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Lawsuit Accuses Trump, Trump University of Bait and Switch Scam

Aug 30, 2013

New York’s Attorney General (AG) just filed a civil lawsuit against Donald Trump over an array of allegations related to his so-called “university.”

The lawsuit seeks restitution for students nationwide who allege the university engaged in what the documents claim was “persistent fraudulent, illegal, and deceptive conduct,” according to The New York Times, citing the AG’s statement. Key claims allege that the students were persuaded into “paying for a series of expensive courses that did not deliver on their promises,” according to the AG’s statement.

The lawsuit accuses Trump and his organization of running an “unlicensed educational institution in New York from 2005 to 2011,” the Times wrote. The institution was called “Trump University” until May 2010 and was not appropriately licensed under state law, the Times noted. The lawsuit also alleges that students were brought in with the offer of free sessions and then offered packages that cost $10,000-$35,000 for bogus courses touted as teaching how to successfully invest in real estate. Also, students believing they would meet Mr. Trump never did, and students who were told they would have the opportunity to be photographed with Trump at one seminar were photographed with a cardboard replica of the man instead, the Times reported.

In one case, a Trump student spent nearly $35,000 and alleges he lost all of his money for, essentially, a photograph of himself with a cardboard cut-out of Trump, who never attended a single session. "They told everybody to get their credit card limits raised to buy real estate, but the true purpose was to pay $35,000 for the next bunch of seminars," he told FoxNews.

Another attendee said that she paid about $17,000 for the Trump University program, and told FoxNews that after just a few days she discovered that, "what I learned there, I could read on the Internet." She said it took about two months of fighting for her money—despite promises that attendees were entitled to a full refund if they changed their minds within three days. "They wouldn't answer my calls or emails," she told FoxNews. She eventually received her refund.

The AG asserts that Trump was involved in running a fake university that promised to make its students rich, yet many of those students say they were pushed into costly and ineffective seminars, according to FoxNews. "We followed PowerPoint presentations, and they gave us loose-leaf manuals and websites you could pull up on your home computer. We were all scammed," according to one former student who told FoxNews that attendees were lured by an instructor who "was flashing his Rolex watch and wearing a very expensive suit and fancy cufflinks as he told us his rags-to-riches story."

The lawsuit also alleges that some students who attended the initial $1,495 three-day group seminar were pushed to sign up for costlier Trump "Elite" programs. Another student said that, in 2009, she paid $10,000 in 2009 to attend three instructor-led courses in New York or New Jersey, near where she lived in Manhattan, with access to advisers who would lead her to private lenders and foreclosed properties, later learning that the courses were offered in Texas and California and only online, according to FoxNews. She was not allowed to cancel as the three-day limit had passed. "I felt fooled," she said.

Another student sued over allegations that he was the victim of a $25,000 "rip-off"; another filed a class action lawsuit in federal court over allegations that she was scammed out of almost $60,000 for 2008 seminars she attended, wrote FoxNews.

The lawsuit provides evidence of a bait-and-switch scheme, according to the Times. For example, Trump promised that his methods could be quickly learned and one advertisement stated, “Just copy exactly what I’ve done and get rich,” which, according to the Times, turned out to be a “false promise.”

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