Editor’s note: This article was first published in August 2013, and reports news from 26 August 2013, the lawsuit filed by New York Attorney General Eric Schneiderman. The Trump University cases were settled in 2016 for 25 million dollars, finalised in 2018, without any admission of wrongdoing.
New York’s Attorney General today filed a lawsuit against Donald Trump and the Trump Entrepreneur Initiative (formerly called Trump University) for engaging in fraudulent, illegal and deceptive conduct towards 5,000 “Trump University” students, from whom it allegedly took 40 million dollars, as reported by Business Insider.
Between 2005 and 2011, Trump University operated as an unlicensed educational institute or university and promised to teach students all the techniques of real estate investing so that any student could get rich using Donald Trump’s “art of the deal”. In the end, however, consumers say they paid for a series of very expensive courses that kept none of their promises.
According to the Attorney General, more than 5,000 people paid money they could not afford for courses and lessons that never materialised. Mr Trump used his celebrity status, appearing in advertisements with false promises, to persuade these people to spend tens of thousands of dollars, and he is being sued over the alleged fraud for a total of 40 million dollars.
Donald Trump‘s recruitment method consisted of advertising a free course on television, in the press and through direct mail, hinting that Donald Trump himself would teach it. Once people were there, a video was played in the room in which Donald Trump explained that the course would be taught by professionals carefully and personally chosen by Trump himself.
Despite the claims in Trump University’s misleading advertising, the people who attended this free course learned nothing about real estate investing techniques. Instead, the supposed real estate investment instructors were salespeople who persuaded attendees to sign up for a 3-day seminar costing 1,495 dollars.
Those who ended up buying the 3-day seminar were persuaded, at the end of those 3 days, to attend the real course that would make you very rich, the so-called “Trump Elite” mentorship, priced at between 10,000 and 35,000 dollars. They were promised they would earn that money back in less than 30 days thanks to the techniques they would be taught, and were urged to take out a loan to pay for the elite course if they did not have enough cash.
According to the case, in the end not a single one got rich, and none of the Trump University students made a single cent from real estate. What’s more, most of them spent money they didn’t have and now owe.
The Attorney General also wants to sue Donald Trump for presenting the business as a legitimate, legal university, when it had already been warned on several occasions that it was operating outside the law, besides not having a licence to carry out this activity in the state.
The students say they feel cheated and swindled, having received none of what they were promised, not even the personal attention from instructors that the programme included.
They were also promised direct access to select sources of financing to get started in real estate, and that didn’t happen either.
Indeed, Donald Trump used his image and popularity to get his hands on the money of these naive would-be millionaires, whose admiration for Donald Trump led them to be swindled by their own idol. Still, they have learned their first lesson.
Featured image: Gage Skidmore from Peoria, AZ, United States of America, CC BY-SA 2.0, via Wikimedia Commons.
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