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Trump University Accused of Being a Racket in Lawsuit

Oct. 21 (Bloomberg) -- Donald Trump was accused of operating a racket by a California businessman who signed up for real estate programs at Trump University, which he alleges didn’t deliver on the promise of teaching Trump’s secrets.

Trump was accused of violations of the U.S. Racketeering Influenced and Corrupt Organizations Act in an Oct. 18 complaint filed in federal court in San Diego. The plaintiff, Art Cohen, who said he spent $1,495 on a three-day program and another $34,995 on a “Gold Elite” program, seeks to represent other buyers of the programs in a class-action lawsuit.

“Trump did not fulfill the promises he made to student-victims around the country,” Cohen said in the complaint. “He did not teach students his coveted real estate investing ‘secrets’ at the live events, he did not contribute in any meaningful way to the curriculum for the live events, and he did not handpick the live event seminar instructors and mentors.”

New York Attorney General Eric Schneiderman sued Trump in August, alleging he swindled students out of $40 million. The attorney general said Trump University, now known as the Trump Entrepreneur Initiative, operated as an unlicensed educational institution and misled students with promises that they would gain real estate investing expertise.

Alan Garten, litigation counsel with the Trump Organization, said the allegation was “frivolous” and called it an attempt to circumvent a judge’s order denying the plaintiff lawyers’ request to amend an existing lawsuit against Trump University with the RICO claim.

“They are judge shopping,” Garten said in a phone interview.

The case is Cohen v. Trump, 13-02519, U.S. District Court, Southern District of California (San Diego).

To contact the reporter on this story: Edvard Pettersson in Federal court in Los Angeles at

epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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