Trump Accused of Financial Fraud; Slated to Take Witness Stand During Primaries

Michael Isikoff
Chief Investigative Correspondent
February 23, 2016

Here’s a part of the political calendar that nobody in the Republican Party seems to have noticed: This spring, just as the GOP nomination battle enters its final phase, front runner Donald Trump could be forced to take time out for some unwanted personal business: He’s due to take the witness stand in a federal courtroom in San Diego, where he is being accused of running a financial fraud.

Republican presidential candidate Donald Trump, seen in reflection, poses for a portrait following an interview with the Associated Press at the Trump National Golf Club in Sterling, Va., Wednesday, Dec. 2, 2015. Trump says that if he’s elected president, he’ll know within six months whether he can achieve an elusive peace accord between Israelis and Palestinians, one of the world’s most vexing challenges. But the Republican presidential candidate says he has doubts about each side’s commitment to the peace process. (AP Photo/Andrew Harnik)

In court filings last Friday, lawyers for both sides in a long-running civil lawsuit over the now defunct Trump University named Trump on their witness lists. That makes it all but certain that the reality-show star and international businessman will be forced to be grilled under oath over allegations in the lawsuit that he engaged in deceptive trade practices and scammed thousands of students who enrolled in his “university” courses in response to promises he would make them rich in the real estate market.

Although the case has been winding its way through the courts for the past five years — and Trump has denied all wrongdoing — the final pretrial conference is now slated for May 6, according to the latest pleadings in the case. No trial date has been set, but the judge has indicated his interest in moving the case forward, the pleadings show.

“This is pretty amazing,” said Scott Reed, a veteran Republican Party consultant, about Trump’s upcoming due date in federal court. “Usually, you clean this stuff up before you run for president.”

Trump’s new lead lawyer in the case, Daniel Petrocelli, best known for representing one of the slain murder victims in a civil suit against O.J. Simpson, did not respond to emailed questions about Trump’s upcoming testimony, including how long he expects his client to be on the witness stand.

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 managed to escape any press attention and 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 for bringing the lawsuit and that she needs protection from his “retaliation.”

But the upcoming civil trial could be a much bigger burden on Trump’s time. If it takes place in May, that would put it in the middle of the final phase of the GOP primary schedule: Nebraska and West Virginia vote on May 10, Oregon on May 17, and Washington state on May 24. Then on June 7, the biggest prize of all: the California primary (with 172 delegates at stake). New Jersey, Montana, New Mexico and South Dakota vote the same day.

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. Trump just last December hired Petrocelli, a master litigator, and he recently identified 965 trial exhibits he expects to use at trial, including PowerPoint presentations, course curriculums, emails, letters, videos and other material. Picking jurors who have neutral views on Trump could present another time-consuming hurdle.

The core case revolves around the operations of a school Trump launched in 2005 with a promotional You Tube 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 $60,000 in fees for seminars in hotel ballrooms and “mentoring” by Trump’s “hand-picked” real estate experts. The lawsuit against the school, which is no longer in business, alleges the seminars turned into little more than an “infomercial” and the Trump mentors offered “no practical advice” and “mostly disappeared.” New York Attorney General Eric Schneiderman filed a separate suit in 2013 alleging fraud on the part of the “university,” which was never an accredited institution and awarded no degrees.

 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.”
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