Home > Uncategorized > The Lesson From Mr. Trump’s $25,000,000 Lawsuit: Fraudulent Schools Are OK

The Lesson From Mr. Trump’s $25,000,000 Lawsuit: Fraudulent Schools Are OK

The NYTimes and NYDaily News each ran front page stories trumpeting the $25,000,000 settlement to compensate the 7,000 students who filed a lawsuit against Trump University. Assuming there are no court costs and no legal fees (the attorneys asset they will not take any money), this means that each bilked student will receive just over $3,500 in compensation for tuition costs that ranged up to $35,000 for a so-called “Gold Elite” course in real estate salesmanship. The Times article noted that:

Documents made public through the litigation revealed that some former Trump University managers had given testimony about its unscrupulous and exploitative business practices. One sales executive testified that the operation was “a facade, a total lie.” Another manager called it a “fraudulent scheme.”

Other records showed how Mr. Trump had overstated the depth of his involvement in the programs. Despite claims that Mr. Trump had handpicked instructors, he acknowledged in testimony that he had not.

The Daily News reports were substantively the same but stylistically different:

(NYS DA) Schneiderman’s 2013 suit against Trump University claimed the school was nothing but a scam designed to make money for Trump by falsely promising wannabe real estate developers they would learn the tricks of the trade from Trump and his hand-picked teachers.

Instead, those who enrolled were pressured to take more expensive programs from people not selected by Trump. The closest they got to Trump himself was when they were able to take a picture with a cardboard cutout of him, Schneiderman alleged.

Despite the seemingly irrefutable facts of the case, the Times reported that Mr. Trump was allowed to settle the case “without an acknowledgment of fault or liability.

The lesson to those operating on-line courses that over-promise and fail to deliver: hang tough and settle for 10 cents on the dollar… a cost that you’ll easily be able to cover by understaffing, underpaying your unqualified teachers, and over-charging your customers— who might be taxpayers. Ain’t privatization great!

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