By Jose Pagliery  From CNN Money

Donald Trump’s real estate school is under attack by New York’s top prosecutor, and both sides took to the airwaves Monday to elaborate on the upcoming legal battle.

During separate interviews on CNN’s “New Day,” New York State Attorney General Eric Schneiderman called the school a “bait-and-switch scheme,” and Trump accused the prosecutor of actions akin to extortion.

Still, Trump dismissed the importance of the matter.

Trump said Schneiderman “is a total lightweight. He’s an incompetent attorney general who figured he could get some publicity on [my] back.”

Schneiderman filed a $40 million civil lawsuit against Trump and Trump University on Saturday, accusing the billionaire of defrauding students who attended his for-profit school. Trump University has been renamed The Trump Entrepreneur Initiative.

The lawsuit claims Trump used his celebrity status to lure students into a school that over-promised and under-delivered. A free seminar urged prospective students to pay $1,495 for a three-day workshop. That, in turn, was used to sell a $34,995 “Trump Elite” course.

In the school’s commercials, Trump tells viewers, “At Trump University, we teach success. That’s what it’s all about: success. It’s going to happen to you.”

Schneiderman said Monday the lawsuit was prompted by dozens of complaints from former students who contacted his office and the Better Business Bureau, a national nonprofit organization. He said the suit completes one branch of a long-running investigation into for-profit schools.

The attorney general said Trump University isn’t even a university, which is defined as a collection of colleges and must be chartered, and that teachers were never certified. And although students were promised an in-person meeting with Trump, “all they got was the chance to stand next to a life-sized poster,” Schneiderman said.

Among the lawsuit’s accusations:

The program teased a “special” list of lenders that was actually photocopied from the Scotsman Guide, a magazine found at any bookstore.

Instructors promised improved credit scores using tactics that could actually hurt your FICO score,

Trump claimed the school was philanthropic, but it actually netted $5 million.

Schneiderman said his lawsuit partly relies on the sworn testimony of Trump University’s former president, Michael Sexton, who explained that Trump maintained a close eye on the school and read all of its promotional material. Schneiderman also said he got hold of the school’s “playbook,” which insisted that instructors keep pitching the upgraded, more expensive programs.

“This is a pretty straightforward case. The documents pretty much entitle us to a judgment,” Scheiderman said on “New Day.”

When Trump appeared on the program by phone later in the morning, he defended the school, saying it had received stellar evaluations by students.

“We didn’t think we were going to get sued because we have a 98% approval rating,” Trump said. “If you go to Wharton or Harvard, they didn’t have a 98% approval rating. People loved the school. The school was terrific.”

Trump then turned his attention to the prosecutor, saying Schneiderman approached Trump for political donations — and when Trump refused, Scheiderman followed with a lawsuit as revenge.

On Twitter, Trump had called the New York attorney general “a total sleezebag” for “shaking [him] down” for money.

In response Monday morning, Scheiderman said, “Prosecutors are all used to people who commit fraud making wild accusations when they’re caught.”

But Trump cast the legal challenge as a power battle between an overreaching government and a private powerhouse — himself.

“I could have settled this case very easily. They wanted to settle. I chose not to,” Trump said. “We have a lot of happy students. They’ll be testifying.”

Meanwhile, on Twitter, Trump suggested the lawsuit was politically motivated and had something to do with President Obama, since Schneiderman had met with the president during his visit to Syracuse last week to discuss higher-education reform.

“Maybe it’s a mini-IRS. I am a Republican,” Trump said, referring to the recent scandal involving the IRS targeting right-wing political groups.

To that, Schneiderman said: “The president and I had much more important stuff to talk about than Donald Trump.”

For more on this story go to:

http://money.cnn.com/2013/08/26/news/companies/trump-university/index.html

Related story:

8 Cringeworthy allegations from the new lawsuit against Donald Trump

Rob Wile From Business Insider

New York is suing Trump University for alleged fraud.

Until this weekend, when the suit was announced, most of us were probably unaware that there was such an institution.

But for more than 5,000 Americans, it was a very real organization that NY Attorney General Eric Schneiderman says collectively cost them $40 million.

We went back through the full complaint, and it basically sounds like an episode of “Seinfeld” (specifically, the one where Kramer recreates “The Merv Griffin Show” in his apartment using a set he found in the dumpster) crossed with a pyramid scheme.

Here are the best and most cringeworthy allegations from the suit:

Instead of Trump actually attending any of the seminars, attendees were often offered the opportunity to instead take a photo next to a life-size cutout.

    In addition to that, the theme song from Trump’s show “The Apprentice” was played at the beginning and end of each seminar.

    A special database of lenders the “University” purportedly had insider access to was actually just “a list photocopied from an issue of Scotsman Guide, a commercially available magazine,” the suit says.

    Attendees were told there was a toll-free “hotline” featuring instructors taking questions about real estate investing. The complaint says no such line existed, and instructors only made themselves available to individuals who’d signed up for the “elite” version of the seminar — “and often, not even then.”

    But, students were asked to call their credit card companies during breaks in the seminar to ask that their credit limits be raised.

    The instructors repeated the business’ ad claims that they’d been hand-picked by Trump himself, when in fact none of them were. And some of the instructors came to the organization after their own failed real estate investments bankrupted them.

    The organization comes pretty close to sounding like a pyramid scheme: the “students” would first attend a free seminar enticing them into paying $1,495 for a subsequent three-day seminar where they’d learn “everything they needed to know to start investing.” Instructors at the three-day seminar would instead warn they would need to purchase additional programs — ideally the $35,000 “elite” program — or they would not succeed.

    Trump pocketed more than $5 million despite insinuating he would not profit directly from the organization.

For more than five years, the group allegedly ignored the warnings of  the New York State Education Department to correct its business practices and change its name (of note: state comptroller Thomas DiNapoli just issued a scathing report of that agency).

And Trump U. has still never applied for a license to operate as an educational institution.

PHOTO: REUTERS/Andy Clark

Donald Trump addresses a ceremony announcing a new hotel and condominium complex in Vancouver, British Columbia June 19, 2013. Trump has put his name to the development to be called the Trump International Hotel & Tower Vancouver and to be built by TA Global Bhd. and the Holborn Group.

For more on this story go to:

http://www.businessinsider.com/details-of-trump-university-suit-2013-8

To view the Complaint go to:

http://www.scribd.com/doc/162981686/NY-Attorney-General-vs-Trump-University-Verified-Petition