March 5th, 2016
With Donald Trump taking center stage in the upcoming Presidential Elections, stories of his now defunct Trump University have been resurrected and making the rounds in the news. In this week’s blog we offer you a few facts on the Trump University and a pending lawsuit filed by NY State Attorney General’s office.
1. Trump University was founded in 2004 as an online operation. Mr. Trump made an initial investment of about $2 million and based the business in the Trump Building at 40 Wall Street in Manhattan. The day-to-day operations were managed by the Trump Organization and its affiliates.
2. Trump University was not an actual university but rather consisted of seminars promising lessons in real-estate investing.
3. The sales pitch was for potential students to attend a free 90-minute orientation after which they were encouraged to sign up for a three-day seminar at the cost of $1,495.
4. Students who enrolled at the three-day seminar were told they would earn six figure incomes in a year just for working five to seven hours a week. They were also told that Mr. Trump frequently dropped by at the seminars to share success tips, which students say did not happen.
5. Students who finished the three-day seminar were advised to register for the next level, known as the Elite mentorship and apprenticeship programs for additional costs of up to $35,000.
6. As early as 2005, the New York State Department of Education warned Trump University that it was operating an unlicensed educational institution in violation of state law, according to the investigation.
7. New York educational regulators said it was misleading and illegal for the company to call itself a university.In 2010, at the insistence of New York education regulators, Trump changed the name of his school to the Trump Entrepreneur Initiative.
8. In 2014, a New York state judge ruled that the company had operated illegally by not meeting state licensing requirements for education providers.
9. The ruling was part of an ongoing lawsuit by New York Attorney General Eric Schneiderman, which also alleges that the company and its spokesman, Mr. Trump, made false and deceptive claims to students. As many as 7,000 people across the country bought the sales pitch, spending an estimated $40 million on the seminars offered by Trump University.
10. According to Mr. Schneirderman’s office, in 2009, an ad that was published at least 170 times promised students would “learn from Donald Trump’s handpicked instructors, and that participants would have access to Trump’s real estate ‘secrets.’ ” However, an investigation by Mr. Schneiderman’s office found this to be the contrary. Most of the seminars were found to have been run by motivational speakers and not instructors, one of whom was a manager at a Buffalo Wild Wings.
Update: On March 2, 2016, a state appeals court gave a green light to a civil fraud claim against the GOP front-runner and his Trump University. In a unanimous ruling, a four-judge panel of the state Appellate Division said the state attorney general’s office is “authorized to bring a cause of action for fraud” — despite Mr. Tump’s claims to the contrary. To be continued…
Sources:
Inside Higher Education: https://www.insidehighered.com/news/2016/03/01/what-does-trump-university-show-about-state-regulation-profit-schools?utm_content=buffer089d4&utm_medium=social&utm_source=facebook&utm_campaign=IHEbuffer
The New York Times: http://www.nytimes.com/2016/02/27/us/donald-trump-marco-rubio-trump-university.html?_r=0
CBS This Morning: https://www.youtube.com/watch?v=xQ_IEvczweY
The New York Daily News: http://www.nydailynews.com/news/politics/court-rules-g-trump-university-fraud-lawsuit-proceed-article-1.2548924
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