Trump Institute Accused of Fraud by N.Y. Attorney General

Donald Trump was sued by New York Attorney General Eric Schneiderman over claims the billionaire operated a fraudulent online educational institute that swindled students out of $40 million.

Trump University, now known as the Trump Entrepreneur Initiative, operated as an unlicensed educational institution and misled students with promises that they would gain real estate investing expertise, according a copy of the petition provided by Schneiderman’s office. Yesterday’s filing wasn’t immediately available from New York Supreme Court in Manhattan.

Read on.

Today, Schneiderman tweeted:

“Trump used his celebrity, personally appearing in commercials making false promises to convince#NY‘ers to pay for lessons they never got …”

“No one, no matter how rich or popular they are, has right to scam hard working #NY‘ers. Anyone who does should expect to be held accountable …

Here is a filing in U.S. District Court in San Diego in 2010 of Trump University. Click here.

Huffington Post:

Tarla Makaeff is a former fashion designer from Corona del Mar, Calif. and lead plaintiff in the class-action lawsuit. Makaeff says that she was convinced to attend the seminars by ads featuring Trump. Three-quarters of the world’s millionaires “made their fortune in real estate,” the promos boasted. “Now it’s your turn.”

But soon, Makaeff was pressured to raise her credit card limits so she could purchase the Trump Gold Program for $35,000, which promised “hand-picked” mentors and a year of training. Instead, she spent two days looking at real estate properties and a half day at a local Home Depot, after which the mentors “quickly disappeared,” Makaeff said. In addition, she claims the seminars taught her to snatch up cheap homes by using “bandit signs,” which are ads placed along the side of roads — a practice that is illegal in California and other states.

Her lawsuit alleges that Trump University’s mentors and associates “guide students toward deals in which they have a personal financial interest at stake — creating a severe conflict of interest, so that the mentors profit while the student does not.”

Another plaintiff in the suit, Ed Oberkrom, a 66-year-old retired computer technician living in St. Louis, says that he and a friend each dropped $25,000 on a similar Trump program. It promised access to “exclusive” property listings and the guidance of mentors. But Oberkrom told The Huffington Post that the listings were available elsewhere online for $35, Trump University staffers gave him the brush-off, and he didn’t get his money back, due to a three-day window on refunds.

“It’s a fly-by-night outfit and I feel cheated,” he says. “What is really aggravating is that Trump is noted for real estate, and that’s what attracted me in the first place.”

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