NY AG blasts Trump for ‘unreliable’ claim he can’t secure bond for $454 million fraud judgment

MANHATTAN (CN) — The New York Attorney General’s Office cast doubts over Donald Trump’s assertion that posting a bond for his half-billion-dollar civil fraud judgment is a “practical impossibility.”

Earlier this week Trump claimed he'd approached some 30 surety companies but none were willing to put up the bond money he needs to secure the judgment.

“As an initial matter, only a handful of sureties are approved by the U.S. Department of Treasury to underwrite bonds for a sum as high as the judgment amount,” Trump claimed in a Monday filing.

But the attorney general says that argument is based on the false premise that Trump needs a single, massive bond to cover what he owes. He should be more than able to get several smaller bonds to foot the bill, according to state lawyers.

“Defendants’ argument that obtaining a full bond is purportedly impossible is based on the false premise that they must obtain a single bond from a single surety for the entire judgment amount of $464 million,” state attorney Dennis Fan wrote in a Wednesday filing. “But appealing parties may bond large judgments by dividing the bond amount among multiple sureties, thereby limiting any individual surety’s risk to a smaller sum, such as $100 or $200 million apiece.”

Last month, New York Supreme Court Justice Arthur Engoron ordered Trump and his co-defendants to pay about $464 million for lying on yearly financial statements to swindle lenders. Trump himself is on the hook for roughly $454 million of that sum — which gains interest every day.

Trump is appealing Engoron’s judgment and is looking to stay its enforcement. To do that, he needs to post a bond to sit in escrow as the appeal plays out. 

Since the process began, Trump has voiced concerns over securing the entire judgment because of its size. He offered to post a $100 million bond, less than a quarter of what the court demands, which an appeals court shot down last month.

Fan said Wednesday that there is “nothing unusual about even billion-dollar judgments being fully bonded on appeal.” He cited four cases, with posted bonds ranging from $1 billion to $1.54 billion, in which the appealing parties did just that.

Trump blamed his bond difficulties, in part, on sureties being unwilling to accept his properties as collateral. But Fan says Trump has offered “no documentary evidence” that demonstrates which properties he offered or why the sureties were hesitant to accept them.

“As far as the court can infer, sureties may have refused to accept defendants’ specific holdings as collateral because using Mr. Trump’s real estate will generally need ‘a property appraisal’ and his holdings are not nearly as valuable as defendants claim,” Fan said.

Ironically, that’s precisely what got Trump into this situation. Engoron’s ruling found Trump inflated the value of his properties, including Mar-a-Lago, Trump Tower and Niketown, to boost his net worth. The court found that in reality those properties may have been worth a fraction of what Trump claimed.

Fan also blasted the “unreliable” sources Trump used to voice these concerns in the first place, namely two affidavits filed Monday to back up his claims that getting a bond would be “impossible.” One was from Connecticut mega broker Gary Giulietti, who Fan said failed to disclose that he was a paid expert witness for Trump. The other was from Trump Organization general counsel Alan Garten, whom the court found to be “personally involved in the fraudulent and illegal conduct.”

“And as the Trump Organization’s general counsel, Mr. Garten has professional interests in this litigation,” Fan added.

As it stands, Trump has until March 25 to secure the judgment before New York Attorney General Letitia James starts seizing his assets, putting a number of his state properties on the chopping block.

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