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Consumer Confidential: Sadly, no one will get to testify on alleged fraud committed by Trump University

David Lazarus, Los Angeles Times on

Published in Business News

Donald Trump, president of the United States, has been given the go-ahead by a federal court to pay $25 million to settle charges that he committed acts of fraud on thousands of Trump University students.

The decision by the 9th Circuit U.S. Court of Appeals in San Francisco puts the kibosh on an attempt by one plaintiff in the case, Florida bankruptcy lawyer Sherri Simpson, to drag Trump into court over the $19,000 she paid for classes and a mentorship program.

Instead, Trump will get off the hook by paying roughly the same estimated amount he wants taxpayers to spend on a parade of tanks and missiles down Pennsylvania Avenue -- which I'm not making up.

Trump wrote the $25-million check after the election. It's been held in escrow pending a final court ruling.

The payment puts an end to lawsuits filed in California and New York -- subsequently rolled into a single class action -- alleging that Trump University, which wasn't really a licensed school but a series of seminars, duped customers with promises of "secrets" from Trump that would allow them to make a killing in the real estate market.

A "one-year apprenticeship" cost about $1,500. A Trump University "membership" ran more than $10,000. The top-of-the-line "Gold Elite" program set people back $35,000.

Trump University customers alleged in the lawsuits that the promised secrets were basically the same sort of information you could find on the Internet, that the seminar instructors were unqualified and that the mentoring was more like cheerleading.

New York Atty. Gen. Eric Schneiderman said he was glad the settlement cash would now find its way to more than 6,000 victims of the alleged racket.

"For years, President Trump refused to compensate the victims of his sham university," he said in a statement. "His reversal in 2016 -- and the large-scale settlement that resulted -- opened the door for student victims to finally obtain the restitution they deserve."

The settlement includes no admission of guilt by Trump.

He said during the 2016 presidential campaign that "the people that took the course all signed -- most -- many -- many signed report cards saying it was fantastic, it was wonderful, it was beautiful."

I asked the White House for a comment on Tuesday's ruling. Nobody replied.

The appeals court ruled that an earlier district court decision to accept the settlement was fair and reasonable in light of the "significant hurdles" that would arise in bringing a sitting president to trial.

Unfortunately, this means the allegedly defrauded Trump University clients won't be able to testify about their experiences, and details of Trump University's operations won't be aired in court.

It means I won't get to testify either.

As part of the lawsuits, plaintiffs' attorneys introduced as evidence hundreds of pages of Trump University "playbooks" that were intended to guide Trump University employees in closing sales with seminar participants.

"When you introduce the price, don't make it sound like you think it's a lot of money," one playbook advised. "If you don't make a big deal out of it, they won't."

In one document, Ronald Schnackenberg, a witness for the plaintiffs who worked as a Trump University sales manager in 2007, said he believed the school was a "fraudulent scheme" that "preyed on the elderly and uneducated."

Prior to the settlement, I was placed on the witness list for a potential trial because of columns I'd written about Trump University. At one point, Trump's lawyers filed a motion to block me from testifying.

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They were apparently nervous about my discussing what I'd seen and heard while attending a Trump University seminar at the Pasadena Hilton in 2007.

The event turned out to be nothing more than a two-hour sales pitch for a three-day workshop costing nearly $1,500. The "priceless information" promised in ads for the event consisted of little more than "buy low, sell high."

Trump called me the day my column ran and said he was going to sue me for the "inaccurate and libelous" things I'd written. He also contacted my editor to say that I'm a "nasty guy" and "a third-rate reporter," and that the Los Angeles Times should fire me.

No lawsuit was filed by the future president. My editor, declaring me at least a second-rate reporter, kept me on the job.

Trump did himself no favors by stating in 2016 that the U.S. district court judge hearing the Trump University case, Gonzalo Curiel, couldn't be impartial because of his Mexican heritage. Curiel was born in Indiana in 1953.

I interviewed Trump prior to attending the 2007 seminar, after I'd seen an ad for the event quoting him as saying that "investors nationwide are making millions in foreclosures ... and so can you!"

"I'm going to give you 2 hours of access to one of my amazing instructors AND priceless information ... all for FREE," it said.

Trump told me the real estate market represented almost limitless opportunity for a real go-getter.

"One of the things a person has to have is instinct," he said. "There are people who can't handle the pressure, who don't have the capacity."

A wave of foreclosures was sweeping the U.S. housing market at the time. Lenders had recklessly gone heavy into subprime mortgages, which would precipitate a crisis in the financial services industry and usher in the worst economic downturn since the Great Depression.

"These are great times," Trump told me. "There are unbelievable opportunities for making money."

I asked why he'd opened Trump University.

"I love teaching," he replied. "I love helping people."

About The Writer

David Lazarus, a Los Angeles Times columnist, writes on consumer issues. He can be reached at david.lazarus@latimes.com.

(c)2018 Los Angeles Times

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