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Trump Scammed Inexperienced Investors Through Endorsement Deals, Lawsuit Claims

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In 2014, a financially struggling hospice caregiver in California decided to invest in a video phone marketing company by the name of ACN.

She knew little about business and even less about telecommunications, but a video heavily featuring Donald Trump’s endorsement of the company as “one of the best businesses” played at an ACN “training event” she attended allayed her fears.

The woman bought in, paying ACN a $499 “registration fee” to join the company, then forking over thousands more to attend “training events” all over the country over the next two years. 

Trump photos and the Trump video featured heavily in every seminar and twice-monthly meetings ― a fixture seemingly designed to ease questions of legitimacy and coax members to continue forking over cash. (For the thousands she put in, by the time the woman quit ACN, she had got back just $38.)

And according to a lawsuit filed in federal court in Manhattan on Monday, ACN, along with two other Trump-endorsed “business opportunities,” amounted to little more than predatory schemes that deliberately preyed on inexperienced, financially distressed investors. The suit, filed on behalf of four people who lost money in the get-rich-quick schemes, seeks class action status on behalf of thousands of similarly treated individuals. 

Copies of the Trump University's <i>How to Build Wealth</i>&nbsp;at a Barnes &amp; Noble store in&nbsp;2005 in New York City.


Scott Gries via Getty Images

Copies of the Trump University’s How to Build Wealth at a Barnes & Noble store in 2005 in New York City. A lawsuit has accused Donald Trump and the Trump Organization of defrauding investors.

The lawsuit claims ACN secretly paid Trump millions of dollars for his endorsement (Trump claimed in his ACN promo that his endorsement was “not for any money”) in exchange for his falsely portraying ACN and several other schemes as legitimate business opportunities.

In addition to ACN, the suit mentions the Trump Network, which peddled bogus “personalized” vitamin regimens, and the Trump Institute, which, like the similarly legally embroiled Trump University, charged attendees as much as $35,000 to attend multiday seminars on Trump’s real estate “secrets,” as examples of other similar schemes. (The Trump Institute also reportedly plagiarized some of its course materials and received an F rating from the Better Business Bureau.) 

The suit describes the Trump endorsements together as “a pattern of racketeering activity.”

Donald Trump, the Trump Organization, Donald Trump Jr., Eric Trump and Ivanka Trump are listed as co-defendants in the suit.

“The Trumps conned each of these victims into giving up hundreds or thousands of dollars ― losses that many experienced as devastating and life altering,” the suit claims. “Surely the Trumps dismissed these amounts (and the lives they wrecked) as trivial. But by defrauding so many for so long, the Trumps made millions.”

In a statement to The New York Times, which first reported the story, the Trump Organization dismissed the suit as a “completely meritless” attempt to push a political agenda:

Read the full 160-page filing, below:



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Gymboree Files For Bankruptcy For The Second Time In Almost 2 Years

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Jan 17 (Reuters) – Children’s clothing retailer Gymboree Group Inc filed for Chapter 11 bankruptcy protection, the second time in almost two years, and said on Wednesday it will close more than 800 Gymboree and Crazy 8 stores.

The San Francisco-based company said it will also sell its high-end line, Janie and Jack, as well as its intellectual property and online platform.

The company’s Canadian arm, Gymboree Inc, also intends to seek bankruptcy protection, it said.

Gymboree is the second U.S. retailer to file for bankruptcy on Wednesday. Earlier, Shopko Stores, a general merchandise store operator, filed a voluntary petition in Nebraska.

More than 20 U.S. retailers, including Gymboree, Sears Holdings Corp and Toys R US, have filed for bankruptcy since the start


SOPA Images via Getty Images

More than 20 U.S. retailers, including Gymboree, Sears Holdings Corp and Toys R US, have filed for bankruptcy since the start of 2017.

More than 20 U.S. retailers, including Sears Holdings Corp and Toys R US, filed for bankruptcy since the start of 2017, succumbing to the onslaught of fierce e-commerce competition from companies like Amazon Inc.

Gymboree, which started making children’s clothing more than 30 years ago, operates about 540 Gymboree stores and outlets in the United States and Canada. It also has about 265 stores across the United States under the ‘Crazy 8’ brand and 139 shops under ‘Janie and Jack’.

Gymboree Group listed assets in the range of $100 million to $500 million and liabilities of $50 million to $100 million, its court filing showed.

Gymboree earlier filed for bankruptcy protection in June 2017 and was one of the few brick-and-mortar retailers that managed to escape liquidation in a wave of bankruptcies that swept the sector.

The company said it signed an asset purchase deal with Special Situations Investing Group Inc (SSIG), an affiliate of Goldman Sachs & Co LLC, and SSIG will serve as the so-called “stalking-horse” bidder in the sale of Janie and Jack.

Gymboree has received a commitment for $30 million debtor-in-possession financing from Goldman Sachs Specialty Lending Holdings Inc and SSIG.

Gymboree, including all its U.S. subsidiaries, filed the petition in the U.S. Bankruptcy Court for the Eastern District of Virginia, it said. Its Canadian arm also intends to seek bankruptcy protection in the Ontario Superior Court of Justice. 

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California Utility Tied To Devastating Wildfires To File For Bankruptcy

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Pacific Gas and Electric, the power company blamed for sparking several devastating wildfires in California in recent years, announced Monday it will file for bankruptcy later this month.

The company is facing billions of dollars in claims related to November’s Camp fire, which destroyed nearly 19,000 structures and killed at least 86 people, as well as several infernos in 2017.

The Camp fire, which obliterated the town of Paradise, is the deadliest and most destructive wildfire in California’s history and was the costliest natural disaster worldwide in 2018. The cause of the blaze is still under investigation, but CNN reported last month it is believed to have started when a PG&E power line came in contact with tree branches.

An attorney representing victims of the fire said there’s “pretty overwhelming” evidence that the utility is at fault, CNBC reported in November.

In October 2017, a series of wind-driven wildfires, aptly named the Northern California “firestorm,” ripped through several counties. Investigators with the California Department of Forestry and Fire Protection later determined that a dozen of those blazes were started by PG&E equipment and power lines, and that in eight of those cases the company was in violation of state laws concerning maintenance and brush clearing.

PG&E faces at least $30 billion in liabilities from damage during the 2017 and 2018 wildfire seasons. And its stock has plummeted, down 88 percent from late 2017.

The utility plans to file for Chapter 11 bankruptcy around Jan. 29. The announcement comes one day after the resignation of company CEO 

“The people affected by the devastating Northern California wildfires are our customers, our neighbors and our friends, and we understand the profound impact the fires have had on our communities and the need for PG&E to continue enhancing our wildfire mitigation efforts,” interim CEO John Simon said in a statement Monday. “We remain committed to helping them through the recovery and rebuilding process.”

Simon said that a court-supervised bankruptcy “will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion.”

Newly inaugurated California Gov. Gavin Newsom (D), who has prioritized combating California’s wildfire crisis, said in a statement Monday that he will work with lawmakers and stakeholders in the coming months to find “a solution that ensures consumers have access to safe, affordable and reliable service, fire victims are treated fairly, and California can continue to make progress toward our climate goals.”

Reuters contributed to this report.

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Elon Musk’s SpaceX To Slash 10 Percent Of Staff

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In a major shakeup at Elon Musk’s aerospace company, SpaceX announced Friday that it will cut 10 percent of its employees.

Behind the move is a planned realignment of its workforce in order to meet its long-term business goals. However, it will mean a significant hit for its current labor pool, which numbers roughly 6,000 people.

In a statement, a SpaceX spokesperson told HuffPost the reduction in staff was needed so that the company could set itself up for future successes.

To continue delivering for our customers and to succeed in developing interplanetary spacecraft and a global space-based Internet, SpaceX must become a leaner company. Either of these developments, even when attempted separately, have bankrupted other organizations. This means we must part ways with some talented and hardworking members of our team.

We are grateful for everything they have accomplished and their commitment to SpaceX’s mission. This action is taken only due to the extraordinarily difficult challenges ahead and would not otherwise be necessary.

One of SpaceX’s major goals, as alluded to in its statement, has been to send tourists into space, potentially even landing humans on Mars with a project called Starship. In September, it was revealed that Japanese entrepreneur Yusaku Maezawa would be among the first passengers on the company’s voyage to the moon, which is expected to take off in 2023.

SpaceX has also embarked on a mission to beam internet services to Earth around the globe through a network of satellites dubbed Starlink, the first set of which will be deployed this year.

Despite the staffing cuts, the company has expressed confidence in its financial standing and its investors, and it plans to launch two missions of its Falcon Heavy rockets along with starting test hops of Starship before year’s end.

On Friday morning, SpaceX marked its first mission of 2019 with the launch of a Falcon 9 rocket from Vandenberg Air Force Base in Southern California. 

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