Tuesday, June 07, 2016

The Art Of The Swindle: Ex-Insiders Allege How Trump University Was Nothing More Than A Racket Peddling Worthless Real Estate Seminars

A recent story in The Atlantic describes the testimony provided in sworn statements from a couple of former Trump University insiders about the operation of its real estate seminar business. The statements were included as part of the recently-released court documents involving the class action litigation accusing Trump University of being nothing more than a fraudulent racket:
  • “Based upon my personal experience and employment, I believe that Trump University was a fraudulent scheme, and that it preyed upon the elderly and uneducated to separate them from their money,” said Ronald Schnackenberg, a sales manager at Trump University in 2006 and 2007.
    ***
    The playbook frequently tells Trump University employees to lean on the instructors’ and mentors’ wisdom as a selling point. But Jason Nichols, a Trump University sales executive who worked for the company in 2007, challenged this depiction in his declaration to the court.

    “The Trump University instructors and mentors were a joke. Most of them were not experts in real estate and did not [have] experience in the real estate techniques they were teaching,” Nichols said. “They were unqualified people posing as Donald Trump’s ‘right-hand men.’ They were teaching methods that were unethical, and they had little to no experience flipping properties or doing real estate deals. It was a façade, a total lie.”
    ***
    Corinne Sommer, the former manager of Trump University’s events departments, recalled how instructors in the second-level seminars, which cost roughly $1,500 to attend, would ask customers to call their credit-card companies to triple or quadruple their credit limit and max out their credit cards for real-estate investments.

    “While Trump University’s advertisements claimed it wanted to help consumers make money in real estate, in fact, based upon my experience, I believe that Trump University was only interested in selling every person the most expensive seminars they could possibly buy on credit,” Sommer testified. “I recall that some consumers had showed up who were homeless and could not afford the seminars, yet I overheard Trump University representatives telling them, ‘it’s ok; just max out your credit card.’”
    ***
    I do not believe that Trump University taught Donald Trump’s investing ‘secrets,’” one former Trump employee testified. “Donald Trump came from a wealthy family and had resources at his disposal to purchase real estate—that is the secret—one the average consumer could not replicate.”
For the story, see The Art of the Swindle (In court filings, former employees of Trump University allege that it preyed on the insecurities of its students, selling them courses they did not need or could not afford).

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