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. Screen2011

    I had a wallet with trumps name on it (it was in sale at a department store) and the thing fell apart within 6 minths. The guy will put his name on anything. Yeah he was was born rich and the idea of him as a wise businessman is probably a smoke screen for a sketchy real estate investor/ entertainer but hes great at selling his name.

    August 25, 2013 06:44 pm at 6:44 pm |
  2. ldean50

    hey, Elliott Carlin... I do payroll for Trump, and I'm pretty sure you're on his payroll. lol

    August 25, 2013 06:51 pm at 6:51 pm |
  3. lynette

    When taking classes at Mott College, I can't get a refund because I don't think the professor was a good teacher or I didn't like the professors style. Nope I had to pay no matter what. Just because Donald Trump is famous doesn't give one the right to us.

    August 25, 2013 06:53 pm at 6:53 pm |

    The old adage still applies.....there is a full born every minute.

    August 25, 2013 06:54 pm at 6:54 pm |
  5. Retired&lovingit

    Sorry but I have yet to get over his hairstyle. In fact I can never concentrate on what he is saying because I am staring at his hair. I have to wonder if he lacks in self esteem if he tries that hard to cover up his baldness or whatever his hairstyle is depicting. Just can't get past it. I too think he is over rated, all hype, the ultimate of marketing one's ego, fooling those around him, those that listen and believe in media hype.. typical America.

    August 25, 2013 06:59 pm at 6:59 pm |
  6. Warrior

    Sad that there are people who are pointing the finger at others when they are manipulative, greedy, deceitful, and untruthful. Trump is pathetic.

    August 25, 2013 06:59 pm at 6:59 pm |
  7. Marie MD

    @ patrick harris, while having money must be nice I am in a good financial position.
    Then again, I can sleep better at night knowing that my wealth wasn't handed down to me by daddy or that I have been married three or four times (hard to kep score on this fool) or I m not known because I fire people or have to be everything I own after me becaue of his enormous ego or can't take a joke even though he is one of the biggest ones around.
    His birther stand against our President and him keeping his big fat dirty mouth quiet when asked about the canadian crazy tool says all there s to say about him.
    Enough of giving him news time. He is a ugly clown and aboutky, not even a tiny bit that important in our daily lives.

    August 25, 2013 06:59 pm at 6:59 pm |
  8. john

    well the big dog screws the little dogs once again.when will people learn that the donald only cares about the donald??

    August 25, 2013 07:04 pm at 7:04 pm |
  9. tstorm92

    What simple-minded person would give Trump even a dollar to hear anything this lunatic had to say???

    August 25, 2013 07:06 pm at 7:06 pm |
  10. abbydelabbey

    Trump has filed for bankruptcy how many times? He's a publicity hound and he'll use this to his own advantage.

    Would I trust any school of which he is a part? Well, no, of course not.

    August 25, 2013 07:08 pm at 7:08 pm |
  11. Thomas

    Why won't President Obama do something about this injustice to these students ?

    August 25, 2013 07:11 pm at 7:11 pm |
  12. NYVeteran

    Hey comb-over, you're fired!

    August 25, 2013 07:11 pm at 7:11 pm |
  13. Skeptic

    I want to sue Trump's hair because it frightens small children.

    August 25, 2013 07:13 pm at 7:13 pm |
  14. John

    Why would they create a website in anticipation of a lawsuit unless they knew they were doing something worthy of getting sued over.

    August 25, 2013 07:16 pm at 7:16 pm |
  15. bougiorno

    takes two people to realize that mistakes happen all the time

    August 25, 2013 07:20 pm at 7:20 pm |
  16. proshooter

    Trump just got what he loves the most...publicity. He claims to be worth $10 million (like we care) so he can write this off as public relations fees. If most of us had a small portion of what he claims to have we'd probably be a lot happier. He seems to be one of the most miserable people on the planet. I don't know why he's on NBC with a TV show (that I never met a person who watches). He'd be better on FOX News spewing about all his miserable thoughts.

    August 25, 2013 07:22 pm at 7:22 pm |
  17. TheZogNJ

    Well, let's get ready to watch another Trump "enterprise" hide behind the bankruptcy statutes. He should run the Trump School for Bankruptcy Studies.

    August 25, 2013 07:25 pm at 7:25 pm |
  18. RJR

    As a student at any University, college, state ran or whatever...The institution has given you the driving manual, the test and the keys to the car. So, the ones who still cant drive should get off the road and maybe try public transit. Get my point?

    August 25, 2013 07:43 pm at 7:43 pm |
  19. easytime

    donald has billions-he can pay a few millions in fines from his pocket change.

    August 25, 2013 07:47 pm at 7:47 pm |
  20. David

    Hey, here is an idea! Talk to some of the 98% claimed to be satisfied. And some of the 2% not. Now that would be reporting news.

    August 25, 2013 07:48 pm at 7:48 pm |
  21. teedofftaxpayer

    When he loses he'll just file bankruptcy on that College like he does everything else and no money out of his pocket.

    August 25, 2013 08:09 pm at 8:09 pm |
  22. New Jersey Guy!

    The New York State Attorney is very wrong on this one. He will loose this lawsuit and taxpayers money. Ahhh New York when are you gonna learn.

    August 25, 2013 08:13 pm at 8:13 pm |
  23. Clear and Present Thinker

    When you go to clown school, you must pay The Clown. Barnum was right.

    August 25, 2013 08:13 pm at 8:13 pm |
  24. kamanalono

    People have been using Trumps' name to promote their 'get rich quick' schemes since the 1970's, if not earlier.

    August 25, 2013 08:31 pm at 8:31 pm |
  25. Veritas Lavinga

    Trump was right on Obama's birth record, Barry Soetoro (Obama) was born in the African Union State of Keyna.

    August 25, 2013 08:31 pm at 8:31 pm |
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