Even as Donald Trump’s first criminal trial commences in New York, the aftermath of a civil fraud case concluded in February continues to unfold. The central dispute concerns the bond associated with the case, which the First Judicial Department reduced to $175 million from an initial amount exceeding $500 million, inclusive of interest. The former president asserts that the Knight Specialty Insurance Company (KSIC), a company owned by California-based billionaire Don Hankey, is qualified to underwrite this bond. However, New York State’s Attorney General, Letitia James, begs to differ.
On April 1, Trump revealed on social media that he had located someone to guarantee the bond, acting as a deterrent to the Attorney General’s attempt to collect on the judgment pending an appeal. In Trump’s words, “I’ve just posted a 175 Million Dollar Bond with the sadly failing and very troubled State of New York…” However, the state dismissed Trump’s paperwork citing multiple defects, including the absence of a financial statement.
The revised filing from Knight Specialty Insurance Company raised a series of questions that were seemingly incongruent with the company’s self-proclaimed qualifications to underwrite the bond. In response, the Attorney General’s office filed an exception on April 4, stating that under Insurance Law § 1111, providing a surety bond necessitates a certificate of qualification from the New York State Department of Financial Services – a certification KSIC does not possess.
In response to the exception filed by the Attorney General, Trump and Knight submitted an indignant brief, calling for sanctions due to the questioning of the bond. They assured the court that the bond is sufficiently capitalized by Trump himself, who granted Knight a lien on an account at Schwab containing $175 million.
However, there is an emerging skepticism connected with Trump’s argument, specifically around the possibility that he is the guarantor of his own surety bond, and the blurring of lines between KSIC and its affiliated entity, Knight Insurance Company. Diana Florence, a veteran from the Manhattan District Attorney’s Office, voiced her concerns, stating it’s a rare occurrence for a defendant to submit a bond of this type without inviting more severe consequences as licensing requirements are not optional.
In spite of these controversies, the presiding Justice Arthur Engoron, has not yet decided to take the case off his calendar for the hearing scheduled on April 22.
This article was originally published on Above the Law.