By MARY PATRICK
Donald Trump has been accused of the bilking college students of about $40 million through his Trump University real estate program, according to New York prosecutors.
In a recently filed lawsuit, New York Attorney General Eric Schneiderman has accused Trump of using an unlicensed real estate program through his Trump University to scam students who entered the school to learn Trump’s secrets of success.
The lawsuit also charges Michael Sexton, the former president of Trump University. The lawsuit is similar to one filed in California by former students who felt cheated by the mogul, according to USA Today. The newspaper reported that Trump so far has failed in efforts to dismiss the California case.
The case highlights the need for students to be selective in the universities they choose to attend. It’s important to choose an accredited institution.
In the New York case, prosecutors claim that Trump University bilked students of more than $40 million since it was formed in 2004.
Trump has accused Schneiderman, a Democrat, of going after him for political reasons while ignoring people on Wall Street who are guilty of worse crimes. Schneiderman said in a CNBC interview that Trump is “going to have to face justice. And he doesn’t like doing that.”
The lawsuit seeks restitution of the former Trump University students. The lawsuit charges that state education officials informed Trump shortly after Trump University LLC was formed in 2004 that the name was illegal because the business was never chartered as a university.
The business operated as an “illegal educational institution” until the name was changed to Trump Entrepreneur Initiative in May 2010.
The lawsuit also alleges that students were “lured” into the school by a free, 90-minute class that was basically a sales pitch to pay $1,495 for a three-day seminar. The seminar, in turn, was used to “upsell” students to costly “Trump Elite” packages that started at $10,000 and increased in price to a year-long mentorship that cost $35,000, according to the lawsuit.
The lawsuit also accused Trump of using a marketing campaign that promised classes would be taught by experts handpicked by Trump. That was not the case, according to prosecutors, although Trump said this week that he did pick the instructors.
In testimony from Sexton, he said that there “wasn’t anything sophisticated” about the three-day seminar, according to USA Today.
In the California case, the lawsuit alleges that “Trump University is more like an infomercial, selling non-accredited products, such as sales workshops, luring customers in with the name and reputation of its founder and Chairman, billionaire land mogul Donald J. Trump.”
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