Trump And Two Sons Agree To Be Deposed In Lawsuit Alleging They Profited From Multilevel Marketing Scam

Topline

Former President Donald Trump and his two adult sons, Eric Trump and Donald Trump Jr., have agreed to sit for questioning for a class-action lawsuit alleging that they received millions of dollars in secret payments to promote a fraudulent multi-level marketing company to investors, according to a letter filed Friday with the US District Court for Southern District of New York.

Key Facts

Donald Trump Jr. is set to be deposed May 10, Eric Trump on May 12 and Donald Trump on June 16 at an as-yet undetermined location, according to the letter, which was signed by attorneys representing the Trumps and the four unnamed plaintiffs.

The attorneys wrote they expected to soon set deposition dates for the plaintiffs, who claim to have been defrauded of life-altering sums as a result of the Trumps’ promotion of the American Communications Network (ACN), a multi-level marketing group accused by the plaintiffs of offering phony business opportunities selling internet, phone and utility plans.

A deposition date has not yet been offered for Ivanka Trump, also a defendant in the lawsuit, the letter said.

The plaintiffs expect to file a letter seeking the court’s intervention on the issue of whether they may take more than 10 factual depositions, an issue that has brought the two sides to an impasse, according to the letter.

According to the letter, MGM has provided the plaintiffs with copies of relevant unaired footage from two episodes of The Celebrity Apprenticea show that allegedly featured two instances of ACN product placement made in exchange for secret payments to the Trumps.

Key Background

Though legally distinct from pyramid schemes, many multi-level marketing companies are fueled less through sales than through the recruitment of new members, 99% of whom end up losing money, according to research published by the Federal Trade Commission. This is consistent with ACN, only 1% of whose recruits made more than a trivial amount of money, according to French regulators. Officials in Montana concluded that the average Montana-based ACN recruit paid ACN around $750 in fees and received just $53 in return, the New York Times reported. Plaintiffs claim that, despite these less than promising figures, Donald Trump falsely described ACN as a low-risk investment opportunity in a promotional video for the company. Furthermore, the plaintiffs allege Donald Trump presented himself as a “partner” of ACN, motivated by a deep belief in the company’s principles, never disclosing that he was in effect a hired spokesperson, leading numerous people to make losing investments in the company. The class-action lawsuit against the Trumps, filed in 2018, alleges false advertising, fraud and unfair competition, as well as a racketeering charge dismissed in 2019. In April 2020, a Southern District of New York judge denied a request by the Trumps to have the case taken to private arbitration. A May 2020 request by the defendants to have the case stayed was also denied. Attorneys for the Trumps have disclaimed responsibility for ACN’s activities, saying that Donald Trump didn’t own ACN and was not in control of it.

Further Reading

“Trump’s Biggest Side Hustle Outside Of ‘Apprentice’? Multi-Level Marketing Schemes” (Forbes)

Leave a Comment