AG Says 'University' Was A Bait-And-Switch

NEW YORK (CBSNewYork/AP) — State Attorney General Eric Schneiderman fired back at Donald Trump on Tuesday, saying the real estate mogul is throwing out outrageous accusations in an effort to distract from the $40 million lawsuit Schneiderman filed accusing Trump University of being a scam.

“This is a guy that goes to the Super Bowl and thinks that the people in the huddle are talking about him,” Schneiderman told WCBS 880’s Jim Smith.

Trump accused Schneiderman of filing the lawsuit after consulting with President Barack Obama. Schneiderman said he spoke briefly with Obama after the president’s speech in Syracuse last week but that they had more interesting things to discuss than Trump.

“The notion that the president of the United States and I are conspiring on a Thursday to file a complaint against him a few days later is just ludicrous.

“Prosecutors are used to folks who you catch doing something wrong, particularly people who commit fraud, making all sorts of crazy allegations trying to distract from the merits.”

In the lawsuit, Schneiderman alleges that Trump helped run a phony “university” that promised to make students rich, but instead steered them into expensive and mostly useless seminars. Schneiderman says many of the 5,000 students who paid up to $35,000 thought they would at least meet Trump, but instead all they got was their picture taken in front of a life-size picture of “The Apprentice” TV star.

“Trump University engaged in deception at every stage of consumers’ advancement through costly programs 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.”

CBS 2’s Janelle Burrell spoke to a former student who claims he was duped when he went to learn more about the real estate business.

“When I heard he was starting Trump University to help little guys like me succeed like billionaires like him, I figured, hey, this is a really good deal,” Bob Guillo said. “I’m going to go and listen to what they have to say.”

Guillo, who lives in Manhasset, first signed up for the university’s $1,500 three-day workshop in 2009. The workshop is taught by instructors who were supposedly hand-picked by Trump himself.

“[The instructor] was in the front of the room, flashing his Rolex. He wore a very expensive shirt, tie, suit — he looked like the epitome of success,” Guillo said.

Organizers convinced students to join Trump’s “Gold Elite” program, Guillo said. The program required a $35,000 entrance fee. Guillo signed up, but soon learned Trump University wasn’t even licensed by the state.

“I knew at that point that all these people were phonies, and they were just scamming us,” Guillo said.

Trump’s attorney accused Schneiderman of trying to extort campaign contributions from the billionaire businessman through his investigation of Trump. Attorney Michael D. Cohen told The Associated Press on Saturday that Schneiderman’s lawsuit was filled with falsehoods. Cohen said Trump and his university never defrauded anyone.

“The attorney general has been angry because he felt that Mr. Trump and his various companies should have done much more for him in terms of fundraising,” Cohen said. “This entire investigation is politically motivated, and it is a tremendous waste of taxpayers’ money.”

State Board of Elections records show Trump has spent more than $136,000 on New York campaigns since 2010. He contributed $12,500 to Schneiderman in October 2010, when Schneiderman was running for attorney general, records show.

Trump also took to TV and Twitter to blast Schneiderman, calling the attorney general a “lightweight” and “a political hack” and repeating his extortion claim.

State Education Department officials had told Trump to change the name of his enterprise years ago, saying it lacked a license and didn’t meet the legal definitions of a university. In 2011 it was renamed the Trump Entrepreneur Institute, but it has been dogged since by complaints from consumers and a few isolated civil lawsuits claiming it didn’t fulfill its advertised claims.


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