Trump Settles Trump University Fraud Cases for $25 Million, 10 Days After Election Victory

Donald Trump agreed on November 18, 2016 to pay $25 million to settle all three Trump University fraud lawsuits—two class actions and the New York Attorney General civil suit—just 10 days after winning the presidential election and less than two weeks before the San Diego class action was scheduled to go to trial. The settlement was reached despite Trump’s repeated insistence throughout the campaign that he would never settle and would win at trial. The $25 million settlement distributed $21 million to participants in the class actions, $3 million to New Yorkers not covered by the class actions, and up to $1 million in penalties to the state of New York. The settlement agreement specified that Trump did not admit any wrongdoing, though the settlement amount and timing eliminated the possibility that Trump would be forced to testify under oath about his fraud scheme during his presidential transition.

Background

Trump had vowed throughout the 2016 campaign that he would never settle the Trump University cases, claiming he would be vindicated at trial. The cases had generated devastating evidence against Trump, including internal sales playbooks revealing predatory tactics targeting vulnerable consumers, employee testimony describing the enterprise as a “fraudulent scheme,” and victim testimony about losing life savings and retirement funds. The San Diego class action trial was scheduled to begin on November 28, 2016, which would have required Trump to testify under oath as president-elect about his role in the fraud scheme. Facing the prospect of sworn testimony about his systematic exploitation of vulnerable consumers, Trump reversed his position and agreed to settle. The settlement provided plaintiffs with 80-90% of what they paid for Trump University programs, representing significant recovery but less than full restitution. Judge Gonzalo Curiel—whom Trump had previously attacked as biased due to his Mexican heritage—would oversee the settlement’s approval.

Significance

Trump’s $25 million settlement represented a rare instance of accountability for documented fraud, though it came only because Trump wanted to avoid testifying under oath during his transition to the presidency. The settlement vindicated New York Attorney General Eric Schneiderman’s characterization of Trump University as “straight up fraud,” with Trump effectively paying $25 million to make the case disappear before being sworn in as president. The timing revealed Trump’s recognition that the evidence against him was overwhelming and that sworn testimony would be devastating to his credibility. The settlement’s “no admission of wrongdoing” clause provided Trump with legal cover while the $25 million payment spoke volumes about the strength of the fraud case. The settlement meant that a sitting U.S. president had effectively admitted through his pocketbook—if not in words—to systematically defrauding thousands of ordinary Americans seeking economic opportunity. The case demonstrated that Trump’s business career was built partly on exploiting vulnerable consumers, a pattern that would inform understanding of his approach to presidential power.