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"\nBy Jonathan Stempel\nNEW YORK (Reuters) - A federal judge on Wednesday said U.S. President Donald Trump and his adult children must face part of a lawsuit alleging they used their family name to promote sham marketing opportunities, but dismissed racketeering claims at the centre of the case.\nU.S. District Judge Lorna Schofield in Manhattan said the plaintiffs, including investors in a Trump-endorsed business called American Communications Network, could pursue state law-based claims of fraud, false advertising and unfair competition.\nBut the judge dismissed claims under the federal racketeering law known as RICO because of a lack of evidence that the Trumps alleged misconduct was the proximate cause of, or directly related to, the investors alleged losses.\nShe said the losses could have simply reflected the inherent challenges of multi-level marketing, including the ability to sell products and recruit new marketers or a lack of customer demand.\nACN charged $499 for a chance to sell videophones and other goods.\nThe plaintiffs claimed that the Trumps received millions of dollars of secret payments from 2005 to 2015 to endorse ACN and conned them into thinking Donald Trump thought their investments would pay off, when the real goal was to enrich themselves.\nOther defendants included Trumps adult children Donald Jr., Eric and Ivanka, and an affiliate of the Trump Organization.\nWe are delighted by the courts decision, Joanna Hendon, a lawyer for the Trumps, said in an interview. The RICO claims were baseless and should never have been brought, and we look forward to dispensing with the rest of the case.\nRoberta Kaplan, a lawyer for the plaintiffs, said in an email she looked forward to continuing the case to obtain justice for the plaintiffs, and thousands of other working Americans just like them, who each lost hundreds or thousands of dollars as a result of the defendants fraudulent scheme.\nIn seeking a dismissal, the Trumps called the lawsuit politically motivated, with funding from a nonprofit linked to progressive causes, and said Donald Trumps statements about ACN were merely opinion or could not be relied on by the investors.\nHendon said in a July 19 letter that the Trump family expects to ask Schofield to move the plaintiffs claims into arbitration, even if the lawsuit were not dismissed.\nKaplan accused the Trumps in a response later that day of pursuing a strategy of heads-they-win, tails-they-seek-arbitration.\nThe case is Doe et al v Trump Corp et al, U.S. District Court, Southern District of New York, No. 18-09936.\n(Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman)\n\nThis story has not been edited by Firstpost staff and is generated by auto-feed.\n"
<https://www.firstpost.com/business/trump-must-face-marketing-scam-lawsuit-escapes-racketeering-claims-ny-judge-7052931.html>