Donald Trump Sued By NY Attorney General For $40 Million

N.Y. AG sues Trump, 'Trump University,' claims fraud
Michael Gormley, Associated Press
August 26, 2013

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.

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 D. Cohen told The Associated Press on Saturday that Schneiderman's lawsuit was filled with falsehoods. Cohen said Trump and his university never defrauded anyone.

He said Trump University provided nearly 11,000 testimonials to Schneiderman from students praising the program and said 98 percent of students in a survey termed the program "excellent."

"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. "This entire investigation is politically motivated and it is a tremendous waste of taxpayers' money."

State Board of Elections records show Trump has spent more than $136,000 on New York campaigns since 2010. He contributed $12,500 to Schneiderman in October 2010, when Schneiderman was running for attorney general, records show. An outspoken conservative, Trump himself flirted with a presidential run last year.

"Donald Trump will not sit back and be extorted by anyone, including the attorney general," 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.

He dismissed Trump's claim of a political motive.

"The fact that he's still brave enough to follow the investigation wherever it may lead speaks to Mr. Schneiderman's character," Schneiderman spokesman Andrew Friedman told AP.

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.

Will Donald Trump Go to the Dean's Office?
By Margaret Carlson
Aug 26, 2013

Class, raise your hand if you take Donald Trump seriously. No one? Well that shows you've learned something at the Trump University which, according to a lawsuit by the New York Attorney General Eric Schneiderman has defrauded at least 5,000 students who paid as much as $35,000 for courses and mentoring led by Trump's "hand-picked instructors," with the suggestion that they would meet The Donald himself.

And they didn't even get a lousy T-shirt. Rather than a glimpse of Trump himself at "graduation," the lucky ones got to have their picture taken with a life-size photo of the man who is "so rich, it's not even funny." In all, the AG's lawsuit claims that the unlicensed school took in $40 million from students with a promise to make them wealthy through expensive seminars. Instead, TU left them in debt.

We know Trump as the "short-fingered vulgarian" (Spy Magazine) and "circus peanut wearing a badger" (Jon Stewart), and by his own constant gloating as the "embodiment of the American Dream." Then there was his brief run for president as a birther and foreign-policy expert based on China selling him inferior drywall.

To that, according to Scheiderman's suit, add the guy who takes the money of kids trying to get a leg up in the world. These accusations give the lie to all of Trump's preening, if any were needed. If he's richer than God why would he stoop taking money from gullible consumers just hoping to learn how to make a buck in real estate? The entry-level seminars ($1,495) were just occasions to ``upsell'' more costly programs to attendees, according to the suit. Instructors were told to not let students "think three days will be enough to make them successful." They were encouraged to extend the limit on their credit cards to be ready to score a great deal, but it was actually a way for them to pay the "elite" mentorships, which cost as much as $35,000.

Trump says everyone was happy with his courses and he has 10,000 testimonials and tweets to prove it. Maybe it has something to do with President Barack Obama (the AG and the president met last week), he said. Or maybe Schneiderman, a "lightweight," wanted a bigger campaign contribution (Trump gave him $12,500). Trump joined cause with the Tea Party and said the suit might well be "a mini-IRS."

Enjoy for now, Mr. Trump, a world where the only bad news is not to be in the news. My money is on Schneiderman and congratulations for not letting the $12,500 or the bluster get in the way of holding Trump accountable.
http://www.bloomberg.com/news/2013-08-26/will-donald-trump-go-to-the-dean-s-office-.html