Consumer Law

Suit alleging fraud by Trump University isn't time-barred, New York appeals court rules

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A lawsuit filed by New York’s attorney general seeking restitution for Trump University students because of the school’s alleged fraudulent practices may proceed as a result of a ruling on Tuesday.

New York’s Appellate Division, First Department, ruled that the statute of limitations does not bar the fraud suit by New York Attorney General Eric Schneiderman against Donald Trump and businesses related to Trump University, report Reuters, the New York Law Journal (sub. req.) and the Washington Post. The suit claimed fraud under state law and common law.

Schneiderman’s $40 million suit had claimed Trump University was offering real-estate investing classes without obtaining a school license, and was promising the courses would be taught by handpicked instructors who would teach “get rich” techniques. Actually, only one of the live-event instructors had even met Trump, the attorney general had alleged.

Students who attended the classes were encouraged to take increasingly expensive courses in a “bait and switch” tactic, the attorney general had alleged. Some students paid as much as $35,000 for the courses.

The Trump Organization’s general counsel, Alan Garten, told Reuters the case was “politically motivated” and the decision would be appealed. “We think all these claims are without merit and baseless,” Garten said. “Ninety-eight percent of those who participated in the programs filled out written surveys giving the programs the highest grades.”

A separate, class-action suit filed by former customers of Trump University is also pending.

Hat tip to @NateRaymond and @jacobgershman.

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