mr. Trump's real estate secrets at his University, Mr. Cohen purchased the $1,495 "Fast Track to Foreclosure Real Estate Retreat," which he attended from May 8-10, 2009. At that event, Mr. Cohen was upsold to the "Gold Elite" program, which he purchased for $34,995.
Mr. Trump had allegedly portrayed Trump University as a university with an admissions process and "Ivy League quality," but Trump University was in fact unaccredited and unlicensed to operate as an institution of higher learning. Trump University provided no degrees, no credits, and no licenses. Mr. Cohen contended that he would not have paid for any of the Trump University programs had he known that he would not actually have access to Donald Trump's real estate investing secrets, that Mr. Trump had no meaningful role in selecting the instructors for the live events, and/or that Trump University was not an actual "university," as Mr. Trump had represented to him.
On Oct. 18, 2013, Mr. Cohen, individually and on behalf of all others similarly situated, filed a complaint against Mr. Trump in the United States District Court for the Southern District of California, alleging violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.S. § 1962(c). Mr. Cohen proposed a class of all persons who purchased live events from Trump University beginning on Jan. 1, 2007. Judge Gonzalo P. Curiel was assigned to the case. In November 2015, a motion to consolidate the case with another was denied.
A Nov. 18, 2016, minute order noted that the parties had entered into a settlement agreement and that the cases was dismissed. That day, a Law360 article by Brandon Lowrey and Steven Trader noted that the by-then President-elect Trump agreed to pay $25 million just days before the case would have proceeded to trial. The proposed deal included $21 million for approximately 7,000 former students, with some receiving up to $35,000, and $4 million to settle a separate case brought by New York Attorney General Eric Schneiderman. The New York portion of the settlement included $1 million in penalties to the state for violating state education laws. The article also indicated that the class had been decertified with respect to damages, so the scheduled trial would have only resolved matters for three of the students and then might have instigated a series of individual damages trials.
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