Trump Buys His Way Out of Likely Fraud Conviction

Richard Nixon believed that, "When the President does it, that means that it is not illegal". That above-the-law notion seems to prevail even for president-elects, given that, for defrauding students who attended Donald Trump's real estate courses at his so-called "university", he needed only to write a check to make it all go away. The settlement, just ten days before the case was to go before a jury, puts an end to two class action suits in California at which Trump would have been called to testify, and the racketeering (RICO) charges filed by in New York by its State Attorney Eric Schneiderman. In addition there
had been investigations by a number of state attorneys general, and the notorious instance of one potential probe being called off after Florida's attorney general, Pam Biondi, received a $25,000 contribution from Trump.

The students were bilked of some $40,000,000, not including time lost, according to Schneiderman's suit, yet Trump — or not even he but one of his companies — need reimburse only $25,000,000 to students for courses that 7,000 in the class actions say were worthless.

And, of course, the settlement does not require Trump to admit to any law-breaking.

Trump University closed its doors in 2010. The suits have been dragging on for years. "Donald Trump fought us every step of the way, filing baseless charges and fruitless appeals and refusing to settle for even modest amounts of compensation for the victims of his phony university", Schneiderman commented. "Mr. Trump used his celebrity status and personally appeared in commercials making false promises to convince people to spend tens of thousands of dollars they couldn’t afford for lessons they never got”. Trump called Schneiderman a “political hack".

While Mr. Trump is off the hook, but his nascent administration is holding open the possibility that it will prosecute Hillary Clinton for mishandling classified documents while Secretary of State. That, to be sure, was breaking the law, but in contrast no one was harmed. Nothing has ever come to light to indicate any national security breach, thanks probably to no foreign intelligence agency imaging the existence of such an oddity as a private server.

Trump has bragged that he never settles. About this case he said in May,

"I could have settled this case numerous times, but I don't want to settle cases when we're right. I don't believe in it. And when you start settling cases, you know what happens? Everybody sues you because you get known as a settler. One thing about me, I am not known as a settler,"

But he was faced with testifying in court, a media event that would have brought forth in detail how the courses relieved people of their money. "This will be a zoo if it goes to trial", Trump's lawyer said to the judge.

“I can turn anyone into a successful real estate investor, including you”, Trump said in the brochures.

"Learn from Donald Trump’s handpicked experts how you can profit from the largest real-estate liquidation in history. He’s earned more in a day than most people do in a lifetime. He’s living a life many men and women only dream about. And now he’s ready to share—with Americans like you—the Trump process for investing in today’s once-in-a-lifetime real estate market.”

In a promotional video, Trump said instructors would be "hand-picked by me". They would show how to structure get-rich-quick deals and even guide students to finding lenders to finance those deals with "other people's money". “We’re going to have professors that are absolutely terrific—terrific people, terrific brains, successful, the best,” Trump claimed on videos shown at the seminars. “We’re going to have the best of the best".

Court documents said otherwise. The president hired by Trump to run the university said in a pretrial deposition that “none of our instructors … were handpicked by Donald Trump” and that the course curriculum was written by an outside firm that develops materials for adult education courses as its business.

Trump himself has been deposed. He admitted to these misrepresentations and could not explain some of the techniques that the marketing brochures pledged to teach, such as Trump's "foreclosure system" which the course writers had seemingly invented. Trump said he had personally approved the marketing materials but did not review the curriculum — the contents of the courses that supposedly divulged his proprietary arts of the deal. He was thus not even interested in what was being taught. And the instructors were not successful real estate experts; they came from sales backgrounds. A couple of them had filed for personal bankruptcy.

Newspaper ads and invitations over Trump's signature sent by mail offered free 90-minute workshop sessions held in 700 locations across the country. Their goal was to persuade attendees to sign up for three-day workshops with a $1,495 tuition that would be "all you need" to go forth on the road to riches. Well, not quite, as it turned out, because at this second tier, the playbook for the "mentors" — who were paid commissions, not a salary — was to "set the hook" in their pupils to sell them third-level programs costing from $9,995 to $34,995.

And sell they did. Court disclosures show that 80,000 attended the 90-minute sessions and close to 9,200 continued to the $1,495 three-day course, during which the instructors urged participants to use the lunch break to call their credit card companies to expand their credit line so they'd have funds for their first real estate deal. But the New York suit alleges that the real purpose was to position the students to sign up for the up to $35,000 Trump Silver or Gold Elite packages they were about to up-sell. Some 800 took the bait.

Those who completed the course were promised a photo alongside The Donald, which turned out to be only a full-size cardboard cutout. (That a photo with him was a draw suggests what sort of people were drawn to Trump U.). The lenders whom the course mentors were to help graduates find to finance projects proved non-existent.

In San Diego, Trump's lawyers argued that because students got varying degrees of value from the courses, their degree of damage claims varied, and therefore they should be required to sue individually, but the judge decided that so little value was conveyed in the course that the students were more uniformly defrauded, and the case was therefore allowed to go forward as a class action. Trump “created, funded, implemented and benefited from a scam that cost them … thousands, even tens of thousands of dollars each”, reads the complaint.

On leaving, students filled out questionnaires. They were effectively coerced into signing "glowing evaluations" of the courses, pressured by the instructors looking over their shoulders, telling them that “Mr. Trump might not invite me back to teach again” if the reviews weren't excellent. “Beautiful statements” is what Trump calls the evaluations; “98% of the students that took the course gave it rave ratings”. As defense in the lawsuit, Trump's company set up a website, 98percentapproval.com, where 10,000 surveys are posted.

That number exceeds the 9,200 who took the three-day course (the 800 who went further are present in the 9,200), suggesting that it includes some who only attended the 90-minute promotion. More contradictorily still, refunds were offered part way into the courses. In the $1,495 group, 32% were issued refunds. It was tougher to get the university to part with the $34,995 tuitions, students reported, but 16% got refunds in that group. Additionally, the mass of plaintiffs in the class action suit claim that they, too, had sought refunds, but were told that their requests were made too late according to university rules.

So the question is, how could 98% of the 9,200 been satisfied if over 3,000 had demanded refunds?

As the suit meandered through the courts, the Trump organization sent an e-mail blast to former students who had given a positive response in the questionnaires asking for yet another endorsement, but back came a flood of negative assessments from those who had evidently found the courses worthless in the outside world in the time since.

An article in Time magazine quoted a fellow named Bob Guillo who had gone for the whole Trump Gold Elite package:

“He’s the biggest phony in the world, yet people as gullible as me think he’s the greatest guy in the world. When I watch him on TV, I’m really impressed. I think, ‘How can people believe in him?’ And I think, ‘Well, Bob, you believed in him in 2009. You gave him $35,000.’”

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