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Trump Says His Venture Endorsements Were ‘Puffery’ in Racketeering Suit

Trump was a “paid spokesperson and motivational speaker” for American Communications Network for nine years.

Trump Says His Venture Endorsements Were ‘Puffery’ in Racketeering Suit
U.S. President Donald Trump speaks during a meeting with Sebastian Kurz, Austria’s chancellor, not pictured, in the Oval Office of the White House in Washington, D.C., U.S. (Photographer: Chris Kleponis/Pool via Bloomberg)

(Bloomberg) -- Donald Trump’s endorsements of a troubled multilevel marketing venture before he was elected president were "puffery" that no "reasonable investor" would have relied upon, his lawyers said in seeking dismissal of a civil racketeering lawsuit.

Trump and his three eldest children were sued by four people who claim Trump’s comments on “Celebrity Apprentice” enticed entrepreneurs to invest in American Communications Network, whose flagship desktop video phone went bust after Trump said it would "literally revolutionize the way we communicate."

The plaintiffs claim they lost thousands of dollars because they believed Trump’s claim that they could invest "without any of the risks most entrepreneurs have to take."

In a filing Thursday in Manhattan federal court, the Trumps said the proposed class-action lawsuit should be dismissed because it doesn’t include "particularized evidence of a materially false or misleading statement" by each of the Trumps. The comments Trump made about ACN were "opinion statements" and were "not genuinely held," according to the filing.

"Mr. Trump cautioned that not everyone will succeed in business for herself," according to the filing. "In his opinion, the ACN business opportunity afforded participants a chance to test their aptitude for direct selling before, or without, giving up their full-time employment."

According to the complaint, Trump praised the videophone product effusively.

“Trust me it’s changing everything,” he said, according to the complaint. “The absolute truth is that this technology will be present in every home within the next several years.”

Trump defended his comments, saying they were "generic positive statements."

Trump was a "paid spokesperson and motivational speaker" for ACN for nine years, appearing publicly at ACN events across the U.S, according to the filing. "Yet until the filing of this lawsuit (one week before the midterm elections), no one sought to sue Mr. Trump for losses she sustained with ACN," the Trumps said.

The plaintiffs claim the Trumps ripped off thousands of aspiring entrepreneurs by promoting ACN and another multilevel marketing venture that sold vitamins. They also allege Trump pitched a dubious live-seminar program that purported to tell his "secrets to success" in the real estate world, even though he wasn’t involved in crafting the educational materials.

In all three alleged schemes, Trump stamped his well-known name on a product he didn’t research or understand, solicited investments from average Americans and then walked away as the products fizzled, all while keeping the cash he got for his pitches, the plaintiffs claim.

The four people who sued in October asked U.S. District Judge Lorna Schofield to allow them to remain anonymous, citing Trump’s penchant for shredding critics on Twitter. Schofield said they could proceed under pseudonyms at least until she rules on the motion to dismiss.

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider

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