New York Attorney General Letitia James has asked the judge in former President Donald Trump’s civil fraud case to vacate the $175 million bail that Trump previously filed to appeal his New York civil suit. I am asking you to do so.
In a 26-page filing obtained by Fox News Digital, Ms. James questions whether the insurance company has enough money to back it up.
President Trump’s bail was issued by California-based Knight Specialty Insurance Company (KSIC), which James said is a small insurance company not authorized to do business in New York. It claimed to be an insurance company and was not authorized to do business in New York. It is not regulated by the state Department of Insurance, has not issued bonds in New York or any other jurisdiction in the past two years, and has a total policyholder surplus of only $138 million.
The company’s total policyholder surplus is just $138 million, according to filings. According to New York state law, small companies like KSIC are not allowed to take on debt, such as bonds, or have potential losses exceeding 10% of their retained earnings.
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“Based on policyholder surplus of $138,441,671 in KSIC’s most recent annual financial statements, KSIC’s maximum loss limit for any one risk is $13.8 million,” the attorneys wrote. ing. “The face value of the bonds exceeds this limit by $161.2 million.”
James also said in the filing that “KSIC has been found by federal authorities to have operated affiliates within KSIC’s holding company structure on multiple occasions in the past in violation of federal law. , KSIC is not qualified to act as a guarantor based on this standard.” A few years. “
“KSIC does not currently have the exclusive right to control the account and will not obtain such control unless it exercises its right with two days’ notice,” the filing states. .
Mr. James also stated that the court should not rely on KSIC’s financial summary attached to the bond as evidence that KSIC has sufficient capacity to justify issuing the $175 million bond. I also wrote
“That is because KSIC transfers 100% of the insurance risk it holds to its affiliates in the Cayman Islands, where lax regulations mean that KSIC uses this risk transfer to artificially increase its surplus. “This is a practice that New York regulators have dubbed “shadow insurance” and are sounding the alarm on,” the filing said. ing.
For these reasons, James wrote, the court should deny the motion and require the defendants to submit an alternative proposal within seven days of the court’s decision.
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In September, Judge Arthur Engoron ruled that Trump and the Trump Organization defrauded banks, insurance companies and others by overstating their assets and exaggerating their net worth on documents used to make deals and secure financing, and that Trump and the Trump Organization had built up a real estate empire. The court ruled that the company had committed fraud while building the company.
The judge also barred Donald Trump Jr. and Eric Trump from serving as officers or directors of any New York business or corporation for two years.
The former president has repeatedly denounced the lawsuit, denying any wrongdoing and calling it a “witch hunt.”
Mr. James filed a lawsuit against Mr. Trump, accusing him and the Trump Organization of deceptive business practices. James alleged that Donald Jr., Ivanka, Eric, his colleagues and the company committed “numerous acts of fraud and misrepresentation” with respect to the financial statements.
Mr. Trump has pleaded not guilty to all charges.
The judge is scheduled to hold a hearing on Monday to discuss the issues raised by the attorney general’s office. The hearing will be held in conjunction with President Trump’s opening statement in his New York criminal trial.
FOX News’ Brooke Singman and Timothy Nerozzi contributed to this report.
