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NY attorney general: Trump was 'luring' students into Trump U

Donald Trump and NY Attorney General Eric Schneiderman
Getty Images
Donald Trump and NY Attorney General Eric Schneiderman

New York attorney general Eric Schneiderman, who has filed a $40 million lawsuit against Donald Trump that maintains the real estate mogul's "Trump University" is a scam, responded on TODAY Tuesday to Trump's claims that the suit is groundless and politically motivated.

"Once again, as with all the facts relating to Trump University which he continues to avoid by making personal attacks, Mr. Trump's statements are false,'' Schneiderman told Savannah Guthrie. "The law on this is very clear: You can't make false representations. You can't tell people you're selling them a car that gets 50 miles a gallon if it gets 10 miles a gallon. Donald Trump's university was phony."

In a phone call to TODAY on Monday, Trump called Schneiderman "a total lightweight," claimed that the attorney general solicited him for campaign donations in the middle of the investigation, and insinuated that an Aug. 22 meeting between Schneiderman and President Barack Obama was connected to the lawsuit, which was filed two days later.

The suit filed by Schneiderman's office on Saturday claims "Trump University" defrauded more than 5,000 students by steering them into expensive and useless seminars on real estate-investing techniques while promising to make them rich.

"A lot of folks think maybe it's their fault they didn't get anything, and now they're realizing that everyone recognized they got scammed, and more people are coming forward,'' Schneiderman told Guthrie.

Promotional materials for the school claimed that the instructors were personally selected by Trump and were real estate experts, which Schneiderman said are false claims.

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"Trump said he was going to teach you his secrets of real estate through his handpicked experts,'' he said. "The president of Trump U has testified Trump did not pick one of the instructors and these guys were not experts. Some of them had just come out of bankruptcy, some of them were just motivational speakers, and there were no real estate secrets involved."

"I was involved to a very high degree,'' Trump said to TODAY's Carl Quintanilla in his phone call Monday. "Obviously it's not my main business, but applications, résumés, I met with people. I had a lot to do with it. I had a lot to do with what they discussed."

But according to Schneiderman, Trump's involvement in the school only extended to the marketing aspect.

"The former president of Trump U has testified under oath that Trump was very interested in the promotional materials,'' Schneiderman told Guthrie Tuesday. "He was the chief pitchman. He was very involved in luring in students with using his celebrity status, but he was not involved in writing the curriculum, he was not involved in the teaching.

"The students thought they were going to get to meet Mr. Trump," he added. "What they ended up was getting a chance to have a picture taken next to a life-sized poster of Trump to make it look as though they had met him."

"I think that the students that enrolled knew exactly what they were doing and what they were getting,'' Trump said on Monday. "After the seminars and after they finished the courses, they were given an application to sign, or like a report card on us. 'What do you think of the job that they did? What did you think of the instructors?' We had a 98 percent approval."

The school provided nearly 11,000 testimonials to Schneiderman from students praising the program and said 98 percent of students in a survey termed the program "excellent," Trump's attorney, Michael D. Cohen, told The Associated Press. When asked for comment, Cohen's office referred TODAY.com to a website, 98percentapproval.com, set up to refute the claims of the lawsuit. It features links to more than 10,000 surveys from 2007 to 2010 that it says are "from Trump University students demonstrating their overwhelming satisfaction with the program."

Trump also claimed on Monday that Schneiderman was soliciting money while investigating Trump's school.

"During the investigation, he was asking people in my firm, including one of my lawyers, for campaign contributions,'' Trump said. "Whoever heard of this? He's asking for campaign contributions while he's looking into Trump. I mean what kind of an attorney general is this?"

"This is very common,'' Schneiderman said in repsonse on Tuesday. "Prosecutors are used to people making wild accusations. He still has yet to address any of the merits of the claims that we sent in. We've got testimony by his former president. We've got their playbook instructing teachers how to constantly be doing a bait-and-switch, tell the students you need to get the more expensive product, you need to go to the next level.

"Any attorney general would be pursuing this, and Mr. Trump, needless to say, we're not really ideologically on the same page, so he's not the kind of person who would provide a lot of support to someone like me."

The program, which has no actual campus, offers a three-day real estate investment seminar that costs $1,495, a "Trump elite" package for $10,000, and a personal mentorship for up to $35,000. The lawsuit alleges that instructors were told to persuade students to purchase the higher-priced packages.

"Probably the most despicable thing, and this is documented, told students to raise their credit limits,'' Schneiderman said. "Call up your credit card companies, get more credit, and then use that extra credit to buy more Trump programs. There's people who had to move out of their homes, there's people who went heavily into debt for this. This is just disgraceful conduct."

Trump also claimed on Monday that there was a connection between the lawsuit being filed on Saturday and Schneiderman meeting with Obama in Syracuse, N.Y., two days later. Trump claimed he had never heard of a lawsuit of this nature being filed on a Saturday.

"I saw the president in Syracuse,'' Schneiderman confirmed on Tuesday. "We spoke for a little bit. We had much more important things to talk about than Donald Trump. The reason the suit was filed on a Saturday was because Trump's lawyers requested that we wait until after midnight on Friday because there was a tolling agreement on the statute of limitations."

In 2011, the school was renamed the Trump Entrepreneur Institute after New York State Education Department officials told Trump he had to change the name because it didn't have a license and did not meet the legal definitions of a university.

"We filed an application,'' Trump said. "The application was accepted and it was signed by a person in the state, but they ultimately came back and said, 'You're not allowed to use the word 'university,' so we changed the name. We took the word 'university' out."

"First of all, the name was phony,'' Schneiderman said. "It never registered as a university. They were being chased around by the New York State Department of Education. They kept lying to them and defrauding them."

Schneiderman feels confident that his office has a strong case.

"I think the documents we've submitted so far probably entitle us to a judgment,'' he told Guthrie. "I think he's going to want to fight it out in the press, and he's a guy who doesn't seem to understand the concept of a bad headline."

—By Scott Stump, TODAY contributor