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Trump University: Fraud Settlement After Defrauding Students of $40 Million

Trump University was not a real university — it had no degree programs, no accreditation, and was not approved to use the word 'university' in New York. Students paid from $1,495 for a preview seminar to $35,000 for a 'Trump Elite' mentorship package. Former employees provided sworn declarations that they were instructed to aggressively upsell students to higher-priced programs and use high-pressure sales tactics. Student evaluation forms praised instructors at the time — but these were collected before students could assess outcomes. Former Trump University president Michael Sexton acknowledged the program was selling a brand, not education. Trump had selected none of the instructors himself, contradicting his marketing claims.

Record summary

Grade

Grade 2 of 5: Major Abuse of Power

Executive actions that exceed constitutional authority, circumvent statutory constraints, or weaponize government institutions for political ends. Scale and definitions

Status
Concluded
Incident date
Record updated
Location
New York, NY
Legal posture
Judicial finding
War-crime classification
Enabling conduct
Verification
Independently verified
ICC relevance
No
Sources
4 cited
Stable ID
trump-pre-presidency-trump-university-fraud
Victims
Approximately 5,000 students who paid between $1,495 and $35,000 for Trump University programs; many took on debt or used retirement savings; elderly and low-income students were disproportionately targeted by high-pressure sales
Alleged responsible parties
  • Donald Trump, Founder; personally appeared in marketing materials claiming to have handpicked instructors; lent his name and image to a program employees later testified used aggressive deceptive sales tactics— Trump University / Trump Organization

Key points

  • Trump personally appeared in marketing videos for Trump University claiming he had handpicked the instructors to teach his real estate techniques; former Trump University president Michael Sexton testified that Trump had not in fact selected the instructors; internal documents showed instruction quality was unrelated to Trump's personal real estate methods
  • Former Trump University employees provided sworn declarations describing high-pressure sales tactics targeting elderly, financially vulnerable students; a 'playbook' for instructors directed them to upsell aggressively, identify which students had credit cards, and encourage students to raise their credit limits to pay for higher-tier programs
  • Students who paid for the top-tier $35,000 'Trump Elite' mentorship package received phone mentorship from third-party coaches who were not endorsed by Trump and who participants said provided generic advice; the promised access to Trump's 'secrets' and personal connections did not materialize
  • New York State found that Trump University had operated as an unlicensed educational institution and had no legal right to use the word 'university' in New York; Trump University continued operating under that name after being notified by state officials, resulting in additional regulatory violations
  • Trump attacked the presiding judge, Gonzalo Curiel, calling him biased because of his Mexican heritage — Curiel was born in Indiana; House Speaker Paul Ryan called the comments 'textbook definition of a racist comment'; Trump maintained the attacks for weeks despite Republican criticism, eventually stopping after advisers intervened
  • The $25 million settlement, announced November 18, 2016, came ten days after Trump won the presidential election; Trump had previously vowed publicly never to settle the case, calling it a nuisance lawsuit; after winning the presidency he agreed to settle; his personal payout as part of the settlement was approximately $1 million of the $25 million total

Overview

Trump University was not a university. It had no accreditation, no degree programs, and no legal right to use the word "university" in New York. It was a seminar business that sold students on the promise that they would learn Trump's real estate secrets from instructors Trump had personally selected.

He had not selected the instructors. The secrets were not his. The $35,000 mentorship package delivered phone calls with third-party coaches.

The settlement came ten days after the election he had just won.

The Marketing

Trump appeared in videos and promotional materials claiming he had handpicked the instructors. Internal documents and sworn testimony from Trump University's own president contradicted this. The instructors were hired through normal processes and received no particular training in Trump's specific methods.

The playbook given to instructors described high-pressure sales techniques: identify which students had credit cards, encourage them to raise credit limits, upsell aggressively. Elderly attendees at "free preview" seminars were pushed toward the $35,000 Elite package. The evaluation forms — which students filled out before the program concluded and outcomes could be assessed — showed high satisfaction at the time.

The Regulators

New York State told Trump University it was illegally using the word "university" and needed to stop. It continued operating under the name anyway, adding regulatory violations to fraud allegations. It operated for five years total.

The Settlement

Trump said publicly he would never settle. He called the lawsuits a nuisance. He attacked the judge's ethnicity when rulings went against him.

Ten days after winning the presidency, he settled for $25 million. His contribution from personal funds was approximately $1 million of the $25 million total. He admitted no wrongdoing.

Five thousand students received partial restitution for programs that had taken thousands or tens of thousands of dollars each.

Update log

  1. Updated with settlement details.

Sequence of events

  1. Trump University launches — not an accredited institution

    Trump University launches with marketing materials featuring Trump claiming to have handpicked instructors. The program is not accredited, offers no degrees, and is not authorized to use the word 'university' in New York. It will operate until 2010.

  2. Trump University ceases operations

    Trump University stops operating after five years. Approximately 5,000 students have paid between $1,495 and $35,000. Student complaints have accumulated and regulatory scrutiny has increased.

  3. New York AG Schneiderman files $40M fraud suit

    New York Attorney General Eric Schneiderman files a $40 million civil fraud lawsuit against Trump, Trump University, and related entities, alleging deceptive practices and false advertising targeting approximately 5,000 students.

  4. Three class action lawsuits filed — federal courts

    Three separate class action lawsuits are filed in federal court on behalf of Trump University students. Two are in Southern California, one in New York. They proceed in parallel with the NY AG case.

  5. Trump attacks Judge Curiel — racist comments

    Trump publicly attacks presiding Judge Gonzalo Curiel, claiming he cannot be fair due to his Mexican heritage. Curiel was born in Indiana. Paul Ryan calls it textbook racism. Trump maintains the attacks for weeks.

  6. Trump agrees to $25M settlement — ten days after election

    Ten days after winning the presidency, Trump agrees to settle all three Trump University lawsuits for $25 million. He admits no wrongdoing. He had previously publicly vowed never to settle. The settlement provides compensation to approximately 5,000 defrauded students.

Sources

  1. Trump Agrees to Pay $25 Million in Trump University Settlement — The New York Times
  2. Trump University settles fraud claims for $25 million — The Washington Post
  3. Trump settles Trump University fraud lawsuits for $25 million — The Associated Press
  4. Attorney General Schneiderman Announces Historic $25 Million Settlement with Trump University — New York Attorney General's Office

How this record was published

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