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  • The State of New York v. Trump University, Complaint

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    The Attorney General of New York’s lawsuit against Trump University moves forward.

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    The State of New York v. Trump University, Complaint

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    The Attorney General of New York’s lawsuit against Trump University moves forward.

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    © All Rights Reserved
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    Segnala contenuti inappropriati
    3K visualizzazioni39 pagine

    The State of New York v. Trump University, Complaint

    Caricato da

    FindLaw
    The Attorney General of New York’s lawsuit against Trump University moves forward.

    Copyright:

    © All Rights Reserved
    Scarica in formato PDF o leggi online su Scribd
    Segnala contenuti inappropriati
    di 39
    SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ‘THE PEOPLE OF THE STATE OF NEW YORK, bby ERIC T, SCHNEIDERMAN, Attomey General of the State of New York, aT Petitioner, Ml ~against- Indox No. IAS Pat Assigned to Tustice ‘THE TRUMP ENTREPRENEUR INITIATIVE LLC fa ‘TRUMP UNIVERSITY LLC, DIT ENTREPRENEUR ‘MEMBER LLC fa DIT UNIVERSITY MEMBER LLC, DIT ENTREPRENEUR MANAGING MEMBER LLC f/kla DIT UNIVERSITY MANAGING MEMBER LLC, THE TRUMP ORGANIZATION, INC., TRUMP ORGANIZATION LLC, DONALD J. TRUMP, and MICHAEL SEXTON, Respondents x “The People ofthe Sate of New York, by their attorney, ERIC T, SCHNEIDERMAN, Attorney General ofthe State of New York espctlly allege, upon information and belie: INTRODUCTION 1. From 2005 through 2011, respondents operated an unlicensed illegal educational, institution fom their headquarters in New York City, which purported to teach students Donald ‘Trump's realestate starepies and techniques. Until May 2010, respondents operated their program legally as “Tramp University,” hecause they were not chartered asa university as required by New York kw and were even notified bythe New York State Education Department NYSED") as erly as 2005 tat ther use ofthe word “university” violated New Vor la 2. Responsnts engaged in a widespread marketing campaign for Trump University both in New York and across the country to lute prospective students toa free 90-minute seminar that served asa sales itch fr a three-day seminar costing $1495" — but this three-day seminar ‘was itself an upsell to increasingly cosly “Trump Elite” packages starting at around $10,000 and nung with what was supposed to bea year-long personal mentorship programs at a cost of $35,000, To induce stidents to enol in ther pad courses, respondents engaged in numerous deceptive practices. Respondents repeatedly claimed that prospective students would be aight by succesfol real estate “experts” who were “handpicked” by Donald Trump. In fat, respondents laced sutstantiation forthe claims that their instructors and mentors were successful real estate entepreneus. Nota single one was “handpicked” by Donald Trump. Many came to ‘Trump University from jobs having litle to do with real estate investments, and some came to ‘rump University shorty afer thir eal estate investing eaused them to go into bankruptcy, Respondents also assured prospective students that they would recoup the cost ofthe courses ina few months, with “insider” acess to special financing and close mentoring by Trump instructors ‘who would coach students through ther first realestate deal. Relying on these representations, individuals spent thousands of dollars oftheir savings or took on thousands of dallas in debt — while Trump University roueht in over $40 million in revenue 3. Trump Chiversity's day-to-day operations were directly managed by Donald ‘Trump's elosely-eld holding company, The Trump Organization, and almost none ofthe formalities ofa separate comporate existence were observed by Trump Univesity oe the limited liability companies thowgh which Donald Trump purported to hol his stake int. Trump University could not even issue its own checks, and it never held a board meeting. Meanshil both Michael Sexton and Donald Trump were personally and knowingly involved with the ‘operations of Trump University, with Sexton taking an active ole in the company’s conduct and ‘This rogram went ya vary of mest difetentines, neti “Fast Track o Foreclosure Investing” the Profit fom Real Exiate nesting" “The Apprenticeship Program,” andthe "Rel Esa ves Bey = program, “Trump personally approving cach ofthe misleading advertisements it published —all the while ignoring the repeated warnings of NYSED, as far back as 2005, that Trump University was ‘operating without a licese in violation of New York law, this evading a comprehensive regulatory system designed to prevent exactly the srt of deceptive practices tissue here. 4, Through their deceptive and unlawful practices, respondents intentionally misled cover 5000 individuals nationwide, including over 600 New Yorkers, into paying as much as $35,000 cach to paricipatein lve seminars and mentorship programs with the promise of| learning Donald ‘Trump's realestate investing techniques. PARTIES AND JURISDICTION 5. Patitionris the People af the State of New York, by their attorney, Eric Schnsiderman, Attomey General ofthe State of New York 6. Petitions brings the above-captioned speval proceeding pursuant to Executive Law § 63(12), Education Law §§ 224 and 5001-5010, and General Business Lav §§ 349 and 350 ‘0 enjoin respondents fom engaging in deceptive act and practices and false advertising in connection wih the operation of Trump University (ater known as Trump Entrepreneurship Institut) an unlicensed euatona nsittion that ravdulently induced students to enol in seminars on real estate investing. Executive Law § 63(12) empowers the Atlomney General © seek injunetive rele, restitution, isgorgement, damages, and costs when any’person or business ety has engaged ino otherwise demonstrated repeated or persistent fraudulent o illegal ats in the transaction of business, GBL §349(a) prohibits deceptive ats or practices in the conduct of any business, rade, or comameree, or in the furnishing of any service in New York. GBI. § 549(b) authorizes the Atorney General to sek injuntive elie and restitution whenever he believes that any person or entity has engaged in or is about to engage in any deceptive acts or Practices. GBI. § 350-4 empowers the Attomey General to seek penalties when any person or «entity has engage in deceptive business practices or false advertising in violation of GBL. Article 22-A. Biducation Law § 5003(5) empowers the Attomey General to bring any appropriate ation proceeding in any cour of competent jurisdiction to recover fine or otherwise enforce any provision of Article 101 ofthe Education Law. 7. Resposdent The Trump EnteprencurIitative LLC (“Tramp Universit) is a ‘New York limited laity company with ts prinipal place of business at 0 Wall Stee, 32nd Floor, New York, New York, The company was originally created pursuant the laws ofthe Siate of New York under the name Trump University LLC on October 25,2004. ts name was changed The Trump Entrepreneur Initiative LLC pursuant toa Cetifiate of Amendment fled With the New Vork Seeretaryof State on May 20, 2010. 8 Respondent DIT Entrepreneur Member LLC is a New York limited ibility company, It doesnot sa prinipal place of business with the New York Secretary of State, The company was originally created pursuant to the laws ofthe State of New York under the name DAT University Member LLC on October 25,2008. ts name was changed to DIT Entrepreneur Member LLC pursuantto a Cerificate of Amendment fied withthe New York Secretary of State on May 20,2010. 9. Respondent DIT Entreprencur Managing Member LLC isa New York limited lability company. 1 dees not ist principal plaeof business with the New York Secretary of State. ‘The company was originally crested pursant athe laws ofthe State of New York under ‘he name DIT Univesity Managing Member LLC on Oetober 25,2004, Its name was changed DAT Entrepreneur Manazing Member LLC pursuant toa Cetifiate of Amendment fled withthe New York Sceretary of State on May 20, 2010. 10. Respordent The Trump Organization, Inc. isa New York corporation with & principal place of business of 725 Fifth Avenue, 26th Floor, New York, New York, 11. Respondent Trump Organization LLC is a New York limited lability company ‘witha principal place o business of 725 Fifth Avenue, New York, New York 12, Responsent Donald J. Trump isthe Chief Executive Officer of The Trump Organization, tne. and Trump Organization LLC and the Chairman of Trump Univesity. He isa [New York citizen who resides at 725 Filth Avenue, New York, New York 15, Respondent Michael Sexton isthe former President of Trump Universiy. He is a New York citizen who resides at 31 Rye Road, Rye, New York 14, Respondents waived servic ofthe noice required by Executive Law § 63(12) and General Business Law § 350d, 15, 1n2004, Donald Trump, Michael Sexton, and Jonathan Spitalny formed Trump University LLC asa New York limited lability company. ‘The original business plan focused primarily on long-distance learning through Interet-based webinars on abroad array of business topics though they were “experimenting” with a variety of formats, including some lve programs. 16, 12005, NYSED became aware that Trump University was operating an unlicensed educational institution in New York, purportedly to teach students how todo real estate and other business deals 17. NYSED wrote to Trump University and to Donald Trump and Micheel Sexton Personally, several times starting in 2005, notiying Trump University and Trump that they were in violation of New York law. NYSED officials also contacted Trump University in person, by phone, and by email, 18, In these communications, NYSED informed Trump University, Donald Trump, and Michael Sexton tat ty was violating New York Education Law by ‘University” when infact it was not chartered as (@) Trump Unive zalling itself suc, and that (©) Trump University needed tobe licensed by NYSED if it wanted to offer student instruction or traning in New York 19, In,June 2005, respondents, through Sexton, communicated ina series of e-mails with Joseph Frey, hen the Assistant Commissioner ofthe Office of Quality Assurance ofthe Olfice of Higher Eduction at NYSED. Frey told Sextoa that Trump University would not be subjet tothe New York Fducation Law licensure requirement if did not have a physical presence in New York State, prelicated on two conditions (a) Trump University needed w have its place of business and its corporate organization outside New York, and (b) it could not run live programs or other ive training in New York. Sexton responded that Trump Univesity would bide by those condition by ereating a new LLC in Delaware and merging the New York LLC into the Delaware entity. Sexton further stated that Trump University would refian fom holding live programs in New York 20. Yet Trump University dd wo abide by these condition. 21 Fi although the Trump Organization erated a new Delaware LLC, the New ‘York and Delaware ents never merged, and Trump University continued communicating to both government entities and to students that its principal place of business was 40 Wall Sree in New York, throughout the entire perio of its operation. 22. Second, Trump University held at least ity live programs in New York between 2006 and 2011 23. Ine, the business decision to expand Trump University’s live programming occured only six mont afler Sexton's agreement with Frey in late 2005 o early 2006, AC that time, Trump University shifted is business model to focus mostly on live programs and instruction, both in New Vork ad nationally. Although respondents Fist relied on a third-party lense to run lve seminars, by 2007, Trump University began operating its own live programming and insinetion, produced and exceuted in-house. 24, Ultimately, for more than five yeas, respondents failed to take any steps to rectify the legal violations raid by NYSED. 25, Te wasmat until May 2010 that Trump University finaly dropped “University” from its name 26. By ignoring NYSED and continuing to use the “Trump University” name from 2005 v0 2010, espondent also repeatedly deceived students into thinking that hey were tending a legally charred “university.” Studeots relied on those misrpresentatons, inducing them to pay for Trump University’s programs. 27. Indeed, the very fact that Trump University LLC was organized and based in New ‘York misled stents into believing that Trump University was obcying New York laws requiring the licensure, regulation, and chartering ofall universities and other educational institutions ‘operating in New York state 28. Tramp University repeatedly reinforced the misperception that it was areal “universiy” by employing many ofthe signs, symbol, terminology, and othe indicia of colleges and universities. 29. Instructors routinely referred to themselves as “faculty” and tothe Trump University propram participants as “students” and then “gmduates” after completing a course and soing through “graduation.” 530, The Trump University program was regularly called a “curriculum,” and students payments were repeately referred to as “tition.” 31, Som instructors claimed that a Trump degree “is a bit of a college degree” and. ‘that Trump University offered “graduate programs, post graduate programs, [and] doctorate programs, 32. Trump University used a university-like seal on many of ts materials and issued

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