President-elect Donald Trump has settled three Trump University lawsuits for $25 million, the New York Attorney General has said.
Donald Trump was being sued by former students who paid $35,000 for real estate “secrets” from his “hand-picked” instructors.
He had repeatedly said he would not settle the class-action lawsuits.
Attorney General Eric Schneiderman said the settlement was a “stunning reversal” by Donald Trump and a “major victory” for victims.
However, Donald Trump’s lawyer Daniel Petrocelli said his client was pleased with the outcome, saying “he was willing to sacrifice his personal interests, put this behind him, and move forward”.
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The president-elect faced three fraud lawsuits – which alleged the school misled students and failed to deliver on its promises – in California and New York.
A trial in one of the cases had been due to begin in San Diego on November 28, although Donald Trump’s lawyers had attempted to delay the case.
Attorney General Eric Schneiderman said in a statement: “Today’s $25 million settlement agreement is a stunning reversal by Donald Trump and a major victory for the over 6,000 victims of his fraudulent university.
“The victims of Trump University have waited years for today’s result and I am pleased that their patience – and persistence – will be rewarded by this $25 million settlement.”
Eric Schneiderman, who Donald Trump has attacked as a “lightweight”, had sought a $40 million payout from Trump over the university, which closed in 2010.
He called Trump University a “fraud from beginning to end” in July, adding that the organization used “false promises to prey on desperate people”.
District Judge Gonzalo Curiel, who is presiding over the two California cases, had been urging both sides to settle out of court.
In June, Donald Trump said: “I will win the Trump University case. I already am, as far as I’m concerned.
“I could settle that case. I could have settled that case. I just choose not to.”
Trump University promised students the opportunity to learn from “hand-picked” teachers, that actually were not chosen by Donald Trump himself.
Eric Schneiderman alleged that the closest students ever got to the real estate mogul was having their photo taken beside a cardboard cutout of him. He also said that Donald Trump personally pocketed about $5 million in the “scheme”.
Donald Trump has been sued by New York’s Attorney General Eric Schneiderman for $40 million, claiming the real estate mogul helped run a phony “Trump University” that falsely promised to make students rich.
Instead, Attorney General Eric Schneiderman said that the university steered them into expensive and mostly useless seminars, and even failed to deliver promised apprenticeships.
After the lawsuit was filed on Saturday, Doald Trump shot back that it is false and politically motivated.
Eric Schneiderman says many of the 5,000 students who paid up to $35,000 thought they would at least meet Trump but instead all they got was their picture taken in front of a life-size picture of him.
“Trump University engaged in deception at every stage of consumers’ advancement through costly programs and caused real financial harm,” Eric Schneiderman said.
“Trump University, with Donald Trump’s knowledge and participation, relied on Trump’s name recognition and celebrity status to take advantage of consumers who believed in the Trump brand.”
State Education Department officials told Donald Trump to change the name of his enterprise years ago, saying it lacked a license and didn’t meet the legal definitions of a university.
In 2011 it was renamed the “Trump Entrepreneur Institute”, but it has since been dogged by complaints from consumers and a few civil lawsuits claiming it didn’t fulfill its advertised claims.
New York’s Attorney General Eric Schneiderman claims Donald Trump helped run a phony Trump University that falsely promised to make students rich
Eric Schneiderman’s lawsuit covers complaints dating to 2005 through 2011 and it claims that students paid between $1,495 and $35,000 to learn from the mogul.
He said the three-day seminars failed to teach consumers everything they needed to know about real estate, as the “university” had promised. The Trump University manual tells instructors not to let consumers “think three days will be enough to make them successful”, Eric Schneiderman said.
At the seminars, consumers were told about “Trump Elite” mentorships that cost $10,000 to $35,000 in which students were promised individual instruction until they made their first deal.
Eric Schneiderman said participants were urged to extend the limit on their credit cards for real estate deals, but then used the credit to pay for the Trump Elite programs.
The attorney general said the program also failed to promptly cancel memberships as promised.
The lawsuit added that many of students were unable to land even one real estate deal and were left far worse off than before the lessons, facing thousands of dollars in debt.
But Donld Trump’s attorney accused Eric Schneiderman of trying to extort campaign contributions from the real estate mogul through his investigation.
Attorney Michael D. Cohen told The Associated Press on Saturday that Eric Schneiderman’s lawsuit was filled with falsehoods. He insisted that Donald Trump and his university never defrauded anyone.
“The attorney general has been angry because he felt that Mr. Trump and his various companies should have done much more for him in terms of fundraising,” Michael D. Cohen said.
“This entire investigation is politically motivated and it is a tremendous waste of taxpayers’ money.”
State Board of Elections records show Donald Trump has spent more than $136,000 on New York campaigns since 2010.
He contributed $12,500 to Schneiderman in October 2010, when Eric Schneiderman was running for attorney general, records show.
An outspoken conservative, Donald Trump himself flirted with a presidential run last year.
“Donald Trump will not sit back and be extorted by anyone, including the attorney general,” Michael D. Cohen said.
Eric Schneiderman is suing the program, Donald Trump as the university chairman, and the former president of the university in a case to be handled in state Supreme Court in Manhattan.
He accuses them of engaging in persistent fraud, illegal and deceptive conduct and violating federal consumer protection law. The $40 million he seeks is mostly to pay restitution to consumers.
He dismissed Donald Trump’s claim of a political motive.
“The fact that he’s still brave enough to follow the investigation wherever it may lead speaks to Mr. Schneiderman’s character,” Eric Schneiderman spokesman Andrew Friedman told AP.