Trump’s $175m fraud bond thrown into doubt as New York attorney general questions insurer

Donald Trump’s $175m bond in his New York civil fraud case has been thrown into doubt by New York Attorney General Letitia James after she filed a notice asking for evidence that the out-of-state firm that underwrote it really has the money to pay up.

Ms James’s office submitted a “notice of exception to the sufficiency of the surety” on Thursday asking for further proof that California-based Knight Specialty Insurance Company (KSIC) has the capital to proceed on the former president’s behalf.

KSIC is not regulated by New York state, which means that it is not authorised to issue surety bonds in the Empire State and therefore cannot obtain a certificate from the New York Department of Financial Services, which is customarily part of any bond package.

“Defendants or KSIC shall file a motion to justify the surety within 10 days of the service of this notice, failing which the bond shall be without effect, except that the surety shall remain liable on the bond until a new undertaking is given and allowed,” the notice read.

Judge Arthur Engoron – who presided over the original three-month trial that ended on 16 February with Mr Trump and his fellow Trump Organization executives being found liable for illegally inflating the value of company assets to obtain favourable terms from lenders – has already moved to schedule a hearing on the matter for 22 April.

Mr Trump finally placed the bond on Easter Monday after a panel of New York appeals court justices granted him a 10-day extension on the original 25 March deadline and ruled that he need only pay $175m – a portion of the full $464m bond representing the value of the entire judgement against him.

KSIC is owned by Republican billionaire Don Hankey – a man dubbed “the king of