What's With The $175,000,000 Bond? Another Scam? Another Con?

-by Helen Klein

Why isn't there more in the mainstream media about this bond? This is a huge story that has had little foothold in the NY Times or Washington Post. The shenanigans involved with this bond need to be out there. As Bobby Bacala of The Sopranos famously said, “What. You gonna tell me you never pondered that?” Yes, I ponder that quite a lot. 

Mr. Hankey, the billionaire who has put up the $175 million bond for Trump in the Letitia James's fraud trial in Judge Arthur Engoron's court, appears to be playing games along with Señor T.  What a surprise!

First off, the name Mr. Hankey. Really? You can't make this stuff up! Sorry, but I have to put this little tidbit in for DWT readers. My husband and sons were great fans of the cartoon show South Park back in the day, and Mr. Hankey, the Christmas Poo talking turd, was a favorite character. He was a piece of shit (literally) wearing a hat who bounced up and down and sang. Call me a sexist, but it was male humor. I almost threw up when I saw Mr. Hankey the first and only time I watched the show, while my family laughed hysterically. Mr. Hankey was eventually cancelled from the show because of his offensive and scatological nature. 

Every time I hear about Mr. Hankey and the bond I think of the little shit in South Park. Rather apt, wouldn't you say? 

Onward to the story.

The bond was originally determined to be for $464,000,000 to cover the losses to New York State for Trump's illegal shenanigans to suit his financial purposes— lies to banks, insurance companies and tax entities about how much he was worth (high numbers), and lies about how little he was worth (low numbers). The Trump Organization never adhered to Generally Accepted Accounting Practices (GAAP)— the standards of business and corporate accounting. The people in charge, Trumpanzee, Allen Weisselberg, Trumpanzee, Jr., and Eric Trump, do not appear to even know what that means. Huh. Here is a video of Don Jr., laughing and name dropping Wharton, the top business school in the country, but clearly indicating he did not absorb a thing about GAAP while he was there. 

TFGs lawyers whined to the court that the bond was too huge and unfair and claimed they tried to get the $464 million bond from 30+ surety companies but none stepped up to the plate. (Was there any check up on their efforts or did the court just believe them in good faith?) The appeals court thus lowered the amount to $175 million, without any explanation as to why it did so. On face value, it appears the court simply did a favor for Trump, one that he clearly did not deserve. What other explanation could there be for the court to lower the amount? 

However,  and this is a BIG one, unbeknownst to the court, it turns out that at the last minute Mr. Hankey came through and offered to put up a bond for the WHOLE AMOUNT, $464 mil. Negotiations to do so were underway.  But the lawyers DID NOT INFORM THE COURT, which was at best a breach of ethics. So the court lowering the amount of the bond should not have happened. 

From my perspective, it appears that THE COURT WAS CONNED by Trump and his attorneys. Shocking. 

There is more. Much more. This story continues to unfold.

Mr. Hankey has now put up the bond for $175 mil. BUT big problems have surfaced about the bond. Another surprise! Incompetence, ignorance and chutzpah on Mr. Hankey's part are being revealed as Letitia James is questioning the validity of the bond. Judge Engoron has called a hearing for April 22 to review the situation.  

It should be mentioned that Mr. Hankey has had previous dealings with Trump. He is a fan. The bank Mr. Hankey is heavily invested in, Axos, loaned TFG $100 million to refinance Trump Tower and another $125 million to refinance the Doral golf course, all when the fraud trial was putting Trump's assets under scrutiny and other banks would not deal with him. His properties were being threatened with foreclosure. Basically, Axos saved his butt. AXOS also financed part of a loan that helped Trump purchase the D.C. Hotel by a group of investors. Thus Trump has been loaned over $500 mil by Axos. Clearly, TFG is hugely indebted to Mr. Hankey.

The Axos loans to Trump were vital to stabilizing his post-presidential finances and enabling him to mount the campaign that now has him leading the  GOP pack for the 2024 presidential nomination, according to disclosure records, loan documents and financial experts.

“It was crucial... that someone gave him credit or he could have had loans going into foreclosure,” said Bert Ely, a longtime independent banking analyst. “And that was also an important factor to him politically.”

It is also interesting to note that Mr. Hankey has been a bottom feeder sleaze in obtaining his fortune by offering high interest auto loans to customers with poor credit. He calls himself “The King of Subprime loans.” So let's welcome Mr. Hankey to the grifters club, those who prey on poor people. His collection practices have been questioned as illegal. His companies have run afoul of regulators and have been racked with consumer complaints and regulatory fines. They have been sued by the DOJ and have been in the crosshairs of the Consumer Financial Protection Bureau and the California Department of Insurance. Hankey has amassed a fortune lending to borrowers other financial firms shun. He has done so for TFG, noted above. I suppose he figured why not do the same with the bond? 

Now to the actual bond.

First of all, the clerk's office immediately returned the bond as the submission had critical errors. A major one: no financial statement was included. 

It turns out the company that posted the bond, Knight Specialty Insurance, doesn't have enough assets to meet the NY requirement for a bonding company to make such a large bond.

Here's the best part: Knight Specialty has argued that they don't have to meet the New York requirements because— ahem— they are not a licensed bonding  company. Sure, that'll work.

The financial information the company provided was not based on any independent audit and the assets and liabilities/obligations listed were vague. Also, the statements were not current, but dated only through December 2023. Thus these numbers have little credibility. Sound familiar? Sound like a TFG playbook? Sounds to me like a redux of the current fraud case!

Even based on the numbers Knight Specialty provided for the bond, the amounts do not cover the bond. With over $539 mil in assets and over $400 mil in liabilities the net positive for the company is around $139 mil. This is less than the $175 mil of the bond!

It appears to my untrained eyes that Mr. Hankey knew very little about the legal ins and outs of such bonds when he posted it and that he thought he could just wing it and get away with it. Hey what are the chances that he has gotten away with plenty in the past? Does this sound like someone we know all too well?

This video below is very interesting and clearly explains the problems with the bond. I encourage DWT readers to view it.

In a recent interview with CNN, Mr. Hankey admitted, apparently ignorantly and stupidly, that he has no idea about Trump's cash collateral for the bond. “Ultimately, he put up all cash,” Hankey said, adding that he does not know where the $175 million in cash that Trump posted came from. THIS IS AGAINST THE LAW.  Customer due diligence is mandatory. There are “Know Your Customer” laws that serve to protect against money laundering.

KYC or 'know your customer' is a mandatory verification procedure carried out by financial institutions with the goal of minimizing illegal activities. 

The Financial Industry Regulatory Authority (FINRA) Rule 2090 states that financial institutions must use reasonable diligence to identify and retain the identity of every customer and every person acting on behalf of those customers.

So to sum up, Mr. Hankey provided a bond for $175 million that does not appear to meet legal standards in New York. Basically, the bond is “sketchy” at best. It is unclear whether his company has the assets required for the bond. In the video above, Michael Popok described the bond as “just a piece of paper pulled out of the backside of the company.” Furthermore, Mr. Hankey did not require TFG to provide evidence for his ability to cover the bond if he loses the appeal. 

Did Mr. Hankey think Letitia James was going to let this bond sail through without any supporting documentation? Was Mr. Hankey willing to eat $175 million if the bond had been accepted at face value and then Trump lost the appeal and refused to cover the bond?  What are the chances of that happening? Ha ha ha.

Will Mr. Hankey's company now undergo intense scrutiny and did he realize this may wind up being trouble for him?

It is a shit show. But further delays in the civil trial are imminent! Naturally. 

It is so exhausting and depressing waiting for something to actually happen. Now we have to wait until April 22 for Judge Engoron's hearing to review the bond situation. Will he give Trump another chance, and more time, to come up with another $175 million bond if Mr. Hankey's bond does not meet requirements? Delay, delay, delay is ongoing, ongoing, ongoing— and it's been a lifelong Trump tactic used successfully to always avoid accountability.