Consumer Fraud

NY Attorney General sues Donald Trump University for allegedly defrauding students

Gavel Scales of Justice American flag square NY Attorney General sues Donald Trump University for allegedly defrauding studentsNew York Attorney General Eric Schneiderman has filed a lawsuit against Donald Trump, alleging the real estate mogul and reality TV star defrauded students with his “Trump University” programs that offered to teach potential investors the keys to success in real estate, but allegedly did nothing more than scam them out of more than $40 million.

The lawsuit comes amid Trump’s legal battles with plaintiffs in California who claim they too were lured to Trump University programs with free seminars but ultimately cheated out of thousands of dollars. Those plaintiffs are seeking class action status for their cases. Seeking to have the case dismissed, Trump has filed a defamation countersuit against the California plaintiffs, but his efforts have so far been overturned by a federal appeals court.

According to the New York lawsuit, after Mr. Trump formed Trump “University” in 2004, state education officials told him that the name was unsuitable because the seminars weren’t chartered as a university. Trump, however, kept the deceptive name and operated the business as an “illegal educational institution” until May 2010, when he changed the name to Trump Entrepreneur Initiative.

The lawsuit also alleges that students were initially lured into the program with a free 90-minute program that “served as a sales pitch for a three-day seminar costing $1,495,” which was in turn “an upsell to increasingly costly ‘Trump Elite’ packages starting at around $10,000.” Many students were also sold on the final stage of the program, a year-long mentorship that cost $35,000, the lawsuit claims.

One former Trump University student told the Associated Press he spent nearly $35,000 to learn some of Donald Trump’s secrets to success. Instead, however, he “left the sessions of Trump University cash-poor, with little more than a photo of himself next to a life-size cardboard cutout of the mogul, who never showed up,” the AP reported.

The lawsuit also accuses Trump of staging a deceptive marketing campaign that claimed students would be taught by real estate “experts” who were personally selected by the real-estate billionaire himself, although both claims are allegedly false.

“Some 5,000 hardworking people from all over the country fell for Donald Trump’s sales pitch and ended up getting taken,” Mr. Schneiderman said in an Op-Ed published in the New York Daily News. “They were victims of a high-pressure bait and switch. That’s consumer fraud. As the state’s chief law enforcement officer, it’s my job to see that perpetrators of fraud are brought to justice.”

The allegations made in the New York lawsuit echo the California lawsuit, which names Tarla Makaeff as the lead plaintiff and claims the Trump University program “is anything but” a program designed to help students achieve financial success through strategic real estate investing.

“Defendant Trump University is more like an infomercial, selling non-accredited products, such as sales workshops, luring customers in with the name and reputation of its founder and Chairman, billionaire land mogul Donald J. Trump,” the California lawsuit says.

Associated Press
New York Attorney General’s Office
New York Daily News