Trump University Fraud Cases Settled for $25 Million

SAN DIEGO, Nov 19—President-elect Donald Trump has reached a $25 million settlement to resolve litigation in New York and California involving allegations of fraud at the now-defunct Trump University, an agreement that resolves a major litigation headache before he enters the White House.

Attorneys for the parties announced the settlement, which is still subject to court approval, during a Friday court hearing.

Mr. Trump has been battling cases brought in California by consumers who alleged the New York businessman’s for-profit real-estate school falsely promised that its seminars would teach them Mr. Trump’s strategies for success. New York Attorney General Eric T. Schneiderman also brought similar claims in separate litigation and will be allocated $4 million of the settlement proceeds.

Mr. Trump has denied the allegations, saying students got their money’s worth from the seminars and that many students gave positive reviews.

Mr. Trump, who announced senior administration appointments on Friday, addressed the settlement on Twitter Saturday morning, saying he agreed to settle because of his election as president.

“I settled the Trump University lawsuit for a small fraction of the potential award because as President I have to focus on our country,” he said in one tweet. “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!,” he wrote in another.

The settlement could benefit thousands of consumers who enrolled in Trump University courses, which cost between roughly $1,500 and $35,000.

Mr. Trump won’t admit any wrongdoing as part of the agreement. A spokeswoman for the Trump Organization said: “While we have no doubt that Trump University would have prevailed at trial based on the merits of this case, resolution of these matters allows President-elect Trump to devote his full attention to the important issues facing our great nation.”

Daniel Petrocelli, an attorney for Mr. Trump, said outside the courthouse that while Mr. Trump “can fight, as we all know,” he put aside his personal beliefs to forge the agreement and avoid trial.

Mr. Schneiderman in a statement said the settlement “is a stunning reversal by Donald Trump and a major victory for the over 6,000 victims of his fraudulent university.”

Plaintiffs’ lawyers will forego taking a percentage of the settlement for attorney fees, an attorney for the students said in court, though $1 million of the funds has been allocated for expenses.

“Plaintiffs are very pleased to be able to pay off their credit cards and move on with their lives,” Rachel Jensen, an attorney for the ex-students, said in court.

The settlement comes as Mr. Trump’s team had been seeking to postpone trial proceedings in one of the California cases, which was scheduled to get under way Nov. 28.

During the Friday hearing, U.S. District Judge Gonzalo Curiel in San Diego said he would review the deal to see if it is “fair, adequate and reasonable.”

He added that “with respect to this country,” he hopes the settlement is the “beginning of a healing process that this country sorely needs.” At a hearing last week, the judge urged the parties to settle the case.

Trial proceedings already had been postponed during the presidential campaign so the case wouldn’t interfere with the election. After he won the White House, Mr. Trump sought another delay, saying he needed to be preparing for his new administration, not the litigation. He also sought permission to testify remotely in the case instead of having to appear in person in front of jurors and Judge Curiel.

While the GOP presidential nominee, Mr. Trump criticized Judge Curiel for not dismissing the case before trial, alleging the judge was biased, given his “Mexican heritage” and Mr. Trump’s tough stance on illegal immigrants from Mexico. Those comments were widely criticized. Judge Curiel, whose parents are from Mexico, was born in Indiana.

The case is one of several that threatened to intrude on Mr. Trump’s early tenure as president.
Other cases include litigation between Mr. Trump and two prominent chefs who withdrew from plans to open restaurants in a new Trump hotel in Washington, D.C., citing incendiary remarks by the New York businessman on the campaign trail.

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