It was 2009 and the real estate flipping training circuit was hot. On the heels of the financial collapse which lead to massive foreclosures, you could not turn on late-night television without seeing the seedy underbelly of the seminar industry. Anyone and everyone suddenly had the ability to turn their bad luck around, leap into higher tax brackets and secure their own piece of the American Dream. All that was necessary is a little education from expert trainers who each proudly exclaimed that just months ago they were broke, eating ramen in their one bedroom apartments without electricity. These trainers all seemed to tell the same story; With lousy credit they secured no-money-down mortgages, elbowed out seasoned real estate investors and bought homes for pennies on the dollar, days before reselling them for massive profits. Look, here’s a redacted check to prove it!
My car radio blared another commercial for one of the endless real estate flipping seminars, but before I could turn the station I realized this one was different. The announcer invited listeners to attend a free presentation by none other than the real estate guru himself Donald J. Trump, maybe the world’s most prolific property investor.
The successful Donald Trump successfully made his millions in real estate, so he and his highly successful trainers, who each have a history of success, will show you how to also be a successful success… So, don’t be a loser. Attend this weekends FREE Trump University at the airport Radisson, but space is limited, because success! Stop not succeeding and succeed, become a successful success like successful Trump. Reserve now!
Like every other real estate flipping program, these free seminars were, of course, upsell presentations to their $1,500 weekend presentations (regurgitating flipping ‘secrets’ one can easily learn on the interwebs), all to funnel the remaining dreamers into the $35,000 “Trump University Elite” seminars, which, by the way, could all be put on a credit card (because they’re nice like that).
TRUMP THE TEACHER
Trump University, a school offering his insights into getting rich in real estate at three-day seminars, was different from the vitamin company. Trump was a founder and an owner, and he portrayed himself as taking an active role, shaping the curriculum and vetting the instructors.
“My father did it, I did it,” went one ad, referring to the fortunes they made in real estate, “and now I’m ready to teach you how to do it.”
The closest most students got to the mogul was a life-sized cardboard cutout. A 2013 lawsuit from the New York attorney general and two class actions in California claim the three days of instructions were largely useless, and that students paying $1,495 to attend were misled. Worse, students at the seminars were told to max out their credit cards to pay tens of thousands dollars more for additional “Elite” training that, the lawsuits claim, were also largely unhelpful.
“I wasted my entire life savings on Trump,” said former Trump University student Nelly Cunningham in an affidavit for the New York case. She added, “I feel like such a fool.”
In 2010, Mark Sokol said he paid for the three-day seminars at a hotel in Woburn, Massachusetts, after attending one of the school’s free introductory classes to get people to sign up. “I was thinking, he’s into real estate, maybe there’s some merit,” he recalled.
He quickly regretted it. Sokol, now 51, said the main speaker was ill prepared, offering dated information. Sokol also didn’t like being pressed to hand over more money for the “Elite” package, which cost $35,000. He refused. We were “preyed upon,” he told the AP. “It was high pressure.”
The New York lawsuit is pending. Under pressure from regulators, the school had to drop “university” from its name in 2010 because it had never been licensed as one. It stopped taking new students later the same year.
From this same article, it also mentioned Trumps multi-level marketing (MLM) company The Trump Network.
Six years ago, Donald Trump stood before 5,000 people in a hotel theater in downtown Miami and informed them he had a rescue and recovery plan for the recession-battered nation.
His remedy: Join the sales team of a business that sold, among other things, specially tailored vitamins based on a user’s urine analysis. Anyone with drive, and $497 to pay for a special “FastStart” marketing kit, could begin raking it in. They would profit not just from their own sales of Trump-branded products but from persuading other go-getters like themselves to start selling. Anyone they recruited would have to pass on a cut of their sales to them, and those recruits, in turn, could get a cut from their own recruits.
It was a multilevel marketing company, like Avon, Amway and Mary Kay.
Trump University and the Trump Network were not his only foray into get rich quick schemes. He was also a spokesman for ACN, another MLM (or pyramid promoter) that charges $499 to enter a downline under a friend or family member, which requires ‘distributors’ seek out others to shell out cash. Oh, the product? Change people’s utility and phone providers, if they can, to the only other provider in town. In many cases, there was not another utility, because that whole monopoly thing. But those $500 new distributor fees really add up. There was so much money involved in ACN Trump touted them on his television show The Celebrity Apprentice. His name legitimized the MLM and caused many more to invest and end up complaining, leading to regulatory problems in Canada, Australia and in the U.S., particularly Montana and Maryland.
The Montana accusations were especially harsh. In 2010, the state’s securities regulator claimed ACN ran an “illegal pyramid promotional scheme” — relying too heavily on fees from new salespeople to generate income — and issued a cease-and-desist order. Regulators dropped the charge that same year after ACN agreed to refund money lost by salespeople and to improve training.
The next year, 2011, Trump featured the company on his TV show, “The Celebrity Apprentice.” He never licensed his name to the company. His role was limited to promoting it, which he did so repeatedly. Earlier, he had appeared in an ACN video calling it a “great company.” And in the past two years, he gave at least three speeches at ACN events, earning $1.35 million in fees, according to figures released by the Federal Election Commission.
There are some very good and legitimate business opportunities out there, including ones in real estate and multi level marketing. However, many real estate flipping programs and some MLM’s are considered by many as the bottom of the barrel of the business training industry. Legitimate trainers cringe when they see or hear get-rich-quick schemes advertised as they know that most folks will lose their hard earned money, and those are the people who can least afford it.
One has to wonder what Trumps supporters would think if they understood his involvement in these schemes. Would they think it speaks to the man’s character and convictions? Would they wonder if he really has consideration and compassion for America’s proletariat?
Could it really be that a leading candidate for President of the United States may just be Vince, the ShamWow guy?