Donald Trump Sued for Fraud Over 'Trump University'

By Brett Snider, Esq. on August 27, 2013 | Last updated on March 21, 2019

Real estate mogul Donald Trump is in hot water after New York's attorney general sued him for $40 million over the entrepreneur's "Trump University" promises.

The suit alleges that Trump's eponymous institution was largely a sham, serving to bilk more than 5,000 students out of tens of thousands of dollars and not delivering on its promised apprenticeships, reports The Associated Press.

What legal trouble does America's iconically coifed billionaire face from this fraud suit?

Trump University Fraud Claims

New York state attorney general Eric T. Schneiderman claims that Trump appeared in ads for Trump University promising to teach students "a systematic method for investing in real estate," despite the fact that, at the time, Trump had no teachers or curricula for any of the self-titled institution's courses, reports The New York Times.

The University had already come under fire in 2011 from the State Education Department for lacking licensing and credentials to be legally called a "university"; Trump simply changed the name to the Trump Entrepreneur Institute, reports The Associated Press.

This alleged deception in passing off the institution as a bone fide state-recognized university is just one claim of fraud in Schneiderman's suit. Trump is also accused of making false claims that:

  • He would appear in person at a three-day seminar,
  • The program would teach Trump's own real estate strategies, and
  • Participation in a seminar would entitle consumers to a year-long "Apprenticeship Support" program.

Even though the current suit covers Trump University's business from 2005 to 2011, New York's Attorney General's Office says it's still fielding complaints from consumers about Trump's education programs.

Trump Fires Back With Conspiracy Theory

Not to be shouted down at press time, Donald Trump responded to these allegations of misleading ads and fraud by suggesting that Schneiderman and President Obama conjured up the suit after meeting last week, reports CBS News.

Trump's attorney Michael D. Cohen reduced Schneiderman's complaint to a political vendetta, explaining that Schneiderman "has been angry because he felt that Mr. Trump and his various companies should have done much more for him in terms of fundraising," reports The Associated Press.

Claims of collusion and extortion by a public official skirt very near to illegal defamation, but Trump stands by his assertions that Schneiderman is "a political hack" who's only pursuing this claim for publicity, reports CBS News.

Forty million dollars is an ambitious amount to pursue against a man like Trump, but if the reports of fraud are true, the "Apprentice" host may end up shelling out even more.

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