New York sues Trump, alleges fraud at Trump University

Aug. 25, 2013 at 12:00 AM

ALBANY, N.Y., Aug. 24 (UPI) -- New York Attorney General Eric Schneiderman has filed a $40 million lawsuit alleging developer Donald Trump defrauded consumers through his "Trump University."

The lawsuit, filed Saturday in Manhattan state Supreme Court, alleges Trump engaged in bait-and-switch tactics by offering free seminars on getting rich through real estate with a promise of providing instructors hand-picked by Trump, the New York Daily News reported.

"Trading on his celebrity status, Mr. Trump personally appeared in advertisements making false promises to convince people to spend tens of thousands of dollars they couldn't afford for lessons they never got," Schneiderman said.

Schneiderman said free workshops promoted in ads for Trump University turned out to be pitches to get respondents to commit to a three-day, $1,495 seminar that the lawsuit alleges also failed to deliver on its promises. Beyond that, the lawsuit alleges, people who bought the three-day seminar then got a pitch to spend another $10,000 to $35,000 per person for a "Trump elite mentorship program," the newspaper said.

The report said ads for the seminars billed the institution as Trump University, even though the state Education Department notified the organization in 2005 it was not licensed to call itself a university, and Trump University officially became the Trump Entrepreneur Institute in 2010.

Schneiderman's office says it has received "dozens and dozens" of complaints about Trump University.

Donald Trump said in an online posting 98 percent of his students are satisfied, the Daily News reported.

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