In 2011, amid multiple investigations, lawsuits and student complaints, it ceased operations. It was founded by Donald Trump and his associates, Michael Sexton and Jonathan Spirally, in 2004.
The company offered courses in real estate, asset management, entrepreneurship, and wealth creation. TrumpUniversity was also the subject of two class actions in federal court.
The lawsuits centered around allegations that TrumpUniversity defrauded its students by using misleading marketing practices and engaging in aggressive sales tactics. The company and the lawsuits against it received renewed interest due to Trump's candidacy in the 2016 presidential election.
Despite repeatedly insisting he would not settle, Trump settled all three lawsuits in November 2016 for a total of $25 million after being elected president. Michael Sexton created a business plan for a real estate training program and presented it to Donald Trump looking to pay Trump a flat fee for the use of his name.
Trump instead decided he wanted to be the principal owner. TrumpUniversity was incorporated in 2004 by Trump, Sexton, and Spirally, as a New York limited liability company.
According to the Washington Post, part of the school sales pitch was, “the billionaire had made enough money for himself. Now, he would put his famous brain to work for the little guy”.
High prices were charged for seminars and programs not to enrich Trump, but so that (as one teacher explained to students) “you assume personal responsibility for doing the work.” The company's original business plan focused on online education, but quickly expanded to include live, in-person instruction as well.
The focus of the instruction was real estate investing, with Trump claiming in advertisements: “I can turn anyone into a successful real estate investor, including you.” Typically the instruction began with an introductory seminar in rented space such as a hotel ballroom.
At the introductory seminar, students were urged to sign up for additional classes, ranging from $1,495 seminars to a $35,000 “Gold Elite” program. Records produced indicate 7,611 tickets in total were sold to customers attending courses.
Approximately 6,000 of these tickets were for a $1,500 3-day course and 1,000 tickets were for silver, gold or elite mentored courses ranging in price from $10,000 to $35,000. While not licensed as a college nor using student loans, the operation used many of the same tactics as predatory colleges: preying on the vulnerable populations, implying that the school offers a fast track to financial security, and creating the impression that the recruiter is a friendly advisor.
Trump claimed that students gave 98% favorable reviews to the program, but according to some former students, TrumpUniversity employees pressured students to offer favorable reviews, told them they had to fill out the forms in order to obtain graduation certificates, and did not undertake procedures often used to ensure that surveys were filled out objectively. He testified in a 2012 deposition, however, that he never selected the instructors for the program.
According to Michael Sexton, Trump signed off on the school's advertisements. For a time in 2008, it used the name Trump Wealth Institute.
In June 2010, TrumpUniversity changed its name to “The Trump Entrepreneur Initiative”. The Trump Institute was a separate business.
It was licensed by TrumpUniversity, and Donald Trump received a cut of every seat sold, but TrumpUniversity did not own any part of it. It was owned and operated by Irene and Mike Milan of Boca Raton, Florida.
It offered real estate seminars from 2006 to 2009, at which point the licensing agreement expired and was not renewed. Trump himself was not involved in the operation of the Trump Institute, but he recorded a broadcast infomercial promoting it and appeared in an introductory video before each seminar.
, 5:28, CNN, September 29, 2015, Trump faces lawsuits from former TrumpUniversity students, 5:47, CBS This Morning, September 24, 2015, Prosecutor: Trump lawsuit no stunt, 3:55, CNN, August 26, 2013, Trump, Rubio spar over lawsuit against TrumpUniversity, 4:53, Fox News Channel, March 3, 2016Three lawsuits were filed asserting that TrumpUniversity engaged in a variety of illegal business practices, ranging from false claims to racketeering. Two were federal class actions: one against TrumpUniversity and its managers, including Donald Trump, and one against Donald Trump personally.
A third case was filed in New York State court. In 2005, the New York State Department of Education sent Trump, Sexton, and TrumpUniversity a letter saying that they were violating state law by using the word university when in fact TrumpUniversity was not actually chartered as one and did not have the required license to offer live instruction or training.
In June 2010, TrumpUniversity changed its name to “The Trump Entrepreneur Initiative”. On August 24, 2013, the State of New York filed a $40 million civil suit against TrumpUniversity alleging illegal business practices and false claims made by the company.
According to a press release from New York Attorney General Eric Schneider man titled A.G. Schneider man Sues Donald Trump, TrumpUniversity & Michael Sexton For Defrauding Consumers Out Of $40 Million With Sham University ', the case was to be handled by Assistant Attorneys General Tristan C. Snell and Melvin L. Goldberg, under the supervision of the Bureau of Consumer Frauds and Protection’s Deputy Bureau Chief Laura J. Levine, Bureau Chief Jane M. Asia, and Executive Deputy Attorney General for Economic Justice Karla G. Sanchez. He accused Trump of misleading more than 5,000 people to pay up to $35,000 to learn his real estate investment techniques.
Trump denied the allegations, claiming the school had a 98% approval rating, and said Schneider man was “a political hack looking to get publicity”. Trump filed a complaint alleging that the state Attorney General's investigation was accompanied by a campaign donation shakedown; the complaint was investigated by a New York ethics board and dismissed in August 2015.
Because of strict confidentiality laws, it is unknown whether the complaint was dismissed because Trump's claims were untrue, or because Schneider man's alleged actions did not contravene any ethical rules. In October 2014, a New York judge found Trump personally liable for operating the company without the required business license.
In May 2010 the consumer protection division of the state of Texas sought permission from the office of the Attorney General of Texas to file a lawsuit against TrumpUniversity. An investigation by the consumer protection division had found the company was “engaging in false, misleading and deceptive practices” and had defrauded Texas taxpayers out of $2.6 million.
According to John Owens, the Texas attorney general’s deputy chief of consumer protection at the time, an estimated 267 Texans spent more than $425,000 on the three-day seminars, and 39 purchased Trump's “Gold Elite” package of additional classes and other perks costing $35,000 each. Another 150 university customers from Texas spent more than $826,000 on other goods and services.
The 'free workshops' are merely a selling ground for the Defendant Trump U's 3-day seminars and offer little useable content. The training materials we have reviewed indicate that TrumpUniversity 3-day seminar attendees are taught to prey upon homeowners in financial turmoil and to target foreclosure properties.
Defendants falsely assert at these 'free workshops' that classes are approved continuing education credit for Realtors, but TrumpUniversity courses were not approved by the Texas Real Estate Commission, nor was TrumpUniversity an accredited institution with the legal credentials to call itself a university.”" The lawsuit proposed by the consumer protection division sought to recover more than $2.6 million for Texas taxpayers who had been students at the university had “spent on seminars and materials, plus another $2.8 million in penalties and fees”.
The investigation was dropped and no lawsuit was filed, but TrumpUniversity agreed to cease operations in Texas. (The attorney general Greg Abbott went on to become governor, and the deputy chief of consumer protection Owens later alleged that Abbots decision “not to sue was political” -- Trump later donated $35,000 to Abbott's campaign for governor.
Abbott's communications director called the charge “absurd”, and TrumpUniversity “disputed that its classes were deceptive”.) Low v. TrumpUniversity, LLC Carla Make, who paid nearly $60,000 to TrumpUniversity in 2008, brought a class action against TrumpUniversity on April 30, 2010, in the U.S. District Court for Southern California.
The suit, Make v. TrumpUniversity, LLC, sought refunds for Make and other former clients of TrumpUniversity, as well as punitive damages for breach of contract, fraud, negligent misrepresentation and bad faith. It did not originally name Donald Trump as a defendant, but did so in a later amended complaint.
On May 26, 2010, TrumpUniversity filed a counterclaim alleging Make had made defamatory statements about TrumpUniversity, “including many completely spurious accusations of actual crimes”, which caused TrumpUniversity losses of more than $1million. On June 30, 2010, Make countered that TrumpUniversity's defamation claim was an attempt to intimidate her, known as a Slap suit (a strategic lawsuit against public participation), and that because TrumpUniversity is a “public figure” the defamation claim required proof that she “acted with actual malice” when speaking and writing about TrumpUniversity.
By invoking California's anti-spam statute, Make triggered procedures that hastened consideration of the defamation claim without further discovery. On August 23, 2010, U.S. district judge Irma E. Gonzalez ruled that TrumpUniversity was not a public figure, did not need to show malice on Make's part, and could proceed with its defamation claim.
Make appealed to the Ninth Circuit Court of Appeals, where a three-judge panel ruled unanimously on April 17, 2013, that TrumpUniversity is a “limited-purpose public figure” and that TrumpUniversity must demonstrate malice on Make's part to establish defamation; it returned the case to the district court to consider the defamation claim against that standard. After additional briefing, U.S. district judge Gonzalo P. Curie ruled in Make's favor on June 16, 2014, and dismissed the defamation claim.
Make then, at the court's invitation, presented evidence of her legal costs and fees in connection with the defamation litigation. She asked for $1.3 million, and on April 20, 2015, Curie ordered TrumpUniversity to reimburse Make $798,000 in legal fees and costs.
In November 2015, the district court ruled on Trump's motion for summary judgment. In a 44-page opinion, the court denied Trump's motion for summary judgment on most of the claims, finding that there was a genuine issue of fact on plaintiffs' claims of deceptive practices and misrepresentation in advertisements in violation of California, Florida, and New York consumer protection and business law and therefore letting these claims proceed to trial.
The court did grant summary judgment in Trump's favor on plaintiffs' request for an injunction, because TrumpUniversity stopped enrolling students in July 2010 and no longer sold the same seminars or other programs. On March 21, 2016, over objections from the attorneys for TrumpUniversity, Curie allowed Make to withdraw as the lead plaintiff, naming Sonny Low in her stead, resulting in the case title Low v. TrumpUniversity, LLC.
Cohen v. Trump On October 18, 2013, California businessman Art Cohen filed a civil suit, Art Cohen v. Donald J. Trump, in the U.S. District Court for Southern California, as a class action on behalf of consumers throughout the United States who purchased services known as “Live Events” from TrumpUniversity after January 1, 2007. It alleged violations of the RICO statute, essentially a scheme to defraud.
It accused Trump of misrepresenting TrumpUniversity “to make tens of millions of dollars” while actually delivering “neither Donald Trump nor a university “. The suit named Donald Trump as the sole defendant and sought restitution as well as damages, including punitive and treble damages.
In an order dated October 24, 2014, U.S. district judge Gonzalo P. Curie certified the class proposed by the plaintiff and ruled that Cohen had presented enough evidence to allow the case to proceed. Alan Garden, general counsel for the Trump Organization, said TrumpUniversity would appeal Curie's ruling, which he said showed a “manifest disregard for the law”.
However, Trump's lawyers never filed any motion to recuse, and according to legal experts such a motion would lack legal merit and possibly be considered frivolous. In May 2016, Curie set the trial on the suit to begin November 28, 2016, after the U.S. presidential election, with jury selection several weeks earlier.
In August 2016, the district court denied Trump's motion for summary judgment, ruling that there was sufficient evidence against Trump for the case to go to a jury. On November 10, 2016, Curie denied a request by Trump to delay the trial until after his inauguration.
At the same time, Curie urged the parties to work toward a settlement, and both sides accepted an offer from U.S. district judge Jeffrey T. Miller to facilitate such talks. Public release of court documents On May 27, 2016, Curie granted a request by The Washington Post for public release of certain documents that had been filed in the case.
The released information included “playbooks” documenting instructions for employees to use a hard-sell approach, as well as depositions in which former employees said that TrumpUniversity had defrauded or lied to its students. On August 2, 2016, the court denied a request by The Washington Post and other media organizations for the public release of hours of videotaped testimony from Trump's two depositions in Cohen, taken in November 2015 and January 2016.
Transcripts of those depositions had already been released, showing “that Trump repeatedly indicated that he had never met instructors at TrumpUniversity, despite advertisements for the program indicating that its staff had been hand-picked by the real estate mogul.” Trump's attorneys had opposed the requests to release the videotapes.
Curie ruled that there was a legitimate public interest in the content of the deposition, but that interest was satisfied via public release of the transcripts. The judge also noted that if the videos were publicly released, it was “nigh-inevitable” that the footage would be used in news accounts and political ads, which might prejudice the jury pool pre-trial.
During primary campaign speeches, Trump repeatedly called the judge a “hater” and described him as “Spanish” or “Mexican” (Curie was born in Indiana to parents who had immigrated to the U.S. from Mexico). Trump also said Curie should recuse himself, although his attorneys said they did not plan to ask for the judge to be removed from the case.
Curie's only comment was to write in a procedural ruling that Trump has “placed the integrity of these court proceedings at issue”. Trump's references to Curie's ethnicity, as well as his comments that “someone ought to look into” the judge, alarmed legal experts, who expressed concern about the effects of the comments on judicial independence.
On June 7, 2016, Trump issued a lengthy statement saying his criticism of the judge had been “misconstrued” and that his concerns about Curie's impartiality were not based upon ethnicity alone, but also upon rulings in the case. On November 18, 2016, it was reported that Trump had agreed to pay $25 million to settle the two class actions and the New York suit.
The settlement was reached ten days before the San Diego class action was scheduled to go to trial. $21 million will go to the participants in the class actions, $3 million will go to New Yorkers not covered by the class actions, and a penalty of up to $1 million will be assessed by the state of New York for running an unlicensed university.
The plaintiff's attorneys agreed to forgo their fees and work pro bono as to maximize the amount that will go to the approximately 7,000 former TrumpUniversity students who are part of the case. The settlement also specifies that Trump, who had previously vowed he would never settle, does not admit to any wrongdoing.
The settlement was brokered by U.S. district judge Jeffrey T. Miller, who offered his services to the parties on November 10 at Curie's request. Curie approved the settlement on March 31, 2017.
New York Attorney General Eric Schneider man said the settlement and payment by Trump, “is a stunning reversal by Donald Trump and a major victory for the over 6,000 victims of his fraudulent university.” Trump himself said he settled “for a small fraction of the potential award” because he was too busy as president-elect to take it to trial.
He added: “The ONLY bad thing about winning the Presidency is that I did not have the time to go through a long but winning trial on Trump U. Final payment of the settlement was put on hold, because one member of the class opted out of the settlement to pursue an individual claim.
A district court and an appeals court rejected that individual's claim, and Curie finalized the settlement in April 2018. Former students can now get a refund of up to 90% of the money they spent on courses.
The settlement was paid, not by Trump, but by his Las Vegas hotel business partner, billionaire Phil Roughing. In February 2019, during a meeting of the US House Committee on Oversight and Reform, Congresswoman Jackie Stair suggested “a Kansan”, later revealed to be Roughing, had paid $25 million to satisfy Trump's liability in the TrumpUniversity judgement.
Roughing admitted to paying Trump $28 million in 2018, but claimed it was for “back-fees” related to Trump International Hotel Las Vegas and unrelated to the TrumpUniversity case. In 2010, the office of Texas Attorney General Greg Abbott investigated TrumpUniversity.
No suit was brought, but after exchanging communications with investigators that included requests from the investigators for customer lists and internal documents, TrumpUniversity closed its operations in the state. These had included newspaper advertising, free presentations, and three-day seminars.
Six years later, during the 2016 presidential election, the Associated Press found that during Abbott's successful run for state governor in the 2014 Texas gubernatorial election, Trump had donated $35,000 to his campaign. Texas Monthly questioned whether Abbott had treated Trump with especial favor.
Ken Paxton, who succeeded Abbott as Texas Attorney General, sent a cease and desist letter to the former Deputy Chief of Consumer Protection, John Owens, who said he had been told to drop the case and had forwarded previously undisclosed documents to the Associated Press. Paxton said in a statement that Owens had released “confidential and privileged information”.
David S. Morales, the Deputy Attorney General in 2010, admitted in 2016 that he had quashed the 5.4 million dollar suit without discussing the issue with Abbott. In 2018, Trump nominated Morales to serve as a judge at the District Court for the Southern District of Texas.
The office of Florida Attorney General Pam Bond announced in September 2013 that it was considering joining a New York lawsuit against TrumpUniversity. Four days later, the Donald J. Trump Foundation donated $25,000 to “And Justice for All”, a 527 group supporting Bond's re-election campaign.
According to a Bond spokesman, Bond had personally solicited the donation from Trump several weeks before her office announced it was considering joining the lawsuit. In March 2016, Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint with the IRS about the potentially illegal donation.
In September 2016, it was reported that the donation violated laws against political contributions from nonprofit organizations, and that Donald Trump had reimbursed the foundation from his own money and paid the IRS a $2,500 excise tax as a penalty. Trump denied the donation was connected to the TrumpUniversity lawsuit, saying it was for Bond's performance as Attorney General.
The White House announced in November 2019 that Bond would be joining its staff temporarily for handling communications about the ongoing impeachment inquiry against Donald Trump, prompting objection from ethics watchdogs. During the Republican presidential primaries of 2016, opponents of Trump's candidacy used TrumpUniversity to criticize him.
Mitt Romney said in early March : “Donald Trump is a phony, a fraud. Senators Ted Cruz and Marco Rubio raised the subject during televised debates in February and March.
One debate moderator, Megan Kelly of Fox News, pursued the issue at length. Trump responded that TrumpUniversity was “a small business” and student evaluations were overwhelmingly positive.
He said lawsuits were a routine part of business and that he wins most of them. Of one of the class actions he said: “It's something I could have settled many times.
I could settle it right now for very little money, but I don't want to do it out of principle.” Hillary Clinton used the TrumpUniversity allegations against Trump in speeches and campaign ads.
TrumpUniversity was the subject of a week-long series in the comic strip Doonesbury in June 2005. TrumpUniversity was also the butt of jokes in a Will and Grace mini-episode released in September 2016, created to get out the vote for the 2016 presidential election.
^ According to a document filed in the case, as of September 26, 2012, Sonny Low was a “71-year-old senior citizen ... retired in 2005 as a U.S. Foreign Service Officer who served our country for 34 years”. Trump University suit revived after ruling by New York court”.
“New York Attorney General Sues Donald Trump And His Alleged 'Sham' University -- Says Students 'Defrauded' Out Of $US 40 Million”. ^ Ian Turtle, “Yes, Trump University Was a Massive Scam”, National Review, 26 February 2016 ^ Carroll, Rory (November 12, 2018).
“NY Court Refuses to Dismiss Trump University Case, Describes Fraud Allegations”. ^ a b Barbara, Michael ; Ever, Steve (May 31, 2016).
“Former Trump University Workers Call the School a 'Lie' and a 'Scheme' in Testimony”. ^ a b Hamburger, Tom ; Alderman, Rosalind S. ; Bennett, Dalton (June 4, 2016).
“What the Legal Battle Over Trump University Reveals About Its Founder”. “New York Attorney General Is Investigating Trump's For-Profit School”.
“Selling the American Dream: What the Trump University Scam Teaches Us about Predatory Colleges”. Barbara, Michael ; Overarch, Steve (March 11, 2016).
“At Trump University, Students Recall Pressure to Give Positive Reviews”. Trump University swindled me, says Iowa retiree”.
^ a b Mullen, Joe; Kandinsky, Jonathan (April 29, 2016). “ Trump Institute Offered Get-Rich Schemes With Plagiarized Lessons”.
^ “The People of the State of New York v. The Trump Entrepreneur Initiative LLC” (PDF). Archived (PDF) from the original on February 19, 2017.
“Donald Trump defends his university, launches Twitter war against 'dopey, stupid' AG behind $40M suit”. “NY ethics board drops Trump's complaint about attorney general during university investigation”.
^ “Ethics cop out: Scope probe of Donald Trump's complaint against Attorney General Eric Schneider man leaves too many unanswered questions”. “Greg Abbott's top consumer attorneys built a $5.4M case against Donald Trump, but it never happened”.
“Judge Hands Down Potentially Crushing Ruling Against Donald Trump In Racketeering Lawsuit”. “Lawsuit accuses Donald Trump of deceiving students”.
“Judge delays Trump University trial”. “Judge rejects media request to release video testimony in Trump University case”.
^ Cohen v. Trump, Order Granting Motion of Non-Party Press Organization for Limited Purpose Intervention and Order Unsealing Court Records”. “Judge bashed by Trump orders release of company records”.
“Hard Sell: The Potential Political Consequences of the Trump University Documents”. ^ “Judge Orders Documents Unsealed in Trump University Lawsuit”.
Trump's personal, racially tinged attacks on federal judge alarm legal experts”. In an interview, Mr. Trump said U.S. District Judge Gonzalo Curie had 'an absolute conflict' in presiding over the litigation given that he was 'of Mexican heritage' and a member of a Latino lawyers' association.
This contains the full text of the Trump statement. “Jeffrey Miller: The San Diego judge who nailed down the Trump University deal”.
“A judge has finalized a $25 million settlement for students who claim they were defrauded by Trump University ". ^ “Billionaire Phil Roughing says he's the Kansan mentioned at Michael Cohen hearing”.
^ “Former Texas official says he was told to drop Trump University probe”. “Former Greg Abbott staffer says he made the call on Trump U suit, didn't consult boss”.
Trump contribution to Pam Bond's re-election draws more scrutiny to her fundraising”. ^ Horowitz, Jeff; Fine out, Gary; Becker, Michael (June 6, 2016).
“Florida AG asked Trump for donation before nixing fraud case”. “Orlando Sentinel raises more questions about Pam Bond's Trump money”.
^ “CREW files complaint against Trump Foundation” (Press release). ^ “Florida AG Personally Asked For Donation Before Declining Lawsuit Against Trump University ".
Trump pays IRS a penalty for his foundation violating rules with gift to aid Florida attorney general”. “Ex-Florida Attorney General Pam Bond to Reportedly Join Trump White House”.
“White House will hire two high-profile aides to run impeachment messaging”. “White House Expected to Bolster Impeachment Strategy With Two New Hires”.
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“A trio of truthful attack ads about Trump University ". ^ a b “Transcript of the Republican Presidential Debate in Houston”.
^ a b “Transcript of the Republican Presidential Debate in Detroit”. Rubio: 'There are people that borrow $36,000 to go to Trump University, and they're suing him now.
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