President-elect Donald Trump has agreed to a $25 million settlement in connection with three separate lawsuits relating to his former school Trump University. The school conducted a series of seminars that purported to educate students on real estate investing. The organization was not an accredited university or college. Nor did it confer college credit, grant degrees, or grade its students.
In 2011, the company became the subject of inquiry by the New York Attorney General’s office for illegal business practices resulting in a lawsuit filed in 2013. Trump University was also named as a defendant in two class action lawsuits in federal court. Those lawsuits alleged that Trump University defrauded its students by using misleading marketing practices and engaging in aggressive sales tactics. Trump was quoted on dozens of occasions during his Presidential campaign as stating he would never settle the cases.
“Today’s $25 million settlement is a stunning reversal by Donald Trump and a major victory for the over 6,000 victims of his fraudulent university.” Attorney General Eric Schneiderman said in a statement. “I am pleased that under the terms of this settlement, every victim will receive restitution and that Donald Trump will pay up to $1 million in penalties to the State of New York for violating state education laws.”
About $21 million will go to settle the class-action suits and $4 million will cover the victims of the suit brought by Schneiderman.
While the initial Trump University seminar was free, teachers would then attempt to upsell the students to attend another program. According to court papers, a “one year apprenticeship,” which was effectively a three-day seminar, cost $1,495. A “mentorship” cost at least $10,000 and the most expensive, the Gold Elite program, cost $35,000.
On November 19, Trump released the following Twitter statement:
The ONLY bad thing about winning the Presidency is that I did not have the time to go through a long but winning trial on Trump U. Too bad!
A number of students complained the experience and class were essentially worthless. Jeffrey Tufenkein, a student who enrolled with his wife, told the New York Times in 2011 that the class “was almost completely worthless.” About 7,000 students will share in the settlement and will be able to recoup at least half of what they spent at Trump University.
In the end, the settlement is a remarkable concession from the soon to be President of the United States who derides legal settlements and has publicly mocked fellow businessman who agree to them.
