Trump to pay $35m in university fraud case

NEW YORK • Mr Donald Trump has reversed course and agreed to pay US$25 million (S$35 million) to settle a series of lawsuits stemming from his defunct for-profit education venture, Trump University, finally putting to rest fraud allegations by former students, which have dogged him for years.

The settlement was announced by the New York Attorney-General on Friday, just 10 days before one of the cases, a federal class-action lawsuit in San Diego, was set to be heard by a jury.

The deal averts a potentially embarrassing and highly unusual predicament: A president-elect on trial, and possibly taking the stand in his own defence, while scrambling to build his incoming administration.

It was a remarkable concession from a real estate mogul who derides legal settlements and has mocked fellow businessmen who agree to them.

But the claims in the case were highly unpleasant for Mr Trump: Students paid up to US$35,000 in tuition for a programmes that, according to the testimony of former Trump University employees, used high-pressure sales tactics and employed unqualified instructors.

The lawsuits had dogged Mr Trump, who denied any wrongdoing, throughout his campaign.

They led to one of the more controversial moments of his run when he claimed the judge overseeing two of the cases was biased because he was of Mexican ancestry.

The deal wraps together the outstanding Trump University litigation, including two federal class-action cases in San Diego, and a separate lawsuit by New York A-G Eric Schneiderman. The complaints allege that students were cheated out of thousands of dollars in tuition through deceptive claims about what they would learn and high- pressure sales tactics.

"I am pleased that under the terms of this settlement, every victim will receive restitution and that Donald Trump will pay up to US$1 million in penalties to the state of New York for violating state education laws," Mr Schneiderman said.

Mr Trump yesterday defended his decision to settle the lawsuits, saying he does not have time to fight the fraud cases in court now that he is headed to the White House.

"I settled the Trump University lawsuit for a small fraction of the potential award because as President I have to focus on our country," Mr Trump wrote on Twitter.

"The ONLY bad thing about winning the Presidency is that I did not have the time to go through a long but winning trial on Trump U. Too bad!"

Trump University operated from 2004 to 2010. About 7,000 students will share in the settlement, according to their lawyers. The customers will be eligible to recoup at least half of what they spent at Trump University, and some could receive a full refund, the lawyers said.

NYTIMES, REUTERS

A version of this article appeared in the print edition of The Sunday Times on November 20, 2016, with the headline 'Trump to pay $35m in fraud case'. Print Edition | Subscribe