Former President Donald Trump’s effort to challenge his massive civil fraud conviction itself appears to rely on deception, The Daily Beast reported Monday.
Last week, Trump posted a $175 million bond to appeal his $454 million fraud conviction in New York — this, after his lawyers claimed he was unable to find anyone willing to guarantee he would actually pay the full amount. In order to post that bond, the former president turned to Knight Speciality Insurance Company, led by billionaire Don Hankey, described by MSNBC legal analyst Lisa Rubin as the “king of subprime car loans.”
But according to former regulators and other legal experts, the bond is highly irregular. Per a legal filing, it amounts to little more than a promise that Trump himself could pay the full cost of the bond if he ultimately loses his appeal, The Daily Beast reported, noting that such an arrangement effectively negates “the whole point of an insurance company guarantee.”
It does not appear that Knight Specialty Insurance Co. could even cover the bond if it wanted: according to a court filing, the company has financial reserves of just $138 million. And while a related corporate entity claims a financial surplus of $1 billion, the court filing does not explicitly state that it would be liable.
“Based on the financial statement provided, Knight Specialty is providing a bond that is one-third of its total assets and greater than its surplus, which is incomprehensible for a carrier to underwrite,” Maria T. Vullo, a law professor at Fordham University who previously served as New York’s top financial regulator, told the publication.
Indeed, experts who reviewed the bond filing said it appears to state that it is "Donald J. Trump" who "shall pay" any bond, an arrangement that is far from normal.
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"This is not common," N. Alex Hanley, CEO of the civil bond company Jurisco, told the outlet.
New York Attorney General Letitia James also has questions about the bond and its issuer’s ability to pay it, stating in a legal filing last week that she “takes exception to the sufficiency of the surety to the undertaking.” A hearing on Trump’s bond and the potential issues with it is scheduled for April 22.
Hankey, for his part, in a recent interview with Reuters insisted that he had accepted collateral for the $175 million bond. But he added that he was not sure exactly what the source of it was.
"I don't know if it came from Donald Trump or from Donald Trump and supporters," he said, adding that he now regrets only charging a Trump a "low fee" for his services.
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