A $40 million lawsuit was filed Saturday against Trump University, Donald Trump's for-profit investment school. The New York state attorney general accused the University of engaging in illegal business activities.
According to the New York Times, New York Attorney General Eric Schneiderman alleged that the real estate mogul, his Trump Organization company and others involved in the school of making false claims about classes at the school, and running it as an unlicensed educational institution from 2005 to 2011.
The lawsuit, which seeks restitution of at least $40 million, claims that Mr. Trump appeared in advertisements for the school making "false promises" to persuade more than 5,000 people around the country — including 600 New Yorkers — "to spend tens of thousands of dollars they couldn't afford for lessons they never got."
The advertisements also claimed that Mr. Trump had handpicked instructors to teach students "a systematic method for investing in real estate.” The lawsuit states, however, that Mr. Trump had not chosen even a single instructor at the school and had not created the curriculum for any of its courses.
"Trump University engaged in deception at every stage …and caused real financial harm," Schneiderman said. "Trump University, with Donald Trump's knowledge and participation, relied on Trump's name recognition and celebrity status to take advantage of consumers who believed in the Trump brand."
Where did all of this come from?
The inquiry into Trump University came to light in May 2011 after dozens of people had complained to the authorities in New York, Texas, Florida and Illinois about the institution, which attracted prospective students with the promise of a free 90-minute seminar about real estate investing that, according to the lawsuit, "served as a sales pitch for a three-day seminar costing $1,495."
Representatives for the New York attorney general's office and Trump were not available for comment late on Saturday.