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The New York Attorney General’s office has been conducting a number of probes into the for-profit education industry over the past few years  The most recent investigation, leading to a $40 million lawsuit, alleges that real estate mogul, Donald Trump and his for-profit “Trump University” (renamed Trump Enterprise Institute in 2011 after the State Education Department said the program lacked an educational license and didn’t meet the legal definitions of a university) engaged in illegal business practices such as persistent fraud, illegal and deceptive conduct and violating federal consumer protection law, and made false claims to students.

Attorney General, Eric Schneiderman, said as many as 5,000 students paid between $1,500 and $35,000 to attend an actual university, and to learn everything they needed to know about real estate from Trump, obtain an apprenticeship, and become wealthy in the real estate business.  Schneiderman said “TrumpUniversity, with Donald Trump’s knowledge and participation, relied on Trump’s name recognition and celebrity status to take advantage of consumers who believed in the Trump brand.”  According to the Attorney General, Trump appeared in advertisements for the school making “false promises” such as claiming Trump himself handpicked instructors to teach students his “very own real estate strategies and techniques.” But, according to the lawsuit, Trump didn’t choose any instructors and did not create the curriculum for any courses.  The lawsuit also alleges that students were urged to extend their credit card limits only to be left with thousands of dollars in debt.  One former student said, “They told everybody to get their credit card limits raised to buy real estate, but the true purpose was to pay $35,000 for the next bunch of seminars.”  Michael Cohen, a Trump attorney, denied the allegations and said the school received 11,000 evaluations, with a 98% “extremely satisfied” rating.  The $40 million is mostly to pay restitution to consumers.

In typical Trump style, the real estate mogul shot back. In a post on Twitter, Trump said “Lightweight NYS Attorney General Eric Schneiderman is trying to extort me with a civil law suit.”  Trump also blasted President Obama suggesting he and Schneiderman may have planned the lawsuit.  For someone who is as successful as Trump has been, he does and says some very stupid and outlandish things. This is typical behavior from wealthy corporate moguls who are sued; they scream “frivolous lawsuit” or lawsuit abuse.  If you have millions, or in Trumps case billions, you can deny, delay, and defend while average citizens, the victims of your abuse, continue to suffer.

This case reminds me of a Michigan carpet company, in which several years ago the owner scammed many Michigan residents out of $500 to $1,000.  After taking their deposit, he deliberately failed to deliver the carpet.  Individuals filed claims in small claims court, but the carpet “scammer” fought back.  He hired his brother-in-law, an attorney, to defend the lawsuits.

Once an attorney is retained to defend the case, it is removed from the small claims docket and placed on the general civil docket. There, it is unwise to proceed without an attorney.  The “Catch -22” is that a small claim is too expensive to pursue with an attorney. His brother-in-law was retained simply to remove the case from small claims.

What happened to being held personally responsible?  No one should have the right to scam others, not even Donald Trump.  If Trump U misrepresented consumers and got caught, its principals should be held accountable.  If Trump participated in a fraud, I commend the New York Attorney General for pursuing justice for the “little guy” who lost money due to false advertisement and deception.  Hopefully, more people will start standing up to the profit-only driven corporations who prey on the weak and dupe innocent people.  Only when wrong-doers feel pain in their pocketbooks, will things begin to change.

Mark Bello has thirty-six years experience as a trial lawyer and fourteen years as an underwriter and situational analyst in the lawsuit funding industry. He is the owner and founder of Lawsuit Financial Corporation which helps provide cash flow solutions and consulting when necessities of life litigation funding is needed by a plaintiff involved in pending, personal injury, litigation. Bello is a Justice Pac member of the American Association for Justice, Sustaining and Justice Pac member of the Michigan Association for Justice, Member of Public Justice, Public Citizen, the American Bar Association, the State Bar of Michigan and the Injury Board.

One Comment

  1. Gravatar for Tom Antion

    I wrote an article called "The Top 20 Seminar Scams" I suspect many of the techniques outlined in this article were used against the students who are claiming they were defrauded.

    BTW I'm a 22 year speaking / seminar industry veteran and Past President of the National Capital Area Professional Speakers Association and considered the number one whistleblower exposing the dirt in this industry.

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