Donald Trump’s pre-trial talking points before he entered the criminal courthouse this morning were the usual drivel about how he was only there because Joe Biden didn’t want him on the campaign trail, bla bla. The usual, and you can see the tape below. But he harped on one point, at least six times, as you will see. And that is that he gave “cash” as collateral to the Knight Surety Company. He’s quite adamant about that point.

What is being questioned in the hearing in Justice Arthur Engoron’s court today, among other things, is whether a Charles Schwab account, which was valued at having $175M in 1994, still has that much money in it. Evidently, that’s the brokerage account which Trump put up as collateral, although Don Hankey, at the time said that cash “and other collateral” was put up to secure the bond. Hankey didn’t specify what the “other collateral” was. This is what Seth Abramson has determined in his extensive research of this matter.

  1. Knight is part of the Hankey Group, which has been flagged by federal regulators for serious and systemic misconduct in the past;
  2. Knight, in the corrected filing of its bond—its initial filing was missing several required elements—showed 
  3. Knight Specialty Insurance Company lacks the capital to back the bond;
  4. Knight is not authorized to write sureties in the State of New York;
  5. Knight has not been subject to regulation by New York state to ensure its past and present compliance with business standards in the state;
  6. the company has never written a surety bond in New York state;
  7. it’s been at least two years since Knight wrote a surety bond in any state;
  8. $537 million in total assets as of December 31, 2023, but its cash-on-hand was just $138 million, an amount less than the face value of the bond (which is $175 million), a capitalization defect that cannot be resolved in the way Knight claims it can, by counting the capitalization of Knight’s parent company (which isn’t a party to the bond);
  9. Knight wrote the bond in a way that makes it null and void, as it doesn’t actually put Knight on the hook for the full $454 million if Trump does not pay;

Pause here. Letitia James is unquestionably aware of this and how is this bond an indemnification if, at the end of the day, something goes south and then there is no money to back the state’s judgment? That’s not an indemnification. At best, this is another one of Trump’s smoke screens, making it seem that something is in place, which should be in place, but which in fact isn’t. It’s a facade wall in the circus, a flat, it looks solid from a distance but you take away the sandbags and it falls right down.

Abramson continues:

  1. the Schwab fund, known as the DJT Trust, is still under Mr. Trump’s rather than Mr. Hankey’s control, and the New York Attorney General understandably argues that the trust must be fully signed over to Knight Specialty Insurance Company for either Trump or Knight to contend that the bond has been properly collateralized (as the NYAG seems to presume, as does Proof—see more below—that Trump actually can’t sign over the Schwab fund, for reasons he’s hiding from the court); 

This gets stranger still. As you go down this checklist you’ll see that Trump could actually withdraw money from the fund by giving a few days notice of his intent to do so. So where is there any indemnification, if Trump can spend the money at will?

  1. because the fund in question allegedly has only $175.3 million in it, the NYAG argues that should Trump (a) make withdrawals from the fund, (b) replace assets in the fund with others subject to the whims of the stock market, or simply (c) experience stock-market losses sufficient to bring the fund under $175 million—which is so likely to happen, given the fund’s current alleged value, that it actually may be happening, in real time, several times every day—it may not be properly collateralizing a $175 million debt;
  2. Hankey admits that he “didn’t charge enough” for the bond—though he won’t disclose what he actually charged his political hero, if anything at all—which the NYAG argues means that Trump could make money on the bond deal, as the fund Knight inexplicably allowed him to retain ownership of could make more in interest than that in a hyothetical second Trump administration);
  3. Knight has failed to meet a restriction under New York insurance law that bars companies from putting more than 10% of their capital at risk, and since Knight has only a $138 million surplus the bond deal is already in violation of state law;
  4. as summarized by CBS News, the NYAG also argues “that Knight relies on risk transfer practices that work to ‘artificially’ bolster its surplus” and that these practices too might be in violation of New York law;
  5. separate from any pending federal investigations of any component of the Hankey Group, the NYAG broadly “argues that Knight’s management is untrustworthy, [having] violat[ed] federal law ‘on multiple occasions over the last several years’”;
  6. under the implied catch-all provision of New York state’s so-called justification protocols, Trump has not made the case that this ensurer is the appropriate one for this bond, as the court must—as a matter of equity—find the surety suitable for the equitable (rather than, in legal parlance, merely the “legal”) interest New York state has in being paid the funds it is owed by Trump, his children, and the Trump Organization (and indeed, it was in contemplation of this payment that Judge Engoron showed mercy to the Trump Organization, most notably by not issuing a “corporate death penalty” that would forbid it from ever again doing business in New York);
  7. it is not clear that any of the details of this bond were run past Judge Barbara Jones, the independent Trump Organization monitor Judge Engoron ordered, who is supposed to have unfettered visibility into any transaction the Trump Organization engages in as well as the ability to veto such transactions (or to bring them to the court for review, if Trump Organization executives object to her veto);
  8. even if Knight’s creative, Cayman Islands-hosted accounting practices are not illegal, the fact that—as ABC News reports—they “use affiliates in the Cayman Islands to reduce the liabilities shown on their books” means that it’s impossible for the NYAG to properly investigate Knight’s financials on the short turnaround this case requires of it (as that investigation would necessarily be international);
  9. the notice provision in the Knight Bond requires that Knight give Trump “two days’ notice” before withdrawing any money from the Schwab fund, which appears to be calculated to ensure that Trump could withdraw all money from the fund during that period, and thereby ensure that all collateral for the bond (and all payment to the State of New York) would suddenly disappear from the view of the NYAG (and perhaps even from the reach of New York state courts, were it to be summarily transferred overseas);
  10. Trump and his legal team may have lied to the New York appellate courts to get this bond in the first instance, as Hankey recently revealed (see the prior Proof reports in the Bibiography for more) that he told Trump he would work with him on a $454 million bond before Trump and his team made their representation to an appellate court in New York that they couldn’t find anyone to do so (which false claim may have been what caused that appellate court to drop Trump’s bond from $454 million to $175 million in the first instance, meaning that the bond should now be restored to its prior level and Trump’s lawyers investigated by the New York State Bar Association for misleading the courts or, less egregiously but still unethically, failing in their inalterable professional duty to correct the record);
  11. separate from the “security” of the still-Trump-held collateral, the NYAG opines that the Schwab fund is inadequately “ascertainable” as to its value to qualify as legally sufficient collateral, meaning that a fund with stocks in it definitionally can’t be given a firm value, and when the value in question is so close to the minimum value the case at bar requires, this creates a legal insufficiency that can only be remedied with a different form of collateralization;
  12. separate from matters of “security” and “ascertainability,” the NYAG alleges that the financial information thus far provided regarding the collateralization of the bond is “vague, incomplete, and inconclusive” (which would mean that Trump must first provide much more hard data and paperwork relating to the DJT Trust before a court can approve it as a source fund for any collateralization; as FT reports, Trump has only provided “one screenshot” of the trust’s account balance);
  13. there may be other individuals—including Trump’s children—with access to and authority over the DJT Trust (and if even a single additional person has authority over those funds, it means that Trump is estopped from representing that he can assure the court that the trust will have the required funds in it when the time to pay New York state finally comes, if it comes); and
  14. because the Hankey Group has repeatedly had to pay tens of millions of dollars in federal fines due to its past misconduct, the court can’t have any certainty that it won’t have to do so once again between today’s date and the date on which it suddenly needs to cover Trump’s judgment—should Trump refuse to pay or be unable to pay on that date—meaning that even if Knight were collateralized properly in 2024, its past misconduct suggests it might not be so in a future year.

This is a basic sketch of the issues that Justice Engoron will be going over. And if the bond is rejected, and you can certainly see why it might be, then there’s a possibility that Letitia James could begin seizing assets. This could happen while Trump is sitting, or snoozing rather, in criminal court.

Complete fiasco. Yet this man is going to be on the ticket for president of these United States as a Republican. And all the Republicans, even the ones he insults regularly, like Bill Barr, are going to vote for him.

Here’s his dirge outside the courthouse this morning.

Then he went inside, took his seat, and began to nod off a few hours later. Does somebody have a cup of coffee and an amphetamine to give this man? This sleep issue is getting more than a bit concerning. How can somebody nod off when their personal liberty is on the line?

Help keep the site running, consider supporting.


  1. The Schwab account was valued at $175 million 30 years ago. That doesn’t necessarily seem to current value. He could have removed funds anytime in that period, or is there something I’m missing.

  2. James is going to fondly remember this day. Not only is trump in more trouble, Hankey may be as well for participating in a scheme to defraud the state. This bond application will fail and the snoring gasbag will be extremely lucky to get a second chance.


Please enter your comment!
Please enter your name here

The maximum upload file size: 128 MB. You can upload: image, audio, video, document, spreadsheet, interactive, text, archive, code, other. Links to YouTube, Facebook, Twitter and other services inserted in the comment text will be automatically embedded. Drop files here