He alleges The Trump Entrepreneur Institute, formerly known as Trump University, for years lured aspiring investors falsely promising Trump would use his handpicked experts to teach get-rich real estate techniques. But instead “misled consumers into paying for a series of expensive courses that did not deliver” on their heavily advertised promises.
According to the AG, between 2005 and through 2011, Trump and his team operated “an unlicensed educational institute” that cashed up to $40 million from more than 5,000 people across the country who "paid Donald Trump to teach them his hard-sell tactics," Schneiderman said, and used his celebrity status to convince people to attend.
In response, Trump made local headline news claiming the university received a 98% student approval rating that is higher than that of some of the country’s finest universities, including Harvard.
Filed in New York Supreme Court in Manhattan, the petition includes details from the advertisements run by Trump University in major newspapers nationwide and “direct mail solicitations sent to entice consumers to attend a free workshop.”
Schneiderman maintains a New York investigation revealed that the university was unlicensed under New York State Education Law and Donald Trump “did not handpick even a single instructor at these seminars” and had little or no role in developing any of the Trump University curricula, or seminar content.
Furthermore, even though the New York State Education Department notified the university as early as 2005 that these practices violated New York law, “Trump University did not change its name until May 2010 and never received a license to operate in the state.”
Attendees signed up for a $1,495 three-day seminar based on false claims including that “they would learn everything they needed to know to become successful real estate investors.” Some instructors claimed they would earn tens of thousands of dollars within 30 days, receive access to private sources of financing from so-called hard-money lenders, access to a year-long “apprenticeship support” program, and the option to receive one-on-one training and mentorship with Trump if they signed up for $10,000 to $35,000 Trump Elite mentorship programs.
The lawsuit alleges that attendees “did not receive substantive instruction on how to raise money from hard money lenders” or “apprenticeship support.” It states that despite diligent efforts, many consumers were unable to conclude even a single real estate deal and felt they had been victims of an elaborate scam.
Schneiderman is seeking full restitution for the more than 5,000 consumers nationwide “who were defrauded of over $40 million in the scheme, disgorgement of profits, as well as costs and penalties and injunctive relief prohibiting these types of illegal practices going forward.”