In documents submitted late Monday night, lawyers for the former president said the cash sum Trump posted to stop New York Attorney General Letitia James from seizing his assets was secured by Knight Specialty Insurance Company (KSIC) and is collateralized by Trump’s Charles Schwab account, which contains just over $175 million in cash.
Trump was fined $454 million after Judge Arthur Engoron ruled the former president had filed fraudulent financial statements that inflated the value of his properties and assets for years. An appeals court lowered the bond Trump needed to post to prevent his assets from being seized while he appealed the decision to $175 million, which Trump posted on April 1.
Details of how Trump and KSIC were able to secure the money and prove they could guarantee the cash have been revealed in the motion submitted on Monday night, shortly before the deadline. Former FBI General Counsel Andrew Weissmann suggested there was something “fishy” about the arrangement between Trump and KSIC to secure the bond.
WIN MCNAMEE/GETTY IMAGES
“The $175 million bond is collateralized by $175,304,075.95 in cash held in a Charles Schwab account pledged to KSIC, and KSIC has the right to exercise control over that account,” the court filings said
The company that provided Donald Trump with a $175 million bond in his New York civil fraud case said it had “substantial financial credibility,” and rejected a suggestion by the state’s attorney general that it wasn’t qualified to provide help.
Trump obtained the bond from Knight Specialty Insurance Co as a guarantee so he could appeal a $454.2 million verdict that state Attorney General Letitia James won in February.
James objected to the bond on April 4 because Knight lacked a “certificate of qualification,” and demanded that the insurer or Trump’s lawyers “justify” the bond within 10 days. The insurer is owned by billionaire Trump supporter Don Hankey.
In a Monday night filing in a state court in Manhattan, Knight said the bond was fully backed by cash in a Charles Schwab account, and that it could access nearly $2.2 billion of assets at its parent company if something went wrong.
Knight, which is licensed in Delaware, also said it has since 2021 had authority in New York to provide the type of bond Trump secured.
“By any standard, KSIC has therefore provided assurance to (James) that she can collect the designated amount if the award is affirmed on appeal,” Knight said. “KSIC was and is authorized to issue the bond.”
Lawyers for Trump, his adult sons and the Trump Organization signed Knight’s filing.
James’ office declined to comment on Tuesday. A hearing is scheduled for April 22.
Hankey made his fortune in subprime car loans, with some regulators criticizing his companies’ debt collection tactics. He is worth $7.4 billion, according to Forbes magazine.
Justice Arthur Engoron issued the $454.2 million verdict after finding that Trump fraudulently inflated his net worth and real estate assets to deceive banks and insurers into providing better terms.
Trump was originally required to obtain a guarantee for the entire verdict while he appeals, but a state appeals court let him post a smaller bond.
