Wealth and real-estate seminars have long littered the landscape, with outrageous pitches to get rich quick emanating from Holiday Inn conference rooms on any night of the week, but now charges of a "scam" stemming from these so-called "educational seminars" is dogging the leading Republican candidate for president, as the Washington Post notes today.
More than a decade ago, real-estate mogul and unlikely Republican presidential frontrunner Donald Trump went into the for-profit education business after two businessmen approached Trump about using his likeness to brand distance-learning courses. By 2010, the New York State Education Department had forced the venture to drop the misleading "University" from its name because it was not chartered as a university under New York law but according to the the New York attorney general, Trump, a 97 percent owner of Trump University, earned $5 million from the venture and defrauded up to 5,000 students, who paid as much as $35,000 to learn Trump’s real-estate investment strategies and techniques.
"We teach success," Trump University's tagline read with The Donald himself proclaiming “I can turn anyone into a successful real estate investor, including you.”
"We had faith in Donald Trump,” Richard Hewson said in a January 2015 affidavit alleging that after he and his wife Sally paid Trump University $21,490 all they got was a guided tour of dilapidated homes in a run down Philadelphia neighborhood. The Hewsons thought they would learn how to flip those home for profit but claim they never received such instruction.
Another complaint filed to the Federal Trade Commission and uncovered by a Freedom of Information Act request by Gizmodo revealed that 75-year-old retiree Robert Guillo charged Trump University was a "scam":
I feel the Donald Trump school scammed good and honest people in believing the school would help them in the Real Estate business. For my $35,000+ all I got was books that I could have gotten from the library that could guide me better then Trump’s class did. I just want my $35,000+ money back. I feel embarrass[ed] and very dumb for falling for Donald Trump so call real estate classes
“As soon as I attended the first workshop, I knew I had been scammed,” Guillo recently told the New York Daily News. “Every single workshop, they charged you another amount. Everything was to get you to spend more and more and more.” Kathleen Meese, another Trump University student, claimed that she was pressured to spend $25,000 with promises that a "mentor" would work with her to make back the money in 6 months.
The Washington Post describes Trump University's "upsell" techniques:
During the three-day workshops, Trump University instructors urged students to call their credit card companies and request increased borrowing limits, ostensibly so they’d have more capital to invest in real estate, according to students’ sworn affidavits. But the New York complaint alleges that the real reason was so students could buy Trump University packages.
John Brown said he was unable to afford a $35,000 package because his request for a credit-limit increase was rejected. He used two credit cards to buy a mentorship package for $25,000 instead, he said in an affidavit. He and his mentor went to Philadelphia for two days, he said, and walked through 20 properties together. But he never got the classroom training he expected from a university.
Another former student told the Post, “I really felt stupid that I was scammed by Trump. I thought that he was really legit.”
Last October, a New York trial court ruled that Trump University and Trump personally were liable for running an unaccredited school but another judge ruled that the statue of limitations prohibited defrauded students from receiving restitution. The case is headed for trial.
Trump is of course fighting back against the accusations. Trump's attorneys have posted 10,000 positive student evaluations of Trump University seminars on a website called 98percentapproval.com. And in a 2014 ethics complaint, Trump went after New York Attorney General Eric Schneiderman, who filed a $40 million suit against Trump and Trump University in 2013, claiming Schneiderman pushed Trump's daughter, Ivanka, and her newspaper-publisher husband, Jared Kushner, to host a fundraising breakfast for him.