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Court revives fraud case against Trump University

A New York state appeals court on Tuesday gave the green light for a fraud case to advance against presidential candidate Donald Trump and the now-defunct Trump University.

"Today's decision means our entire fraud case can move forward," New York Attorney General Eric Schneiderman said in a statement.

In 2013, the New York state attorney general's office sued the real estate mogul and his for-profit investment school, accusing the billionaire and others of making phony claims to convince more than 5,000 people, including 600 New Yorkers, to "spend tens of thousands of dollars they couldn't afford for lessons they never got."

The civil lawsuit, which seeks at least $40 million in restitution, accused the school of engaging in illegal business practices by running an unlicensed educational institution from 2005 to 2011 and making false claims about its classes.

Trump University professors earned commissions to push training on students

The probe into Trump University came after dozens of people contacted authorities in New York, Illinois, Florida and Texas to voice concerns about the institution, which the suit contends lured potential students with the promise of a free seminar about real estate investing. That session ultimately served as a pitch for a three-day seminar costing $1,495, which then pitched pricey packages including so-called personal mentor programs at $35,000 a pop.

In 2014, a state court dismissed the fraud complaint, while granting summary judgment that Trump University had run as an unlicensed school in New York.

Tuesday's ruling, however, found the lower court had incorrectly dismissed the fraud complaint, while siding with the New York AG's contention that a six-year statute of limitations applied in the case, versus the three-year cutoff argued by the defendants.

During a recent rally in Arkansas, Trump called the litigation "a small deal, very small" and told supporters he could have settled but is continuing to fight on principle.