Cohen v. Trump

Filing 1

COMPLAINT against Donald J. Trump (filing fee $400 receipt number 0974-6411097), filed by Art Cohen. (Attachments: # 1 Civil Case Cover Sheet).The new case number is 3:13-cv-2519-DMS-RBB. Judge Dana M. Sabraw and Magistrate Judge Ruben B. Brooks are assigned to the case. (Forge, Jason)(dls) (av1).

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Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 1 of 35 1 ROBBINS GELLER RUDMAN & DOWD LLP 2 JASON A. FORGE (181542) L. JENSEN (211456) 3 rj ens en 4 HOM S R. MERRICK (177987) tmerrick 5 655 West roadway, Suite 1900 San Diego, CA 92101 6 Telephone: 619/231-1058 619/231-7423 (fax) 7 ZELDES HAEGGQUIST & ECK, LLP 8 AMBER L. ECK (f77882) ambere(( 9 HELENTI. ZELDES (220051) helenz 10 ALREN HAEGGQUIST (221858) alreenh 11 AARONM. OLSEN (259923) 12 625 Broadway, Suite 1000 San Diego, CA 92101 13 Telephone: 619/342-8000 619/342-7878 (fax) 14 Attorneys for Plaintiff and Proposed Class 15 UNITED STATES DISTRICT COURT 16 SOUTHERN DISTRICT OF CALIFORNIA 17 ART COHEN, Individually and on Case No. '13CV2519 DMS RBB 18 Behalf of All Others Similarly Situated, CLASS ACTION Plaintiff, 19 COMPLAINT FOR VIOLATIONS OF vs. 18 U.S.C. § 1962(c) 20 MOIL 21 DONALD J. TRUMP, Defendant. 22 23 24 25 26 27 28 883445_1 Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 2 of 35 Plaintiff Art Cohen ("Plaintiff'), by and through his attorneys, brings this action on behalf of himself and all others similarly situated, against Donald J. Trump ("Defendant" or "Defendant Trump"). Plaintiff alleges the following based upon information and belief, the investigation of counsel, and personal knowledge as to the allegations pertaining to him. NATURE OF THE ACTION 1. Defendant ensnared Plaintiff and thousands of other student-victims in a fraudulent scheme nationwide to sell real estate seminars and mentorships ("Live Events") by trading on the Trump moniker. Defendant uniformly misled Plaintiff and 10 the Class that they would learn Donald Trump's real estate secrets through him and 11 his handpicked professors at his elite "University." The misleading nature of the 12 enterprise is embodied by its very name. That is because, though Defendant promised 13 "Trump University," he delivered neither Donald Trump nor a University. 2. 14 Defendant expressly set out to leverage Donald Trump's fame and 15 expertise as a real estate mogul by creating "Trump University," which Defendant 16 marketed as a premier institution of higher learning rivaling Wharton Business 17 School, and with which Trump was so integrally involved, students would effectively 18 be learning from him. 1 Defendant marketed Trump University as `the next best thing 19 to being Trump's "Apprentice," referencing Trump's hit reality television series. 3. 20 In a promotional video for Trump University posted on YouTube, 21 embedded in email blasts, and shown at Trump University Live Events (hereinafter, 22 I the "Main Promotional Video"), Trump himself promised would-be student-victims: We're going to have professors and adjunct professors that are 23 absolutely terrifc. Terrific people. Terrific brains. Successful. The best. We are going to have the best of the best. And, honestly, if you 24 don't learn from them, if you don't learn front sne, if you don't learn from the people that we're going to be putting forward, and these are all 25 people that are handpicked by jne, then, you're just not gonna make it in 26 27 As detailed herein, Trump University changed its name to Trump Entrepreneur Initiative on June 2, 2010. 1 28 883445_1 II -1- Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 3 of 35 terms of the world of success. And that's okay, but you're not gonna make it in terms of success. 1 2 4. 3 Defendant mass mailed to Plaintiff and the Class a "Special Invitation from Donald J. Trump" to the free introductory Live Event, adorned with the Trump 4 University coat of arms and promising: "My hand-picked instructors and mentors 5 will show you how to use real estate strategies 6 ...." The letter continues that with "ongoing support from your own Team of Trump Experts — you'll have what you 7 need to succeed!" The letter closes with Donald J. Trump's name, signature, and 8 Trump University's address at 40 Wall Street, 32nd Floor, New York, NY 10005. 9 5. 10 Trump gave himself a prominent, if not exclusive, role in the national advertising campaign for "Trump University." However, Trump did not fulfill the 11 promises he made to student-victims around the country — he did not teach students 12 his coveted real estate investing "secrets" at the Live Events, he did not contribute in 13 any meaningful way to the curriculum for the Live Events, and he did not handpick 14 the Live Event seminar instructors and mentors who "taught" student-victims at 3-day 15 Live Events and Elite mentorship programs — both of which were upsells from the free 16 introductory Live Event called the "Preview." 17 6. 18 Almost immediately after Trump founded Trump University, the New York State Education Department ("NYSED") wrote to Donald Trump on May 27, 19 2005, warning him that using the name "University" was illegal without a license, and 20 asked Trump to stop using the name "Trump University." Instead of complying, 21 Defendant's agents created a fictitious office in Dover, Delaware, and then Defendant 22 continued to brazenly operate illegally out of his 40 Wall Street office in New York, 23 New York for five years. On March 30, 2010, the NYSED wrote to Donald Trump 24 and again advised that use of the title "University" in the name of his corporation was 25 "misleading" and illegal. On June 15, 2010, NYSED wrote to Trump University 26 Emphasis is supplied and citations and internal quotation marks omitted here and throughout, unless otherwise noted. 2 28 883445_1 II -2- Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 4 of 35 directing Defendant to cease any further training until Trump University obtained a 1 2 license to operate as an institution of higher learning. The NYSED demanded: "All current students should be refunded" and warned that failure to comply with the law 3 4 "may result in disciplinary action." Defendant did not give students refunds, but did stop offering and selling Live Events shortly thereafter in or about August 2010. 5 6 However, Defendant has made multiple statements that he intends to resume Trump 7 University courses in the future. 7. 8 At least 11 Attorneys General and the U.S. Department of Justice have 9 received numerous complaints about Trump University; the Texas Attorney General's 10 investigation into misleading advertisements by Trump University ultimately led to 11 the suspension of Live Events in that state; and a year after the filing of a related class 12 action in this Court, the New York Attorney General launched an investigation into 13 Trump University's deceptive practices. And, due to Defendant's misleading 14 advertisements and marketing of Trump University as a "University," the Better 15 Business Bureau ("BBB") refused to accredit Trump University and gave it a D- grade 16 due to the many complaints lodged by consumers. 8. 17 Plaintiff brings this class action on behalf of himself and all other 18 ~ similarly-situated consumers who purchased Trump University Live Events 19 throughout the United States, asserting violations of the Racketeer Influenced and 20 Corrupt Organizations Act ("RICO Statute"), 18 U.S.C. § 1962(c). 9. 21 Plaintiff seeks damages and equitable relief on behalf of himself and the 22 Class, including, but not limited to: treble their monetary damages; restitution; 23 injunctive relief; punitive damages; costs and expenses, including attorneys' and 24 expert fees; interest; and any additional relief that this Court determines to be 25 necessary or appropriate to provide complete relief to Plaintiff and the Class. JURISDICTION AND VENUE 26 10. This Court has original jurisdiction over the subject matter of this action 27 28 pursuant to 28 U.S.C. § 1331, because Plaintiff's claims arise under the RICO Statute, 883445_1 11 - 3 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 5 of 35 1 18 U.S.C. § 1962. The Court has diversity jurisdiction under 28 U.S.C. § 1332 because 2 Plaintiff resides in California, and Defendant resides in New York. This Court also 3 has original jurisdiction over this action under the Class Action Fairness Act of 2005, 4 28 U.S.C. § 1332(d)(2) ("CAFA"), as to the named Plaintiff and every Class Member, 5 because the proposed Class contains more than 100 members, the aggregate amount in 6 controversy exceeds $5 million, and Class Members reside across the United States 7 and are therefore diverse from Defendant. 8 11. This Court has personal jurisdiction over Defendant because he has 9 significant minimum contacts with this State, and intentionally availed himself of the 10 laws of California by transacting a substantial amount of business throughout the State 11 and this District, including but not limited to, the promotion, marketing, advertising, 12 and sale of Trump University Live Events throughout California and San Diego 13 County, and on the Internet to consumers located throughout California and San 14 Diego County. 15 12. Venue is proper under 18 U.S.C. § 1965(a), because Defendant is subject 16 to personal jurisdiction in this District as alleged above, and Defendant has agents 17 located in this District. PARTIES 18 19 A. Plaintiff 20 13. Plaintiff Art Cohen is a businessman and resident of the state of 21 California. Cohen learned about Trump University in 2009 when he saw an 22 advertisement in the San Jose Mercury News, which is delivered daily to his home. 23 Cohen believes that he also received by mail a "special invitation" to Trump 24 University from Donald Trump, which included 2 VIP tickets to the free seminar. 25 Cohen was lured in by Donald Trump's name and reputation as a real estate expert. 26 Cohen attended the Preview Live Event at the Fremont Marriott Silicon Valley in 27 Fremont, California, on April 29, 2009, where Cohen was shown the Main 28 Promotional Video. Based on Defendant's misrepresentations and material omissions 883445_1 11 - 4- Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 6 of 35 1 that he would receive Donald Trump's real estate secrets from his handpicked 2 "professors" and mentors at his "University," Cohen purchased the $1,495 Fast Track 3 to Foreclosure Real Estate Retreat, which he attended from May 8-10, 2009, at the 4 Sheraton Palo Alto Hotel in Palo Alto. At the 3-day event, Cohen was upsold to the 5 Gold Elite program, which he purchased on May 10, 2009, for $34,995, plus the 6 interest and finance charges paid to his credit card. 14. Plaintiff would not have paid for any of the Trump University programs 7 8 had he known that he would not have access to Donald Trump's real estate investing 9 secrets, that Trump had no meaningful role in selecting the instructors for the Live 10 Events, and/or that Trump University was not a "University," as Defendant had 11 represented to him. 12 B. Defendant 13 15. Donald J. Trump resides in the State of New York. Trump was a founder 14 and Chairman, officer, director, managing member, principal and/or controlling 15 shareholder of Trump University. Defendant Trump is also Chairman of the board of 16 directors, President and CEO of the Trump Organization, a conglomerate of 17 companies which includes Trump University. 16. Defendant Trump received revenues paid to Trump University from 18 19 Plaintiff and other Class Members through two or more shell companies, including 20 DJT University Managing Member LLC (now DJT Entrepreneur Managing Member 21 LLC), a New York Limited Liability Company, and DJT University Member LLC 22 (now DJT Entrepreneur Member LLC), a New York Limited Liability Company. 17. Defendant Trump has conducted substantial business within the State of 23 24 I California, including this District. 18. Defendant Trump approved, authorized, either specifically and/or tacitly 25 26 directed, ratified and/or participated in the acts complained of herein engaged in by 27 Trump University and its personnel. 28 883445_1 (I -5- Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 7 of 35 COMMON FACTUAL ALLEGATIONS 1 2 A. The Scheme 19. Defendant Trump and others, including but not limited to, the former 3 4 President of Trump University, Michael Sexton, devised and executed a scheme to 5 make tens of millions of dollars by marketing Trump University as both: (1) a learning 6 institution with which Donald Trump was so integrally involved that students would 7 effectively be learning from him because, among other reasons, they would be 8 learning his real estate secrets from instructors whom he had handpicked; and (2) an 9 actual university with a faculty of professors and adjunct professors. 10 20. This "Scheme" was fueled by a national advertising campaign, the 11 cornerstone of which was the Main Promotional Video. Defendant Trump caused the 12 Main Promotional Video to be published to YouTube online so it would be viewed by 13 prospective student-victims throughout the country. Trump University operated an 14 extensive advertising campaign with an annual budget at one time of $6 million, and a 15 database of over one million current and potential customers, which it targeted with 16 frequent email blasts. These e-blasts contained misrepresentations and/or links to 17 view the Main Promotional Video on YouTube, and/or Trump University's Facebook 18 page, Twitter account, and/or LinkedIn profile. When Trump University introduced 19 the Donald Trump "signature" campaigns (featuring Donald Trump's signature in 20 letters and ads) including "Are YOU My Next Apprentice?" and "Learn From the 21 Master," consumer responses jumped by over 50%. And though personnel knew it 22 was false to claim the instructors were handpicked by Defendant Trump, Defendant 23 continued to use this catch-phrase as a marketing hook. 21. Other methods and means that Defendant Trump and others used to 24 25 execute and perpetuate the Scheme included the following: (a) Defendant Trump reviewing and approving advertisements before 26 27 I they were released, which featured quotes from Defendant Trump himself, such as: "I 28 883445_1 II -6- Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 8 of 35 1 can turn anyone into a successful real estate investor, including you. — Donald 2 Trump." (b) Using Defendant Trump's name, photos and/or quotes for all Live 3 4 Events, website and advertising, and the website home page displayed a large photo of 5 Defendant Trump along with the message from him: "Are YOU My Next Apprentice? 6 Prove it to me!" 7 1 8 Calf fora free consultation ' (') 7 7 ,{ P • it 5. U.: i • .; 5) ~ Li N I V I IL S I 'I Y ~ E Rcn .,• 5 9 10 11 12 13 14 Afteni a F1,ue Course It 15 16 17 Lecirn w -,alth St ('rift Trio F~ es Ie: i 1r1r :Irk I Creative Financing Techniques for Today's F, r.4d lr ~ : cy ar GetFi ancia Ad ice Market Ohs t - ~ kenhd ThirTy r:.iiith ~ 3ltli cirrus. 6rc -nixed tyre 1 ' ' 7{i1 rsurrgi - _-.°<oi s (dial I iirdyyt FREE r=;inrt. o ~ • May 05, 2010 yv .10: at6PM EST &9PMAEST Get started Find a class near you Enter your email [Enter zip code 1 18 19 20 (d) Using advertisements featuring Defendant Trump and his image 21 with quotes such as: "Don't think you can profit in this market? You can. And I'll 22 show you how. Learn from my handpicked experts how you can profit from the 23 largest real estate liquidation in history." 24 (e) Sending emails to thousands or tens of thousands consumers from 25 Trump University's one million customer database that featured Defendant Trump's 26 photo with the words: "Are you My Next Apprentice," and stated: "76% of the 27 world's millionaires made their fortunes in real estate. Now it's your turn. My father 28 did it, I did it, and now I'm ready to teach you how to do it too." The signature block 883445_1 — 7 — Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 9 of 35 at the bottom of the email read, Donald J. Trump, Chairman, Trump University, and above that is Defendant Trump's actual signature. From: tlnWerstly <en'aitdi tr rrumpun vor> To: branton Sent: Thu, April Oh, 2(110 12:06:00 PM Subject: Enooprer+eurs Needed to be toy - - Ned Apprentice I want people who want success. II you Think BIG and beliove you 've got what it takes to succeed, I want youl 10 76°r, of the world's mflllonnires mach their fortunes In reel estate. Now Its your turn. My father did It. I did It, and new I'm ready to teach you how to do If too. 11 iK ,tin My :cam of Font eslata exports ai Rump Ucivorsity is coming to your area in the pout law cays to conduct my Free Intro Apprenticeship Wmksh:p. It you think you've got what It takes to bony pout Apprentice, step up and attend, You shoold also bring along a rusted partner. Th{s Is YOUR cpporlunity to create weaith anti take cenfrol of your own financial return with proven strato0los that work in the current real 12 13 14 estate market. Attend the Free Intro Approeltoeshlp Workshop to learn how te. -" ~ . sd s r . ,~ ,y' . -, ~ £ s, r x,.,:.: I'm also going to give you my "Secrets of Real Estate Marketing" inventor to0lklt in $50 Value) - absolutely FREE when you attend. 15 Buy proportion from bank; at DEEP dismounts Use sired sales to CONTROL property I- Increase your tinxcche. POWER vnlh bvorege 16 r O r't A. 1: time, . ae tt!rg i3 obey ilntited and dry Trump Workshops ulwpyo fill an It Negottoto PROFITABLE dosis that steel your peals 0. Att.uod and tnon now to develop the CONFIDENCE to succeed I, rent estate 17 See you at the Copt 18 19 Dnnu d J Trump Crmrtman, Tromp Universlty 20 21 Sending signed letters through the mails to consumers nationwide, (f) 23 I with Defendant Trump's name and signature at the bottom, stating: "[N]o course 24 offers the same depth of insight, experience and support as the one bearing my name. 22 . My hand-picked instructors and mentors will show you how to use real estate 25 26 strategies to: [s]upplement or even replace your income, [s]ecure your long-term 27 financial future ... [s]tart profiting today! Now is the time to create your financial 28 legacy. You can do it, even if you only have five or ten hours a week to spare. With 883445_1 II — 8 — Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 10 of 35 1 our simple instructions and practice exercises — and ongoing support from your own 2 Trump Team of Experts — you'll have what you need to succeed!" (Second 3 emphasis in original). The letter closed with Donald J. Trump's name, signature, and 4 address, at 40 Wall Street, 32nd Floor, New York, NY 10005. 5 (g) Sending substantially-similar signed letters through the mails to 6 consumers nationwide addressed as "Dear Friend" from Donald Trump promising: 7 "Come to my free class. In just 90 minutes, my hand-picked instructors will share my 8 techniques, which took my entire career to develop," and signed "Sincerely, Donald 9 Trump" with Defendant Trump's signature. (Emphasis in original). The letter 10 enclosed two "VIP" tickets to an upcoming Preview Live Event in the consumer's 11 area. 12 (h) Delivering to student-victims, who were in the midst of the Trump 13 University $1,495 Fulfillment Live Event and whom Trump University was trying to 14 persuade to sign up for the Elite program, a personalized (addressed to them by name) 15 letter from Donald J. Trump. The letter bore the Trump logo at the top of the letter 16 and the words "From the Office of Donald J. Trump." The letters stated: 17 18 19 20 21 22 23 24 25 26 27 Success in real estate begins with great training and proven strategies. Without education you don't stand a chance. I know how to make money in real estate. I've been doing it for a long time with a lot of success. My family has been a leader in real estate since my father — Fred Trump — started building residential homes in New York City 75 years ago. My father was my mentor and he taught me a lot. Now I want to teach you how to make money in real estate. fo be my apprentice you need to Think BIG and really want to succeed. More than anything, you need to take action. Do YOU have What It Takes to Be My Next Apprentice? I only work with people who are committed to succeed. I founded Trump University back in 2005 to teach go-getters how to succeed in real estate. My team at Trump University is filled with real estate experts . proven winners. We're the best of the best and we know what works. If you think you have what it takes to be my next apprentice, prove it to me. We've trained thousands of real estate investors over the years and we know you will be most successful when you work with a partner... 28 883445_1 -9- Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 11 of 35 If you ' re serious about making money and safeguarding your future, learn to invest in real estate. Trump University will teach you how. We'll give you the best training and the confidence to succeed. If you think you've got what it takes to be my next Apprentice, come prove it to me and my team. 1 2 3 4 The letter closes with "See you at the top!" And, it is signed, "Donald J. Trump, 5 ~ Chairman, Trump University." (i) 6 Promising students that "[t]here are many real estate investment 7 'seminars available but this is the only one designed by Donald Trump ' s personal 8 advisors , to show you step - by-step how to create quick cash immediately , and how to 9 build a large monthly cash flow WITHOUT using any of your own money or credit." (j) 10 Enforcing the uniform deceptive portrayal of Trump University 11 I through policies and procedures , including Marketing Guidelines , the PlayBook, and 12 standardized PowerPoint presentations and scripts that instructors were contractually 13 required to use. For example , the Marketing Guidelines were designed to "ensure 14 brand, tone and message across all Trump University's marketing efforts." The 15 "tone" required by those Marketing Guidelines was to "Think of Trump University as 16 a real University with a real Admissions process, i . e., not everyone who applies, is 17 accepted ." The Guidelines also required that personnel use the term "faculty" which 18 was to be marketed as comprised of Donald Trump ' s "top experts." (lc) 19 Sending scripts containing misrepresentations to instructors for use 20 at the Live Events through the interstate wires, such as the Preview Script sent from 21 Michael Sexton to primary instructors , including James Harris and Stephen Goff. The 22 speaker was required to use the official Trump University script and PowerPoint, and 23 not make any changes without prior authorization pursuant to the PlayBook and 24 his/her contract. Defendant Trump has concealed this speaker script that was used to 25 execute his Scheme. Excerpts of the concealed speaker script include: 26 27, 28 883445_1 II - 10 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 12 of 35 1 TI-11 III pUnivel-sity 2 'Preview Script — Version 3.0 3 4 Slide 01: Trump University Title Slide 5 Slide 02: The Trump University Apprenticeship Program 6 Ladies and gentlemen, I'd like to welcome you to our presentation tonight on behalf of Mr. Donald Trump and Trump University. My name is (lecturer rranrej. I'm a member of the faculty at Trump University. Let's talk a little about Donald Trump. 7 8 Slide 03: Trump Montage 9 Who here thinks they know Donald Trump? Hands up. Very good. Let's play this little game to get you in the mood of things. 10 ill * 12 1 * * I remember one to time Mr. Trump said to its over dinner, he said "real estate is the only market. that when there is a sale going on people run from the store". You don't vvKnrt to run from the store. 13 14 * 15 * * First we will show you Donald "Frump's negotiating system. Nobody negotiates better than Donald. We'll show you how he does it, why he does it, and how you can make it work for you. We will share with you marketing pieces for both finding and selling properties, and again I'll say this to you as I have before. One of the critical things is being able to got out of a property when the time is right for you. And that is what we'll show you how to do. 16 17 18 19 * 20 * Slide 57: Risk Free Guarantee 21 Making money may not be enough ror some of you. You have lost, thousands in the markets, but you worry about the $ 1495 that you pay here tonight-. 22 23 ('Trial Glasu): Some of you are still worried. You say: I am convinced that Trump University is the real deal. 1 am convinced that Donald Trump can teach inc how to make money in real estate. 1 am convinced that I don't have it chance of recovering my 401.1c losses unless I do something. 24 25 * 26 * 27 28 8834451 * II - 11 - * Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 13 of 35 1 Slide 58: Take Control of Your Life 2 When you enroll in Trump University and make use of our systems, specific knowledge and continuing support, you will be taking control of your life. You will create a new normal for yourself; one that is much morn enjoyable and rewarding than Your current situation. 3 4 Follow the proven practices, philosophy and guidance of Donald 'frump. 5 (1) 6 Promising students in blogs posted on Trump University's website 7 that Defendant Trump would be actively involved in Trump University and its 8 courses: Trump University rew out of any desire to impart my business ed knowledge, accumulat over the years, and my realization that there is a huge demand for practical, convenient education that teaches success. 9 10 I want the people who go to Trump University to succeed, and I plan to do tray part to help them. I'm not just putting my name on this venture; I plan to be an active presence in the curricula. The website, , will include such features as "Ask Mr. Trump," in which I answer your questions; the blog you're reading now; video clips of me; and more. My words, ideas, and image will also be woven into the courses we create. The reason I'm playing such an active role in Trump University is that I truly believe in the power of education.. . . [T]he people who go to Trump University want to be successful, and I'm on their side. 11 12 13 14 15 16 Another blog written under Defendant Trump's name promised: "Ihave to believe in 17 whatever Iput my name on, and it has to reflect who I truly am. To do otherwise 18 would be a disservice to me, my loyal customers, and prospective customers." 19 (m) Promising that he would personally select and answer students' 20 questions in a forum called "Ask Donald Trump," when the questions were selected 21 and the answers written by a same ghost writer (who was not a real estate expert). 22 23 24 25 26 27 28 883445_1 II - 12 Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 14 of 35 1 T F& U J4 GESCIiU H4 ' 88, krc 5953 tt€~ tvtftSIrY 2 3 ctty 4 ' Ask Donald Trump 5 Have: you avai Wdoiudto cat u flonaLUcwnp a quostt0u2 t,&Ws Four is carrel 6 i 7'{tro k'i is tltc£fitg lC(J 1 -13'tJii'7 { d 11'tllt*tl"aQ''..i tini::raC'.'1 aC+cti€"r iTi!rir;ji 6;i: '.atlt) aat€ t 51it'stbuta ; ;u; tu3 ; t:. ht i%..5+:f , -duce. itir4 i )e-a s I , Mimi - ON, itS 4 7 ti ;,b ir € ro most talsariestiii;a arxi •tire i grteatiuits. T-.r;: crt in t1tJ D r ttatrl art 0 •_€ E?Iu the ti stgw;AW ~ ;, iarYt} t.3btaal" tOOi, CU to ;').ir t~ .;u,Mara (rt ar,:;tvcieCl ~ Sit@pic. ,`,lfn cuft32.flt aalS\ rS postei Aa1 the (Ptif114' ~.f~'(~' . 8 9 Y. Pry rt t ttlbsrti uuu this tsa+ute 10 11 12 13 14 s .E. t: ..£`~ ' `e `•" ~'x :~ .w :.......:..:. . writ :.k f `< 15 16 17 I B. The Truth 18 22. Defendant knew that these representations were false, that Defendant 19 Trump was not actively involved in Trump University's Live Events, did not select or 20 interview Trump University's Live Event instructors or mentors, that Defendant 21 Trump offered no input into the actual instruction provided to Trump University's 22 student-victims, that a ghost writer wrote the Donald Trump blogs and wrote most or 23 all of the answers to the "Ask Donald Trump" questions and that Trump University 24 did not have a faculty of professors and adjunct professors, but rather independent 25 contractors paid commissions for sales. In other words, Defendant promised Trump 26 University, but delivered neither Donald Trump nor a University. 27 28 883445_1 II - 13 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 15 of 35 1 1. Not Donald Trump 2 23. Though Defendant Trump represented that he would be so integrally 3 involved that Trump University was effectively learning from him, Defendant 4 Trump's involvement was "completely absent," as Defendant Trump has admitted in 5 court filings. Defendant Trump had virtually no involvement in determining, nor was 6 he even aware of, what the instructors actually taught or what the courses were. 24. Though Defendant Trump represented that all of Trump University's 7 8 instructors would be handpicked by him, thus implying that students would get the 9 next best thing to Defendant Trump himself, it was Sexton and COO David 10 Highbloom who interviewed the instructors and was in charge of hiring instructors. It 11 was also Sexton — not Defendant Trump — who would know what, if any, education, 12 professional experience, testing, and/or licenses was required of instructors. In most 13 cases, Defendant Trump did not even know who the instructors or mentors were, nor 14 had he met them. 25. Though the entirety of Defendant Trump and Trump University's 15 16 marketing and advertising campaigns were centered around Defendant Trump's real 17 estate expertise and access to Defendant Trump's coveted real estate "secrets," Trump 18 University did not teach Donald Trump's real estate "secrets" as promised. Rather, 19 Sexton (who had no real estate experience) was responsible for compiling course 20 materials and largely handed this task over to third parties in the industry such as 21 Dynetech, Mark Dove, and David Early. 22 2. 23 26. Though Defendant portrayed Trump University as a University with an Not a University 24 admissions process and "Ivy League quality" rivaling Wharton Business School, 25 Trump University was unaccredited and unlicensed to operate as an institution of 26 higher learning. Trump University provided no degrees, no credits, no licenses, nor 27 anything else of marketable value to student-victims. 28 883445_1 11 - 14 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 16 of 35 27. Though Donald Trump in the Main Promotional Video and elsewhere 1 2 represented to would-be students that they would be taught by a faculty of "professors 3 and adjunct professors," Trump University had no such faculty. Rather, the 4 instructors were high-pressure salespeople hired as independent contractors and paid 5 on a commission basis based on the number and amount of Live Event sales made. 28. The Trump University PlayBook (see below) refers to students as 6 7 "Buyers" and directs "instructors" to prepare to "Sell, Sell, Sell!" 8 C. Trump University "Live Events" 29. Defendant literally had a "PlayBook" for his Scheme and nationwide 9 10 advertising campaign to mislead student-victims. The PlayBook contains a chart 11 depicting the upsell scheme executed across the country. 30. Specifically, Defendant first lured consumers in with a free 90-minute 12 13 Live Event called the Preview. The Preview is used to persuade students to purchase 14 the $1,495 "one year apprenticeship" course called the Fulfillment. If student-victims 15 purchased the Fulfillment, Defendant used the Live Event to convince them to 16 purchase Trump University's $35,000 Gold Elite program. Even then, after investing 17 nearly $36,500, students still do not receive Defendant Trump's "secrets" they were 18 promised, but are constantly subjected to upsells of additional Live Events, products 19 and books. 31. The Preview and Fulfillment were standardized through PowerPoint 20 21 presentations. For the upsell, speakers used standardized slides and worked from the 22 same script. There are detailed instructions in the PlayBook, down to where the 23 speakers and coordinators stand, the temperature of the room and music to be played 24 during the Introduction — "Money, Money, Money" from The Apprentice show. The Preview 25 1. 26 32. Trump University conducted a massive advertising campaign with a 27 multi-million dollar annual budget for the Preview, through mainstream newspapers, 28 its website, online newspapers, Facebook, Twitter, YouTube, radio, email blasts, and 883445_1 II - 15 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 17 of 35 direct mail. Seven to ten days prior to the Preview, ads proclaimed: Donald Trump is 1 2 "ready to share — with Americans like you — his best advice on investing in today's `once-in-a-lifetime' real estate market" directly from "Donald Trump's hand-picked 3 4 instructors a systematic method for investing in real estate that anyone can use 5 effectively." Defendant mailed letters from Donald Trump inviting consumers to 6 learn from "one of my world-class instructors" about Defendant Trump's "proven 7 system for profitable real estate investing that anyone can use, right away, to score big 8 profits in today's market." A L.A. Times article quoted Donald Trump as saying that 9 "[i]nvestors nationwide are making millions in foreclosures ... and so can you!" 3 10 Other advertisements urged consumers to "Learn from the Master" — Donald Trump," 11 that "It's the next best thing to being his Apprentice," and promised would-be students 12 that they would learn "insider success secrets from Donald Trump." E 4 13 TRUMP 14 15 0.11 ~ nc n! 16 G C '.:'Advice 17 18 19 20 21 22 Trump's a grump about column on his 'priceless' tips, L.A. 3 David Lazarus, 23 Times, Dec. 16, 2007, 6,0,1670633 .column. When attended 24 lazarus seminar, he "learned by attending the Lazarus the event the Pasadena Hilton Trump seminar was a two-hour sales 25 pitch Tor a three-day workshop that would cost people $1,495." Id. from Screen shot 26 Phoenix.html?cid=726078 (last visited February 3, 2010). 27 5 Screen shot from (last visited February 3, 28 2010). 883445_1 11 - 16 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 18 of 35 6 1 2 31 12I 5 6 7 33. At the Preview, students were greeted by a large screen projector and two 8 tall banners of Donald Trump's photo. The presentation opens with the song "Money, 9 Money, Money," and the Main Promotional Video is shown. 10 34. 11 The instructor is introduced as one of Donald Trump's top instructors who was hand selected because of his expertise and knowledge in the real estate 12 business. 13 35. The speaker induces the audience to trust in the Donald Trump name and 14 "family" by walking through the history of the Trump Organization and Defendant 15 Trump's `humble beginnings.' The speaker tells the audience that 76% of all 16 millionaires are created from real estate — that "anyone can do it," and that "it's not 17 easy, but it's simple if you know what you're doing, and we'll teach you what you 18 need to know." He states that the mission of Trump University is to "train, educate 19 and mentor entrepreneurs on achieving financial independence through real estate 20 investing" the Donald Trump way. 21 22 23 24 25 26 27 28 883445_1 16 11 Screen shot from (last visited February 3, 2010). - 17 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 19 of 35 1 7 2 3 4 5 6 7 8 9 10 36. The speaker emphasizes that on the television show, "The Apprentice," 11 Donald Trump could only work one-on-one with one person a year, so he created 12 Trump University — not to make money for himself, but so that he could teach others. 13 With this program, "Mr. Trump takes you through an entire apprenticeship for one 14 year." The speaker emphasizes that "Trump University is owned, lock, stock and 15 barrel by Mr. Trump — it's his `baby,' his company, designed to help him accomplish 16 his goal of leaving a legacy." The presentation plays on consumers' trust in the 17 Donald Trump name, The Apprentice show, Defendant Trump's wealth and 18 Defendant Trump's real estate expertise. Student-victims are shown slides that 19 portray Trump University as the latest Donald Trump achievement. 20 21 22 23 24 25 26 These and the following slides are from the official approved Trump University PowerPoint presentation which was presented at a February 12, 2010 Preview Live 27 Event advertised to prospective customers via email blast, and provided in an online 28 Live Webinar format on or about February 12, 2010. 883445_1 7 11 - 18 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 20 of 35 1 2 3 4 5 6 7 9 10 11 12 37. Throughout, the instructor portrays him or herself as knowledgeable in 13 the Donald Trump way of investing and that he or she is close to Defendant Trump 14 through firsthand accounts of Defendant Trump. 15 38. The instructor also plays on the fears of the audience, which includes a 16 significant percentage of senior citizens. "How many of you lost a lot of your 401k 17 investment in the market? How many of you are retired or want to retire? How many 18 of you want to leave a legacy or property to your children or grandchildren?" The 19 speaker encourages attendees, including the elderly, to cash out their 401K' s or 20 increase their credit limits so they can supposedly make a higher return on their 21 investments in the foreclosure market. Consumers are told these strategies will make 22 them money — they are time-tested strategies that have been in the Trump family for 23 75 years. Consumers are told they will pay off their credit cards, pay off their cars, 24 and fully fund their retirement. 25 26 27 28 8834451 II - 19 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 21 of 35 1 2 3 4 5 6 7 39. 8 The staff at the Live Events are taught to close sales "armed with 9 objections and rebuttals" set forth in the PlayBook and to "work the room with special 10 attention to team members in possession of a credit card that needs to be run." 11 2. The Fulfillment 12 40. The Preview was a 90-minute advertisement to persuade attendees to sign 13 up for the "Fulfillment," which purportedly provides a one-year "Comprehensive Real 14 Estate Education." However, for $1,495 the Fulfillment is a 3-day workshop plus a 15 phone number to call a "client advisor." Defendant promises mentors who will be 16 available for a full year. "Other people don't have anyone to call, but you've got 17 Trump. You'll call 40 Wall Street and they'll walk you through it." The emphasis is 18 on persuading consumers that in signing up for Trump University, they can join the 19 Trump "family." 41. 20 At the Fulfillment, the Main Promotional Video is shown and/or students 21 are given personally-addressed letters from Defendant Trump. 42. 22 At the end of Day 1, the students are asked to fill out a detailed financial 23 I goal statement presumably to help them with their financial goals. Instead, these 24 statements are used for Trump University personnel to assess the liquid assets that 25 each student has to spend on the next Trump University program. 43. 26 Students are told at the Preview that the Fulfillment is "all you need." 27 However, at the Fulfillment, student-victims are told what they really need is the Gold 28 I Elite program for $34,995 to get a "full education," including a 3-day in-person 883445_1 11 - 20 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 22 of 35 1 mentorship with a full year of ongoing support from a Trump handpicked 2 multimillionaire mentor. To make the upsell, instructors make standardized pitches 3 using a separate PowerPoint slide presentation. 44. 4 The PlayBook directed personnel to convince student-victims that the 3- 5 day Fulfillment is not enough (even though it was pitched as such at the Preview) and 6 emphasized that all personnel must follow this procedure to ensure sales of Elite 7 programs. 45. During the Fulfillment, the speakers pressure students to raise their credit 9 card limits on the pretext of purchasing property. At the end of the workshop, 10 Defendant's representatives asked students to use their credit cards to purchase the 11 Gold Elite program for $34,995. If they were unable to persuade students to purchase 12 at this level (or if students did not have sufficient funds or credit), Defendant's 13 representatives would encourage the students to purchase the "Trump Silver Elite" 14 program for $19,495, the "Trump Bronze Elite" program for $9,995, or an Elite 15 mentorship for approximately $25,000. Each of these prices was pitched as "one-day- 16 only" sales off the "regular" prices of $48,490 for Gold, $23,490 for Silver and 17 $10,995 for Bronze. 46. 18 Defendant's representatives did not warn students they were likely to 19 I incur finance charges, interest fees and late fees by charging the program on their 20 credit cards, but would tell students they would quickly make the money back. 21 Defendant's representatives also did not tell students that by increasing their credit 22 limits, they could damage their credit scores. And Defendant's representatives never 23 I warned students that by "maxing out" their credit cards, their credit scores could drop 24 even more significantly. 25 3. The Elite Mentorship Program 26 47. The Gold Elite program was sold on the promise of a mentorship with 27 Defendant Trump's handpicked real estate experts who would personally teach them 28 883445_1 II - 21 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 23 of 35 1 Donald Trump's real estate strategies. Instead, none of the mentors was handpicked 2 by Donald Trump or trained in his investing "secrets." 48. 3 During the Gold Elite program, there was still constant up-sell pressure to 4 purchase other Trump University affiliate programs and products, varying in price 5 from $495 to $9,995. As a result, Class Members could ultimately spend upwards of 6 $70,000 after being lured in by a free Live Event. 7 D. Governmental Investigations into Trump University 8 49. In addition to the actions of the NYSED described above, Maryland and 9 Massachusetts required Trump University to change its name for all Live Events held 10 in those states. 11 50. Attorneys General in 11 states and the U.S. Department of Justice 12 received numerous complaints against Defendant and Trump University, and at least 13 two Attorneys General launched investigations. In January 2010, Texas Attorney 14 General Greg Abbott's office launched a probe of Defendant and Trump University's 15 advertising and business practices after getting two dozen complaints. Abbott said he 16 was probing "possibly deceptive trade practices" dating back to 2008. Abbott's 17 investigation resulted in Defendant's ultimate suspension of all Live Events in Texas 18 in May 2010. 51. 19 In May 2011, the New York State Attorney General's Office also 20 launched an investigation into whether Donald Trump and Trump University 21 "engaged in illegal business practices." The investigation was described by the New 22 York Times as "the latest problem" in "a string of consumer complaints, reprimands 23 from state regulators and a lawsuit from dissatisfied former students," and was 24 prompted by about a dozen complaints concerning Trump University that Attorney 25 General Eric T. Schneiderman found to be "credible" and "serious. "8 26 27 8 See Michael Barbaro, New York Attorney General Is Investigating Trump's For-Profit School, New York Times, May 19, 2011. 28 883445_1 (I - 22 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 24 of 35 52. Florida Attorney General Bill McCollum's office has been reportedly 2 I "reviewing" 20 or more complaints from consumers who paid up to $35,000 for 3 I various Live Events. 4 E. The BBB Gives Trump University a Failing Grade 53. 5 The BBB refused to accredit Trump University due to its misleading I 6 marketing, explaining that amongst other things, its classification as a 7 "school/academy/college/university" with "professors" was misleading to a 8 reasonable consumer. Another factor contributing to your firm's ineligibility [for accreditation as a BBB business] is your firm's name "Trump University " which may potentially lead reasonable consumers to believe that your firm is an academic institution. As you acknowledged in your correspondence dated 1/4/2010, your firm does not meet the established definition of a "university." However, your instructors and program experts are referred to as "professors" and "faculty" in your promotional materials and on your web site. Both terms are potentially misleading as they are generally reserved for the teaching and administrative staff and members holding academic rank in an educational institution. 9 10 11 12 13 14 54. 15 The BBB also found Trump University's website misleading in stating: Trump University's School of Real Estate is accredited and we back up our assertions with unequalled educational and mentoring tools, such as retreats, phone and email coaching and on-site coaching, where we actually send a Donald Trump recommended real estate professional to your town to work with you for 3 days. • 16 17 18 55. 19 In addition, the BBB also found, that Trump University's classification as a "School/Academy/College/University" is misleading: 20 [Trump University's] services, as listed in your promotional materials and on your web site, are inconsistent with the established definition for this classification as you do not grant academic degrees or certification and do not appear to have recognized academic charter. Further, your company does not appear to be recognized as an academic institution that is accredited by accrediting agencies recognized by the Secretary of Education. 21 22 23 24 56. 25 gave Trump University a "D-" rating. After Defendant changed Trump University's 26 name in mid-2010, Defendant demanded an "A+" evaluation, and when the BBB was 27 28 1 883445_1 For these reasons, along with numerous consumer complaints, the BBB ~ unable to issue a good "grade" due to ongoing consumer complaints, Defendant II - 23 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 25 of 35 11 Trump called the BBB and his lawyer threatened to sue the BBB. As a result, the 21 BBB changed Trump University's "grade" to "NR" for "Not Rated." RICO ALLEGATIONS 3 4 A. The Trump University Enterprise 57. Trump University, LLC (now The Trump Entrepreneur Initiative LLC) is 5 6 a limited liability company registered in New York with its principal place of business 7 at 40 Wall Street, New York, New York. Trump University is one of the companies 8 in the Trump Organization conglomerate located in New York, New York. After a 9 related class-action lawsuit was filed in this District, Trump University changed its 10 name to "The Trump Entrepreneur Initiative" on or around June 2, 2010. 58. Trump University has never been an accredited University or held a 11 12 license to operate out of the State of New York as an educational institution. Trump 13 University does not offer any degrees, licenses or credits. 59. Defendant Trump and Trump University created a "fictitious office" at 14 15 160 Greentree Drive, Suite 101, Dover, Delaware 19904, in response to the NYSED's 16 demand that it cease operating as a "University" without a license in New York in 17 2005. The Dover address appears on mass emails sent to Plaintiff and the Class. 18 However, Trump University has never operated out of Dover, Delaware. 19 60. Trump University also maintained a sales call center in Utah. 20 61. At all times relevant hereto, Trump University conducted substantial 21 business throughout the State of California, including marketing, advertising, and 22 hosting Live Events in San Diego County and all over the State of California. 62. At all times relevant hereto, Trump University acted for or on behalf of 23 24 I Donald Trump in undertaking the acts and/or omissions alleged herein. 63. Trump University, LLC (now The Trump Entrepreneur Initiative LLC) is 25 26 an "enterprise" within the meaning of 18 U. S.C. § 1961(4), through which Defendant 27 I Donald J. Trump conducted the pattern of racketeering activity described herein. 28 I Throughout its existence, the Trump University Enterprise engaged in, and its 883445_1 II - 24 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 26 of 35 1 activities affected interstate commerce because it involved commercial activities 2 across state lines, including national marketing campaigns, multi-state Live Events, 3 and the solicitation and receipt of money from victims located throughout the country. 64. Defendant Donald J. Trump exercised substantial control over the affairs 4 5 of the Trump University Enterprise, through among other methods and means, the 6 following: (a) 7 Providing the initial operating capital and holding an 8 approximately 93% ownership stake; (b) Creating and approving marketing and advertising materials, which 9 10 featured his name, likeness (in most), and voice (in the Main Promotional Video); (c) Selecting both the original name of Trump University and, five 11 12 years later approving the change to the current name of The Trump Entrepreneur 13 Initiative; 14 (d) Regularly reviewing financial records; and 15 (e) Negotiating and authorizing others to negotiate significant 16 contracts, such as the lease for the Enterprise's headquarters. 65. Defendant Trump was a knowing and willing participant in the Scheme, 17 18 and reaped revenues and/or profits therefrom. 66. The Trump University Enterprise has an ascertainable structure separate 19 20 and apart from the pattern of racketeering activity in which Defendant Trump has 21 engaged. The Trump University Enterprise is separate and distinct from Donald J. 22 Trump. 23 B. Pattern of Racketeering Activity 24 67. Defendant Trump, who is a person associated-in-fact with the Trump 25 University Enterprise, knowingly, willfully, and unlawfully conducted or participated, 26 directly or indirectly, in the affairs of the enterprise through a pattern of racketeering 27 activity within the meaning of 18 U.S.C. § 1961(1), 1961(5) and 1962(c). The 28 racketeering activity was made possible by the regular and repeated use of the 883445_1 11 - 25 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 27 of 35 1 ~ facilities, services, distribution channels, and employees of the Trump University 2 I Enterprise. 68. Defendant Trump committed multiple "Racketeering Acts," as described 3 4 below, including aiding and abetting such acts. 69. The Racketeering Acts were not isolated, but rather were related in that 5 6 they had the same or similar purposes and results, participants, victims, and methods 7 of commission. Further, the Racketeering Acts were continuous, occurring on a 8 regular (daily) basis throughout a time period beginning in mid-2007 and, upon 9 information and belief, continuing through at least 2010. 70. Defendant Trump participated in the operation and management of the 10 11 Trump University Enterprise by directing its affairs, as described above. 71. In devising and executing the Scheme, Defendant Trump and Trump 12 13 University personnel committed acts constituting indictable offenses under 18 U.S.C. 14 § § 1341 and 1343, in that he devised and knowingly carried out a material scheme or 15 artifice to defraud or to obtain money by means of materially false or fraudulent 16 pretenses, representations, promises, or omissions of material facts. For the purpose 17 of executing the Scheme, Defendant committed these Racketeering Acts, which 18 number in the thousands, intentionally and knowingly, with the specific intent to 19 advance the Illegal Scheme. 72. Defendant used thousands of mail and interstate wire communications to 20 21 create and perpetuate the Scheme through virtually uniform misrepresentations, 22 concealments and material omissions. 73. Defendant's fraudulent use of the mails and wires included the following 23 24 ~ items and communications sent by Defendant and Trump University personnel, to 25 Plaintiff and third parties via U.S. mail, commercial carrier, interstate wire, and/or 26 other interstate electronic media: (a) Throughout the relevant time period, including on or about the 27 28 I dates set forth below, Defendant Trump and Trump University personnel, caused to be 883445_1 11 - 26 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 28 of 35 1 delivered by mail or by a private or commercial interstate carrier, or received 2 therefrom, according to the direction thereon, or at the place at which it is directed to 3 be delivered by the person to whom it is addressed, the items described above, 4 including those alleged below: 5 Fr om Donald J. Trump, New York D ate March or April 2009 Donald J. Trump, New York 6 To Art Cohen, California Sonny Low, California March or August 2009 7 8 9 10 11 Description "Special Invitation from Donald J. Trump" to attend Preview in Fremont, California "Special Invitation from Donald J. Trump" to attend Preview in San Diego, California (b) Throughout the Class Period, including on or about the dates set 12 forth below, Defendant Trump and Trump University personnel, for the purpose of 13 14 executing the above-described Scheme caused to be transmitted in interstate commerce by means of wire communications, certain writings, signs, signals and 15 sounds, including those alleged below: 16 From To Date Description 17 Trump University, Art Cohen, California August 26, Email to Art Cohen 18 New York 2009 regarding link to Main Promotional 19 Video 20 Trump University, Art Cohen, California April 29, Email to Art Cohen 2009 regarding one full 21 New York year of ongoing 22 support David Early, Arizona April 14, Email attaching 23 Michael Sexton at Preview Script Trump University, 2009 24 New York Version 3.0 Mark Anthony, Email attaching April 14, 25 Michael Sexton at Trump University, California 2009 Preview Script 26 New York Version 3.0 27 I — — 28 883445_1 II - 27 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 29 of 35 1 Art Cohen, California D ate David Early, Arizona; April 14, Michael Sexton, New 2010 York; April B. Neumann, New York American Express, April 2009 North Carolina Trump University, New York Art Cohen, California May 11, 2009 From Michael Bloom, New York 2 3 4 5 To 6 7 8 9 10 11 12 13 Description Email regarding sales script Credit card transaction in the amount of $1,495 for Art Cohen's purchase of the Fulfillment Seminar Email confirmation of credit card transaction in the amount of $34,995 for Art Cohen's purchase of the Gold Elite program CLASS ACTION ALLEGATIONS 14 74. 15 Plaintiff brings this class action on behalf of himself individually and all 16 others similarly situated, pursuant to Federal Rule of Civil Procedure 23. 75. The proposed Class consists of all persons who purchased Live Events 17 18 from Trump University throughout the United States from January 1, 2007 to the 19 present. Excluded from the Class are Trump University, its affiliates, employees, 20 officers and directors, persons or entities that distribute or sell Trump University 21 products or programs, the Judge(s) assigned to this case, and the attorneys of record in 22 this case. Plaintiff reserves the right to amend the Class definition if discovery and 23 further investigation reveal that the Class should be expanded or otherwise modified. 76. 24 This action is properly brought as a class action because: (a) 25 The proposed Class is so numerous and geographically dispersed 26 throughout the United States that the joinder of all Class Members is impracticable; (b) The disposition of Plaintiff's and proposed Class Members' claims 27 28 in a class action will provide substantial benefits to both the parties and the Court; 883445_1 11 - 28 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 30 of 35 1 (c) The proposed Class is ascertainable and there is a well-defined 2 community of interest in the questions of law or fact alleged herein since the rights of 3 each proposed Class Member were infringed or violated in the same fashion; 4 (d) There are questions of law and fact common to the proposed Class 5 which predominate over any questions that may affect particular Class Members. 6 Such common questions of law and fact include but are not limited to: 7 (i) 8 (ii) Whether Donald Trump violated 18 U.S.C. § 1962; 9 (iii) Whether Plaintiff and Class Members have been harmed and Whether Defendant engaged in a fraudulent scheme; 10 the proper measure of relief; 11 (iv) Whether Plaintiff and Class Members are entitled to an 12 award of treble, punitive damages, attorneys' fees and expenses; and (v) 13 Whether, Plaintiff and Class Members are entitled to 14 equitable relief, and if so, the nature of such relief. 15 (e) Plaintiff's claims are typical of the claims of the members of the 16 proposed Class. Plaintiff and Class Members have been injured by the same wrongful 17 practices of Defendant. Plaintiff's claims arise from the same practices and conduct 18 that give rise to the claims of all Class Members and are based on the same legal 19 theories; (f) 20 Plaintiff will fairly and adequately protect the interests of the Class 21 in that he has no interests antagonistic to those of the other Class Members, and 22 Plaintiff has retained attorneys experienced in consumer class actions and complex 23 litigation as counsel; 24 (g) A class action is superior to other available methods for the fair 25 and efficient adjudication of this controversy for at least the following reasons: (i) 26 Given the size of individual Class Member's claims and the 27 expense of litigating those claims, few, if any, Class Members could afford to or 28 would seek legal redress individually for the wrongs Defendant committed against 883445_1 II - 29 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 31 of 35 1 them and absent Class Members have no substantial interest in individually 2 controlling the prosecution of individual actions; (ii) 3 This action will promote an orderly and expeditious 4 administration and adjudication of the proposed Class claims, economies of time, 5 effort and resources will be fostered and uniformity of decisions will be insured; (iii) 6 Without a class action, Class Members will continue to 7 suffer damages, and Defendant's violations of law will proceed without remedy while 8 Defendant continues to reap and retain the proceeds of his wrongful conduct; and (iv) X Plaintiff knows of no difficulty that will be encountered in 10 the management of this litigation which would preclude class certification. 11 77. Defendant and his agents had, or have access to, address information for 12 the Class Members, which may be used for the purpose of providing notice of the 13 class action. 14 78. Plaintiff seeks damages and equitable relief on behalf of the Class on 15 grounds generally applicable to the entire proposed Class. 16 COUNT 17 Violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §1962(c) 18 79. 19 contained in the paragraphs above as if fully set forth herein. 20 21 22 Plaintiff re-alleges and incorporates by reference the above allegations 80. This claim arises under 18 U.S.C. § 1962(c), which provides in relevant Ipart: (c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity ... 23 24 25 81. 26 At all relevant times, Defendant Donald J. Trump was a "person" within the meaning of 18 U.S.C. §1961(3), because he was "capable of holding a legal or 27 beneficial interest in property." Defendant Trump was associated with the Trump 28 883445_1 II - 30 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 32 of 35 1 University Enterprise and conducted and participated in that enterprise's affairs 2 though a pattern of racketeering activity, as defined by 18 U.S.C. § 1961(5), consisting 3 of numerous and repeated uses of the mails and interstate wire communications to 4 execute a scheme to defraud in violation of 18 U.S.C. § 1962(c). 82. 5 The Trump University Enterprise was created and/or used as a tool to 6 carry out the Scheme and pattern of racketeering activity. 83. 7 Defendant Trump has committed or aided and abetted the commission of 8 at least two acts of racketeering activity, i.e., indictable violations of 18 U.S.C. 9 § § 1341 and 1343, within the past ten years. The multiple acts of racketeering activity 10 that they committed and/or conspired to, or aided and abetted in the commission of, 11 were related to each other, pose a threat of continued racketeering activity, and 12 therefore constitute a "pattern of racketeering activity." 84. 13 Defendant Trump's predicate acts of racketeering within the meaning of 14 18 U.S.C. §1961(1) include, but are not limited to: 15 (a) Mail Fraud: Defendant Trump violated 18 U.S.C. § 1341, by or caus g o 16 sending or receiving, ocausing to be sent or received,, materials via U.S. mail or 17 commercial interstate carriers for the purpose of executing the Scheme, which amount 18 to a material scheme to defraud and obtain money on false pretenses, 19 misrepresentations, promises, and/or omissions. The materials include but are not 20 limited to, letters promoting the Scheme and bearing Defendant Trump's signature or 21 image; and 22 (b) Wire Fraud: Defendant Trump violated 18 U.S.C. § 1343, by 23 transmitting and receiving, or causing to be transmitted or received, materials by wire 24 for the purpose of executing the Scheme, which amounts to a material scheme to 25 defraud and obtain money on false pretenses, misrepresentations, promises, and/or 26 omissions. The materials transmitted and/or received include but are not limited to, 27 interstate credit card transactions, emails promoting the Scheme, and the Main 28 I Promotional Video. 883445_1 II - 31 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 33 of 35 85. Defendant Trump knowingly and intentionally made these 1 2 misrepresentations, acts of concealment and failures to disclose. Defendant Trump 3 either knew or recklessly disregarded that these were material misrepresentations and 4 omissions. 86. Defendant Trump and Trump University obtained money and property 5 6 belonging to Plaintiff and the Class as a result of these violations. Plaintiff and other 7 Class Members have been injured in their business or property by Defendant Trump's 8 overt acts of mail and wire fraud. 87. Plaintiff and the Class have been injured in their property by reason of 9 10 Defendant Trump's violations of 18 U.S.C. § 1962, including the price paid for the 11 Live Events, which collectively amount to tens of millions of dollars, plus interest and 12 late fees incurred on their credit cards. In the absence of Defendant Trump's 13 violations of 18 U.S.C. § 1962, Plaintiff and the Class would not have incurred these 14 losses. 88. Plaintiffs and the Class's injuries were directly and proximately caused 15 16 by Defendant Trump's racketeering activity. 89. Defendant knew and intended that Plaintiff and the Class would rely on 17 18 the Scheme's fraudulent representations and omissions. Defendant Trump knew and 19 intended Plaintiff and the Class would pay fees as a result of same. 90. Under the provisions of 18 U.S.C. § 1964(c), Plaintiff is entitled to bring 20 21 this action and to recover their treble damages, the costs of bringing this suit and 22 reasonable attorneys' fees. 91. Defendant Trump is accordingly liable to Plaintiff and the Class for three 23 24 times their actual damages as proved at trial plus interest and attorneys' fees. PRAYER FOR RELIEF 25 WHEREFORE, Plaintiff, individually and on behalf of all others similarly 26 27 situated, pray this Court to enter a judgment against Defendant that: 28 883445_1 II - 32 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 34 of 35 1 A. Certifies the Class under Rule 23 of the Federal Rules of Civil Procedure, 2 as well as any appropriate subclasses, appointing Plaintiff as Class Representative, 3 and appointing his attorneys as counsel to represent the Class; 4 B. Awards actual, compensatory, statutory, consequential damages; 5 C. Awards punitive and treble damages; 6 D. Awards equitable monetary relief, including restitution and disgorgement 7 of all ill-gotten gains, and the imposition of a constructive trust upon, or otherwise 8 restricting the proceeds of Defendant's ill-gotten gains, to ensure an effective remedy; E. 9 Awards Plaintiff and Class Members the costs of this action, including 10 reasonable attorneys' fees and expenses and expert fees; F. 11 Enjoins Defendant from continuing to falsely market and advertise, 12 conceal material information from the public, and commit unlawful and unfair 13 business acts and practices; orders Defendant to engage in a corrective notice 14 campaign, and requires Defendant to refund to Plaintiff and all Class Members the 15 funds paid; 16 G. Awards declaratory relief; 17 H. Awards pre judgment and post judgment interest at the highest rate 18 allowed by law; and I. 19 Grants such further relief as this Court may deem just and proper. 20 DATED: October 18, 2013 21 22 ROBBINS GELLER RUDMAN & DOWD LLP JASON A. FORGE RACHEL L. JENSEN THOMAS R. MERRICK 23 /s/ Jason A. Forge JASON A. FORGE 24 25 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619/231-1058 619/231-7423 (fax) 26 27 28 883445_1 11 - 33 - Case 3:13-cv-02519-GPC-WVG Document 1 Filed 10/18/13 Page 35 of 35 1 ZELDES HAEGGQUIST & ECK, LLP AMBER L. ECK HELEN I. ZELDES ALREEN HAEGGQUIST AARON M. OLSEN 625 Broadway, Suite 1000 San Diego, CA 92101 Telephone: 619/342-8000 619/342-7878 (fax) 2 3 4 5 6 Attorneys for Plaintiff and Proposed Class 7 8 9 10 11 12 13 ILII 15 16 17 18 19 20 21 22 23 24 25 26 27 28 883445_1 11 - 34 -

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