“Yet Another Fraudulent Operation”: Move Over, ‘Trump U,’ The New Scandal Is The ‘Trump Institute’
The scandal surrounding “Trump University” is already an albatross for Donald Trump’s presidential campaign. The entire enterprise has been accused of being a con job, ripping off “students” who trusted the developer’s name.
But as it turns out, there’s a new, related controversy surrounding the “Trump Institute,” which is something else. The New York Times reports today that the Republican candidate “lent his name, and his credibility” to this seminar business, which offered Trump’s “wealth-creating secrets and strategies” for up to $2,000.
The truth was something else altogether.
As with Trump University, the Trump Institute promised falsely that its teachers would be handpicked by Mr. Trump. Mr. Trump did little, interviews show, besides appear in an infomercial – one that promised customers access to his vast accumulated knowledge. “I put all of my concepts that have worked so well for me, new and old, into our seminar,” he said in the 2005 video, adding, “I’m teaching what I’ve learned.”
Reality fell far short. In fact, the institute was run by a couple who had run afoul of regulators in dozens of states and been dogged by accusations of deceptive business practices and fraud for decades. Similar complaints soon emerged about the Trump Institute.
Yet there was an even more fundamental deceit to the business, unreported until now: Extensive portions of the materials that students received after forking over their seminar fees, supposedly containing Mr. Trump’s special wisdom, had been plagiarized from an obscure real estate manual published a decade earlier.
All things considered, when Sen. Marco Rubio (R-Fla.) referred to Trump as a “con man,” the senator may have been on to to something.
Consider the revelations from recent weeks:
* Those who ran “Trump University” have faced credible allegations of stuffing their own pockets by preying on the vulnerable, selling unsuspecting students snake oil at indefensible prices and through misleading claims.
* Trump has boasted at great length about the millions of dollars he’s given away through charitable donations – though many of these donations don’t appear to exist and many of the promises he made publicly went unfulfilled.
* A considerable chunk of Trump’s campaign fundraising went to Trump corporate products and services, giving rise to a new word for the political lexicon: “scampaign.”
* And now the “Trump Institute” is facing allegations of being yet another fraudulent operation, complete with bogus claims, shady characters, and “the theft of intellectual property at the venture’s heart.”
The Times’ report added:
The institute was another example of the Trump brand’s being accused of luring vulnerable customers with false promises of profit and success. Others, besides Trump University, include multilevel marketing ventures that sold vitamins and telecommunications services, and a vanity publisher that faced hundreds of consumer complaints.
Mr. Trump’s infomercial performance suggested he was closely overseeing the Trump Institute. “People are loving it,” he said in the program, titled “The Donald Trump Way to Wealth” and staged like a talk show in front of a wildly enthusiastic audience. “People are really doing well with it, and they’re loving it.” His name, picture and aphorisms like “I am the American Dream, supersized version” were all over the course materials.
Yet while he owned 93 percent of Trump University, the Trump Institute was owned and operated by Irene and Mike Milin, a couple who had been marketing get-rich-quick courses since the 1980s.
I realize, of course, that there are many voters who trust Donald J. Trump’s word. I’m less clear on why.
By: Steve Benen, The Maddow Blog, June 29, 2016
“Suckers For Trump Need To Believe”: The Psychology Of Chumps And How They Get Taken
Here is how Donald Trump suckers the little people. What follows is a telling of his methods, not commentary on his lack of scruples.
The Question: Why didn’t the trail of wreckage left by Trump’s failed businesses deter students from forking over as much as $35,000 for a class at Trump University? The Answer: They wanted to believe in a plot that favored them.
The skilled con artist knows how to identify chumps and work their emotions. As Trump U salespeople were instructed to tell prospective students, “let them know that you’ve found an answer to their problems.”
Trump’s been at this a long time. In 1995, he raised $140 million from ordinary stock investors for Trump Hotels & Casino Resorts. Why would people put good money in a company built on two casinos that had already gone bankrupt under Trump management?
Because Trump had convinced them that he had become a rich man — not by inheriting his father’s real estate empire but through his celebrity magic. Note that the company’s stock ticker symbol was DJT, Trump’s initials.
Trump controlled a third bankrupted casino hotel, which he later persuaded the company to buy at a grossly inflated price. The bankers finally took over in 2004, sending Trump Hotels & Casino Resorts into a Chapter 11 bankruptcy.
When Trump was done working his “magic,” the stock had lost 90 percent of its value. For every $10 that the believers had invested at the initial public offering, they had $1 left.
A turndown in the casino business could take blame for some of Trump’s other casino problems, but not in this case. During this period, the stock of Harrah’s Entertainment more than doubled. Shares of Starwood and MGM quadrupled.
Trump’s explanation for the diving stock price? “People don’t understand this company.”
Maria Konnikova has studied the psychology of chumps and how they get taken. The skilled con men, she writes, “are exceptional creators of drama.” They spin a story “that makes everything seem legitimate, even inevitable.”
It’s a very human desire to believe the good we’re told will come our way, and it’s not limited to the uneducated. Konnikova tells of a University of North Carolina physicist who fell for an online dating swindle that led to his smuggling cocaine from South America. Elsewhere, the president of a famous New York art gallery was conned into selling forged paintings, including one with the artist’s signature misspelled.
The two patsies conceded the psychological tricks played on them. Konnikova explains, “Faced with incongruous evidence, you dismiss the evidence rather than the story.” Actually, you don’t even see the evidence.
Over at Trump University, economically struggling students ate up the story that Trump himself would be instrumental in blessing them with his secrets to real-estate wealth. They so believed a video promising to teach them “better than the best business school” that they maxed out their credit cards to pay tuition. For those lacking an adequate line of credit, salespeople urged taking on more credit cards. And they did.
Trump University is now defunct and about to go on trial amid charges it defrauded students by $40 million. Trump smeared the judge in the case for his Mexican heritage.
Business reporters trying to get at the truth of Trump’s wealth already assume it is a fraction of what Trump claims. A wish to keep that amount under wraps may account for his refusal to release tax returns.
Evidence of Trump’s confidence games keeps growing, but the pile was already high before he ran for president. Thing is, evidence doesn’t matter to the saps he plays with. It’s always the story.
By: Froma Harrop, The National Memo, June 2, 2016
“Trump Is Still Making Money Off His Defunct University”: Despite Rampart Fraud, It Appears Business Is Boomin
Donald Trump may be facing three separate lawsuits over his now-defunct university, but he’s still raking in money from the enterprise.
According to his 2016 personal financial disclosure form, filed with the Federal Election Commission, Trump made $13,239 in the last year from the Trump Entrepreneur Initiative LLC, the company formally known as Trump University LLC. In an earlier disclosure which he filed last summer when his presidential campaign was beginning, Trump reported earning $11,819 from the company, which held live seminars about earning money from real estate and online courses providing a path to riches.
It’s unclear why or how Trump made money from a business that has been defunct since 2011 and facing litigation since 2013. Alan Garten, executive vice president and general counsel of the Trump Organization, has not responded to a request for comment from The Daily Beast.
Trump is staring down three lawsuits which allege rampant fraud in his educational endeavor. Students claimed that they put money down to learn the tricks of the real estate trade from Donald Trump only to end up with cardboard cutouts of his figure.
One, a class-action suit in San Diego, has been delayed until November 28, which is after the presidential election. There will be a hearing for a second class action suit in San Diego on July 22. Finally a state fraud case, brought down by New York Attorney General Eric Schneiderman, will also likely only go to trial after the election now.
On Tuesday, a four-judge panel in New York agreed to let Trump’s lawyers argue their case with the Court of Appeals, hoping to challenge a ruling that let Schneiderman progress with the case this year. Cases brought to this highest court in New York take a long time to resolve, likely stretching this suit beyond the timeframe of the presidential contest.
Even as Trump managed to dodge bullets—avoiding appearances on the witness stand during a crazy election year—Schneiderman has made it clear that he intends to pursue Trump vigorously.
“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,” Schneiderman said in a previous statement provided to The Daily Beast. “As we will prove in court, Donald Trump and his sham for-profit college defrauded thousands of students out of millions of dollars.”
And it’s still lining Trump’s pockets, apparently.
Overall, Trump said that his revenue grew by $190 million over the past 17 months, and that he had $557 million in earned income. Ironically, the personal financial disclosure indicates that Trump has investments in a number of companies he has publicly railed against at his rallies, including Ford Motor Co. and Apple Inc., which he wanted to boycott.
There are also a series of new LLC’s with names of foreign cities—likely for new international hotel projects—in places like Saudi Arabia, from whom Trump wanted to halt oil purchases. Not to mention that whole suggestion he made that the country was responsible for 9/11.
“Who blew up the World Trade Center? It wasn’t the Iraqis, it was Saudi — take a look at Saudi Arabia, open the documents,” Trump said in February.
Trump has still not released his tax returns which could address more questions about his personal finances. But as he marches towards the nomination, it appears that business is boomin’.
By: Gideon Resnick, The Daily Beast, May 19, 2016
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