Donald Trump accused of fraud in school lawsuit
(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.
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