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. Steve S

    They got what they paid for.
    Trump showed them how the rich get richer.

    August 25, 2013 12:43 pm at 12:43 pm |
  2. Dave

    How about the students who are complaining spending more time of trying to succeed instead of blaming others for their own failure. Life does not come on a silver platter.

    August 25, 2013 12:43 pm at 12:43 pm |
  3. Larry

    The examples of rich entrepreneurs we have in America today is pitiful. Trump, Romney, the Koch brothers, and so many more. It also reads like a list of who's who in the Republican party. It also explains why the GOP are in serious trouble as a political party in this country. Goodbye and good riddance. They stink of bad ethics.

    August 25, 2013 12:44 pm at 12:44 pm |
  4. charlie

    Proably not hard to track since he likes his name in the press

    August 25, 2013 12:44 pm at 12:44 pm |
  5. James

    Whatever!.....this is the same guy that appeared in Vancouver for 24 hours to "endorse" a new Hotel....not a TRUMP TOWER, just a hotel that he says is ok to put his name on. SHAMELESS. Sick of this loser.

    August 25, 2013 12:44 pm at 12:44 pm |
  6. Todd

    Sounds like SUNY colleges, they take thousands, no jobs in most of what is taught, no benefit. I would not distinguish Trump from an overpriced bachelor degree, all the same. Nor would I expect Trump to be there to personally teach me or mentor/select instructors. Education should be free because what do people get out of it in most cases? Nothing. I'll take the refund on my SUNY degrees, same idea. Those schools all take your money first and do not care much about the rest.

    August 25, 2013 12:45 pm at 12:45 pm |
  7. GaryOwen27

    What is that thing on Trumps head?

    August 25, 2013 12:46 pm at 12:46 pm |
  8. martin angell

    Trump is right on spot on his concerns about the national debt, spending recklessly, funding foreign governments irresponsibly. His issues with the computer manufactured birth certificate and all those "layers" that can be peeled apart showing someone doctored Obama's alleged Hawaiian birth certificate are well-documented. I think Trump has been an important voice for keeping America from going down the path Obama is taking us–toward national bankruptcy.

    By the way, I'd be curious to see Trump's thoughts about the document released by the Egyptian government showing Obama and Morsi bribing the Muslim Brotherhood.

    August 25, 2013 12:50 pm at 12:50 pm |
  9. Jerry Schull

    Never really thought much of Trump. Always thought of him as a egomaniac with a desire for publicity.

    August 25, 2013 12:50 pm at 12:50 pm |
  10. Dan

    It's not much different than other for profit schools, except it has Trump's name behind it. A University of Phoenix MBA costs over $28,000 and is nearly worthless to some employers. If Trump guaranteed success, it was an arrogant and foolish move, but most schools guarantee that they'll give you the knowledge to be successful and not that you'll be successful. Also, even for non-profit schools there's a lot of wasted time with non-major courses that have little interest for future employers.

    August 25, 2013 12:50 pm at 12:50 pm |
  11. Freddo

    Trump lying, misrepresenting, and scamming?

    Why, I'm shocked!!

    August 25, 2013 12:52 pm at 12:52 pm |
  12. ok-thnx-bye

    You would think, with all Trump's millions, he could have gotten hair implants, instead of that gawd-awful comb-over/toupee/dead animal on his head...

    August 25, 2013 12:52 pm at 12:52 pm |
  13. charles bowen

    The Republitard Trump strikes again......Nice Hair where did you buy it? Charles Bowen Solomon Stone

    August 25, 2013 12:52 pm at 12:52 pm |
  14. chris

    bernie madoff and now this guy, when are people gonna learn that rich people don't want to help anyone but themselves and other rich people. you think they want to grow the upper-class? you get what your lazy greedy azzes deserve...

    August 25, 2013 12:53 pm at 12:53 pm |
  15. Jeff

    spynall, perhaps a little research before ya post, Trump has never personally filed for bankruptsy, he had companies he owned go bankrupt, totally different. Trump also never received 30 million from his dad before he had already made over 100 million himself, he got his dads company AFTER his dad retired.

    August 25, 2013 12:54 pm at 12:54 pm |
  16. MarioDeletario

    "On a related note, the South African Society for the Preservation of Orangutans has declared Trump's hair an endangered species."

    August 25, 2013 12:54 pm at 12:54 pm |
  17. NNAMDI

    This makes me wonder how much money is really enough ? If trump has the Billions he claims and not hust bank loans he has no intention of paying back, why steal from hard working people no matter how stupid they are ? This makes me wonder if he is really as rich as he makes out to be or if he is just plain greedy ? In any case, I have no respect for the dude, his mouth is bigger than his pocket !

    August 25, 2013 12:54 pm at 12:54 pm |
  18. joe

    duh! Trump has been a con man his whole adult life.

    Crime paid for Trump.

    August 25, 2013 12:56 pm at 12:56 pm |
  19. Joan

    To Diplomad. Barack Obama was born in Kenya and had a birth certificate. The problem for the birthers is that this birth certificate was for his FATHER who actually was born there. No big surprise or scandal. The President was born in Hawaii and that has been proven by hospital officials, newspapers, a Republican governor and the list goes on and on. Trump used the issue for publicity. Everyone knows that. Now that he is being scrutinized, it seems like karma.

    August 25, 2013 12:56 pm at 12:56 pm |
  20. lol

    The bankruptcy king's promises weren't kept? Say it aint so!

    August 25, 2013 12:56 pm at 12:56 pm |
  21. Jeb

    Trump is a con-artist.

    August 25, 2013 12:57 pm at 12:57 pm |
  22. Shawn

    Bet yuh a beer he declares bankruptcy...

    August 25, 2013 12:58 pm at 12:58 pm |
  23. adoptedusa

    Trump is excellent at beating his own DRUM, I hope someone finally will punch a big hole in his drum so he can't play it anymore! And also Trump & Palin would make the best couple in the world!

    August 25, 2013 12:59 pm at 12:59 pm |
  24. Schadenfreude

    Oh, I shouldn't indulge, but will anyway.


    August 25, 2013 01:03 pm at 1:03 pm |
  25. miller

    this man has no class .

    August 25, 2013 01:04 pm at 1:04 pm |
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