‘Trump University’ fraud claims surface in campaign

By Michael Isikoff

Donald Trump’s legal troubles, stemming from his involvement in the now defunct Trump University, erupted into a major issue in the presidential campaign today, with rival Marco Rubio citing it as evidence the Republican frontrunner is a “con artist.” The developer is being sued in federal court by former students who claim they were defrauded of thousands of dollars in fees.

“I mean, this is unreal,” said Rubio on NBC’s “Today” show. “This guy is a con artist. … You have a guy who is being sued right now for fraud for Trump University. … There are people that borrow $36,000 to go to Trump University … And you know what they got? They got to take a picture with a cardboard cutout of Donald Trump.”

“A con artist is about to take over the conservative movement and the Republican Party, and we have to put a stop to it,” he added in a separate interview on ABC News.

Rubio’s comments, which echoed remarks by him and Sen. Ted Cruz at the Republican debate Thursday night, followed the disclosure by Yahoo News that Trump is slated to be a witness in an upcoming civil trial in San Diego. A class-action suit accuses the developer of defrauding thousands of students in his unaccredited, for-profit “Trump University,” which promised to teach them how to get rich in the real estate business. The sharp new attack lines reflect a strategic decision made by the Rubio camp this week that the Florida senator needed to launch a frontal attack on Trump and that the ongoing fraud cases against him — there are actually three he is currently facing over the university — present the most opportunities.


Donald Trump holds a media conference announcing the establishment of Trump University in 2005. (Photo: Thos Robinson/Getty Images)

“We believe it’s going to be a fruitful line of attack,” one Rubio advisor told Yahoo News Friday. To have a leading presidential candidate being accused of fraud in court in the midst of a campaign “is unique in American politics.”

Trump, who has strongly denied all wrongdoing and recently hired prominent litigator Daniel Petrocelli to represent him in the San Diego case, dismissed the issue when it came up in the debate and again in a press conference Friday at which he was endorsed by New Jersey Gov. Chris Christie. Christie defended Trump, who claimed he had won “most” of the lawsuits he has faced over the issue. In fact he has failed in repeated attempts to get the suits dismissed. The San Diego case will be the first to go to trial.

And Cruz appears to have made a similar calculation as Rubio, bringing up the potential effect of the cases on Trump’s electability.

"You know, Marco made reference earlier to the litigation against Trump University. It’s a fraud case,” Cruz said during the debate, pointing to the likely campaign fallout.

"If this man is the nominee, having the Republican nominee, on the stand in court, being cross-examined about whether he committed fraud,” Cruz said. “You don’t think the mainstream media will go crazy on that?”

As noted by Yahoo News last week, the Trump University case has already intruded on Trump’s political schedule. On Dec. 10, 2015, during a day he was making international headlines over his pledge to ban Muslim immigrants from the United States, Trump slipped away to give a closed-door pretrial deposition in the case, according to court filings reviewed by Yahoo News. Exactly what he said in the deposition remains under seal, but lawyers for Tarla Makaeff, a California yoga instructor who is the lead plaintiff in the case, cited portions of his testimony (blacked out in her pleadings) to support their contention that Trump has threatened to ruin her financially and that she needs protection from his “retaliation.”

The case filed by Makaeff and four other plaintiffs revolves around the operations of the school Trump launched in 2005 with a promotional YouTube video, as well as ads that proclaimed, “I can turn anyone into a successful real estate investor, including you,” “Are YOU My Next Apprentice?” and “Learn from my handpicked experts how you can profit from the largest real estate liquidation in history.” The plaintiffs, former students at Trump University, allege they were misled into maxing out their credit cards and paying up to $36,000 in fees (Makaeff claims she forked over $60,000) for seminars in hotel ballrooms and “mentoring” by Trump’s “hand-picked” real estate experts. The lawsuit alleges the seminars turned into little more than an “infomercial” and the Trump mentors offered “no practical advice” and “mostly disappeared.”

The Makaeff case is expected to be consolidated shortly with another outstanding class-action lawsuit over the school accusing Trump of a “pattern of racketeering activities.” A final pretrial conference has been scheduled by U.S. Judge Gonzalo Curiel with an actual trial expected in late spring or summer.

Yet another lawsuit against Trump accusing him of fraud over Trump University has been filed by New York Attorney General Eric Schneiderman and is still pending in the state’s courts.

Trump’s lawyers have adamantly denied the charges. “None of it is true. No one was defrauded,” said Alan Garten, the Trump Organization’s general counsel, in an interview about the allegations last year. “The people that take these classes go into it with their eyes open. A lot of people did very well [with Trump University]. A lot of people enjoyed it. But like everything else, if people don’t put the effort into it, they don’t succeed.”

While it is unclear how long the trial over Trump University will take, both sides have submitted lengthy witness lists: 72 individuals have been identified as prospective witnesses by the two sides. The case shows little sign of being settled. In recent filings, Petrocelli, best known for representing one of the murder victims in a civil suit against O.J. Simpson, identified 965 trial exhibits he expects to use at trial, including PowerPoint presentations, course curriculums, emails, letters, videos and other material.