Trump’s $175m bond in fraud case should be voided, says New York attorney general

New York Attorney General Letitia James has asked the judge in Donald Trump’s civil fraud case to void the whopping $175m bond posted previously by the former president, after questioning whether the insurance company has sufficient funds to back it up.

Mr Trump’s bond was posted by California-based Knight Specialty Insurance Company (KSIC), and Ms James raised concerns that the insurer was “not authorised” to write business in New York.

In a sprawling 26-page filing posted on Friday ahead of a pre-scheduled hearing next week she also argued that the collateral put up by the former president should be under the full control of the company.

Ms James said that the KSIC “had never before written a surety bond in New York or in the prior two years in any other jurisdiction, and has a total policy holder surplus of just $138 million,” according to the documents obtained by NBC.

In his civil fraud trial, one of many legal battles facing the former president, Mr Trump, his two eldest sons and their fellow Trump Organization executives were found liable for illegally inflating the value of company assets to obtain favourable terms from banks and insurers.

The former president was hit with penalties of $354m plus more than $110m in interest.

But after Judge Arthur Engoron handed down the verdict on 16 February, the Republican presidential candidate’s attorneys complained that they were finding it a “practical impossibility” to raise the full $464m for the bond needed to appeal the case, after approaching more than 30 surety companies through four separate brokerages.

It left Mr Trump facing the prospect of seeing the centre pieces of his New York real estate empire repossessed by Ms James, before the panel of appellate division judges granted him the bond as a lifeline.

Mr Trump posted the $175m bond on Easter Monday with the help of KSIC – preventing Ms James from seizing his assets and buying him time before the appeals court takes his case in September at the earliest.

Knight Specialty is owned by California businessman Don Hankey, whom MSNBC legal correspondent Lisa Rubin reports is known as “the king of subprime car loans”, specialising in lending to automobile buyers with poor credit ratings at high rates of interest.

“Hankey repossesses around 250 cars every day and his debt collectors have been known to spoof their caller ID so it appears that they are calling from the local pizzeria,” Forbes wrote of him in 2015.

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  • Source of information and images “independent”

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