Trump's Lawyer Pushes U.S. Appeals Court to Bring Marketing Scam Civil Lawsuit to Confidential Arbitration

Donald Trump’s attorney Thomas McCarthy has requested a federal appeals court to halt a civil lawsuit accusing the president of targeting poor and working-class Americans in promoting a multi-tiered marketing scam.

The charges against the Trumps say they exploited their famous name to secretly benefit from unsuspecting lower-income investors. The case, Doe et al. v. Trump Corp. et al., alleges the Trumps made large profits by fraudulently encouraging poor or low-income people to invest in companies connected to the Trumps.

The four plaintiffs accuse Trump, his adult children Ivanka, Donald Jr. and Eric, plus affiliate family firms including the Trump Network, a vitamin marketing company and the Trump Institute, of promoting the marketing company American Communications Network (ACN) in exchange for hidden payments of millions of dollars.

The secret payments were allegedly made to the Trumps between 2005 and 2015.

The plaintiffs, including one hospice worker, said in their civil lawsuit that ACN charged them $499 for goods including video phones. They allege the Trump family tricked them into believing their investments would be profitable.

The civil lawsuit states Trump "told investors that he had 'experienced the opportunity’, ‘done a lot of research’ and that his endorsement was 'not for any money.’’’

U.S. District Judge Lorna Schofield had already refused to send the case to arbitration in April, saying the four plaintiffs in the lawsuit had no reason to believe their arbitration agreements with ACN included the Trumps.

The Trumps are pushing for arbitration instead of a public civil lawsuit as brought by the plaintiffs. Many defendants prefer arbitration to litigation for numerous reasons, such as the proceedings remaining confidential.

In a new hearing before a panel of three judges in December, New York Circuit Judge Denny Chin agreed with the prior decision not to move to arbitration by Schofield. Chin said it was unfair to the plaintiffs to dismiss their lawsuit, especially since Trumps had already obtained the dismissal of racketeering claims in the lawsuit.

“You waited eight months before asking to compel arbitration,” said Chin. “You requested and obtained substantive relief. In those circumstances, why isn’t the right to arbitration, to the extent it exists, waived?”

Trump’s attorney disagreed, claiming he believes the charges are politically motived and that President Trump had expressed his own opinion on the investment while having no control over ACN.

The plaintiffs' lawyer, Roberta Kaplan, replied that arbitration is “fundamentally a matter of consent.”

“This is a fraud case,” said Kaplan. “This is about what Donald Trump said.”