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Aug 26, 2013 11:04 AM EDT

New York AG Sues Donald Trump, Trump University for Defrauding Students

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Attorney General Eric T. Schneiderman has filed a civil lawsuit against Donald J. Trump; Trump University - his for-profit investment school and Michael Sexton, former president of the university, for misleading students with fake claims and for engaging in deceptive and unlawful behavior in connection with the operation of the university.

The lawsuit filed in New York Supreme Court in Manhattan alleges that between 2005 and 2011, the university functioned as an unlicensed educational institution that vowed to teach Trump's real estate investing skills, except it forced them into paying for a series of costly and useless courses that did not meet their expectations.

"More than 5,000 people across the country who paid Donald Trump $40 million to teach them his hard sell tactics got a hard lesson in bait-and-switch," said Schneiderman. "Mr. Trump used his celebrity status and personally appeared in commercials making false promises to convince people to spend tens of thousands of dollars they couldn't afford for lessons they never got. No one, no matter how rich or popular they are, has a right to scam hard working New Yorkers. Anyone who does should expect to be held accountable."

The lawsuit reveals numerous advertisements by the university in prominent newspapers across the country and direct mail proposals sent to persuade people to attend seminars, at no cost.

The ads featured Donald Trump's photograph and messages saying:

'Students would learn 'from Donald Trump's handpicked instructor a systematic method for investing in real estate that anyone can use'

'My handpicked instructors will share my techniques' 'learn from my hand-picked expert' '

'just copy exactly what I've done and get rich'

When Schneiderman initiated an investigation into the curriculum, he found that none of the instructor's for the seminars were selected by Trump and played very little or no role in designing the curricula or seminar content.

Plus, the educational institution did not have the authority to call itself a 'University' and it was not licensed under the New York State Education Law.

Although the university was alerted by the New York State Education Department (NYSED) in 2005 that its practices violated New York law, the university failed to change its name until May 2010. And till date its hasn't been offered a license to work in the state.

The students were misled to believe that they were enrolled in a university, the delusion which was further strengthened by the use of a university-like seal on most of its material and conferring diploma-like Certificates of Completion with Trump's signature.

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