New York Attorney General Sues Trump University for $40 Million, Calls It "Straight Up Fraud"

New York Attorney General Eric Schneiderman filed a $40 million civil lawsuit against Donald Trump, The Trump Entrepreneur Initiative (formerly Trump University LLC), and Michael Sexton on August 24, 2013, alleging “persistent fraudulent, illegal and deceptive conduct.” Schneiderman characterized the case as “straight up fraud,” alleging that more than 5,000 consumers nationwide were defrauded of over $40 million between 2005 and 2011. The lawsuit documented that Trump University operated as an unlicensed educational institute that promised to teach Trump’s personal real estate investing techniques but instead misled consumers into paying for expensive courses that failed to deliver on promises. The investigation revealed that Trump did not hand-pick even a single instructor at the seminars and had little or no role in developing the Trump University curriculum or seminar content, contradicting core marketing promises made to students.

Background

The Attorney General’s investigation uncovered systematic deceptive practices at Trump University. The enterprise promised students personal mentorship from Trump-selected real estate experts and access to Trump’s proprietary investment strategies. In reality, the “university” employed high-pressure sales tactics to extract money from vulnerable consumers, particularly targeting the elderly and financially struggling individuals. Students were told they would receive one-on-one mentorship and Trump’s personal attention, but these promises were never fulfilled. The investigation documented internal sales playbooks that instructed employees to create artificial urgency, overcome objections regardless of students’ financial circumstances, and upsell from $1,495 introductory seminars to $34,995 “elite” programs. Trump’s involvement was limited to promotional videos and use of his name—he had no substantive role in education delivery or quality control.

Significance

The New York Attorney General’s lawsuit represented one of the most significant consumer fraud cases filed against a high-profile business figure, documenting systematic fraud affecting thousands of victims and $40 million in losses. The lawsuit sought full restitution for all victims, disgorgement of profits, penalties, and injunctive relief. Schneiderman’s characterization of the scheme as “straight up fraud” was backed by extensive documentary evidence from Trump University’s own internal materials showing conscious deception and exploitation. Trump’s defensive response—calling Schneiderman “a political hack looking to get publicity”—foreshadowed his pattern of attacking anyone who exposed his misconduct. The lawsuit established the documentary record that would later force Trump to settle for $25 million just days after winning the presidency in 2016, avoiding testimony under oath that would have damaged his credibility during the transition. The case demonstrated Trump’s willingness to exploit his brand and celebrity status to defraud ordinary Americans seeking financial improvement.