Donald Trump Hit Hard for “Trump University” Fraud Case at Texas GOP Debate
Posted By Derek Johnson on February 26, 2016 at 11:26 am
Republican frontrunner Donald Trump faced repeated attacks last night at the GOP debate in Texas by his two closest rivals over Trump University, a now-defunct corporation that is currently being sued by former customers for fraud.
During a question about building a border wall on Mexico, Trump and Florida Senator Marco Rubio (R) got into a heated back-and-forth exchange before Rubio leveled the charge.
“Well, I don’t know anything about bankrupting four companies. I don’t know anything about starting a university that was a fake university,” said Rubio as Trump tried to talk over him. “And you know what? They got to take a picture with a cardboard cutout of Donald Trump. That’s what they got for $36,000.”
“Trump University” was a for-profit LLC corporation that offered a series of real estate courses, seminars and mentorships. It operated from 2005-2010, was never accredited, and in 2005, the New York Education Department sent Trump a letter warning him not to call his corporation a “university” because it was unlicensed.
According to court documents filed by the plaintiffs, Trump University students were promised they would be taught all of Trump’s real estate secrets from “handpicked instructors and mentors”. In reality, they claim the organization “delivered neither Donald Trump nor a university.”
There are currently two class-action lawsuits against Trump University for fraud. Students claim they paid tens of thousands of dollars for insider knowledge about the real estate market and got scammed in return. According to documents filed by one of the groups, the professors and instructors had never met Donald Trump and were in actuality “high-pressure sales people hired as independent contractors and paid on a commission basis, based on the number and amount of Live Event sales made.”
The second lawsuit claims “the primary lesson Trump University teaches its students is how to spend more money by buying more Trump Seminars.” Potential customers were lured in stages, first with a free 90-day workshop that promoted a $1,495 3-day seminar and workshop that would reveal Trump’s secrets. During that seminar, the plaintiffs allege that instructors had students fill out detailed financial statements and raise their credit card limits, presumably for “real estate transactions.”
On the second day they were told that three days wasn’t nearly enough time to learn Trump’s real estate secrets, and instead “persuaded the students to use their increased credit limit to purchase” the next level of Trump’s program, the most expensive version costing $34,995.
A trial is set for July, something that presidential rival Senator Ted Cruz (R-TX) pointed out during the debate.
“I want you to think about, if this man is the nominee, having the Republican nominee on the stand in court, being cross-examined about whether he committed fraud. You don’t think the mainstream media will go crazy on that?” said Cruz.
Trump has claimed that the lawsuits against him are “scams”, that his courses were “fantastic” and that he had surveys from students showing a “98 percent satisfaction rate.” At the debate, Trump (who also revealed that he is being audited by the IRS this year) responded to the charges by mentioning that he usually wins lawsuits that are filed against him.
“[Trump University] actually did a very good job, but I’ve won most of the lawsuits,” said Trump.
“Most [emphasis added] of the lawsuits,” Rubio said with a laugh in response.
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