Presidential candidate Donald Trump may be ahead in the polls as he moves toward the Republican nomination, but the billionaire businessman was dealt a legal setback this week with a state appellate court ruling that allows New York's attorney general to proceed in his fraud case against the GOP front-runner.
The case involves Trump University, which the real estate developer investor create in 2004 and closed in 2010.
Rubio: I've spoken with a 'victim'
During Thursday night's Republican debate, Sen. Marco Rubio and Trump clashed again over Trump's real estate "university" and Rubio humanized it by saying he had spoken with a "victim."
Rubio tried to get under Trump’s skin by boring in on Trump University, the defunct education and training venture over which Trump is facing civil litigation, alleging that he defrauded students. Recalling that he had spoken to “one of the victims,” Rubio said that what students had gotten in the courses was “stuff you could pull off of Zillow.”
“Why won’t you give them their money back?” Rubio asked.
Trump, who described the litigation as “a minor civil case,” claimed that almost all students who had signed up for the courses “said it was terrific,” but he quickly lost patience with Rubio. Calling him “little Marco” — a phrase he used several times — Trump noted that the senator was losing to him in Florida polls before the state’s March 15 primary.
“The people in Florida wouldn’t elect him dogcatcher,” Trump said.
Attorney general filed charges in 2013
State Attorney General Eric Schneiderman sued Trump in August 2013, alleging the school bilked hapless hopefuls who fell for his bogus sales pitch that taking his seminars would make them real estate moguls.
"I can turn anyone into a successful real estate investor, including you," proclaimed Trump's promotional material. A variety of courses ranging from a $1,495 three-day seminar to special "gold" or "Trump mentorship" packages were offered, according to court papers.
'Bait-and-switch'
Schneiderman alleges some 600 New Yorkers and 5,000 people nationwide fell for the pitch, which the AG characterized as a classic bait-and-switch operation.
While promotional material referenced what Trump described as "handpicked instructors" who would share real estate investing secrets, the AG said most of the instructors had never even met Trump.
Earlier accounts of the venture noted that those attending seminars often had to pass a sales table offering costlier upgrades _ payable by credit card _ as they left the classrooms.
The venture ran into trouble early on since it wasn't accredited or chartered as a university by the State Education Department. It was later renamed the Trump Entrepreneur Initiative.
No statute of limitations
Trump's lawyers tried to block Schneiderman's case, arguing among other things that many of the charges exceeded the three-year statute of limitations for most fraud allegations.
The current case (there is also a class action case in California) began in 2011 when Schneiderman was looking at for-profit universities and trade schools in New York.
Judges said the three-year limit didn't apply in this instance.
A Schneiderman spokesman described the victory as "huge,'' a phrase Trump is fond of using.
In a release, Schneiderman was a bit more buttoned down Tuesday, saying, "Today's decision is a clear victory in our effort to hold Donald Trump and Trump University accountable for defrauding thousands of students.''
Trump's lawyers to appeal
Trumps lawyer Jeffrey Goldberg said they "absolutely" plan to appeal Tuesday's ruling.
But it was hard to say how that would go given the four-member appellate division's unanimity.
"It seems highly unusual" that the three-year statute doesn't apply, Goldberg, of Belkin Burden Wenig & Goldman, said of the decision.
The timetable for when future hearings or a trial might develop remained uncertain.
A potential courtroom spectacle
Trump, who has surprised observers with his seemingly seat-of-the-pants presidential bid characterized by personal attacks on opponents, remains the Republican front-runner.
Tuesday's decision leaves open the possibility of a courtroom spectacle in which Schneiderman, an aggressive career Democratic politician, would take on Trump in a fraud case.
Schneiderman, in his prepared statement, said "We look forward to demonstrating in a court of law that Donald Trump and his sham for-profit college defrauded more than 5,000 consumers out of millions of dollars."
About the Author
