Case 1:18-cv-09936-LGS Document 19 Filed 10/30/18 Page 1 of 164 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK JANE DOE, LUKE LOE, RICHARD ROE, and MARY MOE, individually and on behalf of all others similarly situated, Plaintiffs, v. No. _______________________ THE TRUMP CORPORATION, DONALD J. TRUMP, in his personal capacity, DONALD TRUMP JR., ERIC TRUMP, and JURY TRIAL DEMANDED IVANKA TRUMP, Defendants. CLASS ACTION COMPLAINT Case 1:18-cv-09936-LGS Document 19 Filed 10/30/18 Page 2 of 164 TABLE OF CONTENTS INTRODUCTION .......................................................................................................................... 1 PARTIES ...................................................................................................................................... 11 A. Plaintiffs ................................................................................................................ 11 B. Defendants ............................................................................................................ 11 JURISDICTION AND VENUE ................................................................................................... 12 FACTS .......................................................................................................................................... 13 I. THE TRUMP ENTERPRISE ........................................................................................... 13 A. The Trump Association-in-Fact ............................................................................ 13 B. The Trump Corp. Enterprise ................................................................................. 15 II. BETWEEN THE EARLY AND MID-2000S, TRUMP REINVENTED HIS BRAND, AND THE TRUMP ENTERPRISE BEGAN TO CONCOCT ITS FRAUDULENT SCHEME. ......................................................................................................................... 16 III. THE TRUMP ENTERPRISE AGREES TO ENDORSE AND PROMOTE ACN THROUGH A PERVASIVE AND WIDELY DISSEMINATED MESSAGE. .............. 25 A. The ACN “Business Opportunity” Needed High-Profile Endorsement To Recruit and Maintain Investors. ............................................................................ 25 B. Trump Disseminated the Message Through ACN Videos ................................... 29 C. Trump Disseminated the Message Through Print and Online Media................... 30 D. Trump Disseminated the Message at ACN Events ............................................... 32 E. Trump Disseminated the Message Through National Primetime Television ....... 35 IV. THE TRUMP ENTERPRISE KNOWINGLY CONVEYED A CONSISTENT FRAUDULENT MESSAGE ABOUT ACN. ................................................................... 37 A. The Trump Enterprise Falsely Represented that the ACN Business Opportunity Offered Consumers a Reasonable Probability of Commercial Success. ................................................................................................................. 37 1. Trump Misrepresented ACN’s Risk-Profile. ............................................ 38 2. Trump Falsely Claimed That ACN’s Business Model (and Direct- Selling in General) Provided a Viable Source of Income for Prospective Investors. ............................................................................... 41 3. Trump Misrepresented the Commercial Viability of ACN’s Products, Especially the ACN Video Phone. ............................................................ 43 Case 1:18-cv-09936-LGS Document 19 Filed 10/30/18 Page 3 of 164 B. Trump Falsely Represented that He Genuinely Supported ACN and Failed To Disclose That He Was Being Paid Lavishly for His Endorsement. ...................... 49 C. Trump Falsely Represented that His Endorsement Was Predicated on Appropriate Due Diligence and Personal Experience with ACN’s Business. ...... 56 V. THE TRUMP ENTERPRISE’S FRAUDULENT PROMOTION AND ENDORSEMENT OF ACN WAS THE KEY FACTOR IN PLAINTIFFS’ INVESTMENT DECISIONS. .......................................................................................... 58 A. Jane Doe ................................................................................................................ 61 B. Luke Loe ............................................................................................................... 68 C. Richard Roe .......................................................................................................... 71 D. Mary Moe.............................................................................................................. 75 VI. THE TRUMP ENTERPRISE AND ACN’S CO-FOUNDER WAS INVOLVED IN SIDE DEALS THAT FACILITATED MONEY FLOW BETWEEN THEM. ................ 79 A. ACN’s Co-Founder Bought Property Around The Trump Organization’s Major Golf Course Development in North Carolina. ........................................... 79 B. ACN Has Paid the Trump Enterprise To Hold Charitable Golf Tournaments at Trump Golf Clubs. ................................................................................................ 81 C. Trump Joined the Advisory Board of the SUCCESS Foundation, an Affiliate of SUCCESS from Home Magazine, which Purported To Provide “Third-Party Validation” of the ACN Business Opportunity. ................................................... 85 VII. THE TRUMP ENTERPRISE’S ONGOING PROMOTION AND ENDORSEMENT OF ACN ............................................................................................................................ 88 VIII. THE TRUMP ENTERPRISE’S FRAUDULENT PROMOTION AND ENDORSEMENT OF THE TRUMP NETWORK .......................................................... 91 A. Ideal Health Background & DSNC Licensing Deal ............................................. 92 B. Background on The Trump Network .................................................................... 93 C. Trump Promoted and Endorsed the Trump Network with a Widely Distributed and Pervasive Message. ..................................................................... 94 D. Trump Falsely Represented That Consumers Had a Reasonable Probability of Commercial Success in The Trump Network. ...................................................... 98 E. Trump Falsely Represented that He Was Endorsing The Trump Network Because It Was His Company and Because He Genuinely Believed It Would Be a Success. ....................................................................................................... 106 -ii- Case 1:18-cv-09936-LGS Document 19 Filed 10/30/18 Page 4 of 164 IX. THE TRUMP ENTERPRISE’S FRAUDULENT PROMOTION AND ENDORSEMENT OF THE TRUMP INSTITUTE ........................................................ 110 A. Trump Falsely Represented That Consumers Had Reasonable Probability of Commercial Success in The Trump Institute. ..................................................... 112 B. Trump Falsely Represented that He Supported the Trump Institute Because He Believed It Offered a Reasonable Probability of Commercial Success (Rather than Because the Trump Enterprise Was Being Paid). .......................... 122 C. Trump Falsely Represented that His Endorsement Was Predicated on Appropriate Due Diligence and/or Inside Information. ...................................... 130 X. CLASS ALLEGATIONS ............................................................................................... 131 CAUSES OF ACTION ............................................................................................................... 137 COUNT ONE.............................................................................................................................. 137 COUNT TWO:............................................................................................................................ 144 COUNT THREE: ........................................................................................................................ 144 COUNT FOUR ........................................................................................................................... 147 COUNT FIVE: ............................................................................................................................ 150 COUNT SIX ............................................................................................................................... 151 COUNT SEVEN ......................................................................................................................... 153 COUNT EIGHT .......................................................................................................................... 156 PRAYER FOR RELIEF ............................................................................................................. 159 JURY DEMAND ........................................................................................................................ 159 -iii- Case 1:18-cv-09936-LGS Document 19 Filed 10/30/18 Page 5 of 164 Plaintiffs Jane Doe, Luke Loe, Richard Roe, and Mary Moe, on behalf of themselves and others similarly situated, allege, upon personal knowledge as to themselves and information and belief as to other matters, as follows: INTRODUCTION 1. This case is about four working-class Americans, and thousands more just like them, who were deliberately defrauded by Donald J. Trump, his family, and the corporation that bears their name. The Trumps conned each of these victims into giving up hundreds or thousands of dollars—losses that many experienced as devastating and life-altering. Surely