AG James demands court void Trump’s bond and proposes 1-week countdown before seizing assets

New York Attorney General Letitia James submitted a filing on Friday demanding that former President Donald Trump's bond to appeal his civil fraud judgment be thrown out. She also proposed a seven-day timeline for him to get a different guarantor before her office took more direct action.

In the 26-page filing submitted to Judge Arthur Engoron, James argued that Trump's initial bond guarantor, Knight Specialty Insurance Company (KSIC), was not able to cover the $175 million bond that an appeals court ruled was necessary to avoid having his assets seized by the New York AG's office. The filing showed that KSIC had more than $539 million in assets and over $400 million in current liabilities. This meant that KSIC has just $139 million in surplus funds — $36 million short of what is required to guarantee the bond.

James described KSIC in her filing as "a small insurer that is not authorized to write business in New York and thus not regulated by the state’s insurance department" that "had never before written a surety bond in New York or in the prior two years in any other jurisdiction."

READ MORE: 'Subprime loan king' who posted Trump's $175M bond has long history of 'shady business practices'

New York's top law enforcement official urged Judge Engoron to declare the bond to be voided and no longer in effect, and that the former president get a new replacement bond within seven days. Should he fail to find another third party capable of covering the $175 million bond, James would then legally be able to begin seizing his bank accounts and real estate.

KSIC is run by billionaire Don Hankey, who built a $7.4 billion fortune from the subprime auto loan industry. His company, Westlake Services, has previously been criticized for "targeting low-income customers with high-interest auto loans," according to an April report in the Daily Beast. Hankey is also tied to Trump's real estate empire, and has previously loaned the former president hundreds of millions of dollars to refinance his Doral golf resort and Trump Tower in New York City.

Trump's own Department of Justice previously named Westlake in a civil action, with federal prosecutors alleging the company "had systematically violated the rights of military employees over a period of several years." The DOJ added that Westlake had "repossessed dozens of vehicles belonging to military employees without obtaining the necessary court orders required under the law."

Hankey settled with the DOJ after paying $700,000 in restitution and $61,000 in fines to the federal government.

READ MORE: Trump's bond benefactor 'illegally' repo'd 'dozens of vehicles belonging to military employees'

James' own lawsuit against Trump ended in a judgment of roughly $355 million dollars in February, with interest of nearly $90 million. Trump proposed a counter-offer of $100 million, which James refused. That meant Trump was on the hook for nearly half a billion dollars in penalties, with that amount growing by more than $100,000 each day.

On the eve of the deadline for James to begin the process of having the court seize his assets, a New York appeals court stepped in and ruled Trump could avoid asset seizure by posting a $175 million bond. A bond hearing has been set for this coming Monday in Engoron's courtroom.

Click here to read James' filing in full (PDF link).

READ MORE: Letitia James issues 10-day ultimatum to company that guaranteed Trump's $175M bond