WASHINGTON – At the same time that Donald Trump has been running for the Republican presidential nomination, he’s been having to defend himself in court against charges of racketeering.
His choice of attorneys says a lot. He claims he’s campaigning as an “anti-establishment” guy, but he’s hired Daniel M. Petrocelli, one of the most “inside” of all insiders.
Petrocelli was the mouthpiece for Enron CEO Jeffrey Skilling, who was eventually convicted of fraud and insider trading
In two related lawsuits, Trump is accused of violating the Racketeer Influenced and Corrupt Organizations Act (RICO) by conducting “an enterprise through a pattern of racketeering activity” through “acts of mail and wire fraud.”
The “enterprise” was called “Trump University.”
The suits are in the United States District Court for the Southern District of California. They are class actions on behalf of thousands of students who say they were swindled out of a total of more than $40 million. They shelled out up to $35,000 a piece based on assurances that they would learn real estate investment secrets both from Trump himself and from his “handpicked professors and adjunct professors.” Instead, the suits allege, Trump had no role in choosing instructors and didn’t give students access to any of his real estate investing secrets.
“The misleading nature of the enterprise is embodied by its very name,” one complaint states. “That is because, though Defendant promised ‘Trump University,’ he delivered neither Donald Trump nor a university.”
The criteria for bringing a civil suit against someone is very strict, but the Trump scheme appears to be so egregious that Judge Gonzalo Curiel agreed to hear the cases.
Using his typical racist logic, in a television interview Trump implied that the reason Judge Curiel agreed to allow the case to proceed is because he is Hispanic. In fact, Judge Curiel was born in East Chicago, Indiana.
Several years ago, the supreme court of New York ruled that aside from defrauding students, Trump University violated state education laws by illegally calling the program a “university” without the appropriate licensure or accreditation.
How the scam worked
Trump took out print ads across the country promising that he’d personally help students at Trump University “take advantage of the $700 billion bailout” passed by George W. Bush in 2008. He also went on television talk shows promising to give 90 minutes of “free advice” to all students. He said that he, personally, had handpicked the University’s “faculty of professors and adjunct professors” and that they were among the “smartest” people in America.
The scam began with a 90-minute session during which potential students were told that for $1,495 they could enroll in Trump University’s “fulfillment” seminar and learn Trump’s “business strategies.”
However, the seminars consisted mainly of salespersons getting students to divulge their financial information.
The instructors would then turn up the pressure for students to purchase “elite mentoring packages” which ran in price from $20,000 to $35,000.
Even though they were promised that they would meet Trump in person, the students never did. Instead, they were given the opportunity to have their picture taken with a life-sized cardboard Trump cutout.
Furthermore, the “handpicked” mentors weren’t picked by Trump at all. Often they knew little or nothing about real estate. They were, however, effective high pressure salespeople.
Even after students coughed up big bucks, ‘instructors’ would continue to pressure them to buy more add-ons.
The “instruction” itself was worthless. One student said that the main two bits of advice taught were: ride through neighborhoods and look for “for sale by owner” signs and check properties out on the Zillow website. “This is just universally known common sense,” he said, “certainly not worth paying for.”
Under the pressure of the RICO suits in California and investigations in 11 states, Trump U. scaled back its activities and adopted a new name, “Trump Enterprise Institute, LLC.”
In June, 2010, the New York State Education Department slapped a cease and desist order on Trump U. and ruled that “all current students should be refunded.”
To date, few students have gotten their money back.
Despite his nationwide ad campaign touting his direct involvement in Trump U. and despite the fact that he owned over 90 percent of the business and reaped millions from it, Trump has argued that the cases against him should be thrown out because his involvement consisted entirely of marketing the “University” and nothing more.
The judge found this argument to be as bogus as Trump’s victims say his University was. The case is now being heard and Trump has been forced to take time out of campaigning to testify.
Pundits across the country have noticed that Trump’s promise of lining up the “smartest minds in America” to “teach” at Trump University is identical to his recurring campaign promise to “line up the smartest people in America” to run the country.
In the court case, Trump claims he was so far removed from Trump U. that he did not even know the names of the instructors.
Could be.
On the campaign trail, Trump does not seem to know the names of the “smartest people in America” who he “has lined up” to help him if he is elected president. He has refused to reveal to anyone the names of these “advisors.”
Photo: Steve Helber/AP
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