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Thursday, June 2, 2016

Trump University's Star Student: "It Was A Con" (Newsweek-Daily Beast)


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Trump University’s Star Student: ‘It Was a Con’

Donald Trump’s lawyers used these students as evidence Trump University was everything they dreamt of and more. Trump’s lawyers made a mistake.
Pay no attention to the two federal class action lawsuits in California. The New York Attorney General’s state fraud case? Nonsense. Students, Donald Trump and his team of lawyers say, loved Trump University.
In fact, the family-monied real estate mogul and his attorneys often invoke the satisfied students of Trump University when defending the embattled for-profit school against the three separate lawsuits currently charging that the eponymous institution used aggressive sales tactics in the mid-aughts to prey on naive students and ultimately failed to deliver on grand promises of financial success. But Trump University students—the very ones used by the presumptive Republican nominee’s legal team as evidence of that satisfaction—now tell The Daily Beast they were coerced into providing positive reviews and conned out of their life’s savings with little to show for their trouble besides a mountain of debt.

“Trump University is some [of] the best money I ever invested,” wrote Ryan Maddings in one of the evaluations for a 3-day Trump University retreat in 2008, one that Trump’s legal team points to in their motion as an example of “students [who] were very pleased with TU training.”
“It was a lie,” said Maddings, an ex-marine now 32, who told The Daily Beast that he racked up around $45,000 in credit card debt to buy Trump University seminars and products.
Trump, of course, told a different story on an appearance Fox News Sunday in February.
“I’ll tell you about the school,” Trump said.  “Ninety-eight percent of the people that took the courses, 98 percent approved of the courses. They thought they were terrific.”
“Do you know that almost everybody in the lawsuit has signed a letter saying how great the school was? That’s why I won’t settle because it's an easy case to win in court,” Trump later said on Morning Joe. “I mean, how do you lose a case where people suing you have signed letters and affidavits saying that the school is terrific?”
Trump’s attorneys even launched the website, 98percentapproval.com, to document just how esteemed the school was, featuring positive evaluations from students whose names have been redacted.
But the names and contact information for fifteen students were included on student evaluations entered in as evidence for the defense in one of the class action lawsuits against Trump University—documents newly available to the public as part of a trove of records recently unsealed by U.S. District Court Judge Gonzalo Curiel.
Along with internal sales guides and scorching depositions from former Trump University employees, the released documents include exhibits in a 2014 motion by the defense to dismiss the class certification. In these exhibits, the defense provides the fifteen surveys from Trump University students who praise the program, as shining examples of the “overwhelmingly positive,” 10,000 evaluations Trump University collected from its students.
The Daily Beast reached out to each of the fifteen students, and spoke with five, four of whom reported they no longer felt positively about the program. Two, whose names have not been previously reported, said they had lost their lifes’ savings in the deal.
Representatives for the Trump organization and Mr. Trump’s presidential campaign did not respond to requests for comment Thursday.
Maddings said he was told to max out his credit cards.
“It was a con. I’m 25-years-old, barely making $3,000 a month and they told me to increase my credit limit. I just maxed out three credit cards and I’m supposed to be able to qualify for loans to buy real estate? Those stupid principles have led me to borrow $700,000 of other people’s money and lose it all. I’m still paying off some of that debt to this day.”
“Money is never a reason for not enrolling in Trump University; if they really believe in you and your product, they will find the money. You are not doing any favor by letting someone use lack of money as an excuse,” read internal manuals, called playbooks, alsoreleased as part of the unsealing of documents, which encouraged salespeople to get prospective students to charge Trump U tuition.
“We teach the technique of using OPM… Other People’s Money,” one guide reads. “What most people do is handle the tuition by putting it on their credit cards because it gives them the ability to make very small monthly payments and maintain a low overhead to run their real-estate project. Then we [tell] them to use their success in real estate to pay off the banks in a couple of months or so.”
It was a strategy that ended in financial ruin for Maddings. Court records show he filed for bankruptcy one year after giving a glowing review of Trump University.
Maddings, who moved from California to Texas in 2012, said he has actually joined onto the class action suit and had no idea his survey was being used as evidence for the defense.
“I must have said what I said because I was excited. But hey, I fell for it. I was flying on cloud nine. I thought, ‘I’m going to be rich like Trump!’ But it’s a scam. It’s a complete con.”
The confidential playbooks instructed members of the sales team to capitalize on a student’s dream of unimaginable wealth, and use it to rebut any excuses for not buying more seminars. An “I’m doing pretty well right now,” they advised, should be countered with, “We will show you how to thrive in real estate and control your own financial destiny, and the best part is: when you double your income from real estate part time, you can quit your job, work twenty five hours a week, and create more wealth than you have ever dreamed of.”
It was this dream of retirement and financial security that encouraged Julie Lord, 51, of New Port Richey, Florida and her husband to race home and collect their credit cards to pay for a $35,000 mentorship package with Trump University. In all, Lord said she dropped around $80,000 on Trump University seminars, mentorships, and products, but felt like more of “a target” than a student.
Lord said the Trump U sales team told her, “You bring all your credit cards here and we’ll figure out what we can do.”
“They knew we had a lot of cards paid off, so they knew we were doing well financially. Then they propositioned us later in the day away from the other people. They were trying to get us to buy property with them in another state.”
Despite her current claim that she “got burned by Trump U,” in her written evaluation,Lord rated every aspect of the 2008 seminar as “excellent,” adding several plus signs to the maximum 5 rating.
“I am so sorry that I  did that,” Lord told The Daily Beast after hearing that her positive review is being used as evidence by Trump’s defense. “But they actually coached you.”
Other former students and teachers at Trump University, several of whom were quoted in a New York Times story concerning inflated reviews, have reported feeling similar pressure to give and receive positive evaluations, lest their future business opportunities or teaching gigs be put in jeopardy.
A California appeals judge spoke to the tendency to praise one’s victimizer in a 2013 opinion dismissing Trump’s counterclaim against a different litigant, Tarla Makaeff.
“As the recent Ponzi-scheme scandals involving one-time financial luminaries like Bernard Madoff and Allen Stanford demonstrate, victims of con artists often sing the praises of their victimizers until the moment they realize they have been fleeced,” Judge Kim Wardlaw wrote.
But not all reviews were coerced and two Trump University alum quoted by the Trump defense stood by their evaluations, if half-heartedly.
After his 2008 seminar Satya P Somani, now 46, of Queens, New York, wrote that the three-day seminar had given him “complete confidence and knowledge to work in real estate.”
“It was fine,” Somani said, when reached by phone and asked if he still felt that way.
Somani said he spent $5,500 on a three-day seminar and an online course. Though he’s not currently working in real estate–”financial markets are tight,”—he said he did learn things from Trump University, but adds, “I could have learned the same for a few hundred dollars with books...and for free online.”
“Now I don’t think it would work to spend that much money,” he said.
For Diane Tice, 76, of Poway California, Trump University was worth every penny.
“You can’t improve something that’s perfect,” Tice wrote on her 2008 evaluation after attending a seminar with her husband Harry, 79.
“We had been to several seminars, and we were very happy,” Tice told The Daily Beast, explaining that she spent $1500 on a seminar and didn’t plan to spend any more on classes or investments. “We’ve never been rich enough to put [Trump University’s teachings] to use.”
If there were pushy salespeople, Tice didn’t see them. But she did notice something about the other students: “It was almost like people really didn’t belong there. They were definitely looking for something for nothing. In the real world, Harry and I are not young chickens, and we knew you never get something for nothing.”
“We did not pay the outlandish fees, but we knew a lot of people who did,” Tice continued. “And we were sitting in the back, saying to each other, “If we had that kind of money why would we be sitting here?”


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