NY sues 'Trump University' and its get-rich claims
By | Associated Press – 13 hrs ago
ALBANY, N.Y. (AP) — New York's attorney general sued Donald Trump for $40 million Saturday, saying the real estate mogul helped run a phony "Trump University"
that promised to make students rich but instead steered them into
expensive and mostly useless seminars, and even failed to deliver
promised apprenticeships.
Attorney General Eric Schneiderman
says many of the 5,000 students who paid up to $35,000 thought they
would at least meet Trump but instead all they got was their picture
taken in front of a life-size picture of "The Apprentice" TV star.
"Trump University engaged in
deception at every stage of consumers' advancement through costly
programs and caused real financial harm," Schneiderman
said. "Trump University, with Donald Trump's knowledge and
participation, relied on Trump's name recognition and celebrity status
to take advantage of consumers who believed in the Trump brand."
A spokeswoman for Trump did not immediately return a request for comment Saturday.
The lawsuit says many of the wannabe moguls were unable to land even one real estate
deal and were left far worse off than before the lessons, facing
thousands of dollars in debt for the seminar program once billed as a
top quality university with Trump's "hand-picked" instructors.
Schneiderman is suing the program, Trump as the university chairman,
and the former president of the university in a case to be handled in
state Supreme Court in Manhattan. He accuses them of engaging in
persistent fraud, illegal and deceptive conduct and violating federal
consumer protection law. The $40 million he seeks is mostly to pay
restitution to consumers.A Trump attorney had said Schneiderman sought campaign contributions while investigating the case, telling The New York Times it was "tantamount to extortion," a claim denied by Schneiderman.
"Unlike some who are willing to turn a blind eye to fraud in exchange for campaign contributions, the attorney general is willing to follow an investigation wherever it may lead, even if that means investigating people with whom he's had a relationship, Schneiderman spokesman Andrew Friedman told The Associated Press.
State Education Department
officials had told Trump to change the name of his enterprise years ago,
saying it lacked a license and didn't meet the legal definitions of a
university. In 2011 it was renamed the Trump Entrepreneur Institute,
but it has been dogged since by complaints from consumers and a few
isolated civil lawsuits claiming it didn't fulfill its advertised
claims.
Schneiderman's lawsuit covers complaints dating to 2005 through 2011.
Students paid between $1,495 and $35,000 to learn from the Manhattan
mogul who wrote the best seller, "Art of the Deal" a decade ago followed
by "How to Get Rich" and "Think Like a Billionaire."Scheiderman said the three-day seminars didn't, as promised, teach consumers everything they needed to know about real estate. The Trump University manual tells instructors not to let consumers "think three days will be enough to make them successful," Schneiderman said.
At the seminars, consumers were told about "Trump Elite" mentorships that cost $10,000 to $35,000. Students were promised individual instruction until they made their first deal. Schneiderman said participants were urged to extend the limit on their credit cards for real estate deals, but then used the credit to pay for the Trump Elite programs. The attorney general said the program also failed to promptly cancel memberships as promised.
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Consumers may file complaints at:
www.ag.ny.gov/bureaus/consumer_frauds/filing_a_consumer_complaint.html.