Trump University was an enterprise engaged in racketeering activity

Trump University was a massive fraudulent scheme that targeted financially stressed victims who borrowed money from friends and relatives, cashed out their IRAs and 401(k)s and maxed out their credit cards in order to extricate themselves from poverty. They were willing to risk financial ruin on the say-so of Donald Trump, who enriched himself by millions of dollars at their expense. If there is a silver lining to this tragic predation, you will find it in the Trump University Playbook, a remarkably detailed manual of step-by-step instructions to steal money from vulnerable victims. The fraud will not be difficult to prove because the playbook lays it all out in excruciating detail.

One of the civil cases pending against Donald Trump in federal court in San Diego is Cohen v. Trump, No. 3:13-cv-02519-DMS-RBB. I regard it as the most important case pending against Trump because, unlike the other cases, potentially hundreds of million of dollars are at stake. Two reasons explain why more money is at stake:

(1) This is the only case in which the plaintiff has alleged that Trump’s actions regarding Trump University violated the civil RICO statute that authorizes treble damages See 18 USC 1962(c), and

(2) The court has approved the plaintiff’s request to process the case as a class action that permits thousand of other victims to piggy-back their claims against Trump without having to retain counsel to independently sue him. The case is assigned to Judge Gonzalo Curiel.

RICO is an acronym for a Racketeer Influenced and Corrupt Organization that is referred to as the ‘enterprise’ in the RICO statute. An apparently legitimate organization or business, even a school or a police department, can qualify as an enterprise if it’s being used to defraud people through a pattern of racketeering activity. Trump University is the enterprise in this case. To prove a civil RICO violation, the plaintiff must prove that Trump knowingly, willfully and unlawfully defrauded people by conducting or participating, directly or indirectly, in the affairs of the enterprise (Trump University) through a pattern of racketeering activity. The ‘racketeering activity’ alleged in this case was to carry out the fraud by using wire transmissions to transmit money and the U.S. Postal Service to transmit communications. Specifically, the complaint alleges that Trump devised and knowingly carried out a material scheme or artifice to defraud or to obtain money by means of materially false or fraudulent pretenses, representations, promises, or omissions of material facts that he communicated to others by committing multiple acts of mail fraud and wire fraud every day. In short, the complaint accuses him of using his name and Trump University to create the appearance of legitimacy to conceal a scheme to induce people to pay thousands of dollars to learn his secret knowledge to make millions of dollars by acquiring distressed or forfeited real estate properties at auctions for little more than the amount of the owner/borrower’s deficiency and reselling them later at fair market value for a substantial profit.

We have a name for this money-making venture. We call it ‘vulture capitalism’ by flipping distressed properties pursuant to a detailed method controlled by statute to recycle properties that buyers no longer can afford. There is nothing magical or secret about this method. It has been around for hundreds, if not thousands of years and anyone can learn how to do it for free from the comfort of their own home by using the internet. Trump misled people when he induced them to pay thousands of dollars for his ‘secret’ knowledge that he did not develop and did not own. Even worse, he never provided the statutory process that details how to do it.

More important, this investment method is not risk free and he did not warn them about the risks involved. Consider the game Musical Chairs, for example. The proverbial music stopped when the real estate bubble burst and the market collapsed in 2007/2008. Expanding one’s inventory of dirt cheap properties is not recommended when the real estate market has not reached a bottom and reset itself so that buyers and sellers have a sufficient basis to estimate fair market value. In fact, the housing market is still circling the drain in many parts of the country.

Most of the victims of this fraud were struggling financially and hoped to avert disaster by making a killing flipping real estate. Spending their last dime to further enrich Donald Trump without receiving anything of value in return must have wreaked havoc. There ought to be a special place reserved in hell for people who engage in predatory financial frauds that target vulnerable victims.

23 Responses to Trump University was an enterprise engaged in racketeering activity

  1. girlp says:

    Trump may as well agree to pay the people he scammed back and get it over with

  2. ed nelson says:

    I think Trump might have been a good man… but he is steeped in the… Horatio Alger Mythe…. go West Young Man”… he bought the BS… He is a pretty good example of what the American should be, but ruined, because of Mass culture… from Hell… Just my little opinion… I went to school, I was wrecked by the Queer/lesbian Teachers from the bowells of hell… nasty bastards!

    They ruined us kids… only good teachers were the Gym and shop guys, maybe some of the ”home Economics lady teachers were good too”!

    But not the English teachers, like Ms Ballard! what a mfr! I think maybe she was a sister of the actress Kay… looked like her…mean and didn’t much like us boy students!

  3. ed nelson says:

    I’m for Bernie… unfortunately, I forgot to vote….
    I surely cannot stand Hell or He… the no good punk who will be part of the mix…surely as hell… back to the terms we need!!

    I would vote again for what’s her nice face… Green Party… she is real good…

    No we need to realize the world is going into a toilett…. the Rick bastards are high on their drugs of $$, and they don’t give one shit!!

  4. Trump’s speech tonight appeared to have been written by someone else and his delivery was somewhat flat. No trace of his bad racist self.

    I got the impression that he was presented with this speech and ordered to deliver it or face a mutiny.

    Trump is still Trump. Earlier, he issued a statement softening his racist rant about Judge Curiel. He claimed people misunderstood his comments, basically blaming everyone except himself. Of course, he didn’t apologize. He never does. He did say he wouldn’t mention Judge Curiel again.

    He said he’s going to return to bashing Hillary and Bill next week.

    • girlp says:

      He will be at it again, it doesn’t take much to get under his skin he will tweet something racist or sexist from his fan base. He tried to dial it down before and it didn’t last. They can’t control him.

  5. Senator Mark Kirk issued a statement this afternoon withdrawing his support for Donald Trump because of Trump’s racist comments about Judge Curiel.

    Senator Mitch McConnell just issued a statement criticizing Trump and warning him to get serious.

    Trump is about to speak regarding the situation. He will be using a teleprompter. MSNBC is going to carry it live.

  6. gblock says:

    Even aside from the market issues mentioned here, houses may require substantial fixing up before they can be profitably flipped. This makes this a poor enterprise for those who are very short of money.

  7. It says a lot about people that they would support a candidate who does something like this.

    • gblock says:

      It seems that, like the people who enrolled in Trump University, his political followers are looking for a savior who has all the answers.

    • girlp says:

      They have had 36 years of a party that blames other’s minorities, immigrants, poor people, culture, even government itself, these people think everyone else has caused their hardships when it’s the very people they vote for are giving them nothing but pain. Many don’t believe they are poor because they work. Donald Trump being the sociopathic con man he is taking advantage of their ignorance. Somehow they don’t hear the red flags you should notice from a con man, words like “believe me”, ” we will win, we will win so much we will get tired of winning”, “we will have a yugggggge” He talks like a snake oil salesman; a con man all words with no substance behind it. Many poor people in my state believe Trump is going to give them some of his money. I don’t know what he said to them because there is no way I was going to try to go to one of his rallies but it would not surprise me if he told them that. BTW, he most likely is not a billionaire .

  8. jsandero says:

    Why are people blind to the scam artist?

    • girlp says:

      36 years of Republicans conditioning them, scaring them into thinking the world is falling apart so along comes this sociopath they see his actions, his rage as strength rather than an uncontrolled monster, they can’t see it’s all about him, for him and no one else. Other’s see him as destructive (mainly the supremacist) because they do not like how the world is changing and they want someone who will destroy it. This is what the Republican party brought when they invited the TP, Koch brothers, ALEC and the supremacist under their tent. They thought they could control it and apparently still think they can control it.

    • Malisha says:

      People become enthralled by sociopaths.
      Ignorant people become “inspired” by dominant types.
      Stupid people like glittery things and don’t listen much to words.
      Chronically angry people want to hear their own rage echoed big.
      Weak people want to follow a “strong leader” to feel strong.
      BAD PEOPLE want to hurt, control and deprive others.
      Add them all up and you get a following. Trump has one.

      • gblock says:

        Trump seems to have an appeal to certain people because he appeals to their prejudices and they want to believe that a strong leader can fix everything that is wrong with this country. I find it disturbing and dismaying that the number of people that wanted to follow him seems to be so large, and even more disturbing and dismaying that much of the rest of the Republican Party has acquiesced to following along for the sake of party unity.

  9. I would like to see more about the people featured in his testimonial ads. All of them, in one way or another, have ties to Trump. This lady in particular, Michelle Gunn, seems to be a professional testimonial giver. Here she is in another testimonial ad with someone with ties to Trump:

    Here is the Trump U ad with the same lady:

    Also, one of the guys has made his livelihood selling protein water in one of Trumps resorts.

  10. fauxmccoy says:

    yes, yes, yes and yes! this ugly little enterprise also undermines trump’s grossly overstated wealth. legitimate billionaires do not have to engage in practices which strong arm pensioners from their life savings. seriously.

  11. Two sides to a story says:

    Just wow. Deserves an extra lifetime in hell because he was wealthy enough when he started that endeavor to do legitimate business. The Donald is more than NPD – he’s an unbridled psychopath.

    • bettykath says:

      Are you sure he was that wealthy? He’s such a liar that I think it’s possible that he really needed to find a new scam. Some of his income was from selling his name to various developers so their project looked like a Trump venture. His first big-deal project for NYC was one where he brought a troubled project in on time and on (or below) budget but he found contractors willing to volunteer their work and others who expected to be paid but weren’t. Or maybe I’m conflating in that all contractors went into the project expecting to be paid and became volunteers when he didn’t pay.

      • girlp says:

        He did from his father, but Trump is cheap and greedy. Trump is a con man he even convinced the banks (in the 1990’s; I don’t remember how many he conned it was more than 1) to let him borrow close to 1 billion dollars. He did not pay it back of course they sued him and he sued them back, they walked away it wasn’t worth it to them. He was supposed to pay $40 mill as his first payment, it didn’t happen. He gets other people to pay his obligations for him if the judgment is against him. I just hope he doesn’t con this Nation into putting him in the White House. The Republicans believe they can control him, no one controls a maniac they most likely would have to impeach him and throw him out of office, probably his VP too so we would be left with Paul Ryan. I wish Obama could run a third time, maybe it good a Republican congress is doing nothing since everything they want to do will destroy the nation at least Obama would veto most of whatever they want to do.

      • girlp says:

        from the young turks

        • Disappointed says:

          Great video!

          • girlp says:

            I think he is lying on his taxes, he is nowhere near a billionaire but I do believe he is a multimillionaire, I’ve read most likely anywhere between 50 to 250 million. He wanted Romney to release his tax returns but refuses to release that makes me think he’s not nearly as wealthy as he say’s he is and probably has cheated on his taxes.

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