Topline
President Trump made over $11 million endorsing two multi-level marketing companies in the 2000s for which he and his children would later be sued for fraud, according to the New York Times, which revealed for the first time how much money the future president received for hawking the MLMs, and that those two endorsements were his most lucrative side deals during his height of fame from The Apprentice.
Donald Trump attends a 2006 California casting call for ‘The Apprentice.’
Photo by Frazer Harrison/Getty Images
Key Facts
After dropping the bombshell of Trump’s tax returns on Sunday—revealing Trump paid $750 in taxes during his first two years in the White House—the Times followed up Monday, revealing The Apprentice gave Trump a $427 million lifeline after his Atlantic City casinos failed.
The Times also exhaustively detailed Trump’s countless side deals flogging everything from laundry detergent to Domino’s pizza, but the MLM endorsements by far netted Trump the most cash.
Trump’s most lucrative deal—$8.8 million over a decade—was for promoting ACN, an MLM whose members sold telecom equipment and services, on DVDs of its products and through testimonials, with some alleging in a 2018 class action lawsuit that Trump misled them by claiming ACN was a “great opportunity” and lower in risk.
Trump nabbed another $2.6 million licensing his name to the Trump Network, another MLM that sold vitamins, before the company sold its remaining assets in 2011 with the owners declaring bankruptcy.
The Trump Network is also part of the 2018 lawsuit, which is still making its way through court after a Manhattan judge ruled in June 2019 that the four plaintiffs could pursue claims of fraud, false advertising and unfair competition.
The plaintiffs in the class action lawsuit said they suffered financial losses during their involvement with both MLMs, and the judge allowed the suit to proceed in May after the Trumps moved for the case to be suspended, but they will appeal the decision.
Surprising Fact
Trump promoted an ACN video phone in a 2011 episode of Celebrity Apprentice. According to the Times, the video phone’s technology was nearly obsolete when the episode aired.
Crucial Quote
“[Trump’s] tax returns reveal just how much [ACN] was paying him for the happy talk: $8.8 million over 10 years, including $1 million in 2009—the nadir of the Great Recession, when desperate people were drawn to promises of a fast payday,” the Times reported. “In fact, Mr. Trump actively capitalized on the economic anxiety.”
Key Background
It’s notoriously difficult to succeed as a distributor in an MLM. Generating income is dependent on selling the MLMs products but also on recruiting new sellers into the organization. MLMs are often referred to as “pyramid schemes,” although the Federal Trade Commission has no hard definition for what constitutes a pyramid scheme.. A 2018 AARP study found that nearly 75% of MLM distributors either lost money or broke even. According to the Times, French regulators found that 1% of ACN participants actually made money, while the rest earned about $35 per month, or broke even. The class action lawsuit also names Eric Trump, Ivanka Trump and Donald Trump Jr.
Tangent
Trump pocketed $300,000 to speak at a 2004 real estate seminar in Dayton, Ohio, for a company that was later accused of running a Ponzi scheme, the Times reported.
Further Reading
How Reality-TV Fame Handed Trump A $427 Million Lifeline (New York Times)
Judge allows fraud suit against Trump, family and company to proceed (CNN)
Judge Rules Trump Can Be Sued For Marketing Scheme Fraud