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No. 1 lesson to be learned from Trump U: Student beware

In this May 2005, photo, Donald Trump listens as Michael Sexton introduces him at a news conference in New York where he announced the establishment of Trump University. The manual for Trump University events was precise: the room temperature should be 68 degrees. Seats should be arranged in a theater-style curve. And staff should only provide records to an attorney general if compelled by subpoena. Instructing employees how to stall law enforcement investigations might seem like an unusual part of running a seminar company, but at Trump University it was par for the course.
In this May 2005, photo, Donald Trump listens as Michael Sexton introduces him at a news conference in New York where he announced the establishment of Trump University. The manual for Trump University events was precise: the room temperature should be 68 degrees. Seats should be arranged in a theater-style curve. And staff should only provide records to an attorney general if compelled by subpoena. Instructing employees how to stall law enforcement investigations might seem like an unusual part of running a seminar company, but at Trump University it was par for the course. Associated Press file

Donald Trump, who has a track record of vowing he will do things and then not doing them, has vowed to reopen his Trump University, which is at the center of multiple lawsuits.

“After the litigation is disposed of and the case won, I have instructed my execs to open Trump U,” he tweeted. “So much interest in it!”

Much of that interest is the result of a federal judge in San Diego releasing nearly 400 pages of documents related to two of the lawsuits – filed by former students who allege that Trump University duped people with bogus, get-rich-quick promises of making a killing in the real estate market.

Trump says that he did nothing wrong and that the majority of people who signed up for his training were pleased with the results. His campaign issued a statement saying that “the court’s order unsealing documents has no bearing on the merits of Trump University’s case.”

Did he commit fraud? Take a look at the text of a newspaper ad that ran in 2007. It quoted a tough-looking Trump as saying that “investors nationwide are making millions in foreclosures … and so can you! I’m going to give you two hours of access to one of my amazing instructors AND priceless information … all for FREE.”

What is clear from the newly released documents in the federal cases is that even if Trump University students weren’t deliberately fleeced, one of Trump’s top priorities was to separate them from as much cash as possible – regardless of the amount they might actually have available.

When you introduce the price, don’t make it sound like you think it’s a lot of money.

Trump University sales playbook

“If they really believe in you and your product, they will find the money,” the school’s salespeople were told.

Many of the unsealed documents were instructional “playbooks” intended to guide Trump University employees in closing a sale with prospective students. Trump’s lawyers had tried to keep the materials under wraps.

“When you introduce the price, don’t make it sound like you think it’s a lot of money,” one playbook advised. “If you don’t make a big deal out of it, they won’t.”

It emphasized that salespeople need to size up prospective students for how big a payout they would be good for – “Are they a single parent of three children that may need money for food?” – and identify those “most likely to buy.”

New York Attorney General Eric Schneiderman, who has brought a separate civil action against Trump, said in a statement that the playbooks show “Trump University was a fraud that harmed thousands of individuals.”

The California lawsuits allege that Trump’s “hand-picked” instructors failed to impart any true secrets to real estate success and that the school misled people about the ease with which money could be made off foreclosed properties.

Targeting Lazarus

And here’s a fun fact: My name appears in both of the California actions.

That’s because I was one of the few reporters who actually attended a Trump University seminar and wrote about the experience. I had seen the ad described above and decided, what the heck, I might as well spend a couple of hours at the Pasadena Hilton seeing what Trump (or his minions) had to say about scoring big bucks off foreclosures.

The seminar turned out to be nothing more than a two-hour sales pitch for a three-day workshop costing nearly $1,500. That priceless information on making millions from real estate could be boiled down to this: Buy low, sell high.

After I wrote about my seminar experience, Trump called to say he was going to sue me for the “inaccurate and libelous” things I’d written. Trump also contacted my editor to say I’m a “nasty guy” and that the Los Angeles Times should fire me.

Trump never sued. I’m still employed.

Trump University effectively shut down in 2011, which prompted the New York attorney general to begin investigating its operations and its subsequent legal action.

Hard sell

I saw no evidence of fraud at the seminar I attended. But I can say this: The hard sell was everything, which is precisely what the newly released federal lawsuit documents show. Many of the materials date from 2007, the same year I attended the event.

In one document, Ronald Schnackenberg, a witness for the plaintiffs who worked as a Trump University sales manager in 2007, said he believed the school was a “fraudulent scheme” that “preyed on the elderly and uneducated.”

“I believe most of the instructors, mentors and coaches had very little or no experience in the real estate techniques they were teaching,” he said in a sworn statement.

I spoke with Trump by phone before attending his get-together in Pasadena. “I love teaching,” he told me. “I love helping people.”

He said the foreclosure market represented almost limitless opportunity for a real go-getter. Trump seemed unfazed that millions of people with subprime mortgages nationwide were struggling to maintain a roof over the head.

“These are great times,” he declared. “There are unbelievable opportunities for making money.”

At the seminar, our instructor was a Texan named Steve Goff. He told me that he had bought and sold about 300 houses since getting into the real estate market 11 years earlier.

I asked Goff if he was a millionaire. He said no.

Trump University was a fraud that harmed thousands of individuals.

New York Attorney General Eric Schneiderman

Don’t forget: The ads for Trump University said that “investors nationwide are making millions in foreclosures,” and that Trump’s “amazing instructors” would be imparting “priceless information.” Goff’s lack of millions raises obvious questions.

He told me that learning from him was like learning from Trump himself.

“Why would you ever consider learning real estate from someone else?” Goff said. “Trump is the best.”

A real ‘wise-guy’

After I wrote about what I’d seen and heard, and after Trump told me he was going to drag me into court, Trump sent a letter to my boss declaring me “a third-rate reporter” and saying that I “sounded like a real ‘wise-guy.’ 

“With people like this working for the Los Angeles Times, I now see why it is a newspaper in a tailspin both from an advertising and circulatory standpoint,” he wrote. “Try getting rid of your ‘bad apples’ like this and I bet you will do a lot better.”

Trump knew exactly what might happen when he allowed me to attend his seminar. I can say this because one of the playbooks released last week delved into Trump University’s dealings with the press.

“Reporters are rarely on your side and they are not sympathetic,” the manual said. Among other nefarious tricks, it noted, “reporters use hidden cameras, placing them at odd angles in order to show a candid response, and the interviewee appears nervous and/or caught off guard.”

It warned staffers that “no matter how much confidence you have in Trump University, you should not say anything” to a journalist.

At a news conference May 31, Trump told a roomful of journalists that they were sleazy, untrustworthy representatives of an “unbelievably dishonest” profession.

“The press should be ashamed of themselves,” he said. “You make me look very bad.”

No. Someone with much more experience already has handled that.

David Lazarus is a Los Angeles Times columnist. He answers consumer questions. Contact him: david.lazarus@latimes.com or @Davidlaz. Read more by Lazarus at fblinks.com/laz.

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