Judge Arthur Engoron ruled Monday that Trump’s $175 million bond in his New York fraud case using a California insurance company will be allowed to stand, as lawyer Alina Habba fumed that AG Letitia James thinks Trump’s money ‘isn’t green enough.’
The critical decision rejecting a push by James’ office to reject the bond followed an hour-long hearing that coincided with the start of Trump’s criminal trial over the payoff to porn star Stormy Daniels.
Trump’s nod from the civil court judge came on a day prosecutors were airing tawdry details of the ‘hush’ money payments to the porn star, where Trump reimbursed former fixer Michael Cohen for $130,000 in payments that got marked down as company legal expenses.
Former National Enquirer publisher David Pecker took the stand after prosecutors sketched out a ‘catch and kill’ operation, while referencing tape recordings of discussions involving Trump and Cohen to pay off former Playboy model Karen McDougal, who claims she had a year-long romantic affair with Trump.
Prosecutors accused Trump of running a criminal plot to ‘corrupt’ the 2016 election, and the former president was forced to listen to a transcript of the infamous ‘p****’ tape that surfaced weeks before Election Day in 2016.
But the first day of Trump’s sensational trial fizzled Monday afternoon after Judge Juan Merchan sent jurors home early for Passover, with one unlucky alternate juror headed for an emergency dental appointment.
Judge Engoron’s decision on Trump’s bond prevents James from taking dramatic actions such as seizing Trump properties as a way to ensure payment pending Trump’s appeal.
The court ruled that Trump can rely on California-based Knight Specialty Insurance Co. while placing new strings on his $175 million in collateral for the bond, after receiving an approach from billionaire Don Hankey, known as the ‘king of sub-prime car loans.’
Trump lawyer Alina Habba called the latest gymnastics ‘a complete waste of time and taxpayer money, once again’ in blistering comments following the decision, speaking outside the Manhattan courtroom where Trump’s separate criminal trial is underway.
She tied the two cases together, echoing Trump’s own claim that he faced a ‘witch hunt’ coordinated in Washington, DC, in a case where Engoron ruled that ‘the frauds found here leap off the page and shock the conscience’ and imposed a penalty that would have had him pay $454 million. An appeals court panel then lowered to the $175 million amount.
‘The fact that we have two courts, not one criminal and civil being used against one man because they cannot beat him in the polls is a disgrace to the American judicial system,’ she said.
‘Ms. James wanted to argue and say that our cash somehow isn’t green enough,’ said Habba. ‘This is where your tax dollars are going to America, right here, witch hunt after witch hunt.’
‘He should not have two teams of lawyers here today. He should not even be here today because he did nothing wrong. It is the epitome of a witch hunt.’
The court did impose conditions, amid concerns raised by James’ office that the money if invested could go down, or Trump could be able to remove it, while also raising concerns about Knight Insurance and its ability to back it.
Knight would have to retain ‘exclusive control’ over the Charles Schwab account, and would provide monthly statements showing the account was sufficient to satisfy the bond should the ruling against Trump stand. The court itself would have to approve any changes to the agreement, which lawyers for the AG’s office and Trump worked out in the Monday court hearing.
Trump used the historic start of his Stormy Daniels trial to blast AG Letitia James after she raised questions about the $175 million bond for his New York fraud trial.
He called James the ‘worst attorney general in the country,’ and once again called Judge Arthur Engoron ‘crazed’ as he scrutinizes the insurance company who provided the bond while he appeals the court judgement against him.
Trump fumed that he had ‘put up’ the money, after billionaire Don Hankey said Trump used cash as collateral, but the AG said Trump would still be able to withdraw the money.
‘I put up $175 million in cash and she’s questioning the bonding company,’ Trump said inside Manhattan criminal court.
‘Well, when you put up cash and the number is 175, which is what we’re supposed to be putting up, but I give it in cash, she shouldn’t be complaining about the bonding company.’
He notably focused his comments on financial battle taking place in another courtroom, even as he prepared to site inside Judge Juan Merchan’s courtroom at the start of a trial where ex-publisher of the National Enquirer was expected to testify about tawdry ‘catch and kill’ operations.
Trump said doubts that James’ office raised about the insurance company providing the bond shouldn’t matter since he has ‘plenty of money.’
‘The bonding company would be good for it because I put up the money and I have plenty of money to put up, but nobody is going to be putting up with this,’ Trump said.
Then he revisited refrains about how New York’s economy as businesses decide to stay away as a response to the state going after his business empire.
”Nobody’s going to be listing or coming to New York any more,’ he said, in a possible reference to companies listing on the New York exchanges.
‘And I don’t think she’s complaining about me for the first time ever,’ he said of James. ‘She’s complaining about the company. But why would you be doing that when I put up the money.’
She called Engoron, who imposed a gag order on him before Judge Merchan imposed one as well, an ‘extremely grazed judge,’ but otherwise checked some of his remarks.
‘I don’t have to mention names, I want to be nice. I want to be very nice,’ he said.
Trump courthouse comments came as the insurer that provided him the $175 million bond was set to try to convince a state judge on Monday that it is qualified and financially strong enough to issue the guarantee.
The bond issued by Knight Specialty Insurance Co is meant to secure Trump’s compliance with a $454.2 million judgment won by state Attorney General Letitia James if he does not succeed in an appeal.
Justice Arthur Engoron imposed the penalty after finding that Trump, the Republican presidential candidate, fraudulently inflated his net worth and real estate assets to deceive banks and insurers into providing better terms.
James, a Democrat, challenged the bond this month, saying Knight lacked a ‘certificate of qualification.’ The state attorney general filed court papers on Friday questioning whether the bond is backed by secure assets.
Knight is owned by billionaire Trump supporter Don Hankey.
Engoron will consider James’ objection at a civil court hearing in Manhattan, at the same time jurors down the street are expected to hear opening arguments in Trump’s criminal hush money trial.
Knight has said it was authorized to issue the bond, which is fully backed by cash held in a Charles Schwab account pledged to the insurer, and that it could access nearly $2.2 billion of assets at its parent company if something went wrong.
James said in court papers that a Trump-owned trust still controls the account, and that Knight’s own financial arrangements appear insufficient to cover the amount of the bond.
Hankey previously said in an interview that he charged Trump a low fee as he did not anticipate problems.
‘We thought it would be an easy procedure that wouldn’t involve other legal problems and it’s not turning out that way,’ he said. ‘We probably didn’t charge enough.’
Hankey made his fortune in subprime car loans, with some regulators criticizing his companies’ debt collection tactics. He is worth $7.4 billion, according to Forbes magazine.
Trump was originally required to obtain a guarantee for the entire verdict while he appeals, but a state appeals court let him post a smaller bond.
(Reporting by Jody Godoy in New York; Editing by Nick Zieminski and Bill Berkrot)
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Geoff Earle
