The Real Deal New York

AG accuses Trump of “bait and switch” in fraud suit

Real estate mogul allegedly scammed $40 million from students of Trump University
August 25, 2013 06:00PM

New York Attorney General Eric Schneiderman is suing developer-turned-reality television show star Donald Trump for $40 million for allegedly scamming people through his “Trump University.”

The suit alleges that Trump defrauded more than 5,000 people through the school, which offered free seminars to help them get rich by teaching real estate-investing techniques used by Trump.

Schneiderman, who filed the lawsuit Saturday in New York State Supreme Court, accused Trump of engaging in a “bait and switch,” the New York Daily News reported.

The suit alleges that Trump University ran ads with Trump’s photo and signature offering free workshops, when the free seminars were often just pitches to get people to sign up for a $1,495 three-day seminar.

In addition, those who paid for the three-day seminar were allegedly encouraged to sign up for a “Trump elite mentorship program” that would cost up to $35,000 per person.

Schneiderman’s office said “dozens and dozens” of complaints have been filed. The suit alleges “persistent fraud” and seeks to repay all 5,000 customers, as well as additional penalties and fines.

Trump dismissed Schneiderman’s allegations, claiming that 98 percent of his students are satisfied.

“Mr. Trump appeared in advertisements making false promises to convince people to spend tens of thousands of dollars they couldn’t afford for lessons they never got,” Schneiderman said. “No one, no matter how rich or famous they are, has a right to scam hardworking New Yorkers. Anyone who does should expect to be held accountable.” [NYDN] – James Comtois