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Donald Trump: Trump University is in no way a fake university
New York's attorney general begs to differ
The Donald has had a run-in with the law.
The Donald has had a run-in with the law. David Becker/Getty Images
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ew York Attorney General Eric Schneiderman has launched a $40 million civil lawsuit against Donald Trump, accusing the reality television star of defrauding students who attend his for-profit school, Trump University.

"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."

Here's how the alleged "bait-and-switch" scheme worked: Potential students attended a free seminar, where they were urged to pay $1,495 for a three-day workshop, where they were urged to take a $34,995 course, where, as Trump said in commercials, teachers were "going to teach you better than the business schools are going to teach you." Scheiderman says he is in possession of the school's "playbook," which actually instructs teachers to keep pitching more expensive programs.

Also among Schneiderman's complaints: The students who attended the programs accumulated thousands of dollars of debt, without the benefit of a sweet real estate deal or apprenticeship, as the program's marketing promised.

To top it all off, students had expected a face-to-face meeting with Trump, but instead only got the chance to stand next to a life-size poster of the Donald, says Schneiderman.

There may have been one inadvertent bonus, though:

Trump, who has also licensed his name for bottled water, steak, and chocolate, shot back, calling Schneiderman "a lightweight," and claiming his satisfied students will prove the attorney general wrong in court.

"We didn't think we were going to get sued because we have a 98 percent approval rating," he said on CNN's "New Day." "If you go to Wharton or Harvard, they didn't have a 98 percent approval rating. People loved the school. The school was terrific."

Trump claimed that Schneiderman had approached him for political donations, and that the attorney general slammed him with a suit only after Trump refused him. Trump also suggested that President Obama may have been behind the the lawsuit.

"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," Trump's lawyer Michael D. Cohen said. "This entire investigation is politically motivated and it is a tremendous waste of taxpayers' money."

"I could have settled this case very easily," Trump added. "They wanted to settle. I chose not to. We have a lot of happy students. They'll all be testifying."

For his part, Schneiderman says he launched the suit after dozens of Trump University students complained to the Better Business Bureau.

Carmel Lobello is the business editor at TheWeek.com. Previously, she was an editor at DeathandTaxesMag.com.

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