Mon, Aug 26, 2013 - Page 7 News List

New York sues Trump and his ‘university’ for fraud

PHONY PROMISES:Real-estate mogul Donald Trump denied that his seminar program engaged in persistent fraud by deceiving students using his name recognition

AP, ALBANY, New York

New York’s attorney general sued Donald Trump for US$40 million on Saturday, saying the real-estate mogul helped run a phony “Trump University” that promised to make students rich, but instead steered them into expensive and mostly useless seminars, and even failed to deliver promised apprenticeships.

Trump shot back that the Democrat’s lawsuit is false and politically motivated.

Attorney General Eric Schneiderman says that many of the 5,000 students who paid up to US$35,000 thought they would at least meet Trump, but instead had their picture taken in front of a life-size picture of The Apprentice TV star.

“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.”

However, Trump’s attorney accused Schneiderman of trying to extort campaign contributions from the real-estate mogul through his investigation of Trump. Attorney Michael Cohen on Saturday said that Schneiderman’s lawsuit was filled with falsehoods. Cohen said Trump and his university never defrauded anyone.

He said Trump University provided nearly 11,000 testimonials to Schneiderman from students praising the program and said 98 percent of students in a survey termed the program “excellent.”

“The attorney general has been angry because he felt that Mr Trump and his various companies should have done much more for him in terms of fundraising,” Cohen said. “This entire investigation is politically motivated and it is a tremendous waste of taxpayers’ money.”

State Board of Elections records show Trump has spent more than US$136,000 on New York campaigns since 2010. He contributed US$12,500 to Schneiderman in October 2010, when Schneiderman was running for attorney general.

“Donald Trump will not sit back and be extorted by anyone, including the attorney general,” Cohen said.

The lawsuit says many of the wannabe moguls were unable to land even one real-estate deal and were left far worse off than before the lessons, facing thousands of dollars in debt for the seminar program once billed as a top-quality university with Trump’s “hand-picked” instructors.

Schneiderman is suing the program, Trump as the chairman and the former president of the university in a case to be handled in the New York Supreme Court in Manhattan. He accuses them of engaging in persistent fraud, illegal and deceptive conduct and violating federal consumer protection law. The US$40 million he seeks is mostly to pay restitution to consumers.

He dismissed Trump’s claim of a political motive.

“The fact that he’s still brave enough to follow the investigation wherever it may lead speaks to Mr Schneiderman’s character,” Schneiderman spokesman Andrew Friedman said.

New York Department of Education officials had told Trump to change the name of his enterprise years ago, saying it lacked a license and did not meet the legal definitions of a university. In 2011, it was renamed the Trump Entrepreneur Institute, but it has been dogged since by complaints from consumers and a few isolated civil lawsuits saying it did not fulfill its advertised claims.

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