Trump's $175 million bond should be REJECTED in fraud trial because the insurance company hasn't 'backed' it properly, New York Attorney General Letitia James tells judge

The New York Attorney General's office asked a judge to void the $175 million bond secured in the New York civil fraud case.

In a filing on Friday, AG Letitia James' office said Trump and other defendants in the case failed to show there is enough identifiable collateral to back the bond. 

The attorneys asked Judge Arthur Engoron to require Trump and other defendants to put up a replacement bond within seven days of ruling on the issue.

It comes after the James raised doubts earlier this month about the 'sufficiency' of the $175 million bond put up as Trump goes forward with the appeal in his New York fraud case.

New York Attorney General Letitia James' office asked the judge to reject Trump's $175 million bond in civil fraud case

Trump in court Friday for a separate case. The ex-president was found to have inflated the value of assets to receive more favorable loans in the New York civil fraud case and had to put up a $175 million bond while he appeals

The 26-page filing on Friday notes rather than Trump selecting a large national insurance company licensed in New York, he chose instead Knight Specialty Insurance Company (KSIC)  'a small insurer that is not authorized to write business in New York and thus not regulated by the state's insurance department.'

It stated the company has a total policyholder surplus of just $138 million and that Trump and KSIC failed to justify KSIC as surety 'on this extraordinarily large undertaking' for a number for reasons. 

Earlier this month, James raised doubts about the 'sufficiency' of the $175 million bond given by California billionaire Don Hankey's company as the clock ticked down on Trump's deadline to post bond in the case.

With time running out, James' signaled her office was was willing to start seizing Trump's properties. The ex-president's lawyers told the court he was having trouble finding a company willing to secure an even larger $464 million bond.  

Hankey told DailyMail.com he approached Trump after hearing about his efforts to obtain bond for a larger court judgment, then issued the bond for the lower amount after Trump's team came back to him.

Billionaire Don Hankey is known as the 'king of the subprime car loan.' Trump's appeal bond was provided by Hankey’s Knight Specialty Insurance Company

James earlier this month gave Trump's lawyers an additional 10 days to 'justify' the bond, as she sought assurances the firm would be able to fulfill its obligation to back it up or pay if Trump defaults if he were to lose his court appeal. 

KSIC provided the court with a financial statement as of December 31, 2023 that listed assets of $539 million, and a 'surplus to policy holders' of $138 million.

In the filing on Friday, the Attorney General's office argued they failed to meet their burden of establishing there is sufficiently secure collateral backing the bond and said the court should not rely on Knight Insurance's financial summary as evidence. 

The NY Attorney General's office also said Knight Insurance is not qualified to act as a surety because federal authorities have previously found its management had operated companies in violation of federal law on multiple occasions in the past several years.  

A hearing for the bond dispute is expected to take place on Monday. 

It comes as opening statements are also set to begin on Monday in Trump's separate hush money criminal trial.