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New York’s attorney general urged a judge to invalidate a $175 million bond posted by Donald Trump to stop enforcement of a half-billion-dollar fraud judgment against the former president and its companies, arguing that it is not backed by sufficient guarantees or a duly licensed company.
In a filing Friday afternoon, the office of Letitia James — who filed a civil suit in which Trump was found to have grossly overestimated the value of his real estate empire — said there were only ” vague, incomplete and inconclusive evidence” which was sufficient. cash had been set aside to ensure that the bond chosen by the former president would not default on the bond.
The attorney general’s office suggested that the $175 million bond, underwritten by Knight Specialty Insurance Company, should be considered ineffective, and that Trump still had a week to find another backer. If he fails to post a valid bond, James could begin seizing his properties to satisfy the judgment. A hearing on the matter is scheduled for Monday.
An appeals court reduced the bail amount to $175 million after Trump’s lawyers said it would be “impossible” to obtain bail for the full amount of the judgment. He released it earlier this month, backed by Knight, one of several companies owned by Los Angeles-based subprime auto loan billionaire Don Hankey that lacks the required “certificate of qualification” to be a valid bond in New York.
In court filings a few days later, Knight said it was a “respected and well-capitalized insurer” and that the bond was guaranteed by a Charles Schwab brokerage account owned by the Donald J Trump Revocable Trust, which contains just over $175 million in cash. . But the attorney general’s office said it received only one screenshot of the account balance. The Trust essentially retained ownership of the account and could withdraw funds at any time, James’ office added.
The attorney general’s lawyers further claimed that Knight Insurance sent “100 percent of its retained insurance risk to subsidiaries in the Cayman Islands,” where “lax regulations” allowed the company to increase its excess, making it appear safer than it actually is.
An attorney for Knight did not immediately respond to a request for comment.
Adam Pollock, a New York lawyer who worked in the attorney general’s office, said the record showed James hesitated to “take too aggressive a stance” and that the request for new bail was “an eminently reasonable request.” .
Largest Company Controlled by Hankey’s The Hankey Group, Westlake Financial, is the nation’s largest lender to independent, oft-used auto dealerships, enabling dealerships to offer loans directly to car buyers at the time of purchase . Hankey’s businesses thrived during the coronavirus pandemic as consumers, aided by government aid, had liquidity and car prices were pushed up by supply chain problems.
The attorney general’s office added that Knight’s management had been “found by federal authorities to have operated affiliates within KSIC’s holding company structure in violation of federal law on multiple occasions over the past several years.” “.
He was referring to a 2015 case in which the U.S. Consumer Financial Protection Bureau ordered two of Hankey’s companies, Westlake Services and Wilshire Consumer Credit, to collectively pay nearly $50 million in restitution and fines. . They also cited a settlement federal prosecutors reached in 2017 with two Hankey Group companies, which paid nearly $761,000 to resolve allegations that they illegally repossessed dozens of vehicles belonging to former members of the American armed forces.
Trump, the presumptive Republican presidential nominee, is appealing the civil fraud ruling as he stands trial in Manhattan criminal court for allegedly paying a porn actor in the run-up to the 2016 election to conceal an affair. This is one of four criminal charges he faces, in addition to various civil suits.