This week U.S. District Judge Gonzalo Curiel unsealed 400 pages worth of documents related to two class-action lawsuits filed against Donald Trump’s real-estate seminar, Trump University, by students who say they were defrauded by the program.
Among the documents released were a sales playbook that described the “roller coaster of emotions” potential student-buyers would experience, including the exact moment their emotional state would render them most likely to purchase more Trump products.
Several former employees testified to the high-pressure sales techniques they were instructed to use — for example, guidance on how students might raise their credit card limits in order to finance more expensive Trump University classes than they could afford.
“While Trump University claimed it wanted to help consumers make money in real estate, in fact Trump University was only interested in selling every person the most expensive seminars they possibly could,” one former sales director, Ronald Schnackenberg, said in his testimony.
Most of the instructors and mentors, Schnackenberg said, had no background in real estate, and many came to Trump University through a man named Mark Dove, who he said “essentially owns that ‘front-end high-pressure speaker scam’ world.”
In his testimony, Schnackenberg recalls the moment he realized the company was engaging in “misleading, fraudulent, and dishonest” behavior. It was April 2007, and he was introduced to a couple that was relying on disability insurance.
“After the hard-sell sales presentation, they were considering purchasing the $35,000 Elite program,” Schnackenberg said. “I did not feel it was an appropriate program for them because of their precarious financial condition — they had no money to pay for the program, but would have had to pay for the program using his disability income and taking out a loan based upon equity in his apartment. Trump University reprimanded me for not trying harder to sell the program to this couple.”
Another salesperson, whom Schnackenberg identified as Tad Lignell, eventually closed the deal anyway. “I was disgusted by this conduct and decided to resign,” Schnackenberg later said.
Lignell, reached by Rolling Stone, says he doesn’t recall this particular incident and is skeptical of some of the details in Schnackenberg’s memory. “I’m a pretty laid-back guy and I would never drag people across the finish line,” he says. “If they can’t afford it, I would never do it.”
But in many other ways, Lignell’s memory of Trump University does match Schnackenberg’s. The 63-year-old says more often than not he acted as a mentor to Trump University students, rather than the salesman selling mentorship services. His experience provides a peek inside the program and how it was run.
Lignell, who lives in Utah, has a personal interest in real estate — he says he owns several rental properties and regularly “flips” houses for a profit — but he has no formal education or any kind of license. His background is in motivational speaking.
Lignell says he knew Mark Dove prior to joining Trump University, but he can’t say for sure if it was Dove who brought him on board. “The seminar business is kind of a small world. People know each other, so when Trump was building his business or starting his business, they were looking for a team,” he says; word got around.
After he signed on, he wasn’t provided with much training specific to Trump University, either. “We had some training and we had their manuals and stuff, but, you know, there wasn’t a strict guideline that told us how to [operate],” Lignell says. “We had basically PowerPoints of the things we were to cover.”
His relationship with Trump University headquarters was limited to occasions when they would provide him with a list of prospective student-buyers. “I wasn’t really connected with the office, with the exception of them sending me a list of new students,” Lignell says.
He would call each student up, run them through a list of questions, and they would agree to meet in a particular city on a specific date for three days of one-on-one mentorship as part of the $35,000 “Gold Elite” program sold by Trump University.
He would assemble and introduce students to their so-called power team. “The relators, the brokers, the rehabbers, that sort of thing. Not only introducing them, [but] submitting offers on properties and then following up when those offers are accepted, or if they’re not, continue to submit offers until they are accepted,” he says.
Lignell typically made $5,500 for these three-day sessions, not including expenses like airfare, accommodations and food. (He says that fee was dropped to $4,500 shortly before he left the program.)
One such three-day “mentorship” Lignell provided is the subject of one of the two lawsuits against Trump U., Makaeff v. Trump University. Tarla Makaeff filed suit in 2010 claiming Lignell “engaged in misappropriate conduct and misadvised her regarding a property in Las Vegas in which he had a personal financial interest.”
Makaeff, who has asked to pull out of the suit, accused Lignell of “fraudulently and illegally alter[ing] the real estate documents she had previously signed at the escrow office.”
Lignell, for his part, blames the students for failing to properly utilize the tools the seminar provided. The people he encountered at Trump University were similar to those he recognized from the seminar circuit: desperate and searching for answers.
“People become seminar junkies and they go from one after another after another,” Lignell says. “They are going to seminars looking for the magic bullet where the magic bullet is actually doing the work, and they don’t do it.”
Lignell pushes back against accusations that the program preyed on the elderly and uneducated. “Of course we’re not preying on anybody. It’s just marketing, and people that show up, show up,” he says.
Most students, he insists, were not elderly, but rather in their 40s or 50s — the kind of person “who has realized that their job isn’t gonna take them through retirement like they had planned. They have to make a change and some of them are going off the cliff,” Lignell says. “There are people that, voluntarily, make that decision that maybe they shouldn’t have, but they did because they saw the cliff coming and they just [decided], ‘Well, I’ve got to do something, and I’ve got to do something now.'”
“Maybe some people are looking down the road and they’re saying, ‘I’ve only got $50,000 left, and to give you $35,000 seems like it would be a big mistake,’ but then their thought process changes and they say, ‘I’ve only got $50,000 left, I’m going to go broke in six months anyway. What’s the difference to be broke in two months and take a chance at changing my life?'”
The problem, for many former Trump University students, is that taking that chance didn’t pay off. According to two people familiar with the case, only 12 out of 7,000 students have opted out of the class-action suit; most of those are testifying for the defense.
For his part, Lignell says, “I thought we had a reputable company.”
As for the election, Lignell says Trump wasn’t necessarily his first choice, but once he clinched the GOP nomination “he became my only choice because I wouldn’t vote for Hillary under any circumstances.”Watch Donald Trump defend claims made against Trump University.