August 25th, 2013
10:55 AM ET
9 years 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. don in albuquerque

    Good. another staunch GOTP'er may be merrily on his way to prison. Have fun Mr. Donald, and remember to give our regards to Bubba (the only one who thinks the skunk on your head is sexy).

    August 25, 2013 11:16 am at 11:16 am |
  2. MaryM

    Trump at fraud? Surprise, Surprise. And the republicans love him and Sarah Palin. Will Americans Please vote these teapublicans out of office now

    August 25, 2013 11:23 am at 11:23 am |
  3. Uncle Danny

    Please, CNN, do not give any attention to this buffoon, Donald Trump. This publicity is exactly what he wants. Hopefully enough dissatisfied students will come forward with stories of being defrauded by this huckster, and he will be made to pay the damages. I'm curious how much the participants were compensated to provide positive feedback on the site to ensure 98% satisfaction.

    August 25, 2013 11:26 am at 11:26 am |
  4. Francisco Decastro

    And now, Trumps's fall from the top begins.

    August 25, 2013 11:27 am at 11:27 am |
  5. Anonymous

    I have seen an increase of all this commercials promising an education for better jobs and increase your chances for a better income I wonder how many are legitimate and for once I am glad that the Attorney General of New York is welling to go after the predatory so call 'School of Mr Trump" another example of is shameful way to keep lining is pockets from people that are deperate for a better future and he helps them not for the better but for the worse I hope the Attorney General does found probable cause for fraud and send Mr. Trump to Federal Prison were he belongs.

    August 25, 2013 11:27 am at 11:27 am |
  6. MiddleAmericaMS

    "Trump made his money by investing in New York real estate, casinos and golf courses around the world."

    Actually he inherited it from his Dad.


    August 25, 2013 11:29 am at 11:29 am |
  7. Phil_Bury

    Don, eventually you're going to have to lose the toup – the sooner the better.

    August 25, 2013 11:31 am at 11:31 am |
  8. @lex

    I wish this man would just go away. I am sick and tired of seeing his name in the news all the time and even more tired of seeing his hairstyle.

    August 25, 2013 11:32 am at 11:32 am |
  9. Candy

    I hope he gets what's coming to him, GREED is his first name !!!!!!!!!! Good luck for those who are looking to get back their money .

    August 25, 2013 11:35 am at 11:35 am |
  10. Anonymous

    One of the funniest posts that I have read on CNN. People are actually paying thousand of dollars to get their education at Trump Initiative??? They must be wacko to support another wacko!!

    August 25, 2013 11:35 am at 11:35 am |
  11. Quixote

    A simple con man. No wonder he is a gop darling........

    August 25, 2013 11:36 am at 11:36 am |
  12. Melmel

    I got duped into buying the Trump casino stock and lost thousands. Trump is good at making money for himself–not others people. Go get him Attorney General Schneiderman.

    August 25, 2013 11:36 am at 11:36 am |
  13. Andrew

    One of the worst people ever.

    I am still waiting to see that long form birth certificate proving he was not born a half-orangutan in a Canadian zoo.

    August 25, 2013 11:37 am at 11:37 am |
  14. observer99

    Sue his hair off!!

    Trump will do anything for publicity.

    August 25, 2013 11:37 am at 11:37 am |
  15. Roscoe Chait

    Say it ain't so! I am shocked, deeply shocked. Round up the usual suspects.

    August 25, 2013 11:39 am at 11:39 am |
  16. Maryam

    I signed up for it to help with some real estate holdings. It is a scam.
    I fought hard to get my money back after spending an hour there and realizing it was a scam.
    Good luck. I hope they are successful and get their money back.
    Trump really is scum of the earth.

    August 25, 2013 11:40 am at 11:40 am |
  17. Leonore H. Dvorkin

    Why does anyone pay any attention to this hideous clown, or to anything remotely connected with him? He is a total fraud!

    August 25, 2013 11:41 am at 11:41 am |
  18. Catori

    He acts more like Krusty the clown every day.

    August 25, 2013 11:42 am at 11:42 am |
  19. iceandsnow3

    Why am I not surprised? This man is wealthy and privileged and truly believes he's above everybody else and also the law. There's no end to his greed. I only hope he has to reimburse the people he fleeced but the chances of that are slim because he can afford the most expensive lawyers to manipulate the law in his favor. He may be a savvy businessman but he's an even better carpetbagger. Whenever he dies there will be line-ups around the block of victims waiting to dance on his grave.

    August 25, 2013 11:42 am at 11:42 am |
  20. Michael

    trumps the lightweight. daddys money and went broke countless times

    August 25, 2013 11:44 am at 11:44 am |
  21. Texasmike

    No, I would NEVER think that Donald Trump would defraud students. Defraud EVERYONE else, but not students, right? Of course, he'll try to quietly settle but when you have as big as mouth as he does, when things come back to slap him in the face, everyone knows about it.

    August 25, 2013 11:45 am at 11:45 am |
  22. Dan

    Trump is nothing more than a flim-flam man. All show, no substance.

    August 25, 2013 11:46 am at 11:46 am |
  23. JohnnyGenius

    If the website was created in anticipation of the suit, wouldn't that mean that the data it is using is drawing from a very small sample size?

    August 25, 2013 11:46 am at 11:46 am |
  24. Diplomad

    I have no great love for Trump, whom I consider a ruthless self-promoter, but he did not say Obama was not a US citizen. He said Obama should prove he was born in Hawaii. The issue is the boring one of "natural born" citizen vs. citizen. It was started by Hillary's primary campaign which labelled Obama a Kenyan based on bio blurb from Obama's publisher which referred to him as Kenyan.

    August 25, 2013 11:46 am at 11:46 am |
  25. Shawn

    Wow there is a website that claims 98% are satisfied.... If it's on the internet it must be true...

    August 25, 2013 11:47 am at 11:47 am |
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