Suit accuses Trump of misleading investors in marketing company

Former salespeople allege that he violated anti-racketeering laws

President Donald Trump was accused in a lawsuit Monday of misleading salespeople who lost money in a multi-level marketing company that he endorsed in speeches and on “The Celebrity Apprentice.”

The suit filed in Manhattan federal court alleged Trump received millions of dollars in exchange for reassuring potential salespeople for telephone company ACN there was little risk if they paid fees and incurred other expenses to start selling its phone service to others. The suit said Trump falsely reassured them he had done extensive due-diligence on the company and all was well, though he knew all along they had little chance of recouping their fees.

The suit filed by four salespeople alleged Trump violated federal anti-racketeering law and is seeking class-action status.

A lawyer for the Trump Organization, Alan Garten, told The New York Times the allegations are meritless and motivated by politics, coming just days before the midterm elections. The lawsuit is being underwritten by a nonprofit whose leader is a major Democratic Party donor.

ACN used a system of salespeople recruiting other salespeople, each paying an “initial fee” of $499 to join.

Trump gave at least three speeches at ACN events, earning $1.35 million in fees, according to figures at the Federal Election Commission.

On an episode of “The Celebrity Apprentice” in 2011, Trump said he knew ACN “very well” and, in a video ad, said he had done “a lot of research” to gain insight into how it has “stayed ahead of the pack.” In a Wall Street Journal article in 2015, however, he was quoted saying he was “not familiar” with what the company did or how it functioned.