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. Jeffrey Cox

    I hope they take this clown to the cleaners. Trump proves that money can't by class.

    August 25, 2013 05:38 pm at 5:38 pm |
  2. TexasCommonSense

    Donald Trump made his money by taking the fortune created by his father, Fred Trump, in New York real estate and investing it wisely and professionally. But he is not a self-made man, as he would lead you to believe. And anyone who attends a for-profit school as his primary secondary education is a fool seeking to be fleeced.

    August 25, 2013 05:38 pm at 5:38 pm |
  3. dion

    A while back ago people bought into some beach front condos nesting in front of some mexican beach. The condos were not built yet but he represented the company who was a builder and took deposits or people bought them cash.
    Well other than the model they never got built and left many holding the bag. Just another day of scams at the Trump corp!

    August 25, 2013 05:39 pm at 5:39 pm |
  4. leah

    Number 1 lesson taught at the Trump School of Business....You can always file Bankruptcy, repeatedly.

    August 25, 2013 05:41 pm at 5:41 pm |
  5. Maria Lopez

    Is Donald Trump a crook?

    August 25, 2013 05:41 pm at 5:41 pm |
  6. Trumped

    This is the guy that every time he is personally attacked he resorts to the calling of names, usually of the school yard bully type, and then he turns around and talks about how the people he taunts are acting childish. It is classic Trump and he is too stupid to see he is the one who always comes out looking lit a first grade bully. He will go down in history as one of the biggest jokes in our time.. just because you have a billion dollars doesn't mean you can't still be seen as a buffoon. The fact he declared bankruptcy at least 3 times to keep his fortune proves failure he really is.

    August 25, 2013 05:45 pm at 5:45 pm |
  7. Preston

    Well anyone who paid to enroll in the school school have researched first. What about all the people washing dishes, waiting tables with advanced degrees- should they sue the university they attended? Sounds like a bunch of , umm, unduccessful people smelling money. As usual Trump is right again- " lightweights" . He's a billionaire for a reason, he's very, very smart.

    August 25, 2013 05:45 pm at 5:45 pm |
  8. Scott

    There are a lot of second rate no name schools out there. The company I work for generally will just cross out the degrees from these overpriced schools when we review resumes since they are meaningless to us. Trump is not exactly known for his academic credentials and has a rather sordid reputation, so I am not surprised by the lawsuit. I don't particularly feel sorry for people who spend themselves into debt pursuing a useless degree from a second rate school. They are just overpriced community colleges for below average students.

    August 25, 2013 05:46 pm at 5:46 pm |
  9. Dave

    Trumps secret to success was being born rich, and he still had to resort to bankruptcy courts several times.

    August 25, 2013 05:48 pm at 5:48 pm |
  10. minavaan

    "Trump University"??? Ha ha hah haaaa....( rolling on the floor). Btw, why is Trump's face so orange??? Too much tan spray??

    August 25, 2013 05:48 pm at 5:48 pm |
  11. BobInIrvine

    In The Donald's own words, "this is gonna be HUGE. HUGE!"

    August 25, 2013 05:51 pm at 5:51 pm |
  12. snowdogg

    "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,"

    Shocking... truly unexpected... say it ain't so! LOL

    August 25, 2013 05:52 pm at 5:52 pm |
  13. Bill Davis

    70 is an average grade in high schools, and less than 40% ever find work , in America
    Less than 3% will ever be rich,
    Let's sue the Government, they want to run the show, and always have their hand out for the dough,
    Government is the problem, holding people back, and sustaining Welfare,
    Hey it is a good living...who needs to work in Obama Land.

    August 25, 2013 05:58 pm at 5:58 pm |
  14. Mark

    Donald Trump summarizes – in one person – EVERYTHING that is wrong with America.

    August 25, 2013 06:04 pm at 6:04 pm |
  15. Richard Mitchell

    Trump is just a spoiled rich kid that never grew up and never had to do an honest days work.

    August 25, 2013 06:06 pm at 6:06 pm |
  16. Paul

    You know what they say... "Once a scum sucking vulture, always a scum sucking vulture."

    August 25, 2013 06:08 pm at 6:08 pm |
  17. bhiner

    Trump lives in court. He gets sued every other day. He has a team of shark attorneys for this kind of thing, and he seldom loses. He also lives to sue other people whom he feels may have crossed some Trump "line in the sand". Taking on this guy in court is a losing proposition.

    August 25, 2013 06:09 pm at 6:09 pm |
  18. Bart

    Why does Trump look so orange and mauve?

    August 25, 2013 06:13 pm at 6:13 pm |
  19. Harry Cline

    The up and coming narcissist generation being con at the gate of life. And most to blind to realize they got fleeced by one of the old school cons in the game.

    The Trumps, the Romneys and the like are the kinds of people who stole the wealth out of America. Funneled in to off-shore accounts. These are the kinds of people who supposedly create jobs , so we give them tax breaks.

    While fleecing America one generation at a time. It's getting to be redundant.

    August 25, 2013 06:14 pm at 6:14 pm |
  20. beenthere

    Donald Trump is one of the reasons I'm no longer a New Yorker. I had to get out before he made the city any uglier. His huge, tasteless, sunlight-robbing newer constructions were bad enough, but not enough; he had to put his name on some classic old landmarks as well. A poem by Shelley sums it up: The poem describes "two vast and trunkless legs of stone" in the desert with the inscription "My name is Ozymandias, king of kings. Look on my works ye mighty, and despair!" Do you suppose Trump ever read it? Would he understand that he is Ozymandias?

    August 25, 2013 06:15 pm at 6:15 pm |
  21. BobbyRay

    I still need to see Trumps birth certificate to prove he is not a highly developed orangutan.

    August 25, 2013 06:19 pm at 6:19 pm |
  22. Pete

    Trump the welcher,betting if Pres.Obama showed his birth certificate he give 5 million to any of the presidents charities..Pres.Obama showed his certificate and Trump turned around and as usual refused to send a check ,typical republican clown..Yes as one would say if you believe in anything this clown says you deserve to get what's coming to you being that ignorent to fall for anything that sideshow clown tells or sells yah..What about the personal failures in multiple divorses,business namely the 4 bankruptcies he's filed in recent years ,yah a real winner if a blind man ever saw one!!A true legend in his own mind!!He is truly a republicans best friend isn't he ask Boehner he endorsed him didn't he!!

    August 25, 2013 06:32 pm at 6:32 pm |
  23. Anonymous

    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."

    anyone reading this retort recognizes Trump's MO......this is what he says about ANYONE who challenges him or criticizes him, whether it be about Rosie O'Donnell or Barbara Walters or even the President. He is a sick puppy.....and we are all seeing him as we never saw him as he was growing richer and richer: A disgusting little man.

    August 25, 2013 06:33 pm at 6:33 pm |
  24. Alex

    This is just his students applying their skills they learned – sue the pants off of any and everyone you can.

    August 25, 2013 06:41 pm at 6:41 pm |
  25. Tyler

    Unfortunately, lawsuits are nothing more than a business expense now days. The amount of money he's made probably topples any amount of money he will have to pay in the lawsuit.

    August 25, 2013 06:43 pm at 6:43 pm |
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