New York Attorney General Letitia James is pressuring the judge in former President Donald Trump's civil fraud case to vacate the $175 million bail Trump previously posted to appeal of his civil trial in New York.
In her 26-page filing obtained by Fox News Digital, James questions whether the insurance company has enough money to support her.
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, emphasizing that it s t was a small insurance company that was not licensed to write business in New York. New York. It is not regulated by the State Department of Insurance, has never issued a bond in New York or in the preceding two years in any other jurisdiction, and has a gross policyholder surplus 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 bonds, or any potential loss greater than 10% of their surplus.
James also wrote in the filing that "KSIC is not qualified to act as a guarantor under this standard because federal authorities have found that its management operated subsidiaries within KSIC's holding company structure in violation of federal law several times in recent years. "
“KSIC now no longer has 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 had sufficient capacity to justify issuing $175 million in bonds.
“This is because KSIC transfers 100% of its retained insurance risk to its subsidiaries in the Cayman Islands, and lax regulations allow KSIC to use this transfer of risk to reduce the debts it has on its books in a way that artificially increases its surplus, a practice that New York regulators have called "phantom insurance" and have sounded the alarm about.
In September, Judge Arthur Engoron ruled that Trump and the Trump Organization committed fraud by building a real estate empire by misleading banks, insurance companies and others by overestimating his assets and exaggerating his net worth on paper used to conclude 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 New York legal entity for two years.
The former president has repeatedly criticized the accusations 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 alleged that Donald Jr., Ivanka and Eric, along with his associates and companies, committed "numerous acts of fraud and misrepresentations" in their financial statements.
Trump has pleaded not guilty to all charges against him.
The judge is expected to hold a hearing Monday to discuss the issues raised by the prosecutor's office. The hearing is expected to be held simultaneously with opening statements in Trump's criminal trial in New York.