August 25, 2013 in Nation/World

State claims Trump part of school fraud

N.Y. attorney general seeks to repay students
Michael Gormley Associated Press
 
Associated Press photo

In this 2005 photo, Donald Trump listens at a news conference in New York announcing the debut of Trump University.
(Full-size photo)

ALBANY, N.Y. – 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.

Trump shot back that the Democrat’s lawsuit is false and politically motivated.

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.”

But Trump’s attorney accused Schneiderman of trying to extort campaign contributions from the real estate mogul through his investigation of Trump. Attorney Michael Cohen told the Associated Press on Saturday that Schneiderman’s lawsuit was filled with falsehoods. Cohen said Trump and his university never defrauded anyone.

“The attorney general has been angry because he felt that Mr. Trump and his various companies should have done much more for him in terms of fundraising,” Cohen said.

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.

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.

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