Mortgage insurer ruling ups the ante for Trump in university case

by MPA09 Jun 2016
The New York Court of Appeals has given state Attorney General Eric Schneiderman the go ahead to claw back millions of dollars paid to insurance chief Maurice ‘Hank’ Greenberg.  The AG’s legal avenue to reclaim the bonus is called disgorgement – unlike damages that are paid to victims who have suffered a loss, this remedy allows a plaintiff to demand that a defendant  pay back any monies that he or she received from unlawful means. Legally the term unlawful doesn’t necessarily mean criminal, it can mean anything that is in violation of a statute, a state constitution or prior case law.
Trump’s lawyers are already keeping an eye on the AIG case. “It doesn’t help him,” Jeffrey Goldman told Reuters. Goldman who is an attorney at Belkin Burden Wenig & Goldman LLP is acting for Trump in his NY case. The AIG ruling means that Schneiderman could try to recover $5 million that he says Trump personally pocketed from Trump University. Goldman says that even if Trump doesn’t win the case he can try to limit the amount repayable under the disgorgement ruling by arguing much of the money was earned outside of New York.
New York filed the case against Trump in 2013, claiming that Trump University was an unlicensed operation that took up to $35,000 apiece from students who were encouraged to max out their credit cards to make the payments. Trump also faces two similar class actions in California.
In the AIG case Schneiderman is hoping to recoup over $25 million from Greenberg. The AG has accused the ex-AIG CEO of misleading shareholders in regards to how the company was faring and of making a sham reinsurance transaction to inflate the insurer’s loss reserves.
Greenberg’s lawyer, who acted for Al Gore in the legal battle over the 2000 general election ballot recount, has denied any wrongdoing by his client.
The New York AG will be relying on a disgorgement claim to succeed if his $40 million damages claim is undermined by the California class actions. The California cases are due to  go to trial on Nov. 28, three weeks after the country elects a new president. Many of the claimants on the west coast will be the same as in the New York case, meaning damages may already have been paid by the time Schneiderman gets Trump in court. Disgorgement claims would not be affected by the California cases.
Schneiderman has made no bones about his intention to hammer the now-defunct Trump University and the people he sees as being behind it. “We have a law against running an illegal, unlicensed university. This never was a university,” he told ABC’s Good Morning America. “The fraud started with the name of the organization, and you can’t just go around saying this is the George Stephanopoulos Law Firm/Hospital/University without actually qualifying and registering, so it was really a fraud from beginning to end.”
Meanwhile, Maurice Greenberg told reporters that he is “considering his options.” Greenberg resigned from AIG in 2005.


  • by Rick Cyngier | 6/9/2016 12:43:48 PM

    2 bad this same AG is not investigating why Bill Clinton received 16 million in Honorary Trustee fees from Laureate Inc and Walden University for their sham of a university that has many of the countries they do business with them claiming fraud against those who signed on as students of this for profit university.

  • by The (other) Don | 6/26/2016 8:57:24 PM

    Rick, it's not a sham. Trump's folks have been doing their best to level a false equivalency argument that they can't make stick. Laureate runs educational programs at more than 80 different institutions, including graduate programs for the University of Liverpool where I am currently enrolled in a post-graduate data analytics program (the School is ranked the top 1% Globally). I also attended Walden's doctoral program and at least within the business administration doctoral track, most of the students are current managers, directors, and C-level employees seeking to add a professional doctorate to their credentials. The program is fully accredited, and most of the graduates tend to do fairly well (largely because they are already employed and hold substantive expertise in their fields of study). By example, I entered the program with 20 years as a manager and consultant in the legal technology field, much of that time working for large, international law firms. - The field is beginning to see an influx of PhDs as machine learning and AI grow in popularity, so many of us continue our education well into to our professional careers just so we remain competitive. The four students who originally filed suit, and then dismissed their case, were shown in court documents to have not met the academic standards of the program. Nothing super earth shattering there.


Should CFPB have more supervision over credit agencies?