Lana Oconnell
Trump University was the subject of three lawsuits, two of which were federal class actions and one filed in a New York State court. The lawsuits alleged that Trump University engaged in illegal business practices, including false claims and racketeering. Trump University was found to be unlicensed, and in 2016, Trump agreed to pay $25 million to settle the lawsuits. The settlement included $21 million for the participants in the class actions, $3 million for New Yorkers not covered by the class actions, and a penalty of up to $1 million assessed by the state of New York. Approximately 7,000 former Trump University students were involved in the case and benefited from the settlement.
| Characteristics | Values |
|---|---|
| Number of students involved in the Trump University lawsuit | 7,000 |
| Amount spent by Texas taxpayers on seminars and materials | $2.6 million |
| Amount in penalties and fees | $2.8 million |
| Amount paid by Trump to settle the two class actions and the New York suit | $25 million |
| Amount given to participants in the class actions | $21 million |
| Amount given to New Yorkers not covered by the class actions | $3 million |
| Penalty assessed by the state of New York for running an unlicensed university | $1 million |
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What You'll Learn
Trump University lawsuits involved 7,000 students
Trump University was the subject of three lawsuits, two federal class actions and one filed in a New York State court. The lawsuits alleged that Trump University engaged in a variety of illegal business practices, including false claims and racketeering. Trump University offered real estate seminars from 2006 to 2009 and was owned and operated by Irene and Mike Milin of Boca Raton, Florida.
Although Trump was not involved in the operation of the Trump Institute, he did record promotional infomercials and appeared in introductory videos before each seminar. The New York State Department of Education sent a letter to Trump, Sexton, and Trump University in 2005, stating that they were violating state law by using the word "university" when Trump University was not chartered as one and did not have the required license to offer live instruction or training. Despite Sexton's promise to stop instructing students in New York State, the New York Attorney General alleged that this continued.
The lawsuits sought to recover millions of dollars spent by students on seminars and materials, as well as penalties and fees. In November 2016, it was reported that Trump had agreed to pay $25 million to settle the two class actions and the New York suit. Approximately 7,000 former Trump University students were involved in the case, with $21 million going to the participants in the class actions, $3 million going to New Yorkers not covered, and a penalty of up to $1 million assessed by the state of New York for running an unlicensed university.
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Students sought recovery of $2.6 million spent on seminars
Trump University was the subject of three lawsuits, two of which were federal class actions, and the third was filed in a New York State court. The lawsuits asserted that Trump University engaged in illegal business practices, including false claims and racketeering. The plaintiffs in the lawsuits sought to recover financial losses and hold those responsible for the alleged illegal activities accountable.
One of the key issues in the lawsuits was the claim that Trump University was not a properly chartered university and did not have the required licenses to offer live instruction or training. Despite this, it charged students for seminars and materials, with Texas taxpayers spending $2.6 million on these offerings. The consumer protection division sought to recover this money on behalf of the students, highlighting the financial harm caused by Trump University's misleading practices.
Trump University's seminars were at the heart of the controversy. The "free workshops" were used to sell students on the 3-day seminars, which taught unethical practices such as preying on homeowners in financial trouble and targeting foreclosure properties. Students were led to believe that the classes offered accredited continuing education credits for realtors, which was not the case. This misrepresentation led to students incurring financial costs for classes that did not provide the advertised benefits or credentials.
The recovery of the $2.6 million in seminar and material fees was a significant aspect of the lawsuit. It represented the direct financial losses suffered by the students who enrolled in Trump University's programs. By seeking to recover this money, the plaintiffs aimed to compensate the students for their losses and hold Trump University accountable for its deceptive marketing and illegal operation as an unaccredited institution.
The outcome of the lawsuits was a settlement reached in November 2016, where Trump agreed to pay $25 million to resolve the two class actions and the New York suit. Of this amount, $21 million was distributed to the participants in the class actions, and $3 million was allocated to New Yorkers not covered by the class actions. Additionally, a penalty of up to $1 million was assessed by the state of New York for operating an unlicensed university. This settlement provided some measure of justice and financial relief to the approximately 7,000 former Trump University students involved in the case.
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Students also sought $2.8 million in penalties and fees
Trump University was the subject of three lawsuits that alleged a variety of illegal business practices, including false claims and racketeering. Trump University was not an accredited institution and did not have the required licenses to offer live instruction or training.
In one of the lawsuits, the consumer protection division sought to recover more than $2.6 million that Texas taxpayers, who were students at the "university", had spent on seminars and materials. In addition to this, the students also sought $2.8 million in penalties and fees. This was because Trump University falsely asserted that its classes were approved for continuing education credit for realtors, when in fact they were not approved by the Texas Real Estate Commission.
The lawsuits also alleged that Trump University taught students to prey upon homeowners in financial turmoil and to target foreclosure properties. The training materials indicated that the three-day seminars offered little usable content, and were merely a selling ground for the Defendant Trump U's seminars.
In November 2016, it was reported that Trump had agreed to pay $25 million to settle the two class actions and the New York suit. $21 million went to the participants in the class actions, $3 million went to New Yorkers not covered by the class actions, and a penalty of up to $1 million was assessed by the state of New York for running an unlicensed university. The settlement was reached just 10 days before the San Diego class action was scheduled to go to trial.
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Trump paid $25 million to settle lawsuits
In 2016, three lawsuits were filed against Trump University, alleging that the institution engaged in illegal business practices, including false claims and racketeering. The lawsuits claimed that Trump University misled students by presenting itself as a legitimate university and promising to teach them Trump's secrets to success in real estate. Students paid up to $35,000 to enroll in these programs, which were later found to be unlicensed and unaccredited.
Facing mounting legal pressure, Trump agreed to pay $25 million to settle the three lawsuits, including two federal class-action lawsuits in San Diego and a civil lawsuit filed by the New York Attorney General. The settlement was finalized by a federal judge in 2018, with $21 million going to the participants in the class actions, $3 million to New Yorkers not covered by the class actions, and a penalty of up to $1 million assessed by the state of New York for operating an unlicensed university.
The settlement agreement benefited approximately 7,000 former Trump University students, who were expected to receive refunds of at least half of their original payments. The plaintiffs' attorneys agreed to work pro bono to maximize the compensation for the affected students. Despite the settlement, Trump University did not admit any wrongdoing, and Trump himself stated that he settled to allow him to focus on the country.
The Trump University controversy attracted criticism towards Trump during his presidential campaign, with opponents calling him a "phony" and a "fraud." The settlement marked a significant moment as it indicated that victims of the allegedly fraudulent university would receive compensation, despite Trump's previous refusals to compensate those affected.
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Trump University was not a licensed university
In 2005, the New York State Department of Education informed Trump University that it was violating state law by using the word "university" in its name. The institution was neither a chartered university nor licensed to offer live instruction or training. Despite this, Trump University continued to offer courses in real estate, asset management, entrepreneurship, and wealth creation. It also conducted three- and five-day seminars, often called "retreats," and employed high-pressure sales tactics to attract customers.
Trump University was not an accredited university or college, and it did not confer college credit, grant degrees, or grade its students. It was owned and operated by The Trump Organization, while a separate organization, the Trump Institute, was licensed by Trump University but not owned by The Trump Organization. The Trump Institute was owned and operated by Irene and Mike Milin of Boca Raton, Florida, and offered real estate seminars from 2006 to 2009.
Trump University's lack of accreditation and licensing led to legal troubles. Three lawsuits were filed against Trump University, alleging illegal business practices, false claims, and racketeering. One lawsuit, filed by the consumer protection division, sought to recover $2.6 million in seminar and material fees from Texas taxpayers who attended the "university." Additionally, approximately 7,000 former Trump University students were involved in a class-action lawsuit that resulted in a $25 million settlement, with $21 million going to the participants.
The operation of Trump University without the required business license and the misleading use of the word "university" in its name were significant issues. In 2010, the Deputy Commissioner for Higher Education, Joseph Frey, sent a letter to Trump stating that the use of the word "university" was misleading and violated New York Education Law. In response to these issues, Trump University changed its name to "The Trump Entrepreneur Initiative" in 2010. Despite these changes, the State of New York filed a $40 million civil suit against Trump University in 2013, further highlighting the legal consequences of operating without the proper licenses and accreditation.
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Frequently asked questions
Around 7,000 former Trump University students were involved in the case.
The lawsuit proposed by the consumer protection division sought to recover more than $2.6 million that Texas taxpayers had spent on seminars and materials, plus another $2.8 million in penalties and fees.
Trump agreed to pay $25 million to settle the two class actions and the New York suit. $21 million went to the participants in the class actions, $3 million went to New Yorkers not covered by the class actions, and a penalty of up to $1 million was assessed by the state of New York for running an unlicensed university.
Trump University was accused of engaging in a variety of illegal business practices, ranging from false claims to racketeering. The university was also not accredited and did not have the required license to offer live instruction or training.
