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Donald Trump investment school sued by NY attorney general

Billionaire Donald Trump arrives at the Miss USA 2004 competition at the Kodak Theatre in Hollywood, California April 12, 2004. REUTERS/Robe
Billionaire Donald Trump arrives at the Miss USA 2004 competition at the Kodak Theatre in Hollywood, California April 12, 2004. REUTERS/Robe

(Reuters) - New York state's attorney general said on Sunday he has filed a $40 million lawsuit against Donald Trump and his for-profit investment school, accusing them of engaging in illegal business practices.

New York Attorney General Eric Schneiderman alleged that the real estate mogul, a former executive and the Trump Entrepreneur Institute - called Trump University until 2010 - made false claims about classes at the school, including that Trump handpicked instructors.

"No one, no matter how rich or popular they are, has a right to scam hard-working New Yorkers," Schneiderman said in a statement.

The attorney general said from 2005 to 2011, the Trump school operated without an educational license while misleading consumers into paying for courses promising to teach Trump's real estate investment techniques.

More than 5,000 people nationally took the courses, paying $40 million, Schneiderman said.

The lawsuit is seeking restitution of at least $40 million, as well as a disgorgement of profits, penalties and an injunction, Schneiderman's office said.

A copy of the lawsuit, which was filed in New York state court, was not immediately available Sunday.

But Schneiderman said in the statement that his office found Trump did not himself pick a single instructor at the seminars and had minimal to no involvement in developing the courses' content.

Many students believed they were attending an actual university, Schneiderman said, but the Trump school was unlicensed.

A lawyer for Trump did not immediately respond to requests for comment. But after the lawsuit was first reported in The New York Times late Saturday, Trump said in a post on Twitter: "Lightweight NYS Attorney General Eric Schneiderman is trying to extort me with a civil law suit."

The tweet also linked to a website, which claims: "Trump University has a 98 percent approval rating."

(Reporting by Nate Raymond in New York and Mary Wisniewski in Chicago; editing by Ted Botha, Alex Dobuzinskis Peter Cooney and G Crosse)

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