Trump University

Trump Entrepreneur Initiative
Privately held
Industry Education
Predecessor Trump University (name changed to The Trump Entrepreneur Initiative in June 2010)[1]
Founded 2004 (incorporated)
May 23, 2005 (2005-05-23) (launched)[2]
Founder Donald Trump
Headquarters New York City, United States
Website trumpinitiative.com
(registration required)

Trump University LLC (formerly the Trump Wealth Institute;[3] later named Trump Entrepreneur Initiative LCC) was an American online education company. After multiple lawsuits, it is now defunct. It was founded by Donald Trump and his associates Michael Sexton and Jonathan Spitalny in 2004.[4] It focused on long-distance Web-based learning through seminars. The company offered courses in real estate, asset management, entrepreneurship, and wealth creation, charging fees ranging from $1,500 to $35,000.[5]

The organization was not an accredited university or college and did not confer college credit.[6] In 2011, the company was the subject of an inquiry by the New York Attorney General's office for illegal business practices that culminated in a lawsuit filed in 2013.[5][7][8][9] It is also subject to ongoing class action lawsuits filed in three states. The company and subsequent lawsuits against it are being raised as issues during the 2016 Republican Party presidential primaries.[10]

Formation and subsequent name change

Trump University[11] was incorporated in 2004 by Trump, Sexton, and Spitalny, as a New York limited liability company.[12] On May 23, 2005, Trump formally launched the project.[2]

By letter dated May 27, 2005, the New York State Department of Education notified Trump individually, Sexton, and Trump University that (1) they were violating the New York Education Law by using the word "university" when in fact Trump University was not actually chartered as one and (2) that Trump University was violating the Education Law because it lacked a license to offer live-instruction or training to students in New York State.[12]

A letter sent by the Deputy Commissioner for Higher Education, Joseph Frey, to Trump that was made public in April 2010 stated: "Use of the word 'university' by your corporation is misleading and violates New York Education Law and the Rules of the Board of Regents."[13] In June 2010, "Trump University" changed its name to "The Trump Entrepreneur Initiative."[1]

Allegations of impropriety and lawsuits

On August 24, 2013, the State of New York filed a $40 million civil suit against Trump University (which had largely ceased operations in May 2011) alleging illegal business practices and false claims made by the company.[14] Donald Trump denied the allegations, claiming the school had a 98% approval rating and said New York Attorney General Eric Schneiderman was "a political hack looking to get publicity."[15]

External video
Is Trump University a fraud?, 5:28, CNN, September 29, 2015
Trump faces lawsuits from former Trump University 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 Trump University, 4:53, Fox News Channel, Mar. 03, 2016

Schneiderman described Trump University as a bait-and-switch scheme and pointed to the fact that the organization was not a university.[16] Schneiderman accused Trump of misleading more than 5,000 people to pay up to $35,000 to learn his real estate investment techniques.[17]

In an infomercial, Trump claimed to have "handpicked" Trump University's instructors. He testified in a 2012 deposition, however, that he never selected the instructors for the program.[18]

In October 2014, a New York judge found Trump personally liable for operating the company without the required business license.[17] In February 2016, Trump suggested the lawsuit had benefited from the Hispanic ethnicity of the presiding judge.[19] Shortly thereafter Schneiderman described Trump's remarks as “racial demagoguery.”[20]

In a separate class-action civil suit in mid February 2014, a San Diego federal judge allowed claimants in California, Florida, and New York to proceed.[21] A Trump complaint alleging that the state Attorney General's investigation was accompanied by a campaign donation shakedown was investigated by a New York ethics board and dismissed in August 2015.[22] Trump also filed a $1 million defamation suit against former Trump University student Tarla Makaeff, who had spent about $37,000 on seminars, after she joined the class-action lawsuit and publicized her classroom experiences on social media.[23] Unable to prove malice, Trump University lost an anti-SLAPP lawsuit (under statutes designed to thwart legal intimidation of class-action participants) and was ordered by a federal judge in April 2015 to pay Makaeff and her lawyers $798,774.24 in legal fees and costs.[24] In 2013 the Ninth Circuit Court of Appeals upheld the judgment, noting that "victims of con artists often sing the praises of their victimizers until the moment they realize they have been fleeced."[9]

Despite Trump's claim to have won much of the lawsuit, all three lawsuits are still pending.[25] As of May 2016, trial was scheduled to begin on November 28, 2016.[26]

The topic was highlighted during the Republican primaries and at the March 3, 2016 Republican Party presidential nomination debate in Detroit, Michigan.[27]

The New York Times reported that: "Interviews and documents show that employees of Trump University at times applied pressure on students to offer favorable reviews, instructed them to fill out the forms in order to obtain their graduation certificates, and ignored standard practices used to ensure that the surveys were filled out objectively."[28]

References

  1. 1 2 "Trump University: No Longer a University?". The Huffington Post. April 19, 2010.
  2. 1 2 Hindo, Brian (May 23, 2005). "Trump University: You're Wired! – The Donald Launches His Own Online 'Self-Directed Learning' Courses – And They Differ Mightily from the Usual Fare". BusinessWeek . Retrieved April 18, 2012.
  3. ↑ Gitell, Seth (March 8, 2016). "I Survived Trump University". Politico. Retrieved March 18, 2016.
  4. ↑ Cohan, William D. "Big Hair on Campus: Did Donald Trump Defraud Thousands of Real-Estate Students?". Vanity Fair. Retrieved 2016-03-06.
  5. 1 2 (registration required) Barbaro, Michael (May 19, 2011). "New York Attorney General Is Investigating Trump's For-Profit School". The New York Times.
  6. ↑ Levine, Greg (May 23, 2005). "Trump University Founded For Student 'Customers'". Forbes. Retrieved April 18, 2012.
  7. ↑ Donald Trump University Lawsuit Is Lesson For All For-Profit Colleges Forbes August 2013
  8. ↑ New York judge finds Donald Trump liable for unlicensed school Reuters August 2014
  9. 1 2 Trump faces two-front legal fight over 'university' USA Today
  10. ↑ Bump, Philip (February 25, 2016). "Marco Rubio came out swinging at Trump, and one punch really landed: Trump University". The Washington Post.
  11. ↑ Kurt Orzeck, 'Trump University' Students Win Class Cert. In RICO Suit, Law360 (October 28, 2014).
  12. 1 2 David Halperin, NY Court Refuses to Dismiss Trump University Case, Describes Fraud Allegations, Huffington Post (March 3, 2016).
  13. ↑ Douglas Feiden, State educrats give failing grade to Donald Trump's 'misleading' Trump University, Daily News (New York) (April 15, 2010).
  14. ↑ "Trump University Made False Claims, Lawsuit Says". The New York Times. Retrieved August 24, 2013.
  15. ↑ Gormley, Michael. "Trump Calls NY Attorney General a 'Political Hack'". ABC News. Archived from the original on November 10, 2013. Retrieved 26 August 2013.
  16. ↑ "Prosecutor: Trump lawsuit no stunt", CNN (August 26, 2013).
  17. 1 2 Curran, Eddie (October 16, 2014). "New York judge finds Donald Trump liable for unlicensed school". Reuters. Retrieved February 20, 2015.
  18. ↑ Karen Freifeld (February 1, 2016). "Trump University swindled me, says Iowa retiree". American Media Institute. Retrieved February 1, 2016.
  19. ↑ King, Robert (February 27, 2016). "Trump blames legal woes on 'Spanish' judge". Fox News. Retrieved February 27, 2016.
  20. ↑ "New York Attorney General Schneiderman Fires Back At Trump For Hispanic Judge Remark". CBS New York. February 27, 2016. Retrieved February 27, 2016.
  21. ↑ Fire Ant. "Donald Trump to Face Fraud, Racketeering Claims in California Class Actions. New York Fraud Case Continues". New Times Broward-Palm Beach. Retrieved June 16, 2015.
  22. ↑ Virtanen, Michael (August 31, 2015). "NY ethics board drops Trump's complaint about attorney general during university investigation". Associated Press. Retrieved August 31, 2015.
  23. ↑ Barbaro, Michael (May 12, 2011). "Buying a Trump Property, or So They Thought". The New York Times. Retrieved August 31, 2015.
  24. ↑ Kearn, Rebekah (April 30, 2015). "$798,000 Award Against Trump University". Courthouse News Services. Retrieved August 31, 2015.
  25. ↑ Ye Hee Lee, Michelle (February 27, 2016). "Donald Trump’s misleading claim that he’s 'won most of' lawsuits over Trump University". Washington Post. Retrieved February 27, 2016.
  26. ↑ Gerstein, Josh (May 6, 2016). "Judge delays Trump University trial". Politico.
  27. ↑ "Lawsuits against Trump University claim students paid thousands for nothing". latimes.com. Retrieved 2016-03-04.
  28. ↑ Michael Barbaro & Steve Edermarch, At Trump University, Students Recall Pressure to Give Positive Reviews, New York Times (March 11, 2016).

External links

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