USA TODAY International Edition
Trump faces legal fight on two fronts
New York and California suits challenge Trump University
A newly filed lawsuit that accuses real estate developer Donald Trump of bilking students of his “Trump University” confronts the reality TV star with a potentially risky twofront legal battle over his name, reputation and integrity.
New York Attorney General Eric Schneiderman accused Trump of using an unlicensed university real estate program to scam would- be real estate investors who sought his secrets of success. The petition, filed Saturday, also charges Michael Sexton, the venture’s former president.
The case comes amid Trump’s so far unsuccessful efforts to dismiss a California federal court lawsuit based on similar allegations filed on behalf
of disillusioned former students.
Plaintiff lawyers are seeking classaction status for the California case. Trump’s effort to continue a defamation countersuit against the lead plaintiff was overturned by a federal appeals court in an April ruling his lawyers are now trying to appeal.
Schneiderman, whose petition refers to the California case, said during a CNBC appearance Monday that Trump is “going to have to face justice. And he doesn’t like doing that.”
Trump shot back. In a blitz of TV news show interviews, a new website and numerous tweets, he accused Schneiderman of filing false allegations and being a “lightweight” who “sues a school w/ a 98% approval rating but doesn’t go after billion $ fraudsters all over Wall St.”
He also alleged Schneiderman sought campaign contributions from him during the probe. Schneiderman spokesman Damien LaVera suggested some investigation subjects “make wild accusations” to “distract from the substance of the case.”
Seeking restitution for students allegedly defrauded of more than $ 40 million, the New York case charges:
uTrump University was formed in New York in 2004 and was told by state education officials the name was improper because the business wasn’t chartered as a university. It operated as an “illegal educational institution” whose name wasn’t changed until May 2010.
uStudents were lured to free, 90minute classes that “served as a sales pitch for a three- day seminar costing $ 1,495.” Those seminars were “an upsell” to “Trump Elite” packages starting around $ 10,000” and ending with a year- long mentorship for $ 35,000.
uA marketing campaign claimed students would be taught by real es- tate “experts” who Trump “handpicked.” Allegedly, none were.
uTrump and Sexton were “personally and knowingly involved with the operations of Trump University.”
The California case was filed in 2010 and lists Tarla Makaeff, who took a Trump University class two years before, as lead plaintiff. As in the New York case, the California lawsuit said the school “is anything but” a place to help students gain financial independence via real estate investing, as allegedly promised.
Instead, “Defendant Trump University is more like an infomercial, selling non- accredited products, such as sales workshops, luring customers in with the name and reputation of its founder and Chairman, billionaire land mogul Donald J. Trump,” the California lawsuit charged.
A hearing to amend the allegations is set for Friday. Plaintiff attorney Jason Forge declined to comment. Trump lawyer David Schneider argued in an Aug. 16 court filing that the proposed amendment represented a “wholesale metamorphosis” of the case from fraud- based claims against the business to “quasi- criminal claims” against Trump. He called the claims “completely false.”
Trump’s new website also linked to a video where Makaeff called a Trump University session “great” and said “all the speakers were really good.” Trump lawyers have used that in a bid to undermine her credibility and continue the defamation case.
But in blocking that case from proceeding, the U. S. Court of Appeals for the Ninth Circuit wrote: “As the recent Ponzi- scheme scandals involving onetime financial luminaries like Bernard Madoff and Allen Stanford demonstrate, victims of con artists often sing the praises of their victimizers until the moment they realize they have been fleeced.”