Evidence Suggests Trump U Battle May Have Ended in Trump Loss

SAN DIEGO (CN) – Even after President-elect Donald Trump agreed to settle three lawsuits against his now-defunct real estate school for $25 million – and acknowledged no wrongdoing per the agreement – he remained convinced he would have won the first trial, which would have begun Monday in San Diego federal court.

“The ONLY bad thing about winning the presidency is that I did not have time to go through a long but winning trial on Trump U. Too bad!” the president-elect wrote on Twitter the day after the global settlement awarding $21 million to two classes in California and $5 million to settle a case brought by New York’s attorney general was announced.

If Low v. Trump University and the other two cases had not been settled ahead of its Nov. 28 trial date, America would have had for the first time in its history a president-elect going to trial on fraud claims just weeks before being sworn in as president.

While Trump remains convinced he would have easily prevailed in the class action claiming Trump University misrepresented Trump handpicked instructors and the “university” title led students to believe the school was accredited, the evidence points to what could have been a hard-fought battle.

The Low case, filed in 2010, was the first of three lawsuits against Trump and his real estate school. Cohen v. Trump, also in San Diego, and the lawsuit filed by New York Attorney General Eric Schneiderman followed in 2013. All three cases relied on essentially the same fraud claims: misrepresentations about Trump University instructors and the misleading title that led students to believe the school was accredited or on par with the country’s top business schools.

The president-elect has always insisted the claims were bogus, saying Trump University students who didn’t find real estate success were lazy or unable to succeed because of their own failings.

In a campaign stump in San Diego this past May, Trump went on a 10-minute rant about the two cases in the local federal court and famously called U.S. District Judge Gonzalo Curiel, who presided over the two San Diego cases, a “hater of Donald Trump” – a comment that led many Republican leaders to denounce the then-candidate’s skepticism of the fairness of the judicial process. Trump vowed shortly after not to discuss the case publicly and remained mostly mum until the settlement was announced Nov. 18.

While Trump pointed to thousands of positive student reviews of Trump University, the plaintiffs’ attorneys gathered thousands of other documents – including internal training manuals and communications – that pointed to a business that directed its employees to convince people to pay thousands for “elite” Trump University packages regardless of how cash-strapped the students were. Trump University “playbooks” unsealed by the court this summer revealed sales managers were encouraged to sell the most expensive seminars even if it meant potential students had to max out their credit cards, take out loans or tap into retirement funds to do so.

One Trump University sales manager, Ronald Schnackenberg, said in his deposition he resigned because he was reprimanded for not up-selling a couple the elite $35,000 package, which they would have had to pay for by taking out a loan and using disability income.

“I found it particularly offensive that while Trump University claimed it wanted to help consumers make money in real estate, in fact Trump University was only interested in selling every person the most expensive seminars they possibly could. I was disgusted by this conduct and decided to resign,” Schnackenberg said.

University of Utah law professor and consumer-law expert Christopher Peterson said in a phone interview that the most troubling evidence he’s come across in his research of the case was from sworn affidavits by former Trump University students who said they lost their life savings or ended up in desperate circumstances because they believed and invested in the real estate school.

Peterson cited the example of Kathleen Mese, the mother of a son with Down syndrome who was struggling financially but believed her Trump University mentor could help her make enough to support her family. After investing $25,000 in the program, Mese’s Trump University mentor didn’t return her calls or give her the real estate mentorship she paid for, Peterson said.

“That’s just banal fraud no matter who does it,” Peterson said.

Peterson wrote an academic paper this fall which made the case that under the Constitution, Trump could be impeached for “high crimes and misdemeanors” due to the federal racketeering claims in the Cohen case.

Despite the settlement, Peterson said, Trump could still be legally impeached – though he said “as a practical matter, a political matter, it is likely this issue will be pushed out of the headlines and public discussion.”

The law professor also pointed to heightened consumer-protection laws in many states which ensure senior citizens – who typically have robust retirement savings accounts and are vulnerable to predatory sales practices and scams – don’t fall prey to get-rich-quick schemes.

Sonny Low, the lead plaintiff in the 2010 case, was the representative on the financial elder abuse claim. After the settlement was announced Nov. 18, his attorney Rachel Jensen revealed he had to get a job at his local Home Depot store to pay back the thousands in debt he owed for a Trump University education.

Peterson said that rather than go through with the trial and “face further embarrassment and press that he was scamming older Americans,” Trump’s decision to settle was “strategically sound given the significant probability he would have lost.”

The law professor added, “I was not convinced he was going to win the trial. There was compelling documentary evidence indicating he committed fraud.”

While the New York case claimed students across the country paid $40 million to learn Trump’s real estate secrets from instructors purported to be handpicked by the president-elect, the $25 million settlement will recover at least half if not all of what students paid to learn from the businessman-turned-world leader.

“It’s easy to lose sight of the individual victims who lost so much in this case because of the dramatic political backdrop. But what this case was about, what the story was about, is the people who were harmed and treated unfairly,” Peterson said.

 

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