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NY AG's Trump University Fraud Lawsuit Will Proceed
By
Jen Chung
Published Mar 1, 2016
Modified Mar 1, 2016
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By
Jen Chung
Published Mar 1, 2016
Modified Mar 1, 2016
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The New York Appellate Division made a yyyuuuugggge ruling today, paving the way for Attorney General Eric Schneiderman's lawsuit against Trump University to move forward. Happy Super Tuesday!
A number of people have complained that the "school" is more like a time-share condo pitch—that you pay $1,500 for—rather than a meaningful learning experience from business leaders. One dissatisfied scholar said, "I, too, signed up for the 3 day class at $1,495, after attending the 2 hour free event. The deal was, if you were dissatisfied after the 1st day, you could get your money back. The first day was full of excellent information, so of course, no one wanted their money back. The next 2 days were completely worthless. The focus for those 2 days was to sell you on other programs."
In its ruling, the Appellate Division noted:
"According to the Attorney General, the free seminars were merely an instrument through which instructors would induce students to enroll in increasingly expensive seminars, starting with a three-day $1,495 seminar. The Attorney General averred that although Trump University speakers represented that the three-day seminar would teach students all they needed to know to be successful real estate investors, the instructors at those three-day seminars then engaged in a "bait and switch," telling students that they needed to attend yet another seminar for an additional $5,000 in order to learn more about particular lenders.
Instructors at the three-day seminars are also alleged to have engaged in a bait-and-switch by urging students to sign up for "Trump mentorship packages, which ranged anywhere from $10,000 to $35,000" and supposedly provided "the only way to succeed in real estate investment."
The Atlantic took a look at the Trump University playbook: "As the playbook puts it on page 23, 'Sell, Sell, Sell!' The playbook posits a 'Minimum Sales Goal' of $72,500 per seminar, meaning that the seminars leaders needed to convince at least 20 percent of attendees to sign up for three-day seminars costing $1,495.
A group called the American Future Fund has released videos of unhappy Trump University "grads"; for instance, one said "that she had hoped to learn about how to finance real estate deals, and to access financing, but the program has no funding sources. 'They told people to use credit cards,' she said."
The AG's office is suing Trump and former Trump University President Michael Sexton for $40 million, alleging they were "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."
Trump himself calls the lawsuit "a minor civil case I have not settled out of principle." And regarding a California class-action lawsuit against Trump University, America's Last President pointed out that the judge there is Hispanic and out to get him: "I think it has to do perhaps with the fact that I’m very, very strong on the border, very, very strong at the border, and he has been extremely hostile to me."
Today, Schneiderman called the ruling a "clear victory in our effort to hold Donald Trump and Trump University accountable for defrauding thousands of students. The state Supreme Court had already granted our request for summary judgment determining that Trump and his University are liable for operating illegally in New York as an unlicensed educational institution. Today’s decision means our entire fraud case can move forward, and confirms that the case is subject to a six year statute of limitations... We look forward to demonstrating in a court of law that Donald Trump and his sham for-profit college defrauded more than 5,000 consumers out of millions of dollars."
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donald trump
fraud
lawsuit
trump university
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
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