The Art of the Con: the Trump U Fraud Case

As long as we are on the subject of “New York values”, let is consider the New York lawsuit against one Donald J. Trump and his “university” which alleges that Trump defrauded thousands of students who spent tens of thousands hoping they could benefit from his professed business acumen. The case has been woefully under-covered by a largely Trump-leaning media, but it could soon be as important to Trump as the FBI investigation of Hillary Clinton’s emails and server could be to the former First Lady.

As Fox News reported on April. 26, the case is going to trial, likely in the middle of a presidential campaign in which Trump hopes to be the GOP nominee:

New York County Supreme Court Judge Cynthia Kern made the decision at a hearing Tuesday, though it remains unclear whether the case will be weighed at a jury trial -- which is what Trump’s team is seeking. Trump attorney Jeffrey Goldman said it’s possible the trial could be held this fall, and Trump could testify.

In the case, New York Attorney General Eric Schneiderman, a Democrat, has accused Trump and others of misleading thousands of students over the school.

Schneiderman alleges that Trump University was unlicensed since it began operating in 2005 and promised lessons with real estate experts hand-picked by Trump, only one of whom had ever met him. The attorney general said the school used "bait-and-switch" tactics, inducing students to enroll in increasingly expensive seminars…

Schneiderman had sued Trump and the school, which changed its name to the Trump Entrepreneur Initiative before it closed in 2010, for $40 million. The lawsuit seeks restitution and damages for more than 5,000 students nationwide, including 600 New Yorkers, who paid up to $35,000 each.

The irony here is that Trump has often railed against a corrupt establishment and the shenanigans of “insiders,” but the man who wrote The Art of the Deal may have to reprint it with an added chapter titled The Art of the Con. Now comes the news that The Donald himself will be called to testify. As ABC News reports:

"I am very pleased the judge has indicated her intention to move as expeditiously as possible to trial, as thousands of Mr. Trump’s alleged victims have been waiting years for relief from his fraud," Attorney General Eric Schneiderman said in a statement released this afternoon.

"We believe that Mr. Trump and Mr. Sexton will be essential witnesses at trial. As we will prove in court, Donald Trump and his sham for-profit college defrauded thousands of students out of millions of dollars," Schneiderman's statement said, referencing Michael Sexton, the man who approached Trump about starting the program.

The fraud charges against Trump University were pointedly raised by Fox News anchor Megyn Kelly at the debate in Detroit, Michigan. As the Huffington Post noted:

Fox News host Megyn Kelly may as well have been on the debate stage at Thursday’s Republican presidential debate in Detroit, because she wiped the floor with real estate mogul Donald Trump over a 2004 business venture that has recently come under scrutiny….

Trump, however, brushed aside the questioning.

“Let’s see what happens in court,” Trump responded. “This is a civil case. Very easy to settle. Could settle it now. Very easy to have settled. Let’s see what happens at the end of a couple years when this case is over, okay?”

Well, the case will be hitting the political fan earlier than he hoped and all the tap dancing about Trump University and its accreditation rating may be rendered irrelevant by the evidence and testimony of former students about Trump University’s blatant fraud.

There was much speculation that Trump later skipped the Utah debate because he was afraid Megyn Kelly would continue to grill him on his fabrications about the questionable activities of Trump University and its ratings by the Better Business Bureau. As Newsmax reported:

Fox News Channel anchor Megyn Kelly on Monday accused Donald Trump of a "head fake" when he said his Trump University was upgraded from a "D-minus" Better Business Bureau rating to an "A."

Trump first challenged Kelly during the most recent Republican presidential debate, at which she was a moderator. During a commercial break, Trump handed the moderators a faxed paper he said showed the school, which is the subject of a fraud lawsuit in New York and a class-actions suits from some former students, currently has an "A" rating.

Kelly noted Monday that the BBB denied sending the fax to the Trump campaign, and she added that the D-minus was never upgraded until after the name was changed to Trump Entrepreneurial Initiative and stopped accepting new students.

"Mr. Trump now accuses your humble debate moderator of dishonesty," Kelly said. "We stand by our reporting, which has been verified by multiple news organizations as well as the Better Business Bureau. Trump University had a 'D-minus' rating before it went out of business in 2010. The claim about the 'A' is quite simply a head fake."

Trump did not want to answer questions about Trump University, which he falsely claimed was still open for business, the lawsuits against it, or the fake Better Business Bureau fax. The Trump University fraud case is serious business, one that speaks volumes about Trump’s business ethics and exactly how much “art” is in his “deals”. New York Attorney General Eric Schneiderman calls it a “straightforward fraud case”. As the New York Daily News reported:

New York Attorney General Eric Schneiderman on Sunday rejected suggestions that his office’s case against presidential candidate Donald Trump’s defunct “Trump University” was at all political.

“This is a straightforward fraud case. We never had any idea in 2013 the guy was going to run for president,” Schneiderman said on John Catsimatidis’ “Cats Roundtable” program on AM 970. “This is not a political case. This just a case where a lot of New Yorkers were ripped off.”

“There were thousands of folks who thought they were going to learn from real estate experts who were handpicked by Trump and that they would learn his personal secrets,” Schneiderman said. “Thousands of people (who) paid as much as $35,000 to $45,000.”

Trump has made an issue about the credibility and honesty of his primary opponent, whom he has called “Lyin’ Ted Cruz”. Trump may very well be the classic case of the pot calling the kettle black. Trump has asked his supporters on occasion to raise their hands and pledge allegiance. Soon he will be asked his hand and pledge to tell the truth about Trump University and nothing but.  

Daniel John Sobieski is a free lance writer whose pieces have appeared in Investor’s Business Daily, Human Events, Reason Magazine and the Chicago Sun-Times among other publications.