August 25th, 2013
10:55 AM ET
1 year ago

N.Y. attorney general suing Trump's school for fraud

(CNN) – New York's attorney general accused Donald Trump in a lawsuit Saturday of defrauding students who studied at the billionaire mogul's investment institute, though Trump's representative said a large majority of the school's alumni were satisfied with their experience.

The $40 million civil suit alleges Trump made false claims about the school, including that he was personally involved in selecting instructors and creating the curriculum.

Eric Schneiderman, the New York attorney general, said Trump had crafted a "bait and switch" with his school, using his well-known name.

"Trading on his celebrity status, Mr. Trump personally appeared in advertisements making false promises to convince people to spend tens of thousands of dollars they couldn't afford for lessons they never got," he wrote in a statement. "No one, no matter how rich or famous they are, has a right to scam hard working New Yorkers. Anyone who does should expect to be held accountable."

The suit names both Trump, the chairman of the school, and Michael Sexton, its former president, as defendants. Schneiderman is seeking $40 million to repay customers who have enrolled in the school, as well as additional penalties and fines.

On Twitter, Trump called Schneiderman a "lightweight" and said the attorney general was "trying to extort me with a civil law suit."

He also linked to a website that claims 98% of Trump University's former students were satisfied with their experience.

Michael Cohen, executive vice president of the Trump Organization and a lawyer for the billionaire, said the suit "has no merit and is nothing more than a cheap publicity stunt to deflect from (Schneiderman's) weak job performance."

"I am shocked he didn't leak it to the Kris Kardashian show," Cohen continued. "Maybe his office should focus more of their attention and the use of our tax dollars on bringing to justice those responsible for the financial meltdown."

Cohen also pointed to the website citing an approval rating of 98% for the Trump investing classes, saying the figure was derived from questionnaires submitted by students upon completing the course of study. He said the website was created in anticipation of the lawsuit.

Trump University became the Trump Entrepreneur Initiative in 2010 after the New York State Education Department said the company could not use the term "university" without its consent. In 2011, the attorney general began investigating it, along with several other for-profit educational institutions.

Former students in California have also sued Trump's school, saying its advertising misled them into spending thousands of dollars on workshops and "mentorships." In a class-action suit filed in 2010, the former students say Trump University is "like an infomercial" that lures customers with the Trump name but fails to deliver on its promises of success in real estate.

The Trump school offered courses in real estate, asset management, entrepreneurship and wealth creation. The courses ranged in price from $1,495 for a three-day workshop to $34,995 for a "full education."

Unlike other for-profit schools, Trump's outfit relies heavily on the brand of its namesake.

Trump made his money by investing in New York real estate, casinos and golf courses around the world. But he is perhaps best known in popular culture for his long-running reality television show, "The Apprentice."

More recently, Trump made headlines for suggesting that President Barack Obama is not a U.S. citizen, part of Trump's public mulling of a presidential bid. He eventually declined to run for the White House.

CNNMoney's Ben Rooney contributed to this report.


Filed under: Donald Trump
soundoff (426 Responses)
  1. yankquest

    Anybody told Trump yet about Cruz? Can't wait for this one.....

    August 25, 2013 04:52 pm at 4:52 pm |
  2. Quest

    Attention students of Trump, I'm selling a resort island on the moon. Trump was there! No college education needed.

    August 25, 2013 04:54 pm at 4:54 pm |
  3. fayray11x

    zzz don's just doing what he does best selling a big fat lie

    August 25, 2013 04:54 pm at 4:54 pm |
  4. Grumpster

    Well, as Gomer Pyle would say: "Surprise, Surprise, Surprise!!!" In this case that would be sarcastic since this isn't at all unexpected of this birther-schlepping scam artist.

    August 25, 2013 04:55 pm at 4:55 pm |
  5. Elliott Carlin

    I love Cohen's comments about the New York Attorney General. This is a complete waste of taxpayer's money, but hey, seeing what candidates they are choosing from (Weiner/Spitzer et al) this is probably considered a wise investment. NY aintsotuffnomore, knowhutimean?

    August 25, 2013 04:55 pm at 4:55 pm |
  6. widow

    I say if you Spend 10's of thousands you can afford maybe you should not spend the money.. just a thought

    August 25, 2013 04:57 pm at 4:57 pm |
  7. Solomon

    I don't want to hear or see this ugly guy in any news.He is a rotten wood. I wonder why people value one another only on what they have not on who they are. Trump is a trash.

    August 25, 2013 04:57 pm at 4:57 pm |
  8. chuck

    "Buyer Beware" and "There's a Sucker Born Every Minute". People are just foolish to give this snake oil sellsman their money.

    August 25, 2013 04:59 pm at 4:59 pm |
  9. Newport Pagnell

    I wonder if Wolfgang Puck actually cooks all the dinners at his restaurants too.

    August 25, 2013 05:00 pm at 5:00 pm |
  10. buccakenji

    Democrats attack any Republican that is successful in business. Its called ENVY. But, in case you didn't notice, they leave their own alone, ergo Bill Gates, Steve Ballmer, etc., etc,.

    August 25, 2013 05:01 pm at 5:01 pm |
  11. Winston Smith

    Good. Jail is too good for this person. Once all of his dirty backhanded dealings are revealed, his days in the news, except for a perp walk are all but over. The sooner the better. And by the by, he was embraced by republicans. Isn't that interesting?

    August 25, 2013 05:03 pm at 5:03 pm |
  12. palebluedot

    Again he's in thhe news.Just what he loves.Again it will blow over but did what he desired....keep the creep in the news
    He's old news and really offers nothing but hot air and the desire to be the center of attention.

    August 25, 2013 05:09 pm at 5:09 pm |
  13. BD70

    Anything with the Trump name on it you had better run. Take your money and run...Fast!

    August 25, 2013 05:09 pm at 5:09 pm |
  14. Hugh_Mann

    America: "It's all about Me",,,We're Winners

    August 25, 2013 05:09 pm at 5:09 pm |
  15. action Jackson

    Trump change.....

    August 25, 2013 05:13 pm at 5:13 pm |
  16. DaMenace1

    Trump is a cheap money grubbing fraud.

    August 25, 2013 05:16 pm at 5:16 pm |
  17. lerianis

    Not a surprise. Trump is a maven of the conservative elite so it's not a surprise that he has been stealing from various people.

    August 25, 2013 05:17 pm at 5:17 pm |
  18. lerianis

    Not a surprise. Trump is a maven of the conservative elite so it's not a surprise that he has been stealing from various people. Posting again so it actually shows.

    August 25, 2013 05:18 pm at 5:18 pm |
  19. a b

    you know what has no merit? every single time a lawyer says a lawsuit "has no merit." has there ever been a case where the defendant's lawyer didn't use this line? lawyers say this more times than athletes say "it is what it is."

    August 25, 2013 05:19 pm at 5:19 pm |
  20. bspurloc

    maybe trump should move this school to Alabama his red base. I am sure man can afford it there

    August 25, 2013 05:24 pm at 5:24 pm |
  21. Evelyn Bradley

    Ha! Mr. Cohen is the one using cheap parlor tricks on us, – I mean "using cheap publicity stunt."
    Statistics 100 – DON'T BE FOOLED BY THIS LAWYERS CLAIM (citation 1 listed below): - 98% of what population sample and what control group, Mr. Cohen? 10 students? I would concur that it is –likely– that 98% of 10 students are satisfied with the program out of hundreds who were not. ;)

    (1) "He also linked to a website that claims 98% of Trump University's former students were satisfied with their experience."

    (2) Michael Cohen, executive vice president of the Trump Organization and a lawyer for the billionaire, said the suit "has no merit and is nothing more than a cheap publicity stunt to deflect from (Schneiderman's) weak job performance."

    August 25, 2013 05:25 pm at 5:25 pm |
  22. Zimmerman

    Good way to Dump Trump.

    August 25, 2013 05:25 pm at 5:25 pm |
  23. jboh

    Trump is a self-serving egotist. Another 1%'er who lies, steals, and flimflams his way thru life. He inherited his $, and now runs scams and files for bankruptcy for kicks. With clowns like him, TEA/GOP show the truth of judging by the company they keep. Way to go A.G.

    August 25, 2013 05:27 pm at 5:27 pm |
  24. Jiminy

    It isn't just buyer's who should be aware. If your going to put your name on something, you need to be aware too. I would suggest Trump should be a little more careful of what he sells out his name for, but really, when a guy is willing to put his name on almost anything, he deserves what he gets.

    August 25, 2013 05:30 pm at 5:30 pm |
  25. Cheese

    He's checking under the sofa cushions right now.

    August 25, 2013 05:31 pm at 5:31 pm |
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