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Donald Trump sued for $40 million, lawsuit alleges his 'sham' university cheated thousands

Real estate mogul Donald Trump cheated thousands of students through a "sham" university, according to a lawsuit filed this weekend.

Donald Trump in 2011. Credit: Larry Marano/Getty Images Donald Trump in 2011. Credit: Larry Marano/Getty Images

Real estate mogul Donald Trump cheated thousands of students through a "sham" university, according to a lawsuit filed by New York State Attorney General Eric Schneiderman this weekend.

The lawsuit alleges Trump promised to teach students real estate investing techniques if they enrolled in The Trump Entrepreneur Institute, previously known as Trump University, but instead defrauded more than 5,000 people across the country of$40 million.

Schneiderman said Trump used his "celebrity status" to make false promises about classes at the institute.

"No one, no matter how rich or popular they are, has a right to scam hard working New Yorkers," Schneiderman said in a statement. "Anyone who does should expect to be held accountable."

Trump's attorney, Michael D. Cohen, slammed Schneiderman's office for the petition, which was filed Saturday night.

"The action has no merit and is nothing more than a cheap publicity stunt to deflect from his weak job performance," Cohen said in an email. "I am shocked he didn't leak it to the Kris Kardashian show."

According to Schneiderman's office, Trump helped the institute advertise free workshops where students could learn "from Donald Trump's handpicked instructor a systematic method for investing in real estate that anyone can use." Other ads made similar promises.

In reality, the petition alleges instructors at the free seminars only tried to convince consumers to sign up for a $1,495 three-day seminar where they were told about additional "elite" programs costing $10,000 to $35,000.

According to the petition, consumers were encouraged to increase their credit limits to better make real estate deals, but the money was only used to pay for the expensive programs.

The institute told "elite" students they would have personal training and help until their first real estate deal. The petition alleges students tried and failed to contact instructors for help after their first sessions.

The lawsuit also alleges the institute did not comply with federal cancellation laws and illegally called itself a "University" before being renamed in 2010.

Along with Trump, the lawsuit names the institute and its former president, Michael Sexton.

The lawsuit seeks full restitution for consumers, additional costs and penalties and an order to prohibit similar practices in the future.

Follow Anna Sanders on Twitter: @AnnaESanders

 
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