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. kali

    it's specially galling when people who are already filthy rich engage in fraud to further enrich themselves........

    August 25, 2013 11:50 am at 11:50 am |
  2. z2cents

    I see Trump being featured on American Greed.

    August 25, 2013 11:52 am at 11:52 am |
  3. z2cents

    34,995 for a "full education" for you and a date night dinner for Trump.

    August 25, 2013 11:53 am at 11:53 am |
  4. Four Two

    There's a shocker. A wealthy "mogul" being nailed for greed. God bless America.

    August 25, 2013 11:53 am at 11:53 am |
  5. Trumped

    Either Donald believes that everything on the internet must be true.. so he points people to look at his website that says there is a 98% approval, or he hopes people believe once he puts in on the internet it becomes truth. Donald Trump has been and always will be a lying piece of medicine man salesman with no morals and no dignity. He will go down in history as on of the most corrupt and lying sack of cow pies ever known in the United States.

    August 25, 2013 11:55 am at 11:55 am |
  6. Anonymous

    trump – you're fired!

    August 25, 2013 11:55 am at 11:55 am |
  7. Clarke

    Trump, is not someone to be trusted, never has been, never will. He is so shady,and is smart enough to cover his tracks
    All the way tothe bank.

    August 25, 2013 11:57 am at 11:57 am |
  8. Amy in Cambridge

    Who in their right mind would even consider attending (let alone paying for the "education") a school associated with Donald Trump?

    August 25, 2013 11:58 am at 11:58 am |
  9. Sheesh Louise

    These students should have figured it all out before dropping their money. Trump is/was all about promoting the name.
    You don't become a successful business person without being wary to hype before you start down the trail.

    August 25, 2013 11:58 am at 11:58 am |
  10. Snapshot

    El Trumpo is best known for his -Birther- nonsense. That's it, nothing more.

    August 25, 2013 12:00 pm at 12:00 pm |
  11. Bill Davis

    The con man is being investigated so he resorts to name calling. Typical Trump.

    August 25, 2013 12:04 pm at 12:04 pm |
  12. Sharkmann

    Does that mean that he will not be able to afford another boneless cat to wear as a hat and call it his hair?

    August 25, 2013 12:08 pm at 12:08 pm |
  13. Alex

    Donald Trump is relentlessly, persistently, invariably a total jerk.

    August 25, 2013 12:08 pm at 12:08 pm |
  14. Jonathan Garcia

    That degenerate poor excuse for a human being should be criminally prosecuted and jailed. One thing would be to charge a couple hundred dollars for a course but up to 30k plus is plain robbery and fraud. This thing has no ethics or morals, he is the essence of slime and should not be allowed to practice in any business in any capacity.

    August 25, 2013 12:09 pm at 12:09 pm |
  15. Fiona

    Well, a f_ool and his money, etc. What did these people expect?

    I will never understand how Trump can beleive that strange comb-over and his face-lifing and Botoxin and fillers add up to "attractive". He looks like a freaky old woman.

    August 25, 2013 12:10 pm at 12:10 pm |
  16. Californian

    I do believe in Trump. I do believe in Trump. I do, I do, I do, I do, I do believe in Trump. I do believe in Trump. I do, I do, I do, I do, I do.

    August 25, 2013 12:11 pm at 12:11 pm |
  17. ya rights

    Couldn't happen to a nicer guy.

    August 25, 2013 12:11 pm at 12:11 pm |
  18. Bob

    The website is a bit of a joke. 98% were satisfied based on the class reviews that they posted. Why would you possibly doubt such an independent source?

    August 25, 2013 12:12 pm at 12:12 pm |
  19. sooner79

    Trump will be asked and will happily settle out of court. But not for $40 million dollars. Billionairs don't litigate they settle.

    August 25, 2013 12:12 pm at 12:12 pm |
  20. ChrisM

    HA! Trump a fraud! Who would have thought. I certainly want to know , what is that thing living on trumps head and most importantly, does it have a birth certificate

    August 25, 2013 12:14 pm at 12:14 pm |
  21. tp1776

    hooray! drain his money, so his wallet is an empty as his brain

    August 25, 2013 12:16 pm at 12:16 pm |
  22. patrick harris

    I love all the haters- I think your all jealous of Trump, just admit it! Don't you wish you were worth upwards of a billions dollars instead of the pathetic financial spot you find yourself in right now?

    August 25, 2013 12:20 pm at 12:20 pm |
  23. Anonymous

    Trump is a fool..................

    August 25, 2013 12:20 pm at 12:20 pm |
  24. W.

    First, ask for his birth certificate. It does not bother me at all to see a man hiding under his pet squirrel being stalked for some, "Risky Business." I am absolutely convinced that Trump has been involved in something that is either apart from the spirit of the law or the very letter of the law. Nobody that runs a shakedown joint can say they wash behind their ears very well.

    August 25, 2013 12:23 pm at 12:23 pm |
  25. crook

    Trump is a fool and ignorant rich spolit brat ... he is lucky he got rich , i hate his school .. couple of my friends have given very bad reviews .. shame on trump ,how low can this fool go.

    August 25, 2013 12:23 pm at 12:23 pm |
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