N.Y. Attorney General: Trump University Students 'Fleeced'

Donald Trump says fraud lawsuit against his realty school is unfounded.
2:31 | 08/26/13

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Transcript for N.Y. Attorney General: Trump University Students 'Fleeced'
We'll turn now to donald trump accused of fraud and slapped with a $40 million lawsuit by new york state's attorney general. The lawsuit going after his trump university which offered classes in real estate. It claims people who paid thousands of dollars for the classes were scammed. We will hear from donald trump live in just a moment but first abc's linzie janis is here with more on this story. Good morning, linzie. Reporter: Trump appeared in advertising for the school making false promises and called the operation one of the most blatant, quote, scams his office has seen. ♪ ♪ money money money ♪ Reporter: Inspired dozens of candidates on his tv show, "the apprentice." You're fired. You're fired. You're fired. Reporter: But now the donald himself is under fire for videos like this allegedlying to teach people his secrets but then not delivering. At trump university we teach success. That's what it's all about. Reporter: This morning new york's attorney general is suing saying the real estate mogul cheated chows. They were fleeced. They were taken, they were convinced by very persuasive motivational speakers and videos of trump that they would make money in real estate. They didn't get anything. Reporter: It alleges trump and others operated an elaborate bait and switch and asked some to raise their credit card limits for the next level. Bob gia who borrowed $35,000 to pay for his seminars and a retreat to help his son switch careers. They promised moo he that i would be one of the insiders and that whenever trump put up a condominium we would get first crack at getting into it. Reporter: He says not only did he not get that opportunity, he didn't even meet trump. Instead, he says he got this, a picture of himself next to a life-size poster of the billionaire. He took my self-respect and he embarrassed me. Reporter: Trump says the lawsuit has no merits and that 98% of students gave his courses an excellent rating. Trump's people say this is the ploy to gain political capital for yourself. That it's just a publicity stunt. The complaint speaks for itself. This was a lie from beginning to end. The only person guilty of a cheap publicity stunt is america's leading expert on cheap publicity stunt, donald trump. Reporter: He is suing for $40 million and that would pay back former students and tens of millions in fines. Trump and the other defendants are accused of operating that school without a license for six year, george.

This transcript has been automatically generated and may not be 100% accurate.

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