NEW YORK — President Trump and three of his adult children have been ordered by a federal judge to search through 15 years of business records for materials that could inform a lawsuit alleging they profited by promoting a marketing scam targeting vulnerable investors.
Trump is being sued by four people who say they were duped into joining the multilevel marketing company ACN years ago because of his endorsement. The suit characterizes ACN as a pyramid scheme and accuses Trump of having made misleading claims as a paid pitchman before his presidency. All four say they suffered financially as a result.
The order on Friday by U.S. District Court Judge Lorna Schofield allows the plaintiffs to look further into the Trump Organization’s history – to 2005 – for others who may have been involved in the president’s deal with ACN.
The suit, filed in Manhattan federal court, dates to October 2018. Racketeering claims were dismissed but state-level fraud charges were allowed to proceed and the document-production process known as discovery is well underway. That could turn up names of people at the president’s family-run real estate company and other entities under its control whom the plaintiffs could seek to depose.
“We look forward to working with defendants,” attorney Roberta Kaplan said in a statement.
“We continue to make every effort to gather the evidence we need to obtain justice for our brave clients, and the thousands of other Americans just like them who were defrauded by the Trumps.”
A lawyer for Trump, Joanna Hendon, did not respond to a request for comment on the judge’s order.
The president faces the possibility of testifying under oath in several personal lawsuits, matters that could prove problematic for him politically if he’s forced to discuss them publicly in the run-up to November’s election. He was served with a notice in this case to be deposed at the White House on May 1 and “continuing from day-to-day thereafter until completed,” according to a court filing. Kaplan’s team has said it would accommodate the president’s demanding schedule.
His lawyers have not yet responded to the notice but are likely to seek a delay.
In this case, unlike in others, he has not asserted presidential immunity as a defense, and his legal team has already turned over a number of documents.
A defamation lawsuit brought by “Celebrity Apprentice” contestant Summer Zervos is in a holding pattern in Manhattan while the state’s highest court considers Trump’s immunity claim. Zervos said Trump sexually assaulted her in 2007, and he’s accused of trashing her publicly when she came forward during his 2016 presidential campaign.
A similar defamation case was brought by journalist E. Jean Carroll, who went public with an accusation of rape against Trump in a memoir she published last year, could also be put on hold if a judge rules that it should track with the Zervos case.
Trump has denied both women’s claims of sexual assault.
The presidential immunity question also is before the U.S. Supreme Court, which has said it will hear whether Trump can shield his financial records from Congress and the Manhattan District Attorney’s Office.
The ACN participants who are suing Trump say they invested in the company because the wealthy celebrity businessman made promises they believed. They paid $499 buy-in fees to start and faced other expenses as time went on, they say.
A California hospice caregiver who joined in 2014 took it to heart when Trump, with his children at his side on “Celebrity Apprentice,” praised ACN as a “great opportunity” that did not carry “the risk most entrepreneurs have to take,” according to the civil complaint.
“In the two years that followed, (Jane Doe) paid thousands of dollars in fees and expenses to attend ACN events and host ACN meetings in an effort to succeed with the business,” the complaint says.
ACN is not named as a defendant in the lawsuit, but the company is cited throughout court records. Its model is to recruit “independent business owners” to its army of salespeople for communications and utilities services, like high-speed Internet plans, the suit says.
A lawyer for the company did not respond to a request for comment.
Trump was paid for ACN-related speaking engagements, making $450,000 for each of three appearances in 2014 and 2015, court papers say, citing a financial disclosure. The lawsuit says he made millions of dollars overall in his years of lending his name to the ACN brand.
Lawyers for Trump, the Trump Organization, Ivanka Trump, Donald Trump Jr. and Eric Trump sought to limit the scope of document production to five years before the filing of the lawsuit in 2018.
“Discovery is supposed to be proportional to the needs of the case,” Hendon said in a conference call with the judge Thursday, before the order.
Hendon argued that document production should be relatively limited and argued that Trump is known for not using email. Business for Trump is conducted largely through talks with his personal assistant, according to the lawyer.
“There’s a small number of people that he dealt with on this issue,” Hendon added.
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