NEW YORK - Attorney General Eric Schneiderman has filed a lawsuit against Donald Trump, The Trump Entrepreneur Institute -- formerly named Trump University LLC (“Trump University”), and Michael Sexton, former President of Trump University for engaging in persistent fraudulent, illegal and deceptive conduct in connection with the operation of Trump University.
Between 2005 through 2011, Trump University operated as an unlicensed educational institute that promised to teach Donald Trump’s real estate investing techniques to consumers nationwide but instead misled consumers into paying for a series of expensive courses that did not deliver on their promises. Some students reportedly paid up to $35,000
"More than 5,000 people across the country who paid Donald Trump $40 million to teach them his hard sell tactics got a hard lesson in bait-and-switch," said Schneiderman. "Mr. Trump used his celebrity status and personally appeared in commercials making false promises to convince people to spend tens of thousands of dollars they couldn't afford for lessons they never got. No one, no matter how rich or popular they are, has a right to scam hard working New Yorkers. Anyone who does should expect to be held accountable."
Trump is quoted in other media as saying the Democrat attorney general’s suit is “… false and politically motivated.”
In a posting on his Twitter account, Trump writes: "Lightweight NYS Attorney General Eric Schneiderman is trying to extort me with a civil law suit".
The posting points to a website: www.98percentapproval.com
The petition filed in New York Supreme Court in Manhattan by Attorney General Schneiderman details the advertisements run by Trump University in major newspapers across the country and the direct mail solicitations sent to entice consumers to attend a free workshop. These ads prominently displayed Donald Trump’s photograph and signature, or were styled as letters written by Trump himself. The advertisements were replete with false claims, including claims that consumers would learn “from Donald Trump’s handpicked instructor a systematic method for investing in real estate that anyone can use.” Other ads promised “my handpicked instructors will share my techniques” or “learn from my hand-picked expert” and “just copy exactly what I’ve done and get rich.”
An investigation by Attorney General Schneiderman revealed that Donald Trump did not handpick even a single instructor at these seminars and had little or no role in developing any of the Trump University curricula, or seminar content. The investigation also revealed that officials used the name “Trump University” even though they lacked the charter necessary under New York law to call themselves a University. They were also unlicensed under New York State Education Law, evading an array of legal protections designed to protect New Yorkers from fraud.
Even though Trump University was notified by the New York State Education Department (“NYSED”) as early as 2005 that these practices violated New York law, Trump University did not change its name until May 2010 and never received a license to operate in the state. As a result, many students believed they were attending a University, when they were not. This misconception was reinforced by Trump University’s use of a University-like seal on much of its material and awarding diploma-like Certificates of Completion bearing Donald Trump’s signature.
Despite Trump University’s advertised claims, consumers attending free seminars did not learn Donald Trump’s real estate techniques. Instead, Trump University’s instructors made multiple misrepresentations to convince consumers to sign up for a $1,495 three-day seminar. These misrepresentations included false claims about the three-day seminars such as:
- consumers would learn “everything [they] need[ed] to know” to become successful real estate investors;
- consumers would quickly recoup their investment by doing real estate deals, with some instructors claiming that consumers would earn tens of thousands of dollars within thirty days;
- instructors were “handpicked” by Donald Trump;
- consumers would be taught Donald Trump’s very own real estate strategies and techniques;
- consumers would receive access to private sources of financing (“hard money lenders”);
- the three-day seminar would include a year-long “Apprenticeship Support” program.
Instructors also insinuated Donald Trump himself would appear at the three-day seminar. According to reports, the most they got was a chance to pose with a life size poster.
In reality, many of the promises made at the free seminars went unfulfilled. Despite claims to the contrary, consumers who paid for and attended the three-day seminars were not taught everything they needed to know about real estate investing. For example, consumers did not receive substantive instruction on how to raise money from hard money lenders or receive an extensive “apprenticeship support” program. Instead of providing the sustained support promised by Trump University’s instructors, consumers were provided a list of lenders from a commercially available magazine. Instead of a personal appearance from Donald Trump as some consumers were led to expect, some participants got their photographs taken with a life-size photo of Mr. Trump.