“I find it strange”: Legal scholar baffled at Trump’s “stunningly embarrassing” fraud bond filing

Former President Donald Trump asserted earlier this week that he is unable to secure a bond to cover his $450+ million civil fraud judgment but the New York attorney general made it clear on Wednesday that she’s not buying it. 

In a nine-page filing, Attorney General Letitia James urged an appeals court to disregard the former president’s claim that he cannot obtain an appeal bond for the massive judgment after approaching 30 surety companies through four brokers. Seeking from the court a pause on the execution of the judgment or a steep drop in how much he must post, Trump’s attorneys also argued that bond companies are generally not capable of underwriting such sums, and said the companies told Trump they are unable to accept real estate assets as collateral, according to The Washington Post.  

A lawyer for James, Dennis Fan, in response called Trump’s filing “procedurally improper” and argued Trump has not explained why he can’t post his real estate or obtain a letter of credit. Trump’s team also should have informed them of their bond issues earlier rather than days before payment is due, Fan said. 

“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 added in the filing, seemingly taking aim at the true value of Trump’s assets.  

The former president’s “alleged difficulty” in obtaining a bond raises a number of questions about what underlies his claims, Bennett Gershman, a Pace University law professor and former New York prosecutor, told Salon.

The likely GOP presidential nominee could be “lying,” reluctant to “squander limited assets” needed for his campaign, or considered financially untrustworthy given the “lengthy history of his business fraud and numerous bankruptcies,” he said.

“I find it strange that Trump is essentially claiming that he either does not have sufficient assets to cover a bond or that bonding companies don’t trust him,” Gershman added. “Either claim is stunningly embarrassing to someone who has flaunted his wealth and power.” 

In the filing, Fan also told the appeals court that Trump’s Monday claims are “unreliable” because they’re based on sworn statements from Gary Giulietti, a friend of Trump’s, and Alan Garten, the Trump Organization’s general counsel, The Post reports. 

Giulietti, Fan wrote, was deemed not credible as a witness by Judge Arthur Engoron, who oversaw James’ civil trial against Trump, while Garten, Fan argued, was involved in the conduct at issue and has “professional interests in this litigation.” Garten disputed Fan’s claim, according to The Post. 

Former federal prosecutor Andrew Weissmann, who served on special counsel Bob Mueller’s team, told MSNBC that the “real issue” for Trump is that he “may just be too leveraged.”

“He says he’s worth so much, but all these properties are used to back loans from other institutions,” Weissmann said. “He may not have all that much money, either cash on hand or property that isn’t already pledged for other loans. So the reason he’s having trouble and the reason he might be having this meltdown is he can’t post the money himself, and he needs to find a lifeline through some third party who is going to be able to bail him out.”

The surety companies Trump approached may have a “good reason” for why they “don’t want to underwrite the entire amount” of his judgment, Gershman told Salon, arguing they “probably don’t trust” Trump’s asset valuation because of the lawsuit’s determination.

James sued Trump, his company and Trump Organization executives in 2022 for allegedly defrauding banks and insurers by inflating the value of his assets by up to $2.2 billion per year from 2011 to 2021 in order to cut better deals and secure better loan terms. 

Engoron found Trump and his co-defendants liable for fraud last September and earlier this year ordered the former president to pay more than $350 million plus around $100 million in interest, which is still accruing. James gave Trump a 30-day grace period after the judgment before she would begin collecting the payment. 

If the former president is unable to post bond by the period’s end on Monday, the attorney general can begin seizing his assets and real estate holdings. James has signaled she is prepared to do so if Trump fails to pay the fine. 

Syracuse University College of Law professor Gregory Germain, however, argued that it’s “not reasonable to expect someone to be able to post a half-billion-dollar bond on short notice.”

“The focus should be on maintaining the status quo while the appeal is reviewed,” he told Salon, adding that he’s unsure how the appellate court will ultimately rule on Trump’s request for a stay on the judgment or if they will do so quickly.

The appeals court deciding in favor of Trump is “doubtful,” Gershman said. They may allow the former president “more time to explore other options,” including divvying up the bond or “having Trump’s real estate interests held by the court” as James offered Wednesday. 

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But James’ suggestion that Trump post his real property to the court is “absurd,” Germain said, arguing that the court is “not equipped to manage” it. 

Germain instead said the appellate court could grant the pause for a 10- or 30-day period and direct Judge Engoron to meet with both parties and Trump’s court-appointed monitor to “determine and recommend to the appellate court what actions need to be put in place to prevent the Trump defendants from dissipating their assets during the pendency of the appeal.”

Placing “judicial liens,” claims to a debtor’s property issued after a failure to pay a judgment, on Trump’s real property or ordering an injunction, which forces a person to do or cease a specific action, could be enough to prevent Trump from “disposing his real property,” he added. 

“The Court needs to be assured that Trump’s assets will not be dissipated during the pendency of the appeal, so that the AG will not be worse off in being able to collect her judgment while the appeal proceeds than she is right now,” Germain said. “The goal is to allow Trump to have his appeal heard, but not to cause harm to the judgment creditor in the process.”

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