NY AG Letitia James asks judge to vacate Trump's $175 million bail in civil fraud case

New York Attorney General Letitia James is pushing the judge in former President Donald Trump's civil fraud case to vacate the $175 million bond Trump previously posted to appeal his civil trial to New York.

In his 26-page filing obtained by Fox News Digital, James questions whether the insurance company has sufficient funds to back it up.

Trump's bond was posted by California-based Knight Specialty Insurance Company (KSIC), but James argued that the insurer was “not authorized” to underwrite business in New York, saying it s t was a small insurer that was not authorized to write business in New York. and is not regulated by the State Department of Insurance, has never issued a bond in New York or within the preceding two years in any other jurisdiction, and has a total excess of insureds of only 138 millions of dollars.

The company has a total policyholder surplus of just $138 million, the filing shows. Under New York State law, small businesses like KSIC are not allowed to have exposure to debt, such as a bond, or any potential loss greater than 10% of their surplus.


Donald Trump and Letitia James

New York's attorney general says he is “ready” to ask a judge to seize former President Donald Trump's assets if he can't pay the $354 million judgment in his civil fraud case. (ABC News/Screenshot/Brendan McDermid-Pool/Getty Images)

“Based on KSIC's policyholder surplus in its most recent annual financial statement of $138,441,671, the loss limit on any risk KSIC is permitted to underwrite is $13.8 million,” the lawyers wrote. “The face amount of the bond exceeds this limit by $161.2 million.”

James also wrote in the filing that “KSIC is not qualified to act as a surety under this standard because federal authorities have determined that its management has operated affiliates within KSIC's holding company structure in violation of federal law on several occasions in the past several years.”

“KSIC does not now have the exclusive right to control the account and will not obtain such control unless and until it exercises this right with two days’ notice,” the filing states.

James also wrote that the Court should not rely on KSIC's financial summary attached to the bond as evidence that KSIC has sufficient capacity to justify posting a $175 million bond.

“This is because KSIC sends 100% of its retained insurance risk to subsidiaries in the Cayman Islands, where lax regulations allow KSIC to use this risk transfer to reduce the debts it carries on its books in a way that artificially bolsters its surplus, a practice New York regulators have dubbed 'phantom insurance' and have sounded the alarm,” the filing reads.

For these reasons, James writes that the Court should deny the motion and require Defendants to issue a substitute commitment within seven days of the Court's decision.


Letitia James and Donald Trump

Democratic New York Attorney General Letitia James and former President Donald Trump. (Getty Images)

In September, Judge Arthur Engoron ruled that Trump and the Trump Organization committed fraud by building a real estate empire by misleading banks, insurers and others by overvaluing his assets and exaggerating his net worth on documents used to make deals. transactions and obtain financing.

The judge also barred Donald Trump Jr. and Eric Trump from serving as an officer or director of any New York corporation or legal entity in New York for two years.

The former president has repeatedly criticized the case against him and denied any wrongdoing, calling it a “witch hunt.”

James filed a lawsuit against Trump, accusing Trump and the Trump Organization of fraudulent business practices. James claimed that Donald Jr., Ivanka and Eric, along with his associates and companies, committed “numerous acts of fraud and misrepresentation” on their financial statements.

Trump has pleaded not guilty to all charges.


The judge is expected to hold a hearing Monday to discuss the issues raised by the attorney general's office. The hearing is expected to take place alongside opening statements in Trump's criminal trial in New York.

Fox News' Brooke Singman and Timothy Nerozzi contributed to this report.


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