Court: Fraud suit against Donald Trump can proceed
ALBANY - A state appeals court dealt a blow Tuesday to Republican presidential front-runner Donald Trump, allowing a fraud lawsuit against him to proceed in full.
The Appellate Division of state Supreme Court in Manhattan ruled Tuesday that state Attorney General Eric Schneiderman can move ahead with his fraud claims against Trump, which accuse the billionaire real estate developer of scamming customers of his Trump University seminar series out of millions of dollars.
A lower court had tossed one of Schneiderman's six claims, saying it was outside the statute of limitations. But the appeals court disagreed, saying it was actually subject to a six-year statute of limitations, not three.
The $40 million lawsuit has emerged as an issue on the presidential campaign trail: Republican presidential hopefuls Marco Rubio and Ted Cruz have both sought to use it against the leading candidate, with Rubio and his allies repeatedly labeling Trump a "con artist."
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In a statement, Schneiderman called the ruling a "clear victory."
"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," he said.
Schneiderman's suit accuses Trump University of being a sham operation designed to lure customers in for a free seminar before pressuring them to buy higher-priced offerings, including a yearlong "mentorship" program that cost upward of $36,000 a year.
The instructors of the seminar series were advertised as being hand-picked by Trump, but only one had met him previously, according to the suit.
Trump and his allies have aggressively pushed back against Schneiderman, accusing the attorney general of trying to solicit campaign donations from Trump's daughter and son-in-law shortly before he filed the suit in 2013.
The real estate developer has characterized the lawsuit as "minor" and accused Rubio of "grasping at straws."
“Trump University has a 98 percent approval rating and an 'A' rating from the Better Business Bureau," Trump said in a statement Monday, prior to the ruling. "New York Attorney General Eric Schneiderman continues to waste taxpayer money trying to smear me, but the fact is that the overwhelming majority of students had a great experience."