Donald Trump Liable For Real Estate 'School' Alleged Fraud

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Real estate mogul and television personality Donald Trump has been masterful at moving beyond business problems and repeatedly reestablishing himself. But a New York judge has said that Trump can't walk away from a real estate school that allegedly defrauded thousands of people who paid between $1,495 and $35,000 to learn his investment techniques, reported Reuters.

New York Attorney General Eric Schneiderman had filed a $40 million lawsuit against Trump, claiming that Trump's "university" was nothing more than a scam that had victimized more than 5,000 people, according to the New York Daily News. People had paid thousands for short courses and for mentoring but received little in return.

"These new complaints reinforce what we have said all along: Trump and his so-called university ran a nationwide scam for years, selling unfulfilled dreams and empty promises of riches for tens of thousands of dollars to consumers who could ill afford it," a Schneiderman spokesman said.

A former New York City transit worker told the Daily News: "Trump, as far as I can tell, had no real involvement in this program at all, other than collecting money, obviously. The thing's a joke."

Some of the allegations were astounding, said Mother Jones. The lawsuit filings claim that the instructors knew nothing about real estate, Trump never showed up despite suggestions that he would, positive ratings of the school were manipulated, and although Trump claimed it was a philanthropic undertaking, he pulled down $5 million in personal profit.

The university folded in 2010 and was reborn as the Trump Entrepreneur Initiative. But no matter the name, "It is undisputed that Mr. Trump never complied with the licensing requirements," New York state Supreme Court Justice Cynthia S. Kern, according to Reuters.

Trump claimed that the suit was politically motivated, according to USA Today, and that Schneiderman was angry that Trump would not donate more to his campaign for office.

Although Trump's name is intrinsically associated with the organization, he had tried to avoid personal liability for any outcome of the suit. Kern's ruling means that he is in the hot seat. A trial will still have to determine whether students were actually defrauded.

The Donald is no stranger to using the legal system to avoid being overly entangled in problems. By 2011, Trump's businesses had already filed for bankruptcy four different times, according to ABC News. In 1991, 1992, 2004, and 2009, either his personally-branded properties or companies used Chapter 11 protection to reorganization and write off debt that to most people would seem massive. As he told George Stephanopoulos at the time:

If you look at our great businesspeople today, Carl Icahn, Henry Kravis, (UNINTEL) – Leon Black of Apollo. All of them have done the same. They use and we use the laws of this country, the bankruptcy laws, because we'll buy a company. We'll have the company. We'll throw it into a chapter. We'll negotiate with the banks. We'll make a fantastic deal. We'll use those. But they were never personal. This is nothing personal. You know, it's like on the Apprentice. It's not personal. It's just business.

But, as former Secretary of Labor Robert Reich noted in Salon, when corporations file for bankruptcy, there is often a heavy impact on many individuals. "Last week, the Trump Plaza folded and the Trump Taj Mahal filed for bankruptcy, leaving some 1,000 employees without jobs," Reich wrote.

Hey, at least it's not like he'll face detention for this university ... sorry, institute ... alleged transgression, which can be a lot more severe under the justice system than under high school.
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