Trump University was an enterprise engaged in racketeering activity

June 5, 2016

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.


Trump’s defense of Trump University fails the straight-face test

June 3, 2016

Donald Trump appears to be going down on his Trump University scam. He’s made two arguments this week in support of his claim of innocence. Both arguments fail to pass the straight-face test. As you all know, good lawyers can come up with all sorts of arguments in support of their client’s position in litigation. Tha’ts what good lawyers are paid to do. The straight-face test is a simple litmus test for determining whether to make a particular argument. Rule of thumb: Don’t make an argument if you can’t keep a straight face when you make it. These arguments are ridiculous.

The first argument is that Trump University was legitimate because 98% of the students gave the program the highest rating possible. That’s true, however, they filled out the evaluations in front of their instructors who asked them for the highest rating and this happened before the students were given their certificates and permitted to leave the main meeting room. In other words, the forms were not filled out anonymously and they filled them out with the expectation that they would soon learn Trump’s secrets to buying and selling real estate. That didn’t happen.

Instead instructors, many of whom knew little or nothing about real estate, have provided sworn statements that the school was a scam and they were told to focus on persuading people to spend more money for the advanced courses. They were also told to pressure the students into giving the favorable ratings before they took the actual courses.

The second argument is that Trump has produced three people who claim to have taken the courses and prospered. They do not qualify as independent witnesses, however, because they are in business with Donald Trump.

Trump announced today at a rally in San Jose that the school was so successful that he plans to reopen Trump University. I wouldn’t bet the ranch that will happen since New York Attorney General Eric Schneiderman and California Attorney General Kamala Harris are suing Trump for committing fraud with Trump University. They will shut him down if he tries to reopen it.

Meanwhile, Speaker of the House Paul Ryan finally endorsed Trump today despite the Trump University fiasco and this brings me to my final point. How can any Republican politician endorse Trump. He has dropped the mask with his overtly racist comments about United States District Court Judge Gonzalo Curiel, who happens to have a Hispanic name, but was born and raised in Indiana. The Trump University case was assigned to him and the Donald hates him because he is doing his job.

As the presumptive nominee of the Republican Party, Trump is now the face of the party. That means the Republican Party now stands for racism, xenophobia, misogyny and hatred and conspiracy thinking. There is no way to separate Trump from his avid supporters. They are the Republican party.

If I were a Republican serving in the House or Senate, I would hold a press conference and announce that I was resigning from the Republican Party. It is, after all, the party of Abraham Lincoln. It’s the ethical thing to do.

Saying that you are going to vote for Trump because you can’t vote for Hillary is a cop out because it’s still a vote for Trump, who may well be the most vile, disgusting and least qualified human being to ever run for president.


Trump University looks and quacks like a duck

May 29, 2016

I’ve reviewed a copy of the 2010 Trump University Playbook and it certainly looks like a scam to me. The principle objective identified in the 172-page playbook is to classify the attendees into 1 of 4 categories based on the amount of liquid assets they have at their disposal. The categories are set forth on page 36.

1. Greater than $35 K;
2. Between $20 K and $30 K;
3. Greater than $10 K; and
4. Greater than $2 K.

The target group is the 1st category, which they call the Gold Elite Group.

With one important exception, the rest of the playbook is a detailed how-to manual regarding procedures like scheduling conferences, setting up conference rooms and submitting bills seeking reimbursement for expenses.

The exception is a recommended set of strategies to employ in convincing people in the Gold Elite Group to signup for advanced conferences where the strictly hush-hush mystical goodies will be revealed to the worthy initiates.

Yes, indeed, you would be correct if you guessed that the advanced level conferences cost lots of money. From $1,500 to the super special $35,000 conference where Trump himself will disclose the mystical goodies.

Speaker subject matter is tightly controlled. For example, the playbook warns them to use only the approved course materials and illustrative slide shows when lecturing to the students. No variation is permitted and anecdotal stories are prohibited without prior approval. The absence of room to move suggests that no special expertise is required to give a lecture.

My suspicions deepened when I reviewed carefully scripted responses in the playbook to frequently asked questions. No variation from the scripted responses was permitted. If a student asked a question that was not on the list, the playbook recommended segues to steer the student to a scripted answer. I got the impression that a pleasant voice, a smiling face and an ability to read slides were the only prerequisites to be a speaker.

Guidelines are provided for dealing with disruptive students, reporters and inquisitive attorney generals.

Separating a student from his or her money appears to have been the prime directive.

If it looks like a duck and quacks like a duck . . .


Death with dignity should be a fundamental human right

April 24, 2016

Lindsey Bever of the Washington Post wrote on Friday,

One gunshot.

Then another.

Within minutes, a prominent death-with-dignity advocate was shot dead along with his ailing wife in an assisted living center in Florida.

Eighty-one-year-old Frank Kavanaugh — who served on the national advisory board for the Final Exit Network, an advocacy organization in the right-to-die debate — was discovered dead in the early morning hours Tuesday alongside his wife, 88-year-old Barbara Kavanaugh.

The couple was found at the Solaris HealthCare Charlotte Harbor center in Port Charlotte, Fla. Charlotte County Sheriff’s Office spokesman Skip Conroy said the case is being investigated as a murder-suicide.

I support death with dignity via physician assisted suicide. There are any number of ways to design the process for the purpose of excluding a spur-of-the-moment decision based on situational depression. If the woman in this case could have opted for physician assisted suicide, she likely would have, given the information in the article. However, it was not an option.

My English teacher in high school did what Frank Kavanaugh did. She shot to death her terminally-ill-with-cancer lover and then drove to the police station where she committed suicide by shooting herself in the head. She left a note explaining why she did it.

I was shocked, of course, as all of us were, but we respected her decision and the courage it took to do what she did.

Since most people do not want to commit suicide and could not be talked into it, I doubt that physician assisted suicide would unleash a tsunami of suicides.

For more information, please read another story by Lindsey Bever about Brittany Maynard, the 29-year-old woman who was terminally ill with a stage 4 malignant brain tumor. She chose to die with dignity in her own bed at home via physician-assisted suicide surrounded by her loved ones.

I would like to see death with dignity via physician-assisted suicide designated as a fundamental human right.

____________________________________________

PS: Rachel’s father passed peacefully early Saturday morning. Our cat, Byrd, was killed by a vehicle on the street behind our house at approximately the same time. We found his cold body lying in the street when we walked out to our car at dawn. I buried him deep in the woods on a hill overlooking a lake.


What should we do about our end of days?

April 19, 2016

My wife Rachel, whom you know as Crane-Station, just returned from Seattle where she was visiting her dying father. Her mother is in declining heath and unlikely to survive him by more than a year. I’ve been through this end-of-life experience with my parents. They passed in 1999 (father) and 2000 (mother).

She is close to her parents. I was not close to mine. She has siblings to share the experience. I was an only child. Despite different relationships with our parents, both of us have experienced emotional storms that are difficult to describe.

My father succumbed to Alzheimers. I watched him die by inches and that experience damn near killed me. I do not want to die that way. I’m willing to take my life, if I find myself drifting down the river of forgetfulness.

I have been thinking a lot lately about dying and what to do about it. Rachel’s father is in his nineties. He saw it coming. Imprisoned in a dying body, he made sure his affairs were in order and prepared himself to die.

But he didn’t die . . .

He is more aware than my father was.

I do not plan to let death choose when I pass.

What about you?


Innocent Jack McCullough will be released from prison today

April 15, 2016

Jack McCullough will be released from prison in Illinois today after serving four years of a life sentence for kidnapping and murdering 7-year-old Maria Ridulph. The crime was committed on December 3, 1957, but no one was prosecuted until 2012, when DeKalb County State’s Attorney Clay Campbell convicted McCullough.

Campbell’s successor, DeKalb County State’s Attorney Richard Schmack reviewed the case after defeating Campbell in an election. He concluded that McCullough could not have committed the crime because he was 40 miles from the scene of the crime when it was committed. According to Illinois Bell telephone records McCullough called his family collect from an Air Force recruiting office in Rockford, Illinois at 6:57 pm. Maria Ridulph disappeared between 6:45 p.m. and 6:55 p.m.

Schmack also challenged the accuracy and reliability of an eyewitness identification of McCullogh by Maria’s friend with whom she had been playing in the snow when a young man offered to give Maria a ride on his shoulders. First, she identified McCullogh more than 50 years after the incident. Second, the photo was unnecessarily suggestive since McCullough’s photo stood out from the others in a photo array of six photographs because they were professional yearbook photographs and each person was wearing a suit coat.

Yet another example of the unreliability of eyewitness identifications.

Fortunately, an honest and ethical prosecutor corrected the wrongful conviction.

Read more here.


Hillary Clinton cynically uses Sandy Hook shootings for political gain over Bernie Sanders

April 7, 2016

Hillary Clinton is using the tragedy at Sandy Hook for political gain over Bernie Sanders. Yesterday, she tweeted,

@BernieSanders prioritized gun manufacturers’ rights over the parents of the children killed at Sandy Hook.

This is disgusting and it shows how little she cares about the feelings of the people devastated by the shootings. It shows how desperate she is and how low she is willing to go to beat Sanders.

Bernie’s alleged offense is voting against a bill that would have held gun manufacturers liable for murders committed with guns they manufactured. Although I detest guns, I would have voted against the bill because it would hold gun manufacturers strictly liable for producing a product that is legal to sell, possess and use even though they did not sell it to the user or have any knowledge or control regarding the decision to sell it.

Love it or hate it, the Second Amendment is here to stay until such time as it is repealed. That is not going to happen in the foreseeable future, if ever. That means gun manufacturers are going to continue to make and sell guns to gun shops who will sell them to the public for as long as the public is willing and able to buy them.

While we do have laws that hold manufacturers strictly liable for injuries caused by the products they make, the product must be hidden and defective when made. Otherwise, there is no liability.

Hillary is a lawyer and she should know this because it’s taught in every torts class in every law school in the country and torts is a required subject, not an elective.

Voting against a bill that would have been deemed unconstitutional is the right thing to do. Bernie deserves credit, not criticism, for doing the right thing.

Hillary deserves a double helping of criticism, scorn and derision for this cynical and desperate ploy for votes. She is repugnant.

I have said that I will vote for her if she is the democratic nominee because the republican candidates are so repugnant, but I am so disgusted with her that I might have to vote for Dr. Jill Stein.


Panama Papers: A Shot Heard Round The World

April 5, 2016

Standing on Shaky Ground

An anonymous person has leaked more than 11 million documents documenting how the rich and powerful hide their money in offshore tax havens. The documents were published Sunday by the International Consortium of Investigative Journalists (ICIJ), Süddeutsche Zeitung, the German newspaper, and several news organizations around the world, including the BBC, after a yearlong investigation. The actions described in the documents are not necessarily illegal, but some of the documents reveal a clandestine web of shell companies, their real owners concealed under layers of secrecy, and connections to firms in different tax havens. A coalition of more than 100 news organizations published a review of the documents yesterday. USA Today describes the treasure trove,

The cache exposes assets of everyone from political officials to billionaires to celebrities to sports stars that were previously undisclosed. The documents expose holdings of 12 current and former world leaders and details of the hidden financial dealings of 128 more politicians and public officials worldwide. Included: At least 33 people and companies blacklisted by the U.S. government because of links to wrongdoing, such as doing business with Mexican drug lords, terrorist groups or rogue nations such as North Korea and Iran. According to Sueddeutsche Zeitung, the Munich-based newspaper that obtained the trove of documents more than a year ago from an anonymous source tied to Mossack Fonseca [a law firm in Panama with 40 offices around the world], the “Panama Papers” include approximately 11.5 million documents — more than the combined total of the Wikileaks Cablegate, Offshore Leaks, Lux Leaks and Swiss Leaks.

The leak of documents shows how the rich and famous can exploit offshore tax shelters and reveals an unprecedented pattern of corruption worldwide for 40 years, including maneuvers by major banks who created the hard-to-trace companies. World leaders or associates who have embraced anti-corruption platforms are featured throughout. The papers also allege a billion-dollar money laundering ring run by a Russian bank tied to associates of Russian President Vladimir Putin.

Difficult at this point to determine who violated any laws. Tax avoidance is a lawful standard-operating procedure for the rich. Tax evasion, however, and money laundering are crimes. The use of multiple transactions by shell companies that consist of little more than a name and a P.O. box, together with nominee owners who conceal the real parties in interest is inherently suspicious. Mossack Fonseca, the Panama law firm, specializes in creating opaque financial transactions involving equally opaque offshore banks.

Sorting through it all is going to take some time.


Donald Trump does not comprehend macroeconomics

April 3, 2016

Donald Trump claims he can fix our trade deficit by renegotiating better deals with other countries, principally the Chinese. If he understood trade deficits, he would not say that. Trade surpluses or deficits are based on the net difference between exports and imports with a particular country. They are consumer driven. For example, we run a trade deficit with China, if consumers in our country buy more products made in China than consumers in China buy from us. Therefore, a trade deficit is based on a comparison of business or individual spending by two countries.

Trump does not know what he is talking about when he says he will pay for the $16 million wall that he wants to build along the Mexican border by raiding Mexico’s $58 million surplus in its balance of trade with us because that money has been paid to businesses in Mexico, not the Mexican government.

A government deficit is the difference between government spending, rather than business or individual spending, and government revenues. Our national debt (total of all debt since 1790) at the end of Fiscal Year 2016 is estimated to be $19.4 trillion. The amount is large, but so is our economy. There is no reason to freak out. Investors certainly aren’t freaking out or they would not invest in Treasury bonds. Here is a Wikipedia explanation using Modern Monetary Theory (MMT):

The government sector is considered to include the treasury and the central bank, whereas the non-government sector includes private individuals and firms (including the private banking system) and the external sector – that is, foreign buyers and sellers.

In any given time period, the government’s budget can be either in deficit or in surplus. A deficit occurs when the government spends more than it taxes; and a surplus occurs when a government taxes more than it spends. Sectoral balances analysis states that as a matter of accounting, it follows that government budget deficits add net financial assets to the private sector. This is because a budget deficit means that a government has deposited more money and bonds into private holdings than it has removed in taxes. A budget surplus means the opposite: in total, the government has removed more money and bonds from private holdings via taxes than it has put back in via spending.

Therefore, budget deficits, by definition, are equivalent to adding net financial assets to the private sector, whereas budget surpluses remove financial assets from the private sector.

This is represented by the identity:

(G-T) = (S-I) -NX

where NX is net exports.

The conclusion drawn from this is that private net saving is only possible if the government runs budget deficits; alternately, the private sector is forced to dissave when the government runs a budget surplus.

According to the sectoral balances framework, budget surpluses remove net savings; in a time of high effective demand, this may lead to a private sector reliance on credit to finance consumption patterns. Hence, continual budget deficits are necessary for a growing economy that wants to avoid deflation. Therefore, budget surpluses are required only when the economy has excessive aggregate demand, and is in danger of inflation.Because the government can issue its own currency at will, MMT maintains that the level of taxation relative to government spending (the government’s deficit spending or budget surplus) is in reality a policy tool that regulates inflation and unemployment, and not a means of funding the government’s activities per se.

Our government can afford and should pay a living wage to put people to work fixing our infrastructure. Every dollar spent will be respent 7 times dramatically increasing tax revenues. If we tax the rich, we can pay down the debt as desired.

There is no evidence-based reason to hit the panic button.

Donald Trump is an idiot willfully ignorant and stubborn.

He demonstrates his ignorance and idiotic ideas in this interview:

Transcript: Donald Trump interview with Bob Woodward and Robert Costa


Trump is unqualified to be president

March 31, 2016

Donald Trump is unqualified to be our next president because he acts like a thug, does not know how our system of government works and he lacks the proper temperament to govern in the best interests of everyone. Thuggery and poor temperament cannot be fixed because that is who he is. He admires those ‘qualities’ in himself and he is unlikely to change. While lack of knowledge can be fixed by learning, given sufficient time and commitment, he has not demonstrated that he realizes he is ignorant about anything. A president who respects no one except himself and who relies on intimidation to get what he wants is not suited to govern democratically in the best interests of the many as opposed to the few.

He has been conducting a war against people who protest at his public appearances by calling them bad people, ordering security personnel to evict them and offering to pay the legal fees of anyone who assaults them. He has invoked his right to freedom of speech to justify excluding and assaulting protesters. He mistakenly believes that the Freedom of Speech Clause in the First Amendment protects his right to speak to his supporters, but it does not protect people who disagree with him. He has it backwards. The Freedom of Speech Clause protects people who disagree with the government and the Freedom of Assembly Clause protects them when they assemble in a public place to express their dissent. Instead, he abuses the First Amendment to eliminate dissent rather than protect it. This is what dictators do. They criminalize dissent and govern from the top down by proclamation. People who disagree are imprisoned or killed.

Next, let’s take a look at the Corey Lewandowski case. He is Trump’s campaign director who was charged recently with battery for grabbing a reporter and pulling her away from Trump while she was questioning him. Wikipedia provides a summary of the incident.

On March 8, 2016, Michelle Fields, a reporter for Breitbart News, alleged she was yanked out of the way and bruised by Lewandowski while attempting to pose a question to candidate Donald Trump while he was exiting a room in the Trump National Golf Club in Jupiter, Florida following a press conference. Ben Terris of the Washington Post identified Lewandowski as the man who yanked her.[24][25][26] The Trump campaign denied the allegations, as did Lewandowski on his Twitter feed, wherein he denied ever having touched her.

On March 29, 2016, Lewandowski was charged with one count of simple battery by the Jupiter Police Department for the March 8 incident. A court date was set for May 4, 2016, after Lewandowski surrendered himself to the authorities. He released a statement maintaining his innocence. The Jupiter Police also released closed-circuit video of the incident taken by an overhead camera at the Trump National Golf Club resort.

Battery, which is defined as an ‘unpermitted touching,’ is a misdemeanor crime. The touching must be the result of an intentional act, as opposed to an unconscious, inadvertent, or accidental act. A video shows Fields suddenly being yanked backward and she has bruises on her arm caused by the person who grabbed her. Although we cannot see the hand and arm of the person who yanked her backward, Lewandowski was right behind her in a position where he could have grabbed her arm or, at a minimum, was in position to have seen who did. No one else appears to have been close enough to have grabbed her, however, and she has identified Lewandowski as the person who grabbed her. Ben Terris, a reporter for the Washington Post, has independently confirmed the identification. This evidence certainly is sufficient to establish probable cause (reasonable grounds) to believe that Lewandowski committed a battery.

At first Lewandowski denied that he touched Fields. Recently, however, he conceded that might have inadvertently touched her. He and Trump have denied knowing her. Curiously, both have accused her of being ‘crazy.’ Neither has explained how they would know that if they had no idea who she was. Trump attacked Fields yesterday for reporting such an ‘insignificant’ matter to the police and suggested that she should have been charged for harassing him. This is intolerable victim-shaming, a form of witness intimidation that potentially could be the subject of a new criminal charge.

This is not how we handle criminal cases in this country. A defendant who has been charged with a crime can admit or deny guilt. If he were to deny guilt, the matter would be scheduled for trial. He would be released and the case would be dismissed, if the jury finds him not guilty. The matter would proceed to sentencing if the jury finds him guilty.

Trump is trampling Lewandowski’s right to due process of law while putting the victim on trial. This stunt will likely backfire by alienating women voters, a result he can ill afford since 70% of women surveyed in a recent poll said they would not vote for Trump.

Trump aggravated the situation yesterday when he told MSNBC’s Chris Mathews that he believes women who have abortions should be sentenced to prison, if abortion were to be legalized. He changed his mind later in the day after he was criticized by Ted Cruz and John Kasich. He now agrees with them. If the SCOTUS were to overrule Roe v. Wade, they would punish the person who performed the abortion, but not the woman, whom they would regard as a victim.

In conclusion, We want a president who is knowledgeable about the issues of the day and not given to shooting from the hip. Electing Donald Trump would be a disaster.


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