Financial imagineer Donald Trump has bested mathematicians worldwide. His $175 million proposed bond is required to appeal a New York state civil fraud judgement. It relies on imaginary cash and an unapproved bonding company.
NY Attorney General Letitia James isn’t having it.
Her office is responsible for collecting on the $364 million civil fraud judgment issued against him by New York Supreme Court Justice Arthur Engoron in February.
Buzzkill prosecutor James has asked New York’s courts to reject Trump’s bond proposal.
James, as well as New York Supreme Court Judges Juan Merchan and Engoron: the latter-day Tinker to Evers to Chance. Play ball!
James asked the court to give Trump seven days to find an authentic bond. The former president told Engoron earlier that finding a $364 million bond was impossible. A New York appeals court reduced the required bond amount to $175 million.
In his appeal bond filing, Trump claimed he owned a Charles Schwab brokerage account holding more than $175 million in “cash.” Those are Trump’s quotation marks, and they're doing a lot of work.
As you might already be asking, if Trump has more than $175 million in “cash” squirreled away at Schwab, why is he asking to pay a legitimate bonding company additional millions for services that are superfluous?
The key words there are “legitimate bonding company.” It's not.
Trump’s surety is Knight Specialty Insurance Company.
Knight lacks the regulatory approval required to issue insurance in New York State.
Moreover, James added in an April 19 court filing, Knight has a total policyholder surplus of just $138 million. That's not enough.
James also pointed to Knight’s sketchy accounting methods, which Empire State regulators condemn.
Knight “sends 100% of its retained insurance risk to affiliates in the Cayman Islands, where lax regulations allow [the company] to use this risk transfer to reduce the liabilities it carries on its books in a way that artificially bolsters its surplus — a practice New York regulators have dubbed ‘shadow insurance’ and about which they have sounded the alarm,” James said.
Federal regulators have lambasted Knight, too.
“[U]nder the regulations that govern the placement of insurance on an excess lines basis, a licensed excess lines broker may place business with an unauthorized insurer like [Knight] only if it is satisfied that the insurer’s management is trustworthy and competent,” the attorney general added.
“[Knight] is not qualified to act as the surety under this standard because its management has been found by federal authorities to have operated affiliated companies within [its] holding company structure in violation of federal law on multiple occasions within the past several years,” James said.
Trump’s fly-by-Knight surety appears riskier than a Boeing 737 Max.
If the courts reject Trump’s bond, James stands ready to confiscate the former president’s assets, including his golf courses and office buildings.
Fore!