Government Actions
NY AG Sues Trump Entrepreneur Initiative, Seeks $40M in Restitution for Consumers
Date of Action: 8/24/2013
The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the governments allegations, which have not yet been proven.
On August 24, 2013, New York Attorney General Eric Schneiderman announced that he has filed a lawsuit against Donald Trump, The Trump Entrepreneur Institute -- formerly named Trump University LLC (Trump University), and Michael Sexton, former President of Trump University for engaging in persistent fraudulent, illegal and deceptive conduct in connection with the operation of Trump University. Between 2005 through 2011, the lawsuit says that Trump University operated as an unlicensed educational institute that promised to teach Donald Trumps real estate investing techniques to consumers nationwide but instead misled consumers into paying for a series of expensive courses that did not deliver on their promises. The petition filed in New York Supreme Court in Manhattan details the advertisements run by Trump University in major newspapers across the country and the direct mail solicitations sent to entice consumers to attend a free workshop. These ads prominently displayed Donald Trumps photograph and signature, or were styled as letters written by Trump himself. The suit says the advertisements were replete with false claims, including claims that consumers would learn from Donald Trumps handpicked instructor a systematic method for investing in real estate that anyone can use. Other ads promised my handpicked instructors will share my techniques or learn from my hand-picked expert and just copy exactly what Ive done and get rich. Despite Trump Universitys advertised claims, consumers attending free seminars did not learn Donald Trumps real estate techniques. Instead, the lawsuit alleges that Trump Universitys instructors made multiple misrepresentations to convince consumers to sign up for a $1,495 three-day seminar. And instead of providing all of the promised services, instructors then used the three-day seminars to pitch consumers an expensive Trump Elite mentor-ship programs costing $10,000 to $35,000. The New York Attorney Generals lawsuit seeks full restitution for the more than 5,000 consumers nationwide who were defrauded of over $40 million in the scheme.
In October 2014, New York State Supreme Court Justice Cynthia S. Kern ruled that Mr. Trump is personally liable for operating a for-profit investment school without the required license. She also tossed out some of the New York AG's claims and ruled that some evidence is beyond the statute of limitations. Judge Kern ruled that several major aspects of the fraud lawsuit will be decided at a forthcoming trial.
On March 1, 2016, The Supreme Court, Appellate Division, First Department held that the New York State Attorney General is authorized to bring a cause of action for fraud under Executive Law §63(12), overruling a lower courts decision on this cause of action.
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Advertising Review
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Additional Information
BBB file opened: June 27, 2007
Business started: 10/25/2004 in NY
Business incorporated 10/25/2004 in NY
Type of Entity
Corporation
Business Management
Mr. Donald Trump, President
Contact Information
Principal: Mr. Donald Trump, President
Business Category
TRAINING PROGRAMS
INVESTMENT SEMINARS
EDUCATIONAL CONSULTANTS
Alternate Business Names
(Formerly) Trump University
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