Business, Economics and Jobs

New York sues Donald Trump for $40m, calls 'Trump University' a ripoff


NEW YORK, NY - AUGUST 29: American business magnate and TV personality Donald Trump visits "FOX and Friends" at FOX Studios on August 29, 2011 in New York City.



The New York attorney generals' office is suing real estate mogul Donald Trump over claims that his for-profit "Trump University" is engaging in illegal business practices.

It may be chump change to Trump but mogul-turned-reality TV star is being accused of charging students up to $35,000 and promising to help them get rich.

Instead, the lawsuit claims those who forked over the cash got only expensive seminars and their picture taken in front of a life-size picture of "The Apprentice" TV star.

Attorney General Eric Schneiderman is seeking at least $40 million from Trump and claims that the unlicensed educational institution made false claims about its classes in what was described as "an elaborate bait-and-switch."

"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."

Trump dismissed the allegations and claimed that the lawsuit was politically motivated.

George Sorial, a lawyer for Trump, said that Schneiderman had previously asked Trump for a campaign contribution and was turned down.

"This is tantamount to extortion," Sorial said.

Another of Trump's lawyers, Michael D. Cohen, said Trump University provided nearly 11,000 student evaluations to Schneiderman and said 98 percent of students called the program "excellent".

The investigation started in 2011 after dozens of students filed complaints against the for-profit institution.

Trump University attracted prospective students the promise of a free 90-minute seminar, which the lawsuit calls a "sales pitch" for a $1,495, 3-day seminar.

Students at the three-day seminar were then upsold to expensive "Trump Elite" packages that ran up to $35,000 but were not given the personal mentoring that was promised, the lawsuit claims.

"No one, no matter how rich or famous they are, has a right to scam hardworking New Yorkers," Schneiderman said.

"Anyone who does should expect to be held accountable."