This article is more than 1 year old

This article is more than 1 year old

Donald Trump was on Monday accused in a lawsuit of misleading vulnerable investors who lost money in a multi-level marketing company he endorsed in speeches and on his reality TV show The Celebrity Apprentice.

One plaintiff was a hospice worker in California who was persuaded to spend thousands upfront to join a telemarketing company that Trump promoted as a lucrative opportunity – and yet she allegedly only ever made $38 from her work with that company.

The suit, filed in federal court in New York on Monday, alleges that the Trump Organization operated for years as a fraudulent racketeering enterprise. The suit also names the president’s eldest children, Donald Jr, Eric and Ivanka Trump as defendants.

It alleges the president received millions of dollars in exchange for persuading unsophisticated investors to put money into a telephone company, ACN. They were lured – fraudulently, according to the lawsuit – by the idea promoted by Trump that there was little risk if they paid fees and incurred other expenses before getting a chance to sell its phone service to others, as first reported by the New York Times.

But the court documents say Trump knew these sales people had little chance of recouping their money, and falsely claimed he had done extensive due diligence on the company.

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The suit filed by four unnamed investors says Trump violated federal anti-racketeering law and is seeking class-action status and includes the president, his company and his three children by ex-wife Ivana.

The Trump Organization did not immediately respond to phone and email requests from the Associated Press seeking comment.

Alan Garten, a lawyer for the Trump Organization, told the New York Times that the allegations were completely meritless.

Other entities accused included a vitamin marketing operation called the Trump Network and a body called the Trump Institute that promised high-priced seminars in return for imparting Donald Trump’s real estate “secrets” – the latter being an echo of the now-defunct “Trump University” which was sued and prompted a $25m settlement from Trump not long after the presidential election in 2016.

The 160-page complaint accuses Trump and his family of benefiting from enterprises that lured unsophisticated people to risk money they often could not afford into what turned out to be sham get-rich-quick schemes.

Attorneys Roberta Kaplan and Andrew Celli Jr, representing the plaintiffs, issued a statement saying: “This case connects the dots at the Trump Organization and involves systematic fraud that spanned more than a decade, involved multiple Trump businesses and caused tremendous harm to thousands of hardworking Americans.”