Legal AF by MeidasTouch - Wow! Trump Bond Company ADMITS it BROKE LAW?!

Episode Date: April 5, 2024

The bonding company owner that posted Trump’s $175 million bond in New York against the $465 million civil fraud judgment JUST ADMITTED THAT his company is violating ANTI MONEY LAUNDERING and “Know Your Customer” laws because he DOES NOT KNOW THE SOURCE OF TRUMP’s cash collateral. Michael Popok examines the new bond just filed by a company controlled by a Trump donor, and why the UNAUDITED and stale financial statements filed by them in the case raise new questions about their SOLVENCY that Judge Engoron will hold a hearing about later this month. Cancel unwanted subscriptions – and manage your expenses the easy way – by going to https://RocketMoney.com/legalaf Visit https://meidastouch.com for more! Remember to subscribe to ALL the MeidasTouch Network Podcasts: MeidasTouch: https://www.meidastouch.com/tag/meidastouch-podcast Legal AF: https://www.meidastouch.com/tag/legal-af The PoliticsGirl Podcast: https://www.meidastouch.com/tag/the-politicsgirl-podcast The Influence Continuum: https://www.meidastouch.com/tag/the-influence-continuum-with-dr-steven-hassan Mea Culpa with Michael Cohen: https://www.meidastouch.com/tag/mea-culpa-with-michael-cohen The Weekend Show: https://www.meidastouch.com/tag/the-weekend-show Burn the Boats: https://www.meidastouch.com/tag/burn-the-boats Majority 54: https://www.meidastouch.com/tag/majority-54 Political Beatdown: https://www.meidastouch.com/tag/political-beatdown Lights On with Jessica Denson: https://www.meidastouch.com/tag/lights-on-with-jessica-denson On Democracy with FP Wellman: https://www.meidastouch.com/tag/on-democracy-with-fpwellman Uncovered: https://www.meidastouch.com/tag/maga-uncovered Learn more about your ad choices. Visit megaphone.fm/adchoices

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at kraken.com slash legal slash ca dash pru dash disclaimer. This is Michael Popak with Illegal AF Hot Tech. Donald Trump's bond problems continue to multiply. First, he went to a long time lender of his to which he's indebted by almost $500 million, Don Anke, who not only controls or has a leading majority interest in Axos Bank out of California that did a number of refinancings for Donald Trump's properties and also stepped up and did $175 million bond posting in New York. But now we've got reporting and new information that not only has the clerk's office bounced

the bond, but there is doubts about whether the bonding company that Don Henke owns that is now posting the bond on Donald Trump's behalf to stop the enforcement of the $465 million judgment belonging to the people of the $465 million judgment belonging to the people of the state of New York in the civil fraud matter, whether it is worth the paper it is written on, whether the Don Hanke controlled night specialty company has the financial wherewithal is stable enough to support the bond. In order to post the bond, it can't just be an IOU and a piece of paper. The company's got to be legitimate, be solvent, have enough assets to back the $175 million promise to pay. Now we have new information even based on the new uploaded bond,

which Don Hanke's company was forced to redo because their original bond was bounced by the clerk's office, that bond has problems. And we have a revelation that this company probably doesn't have enough money in assets to be liquid enough and solvent enough to post the bond that they posted. And the New York attorney general is calling out and calling the bond. It's like a giant poker game. She's called the bond. She's demanded that they prove the bond, meaning that the and calling the bond. It's like a giant poker game. She's called the bond. She's demanded that they prove the bond, meaning that the party behind the bond, the Don Hanke and Axos controlled entity, Knight Specialty Company, come forward and demonstrate their financial wherewithal. And there's going to be a hearing towards the end of April in front of Judge Angoron,

the judge who actually entered and found against Donald Trump in the $465 million case, he's going to have to decide whether this bond is sufficient. More importantly, whether this bonding company is sufficient. Let me read to you what we've learned so far just based on what was posted in the court system just today. Two days ago, the court system bounced the bond and said that it was insufficient for a number of reasons having to do with the form of the bond,

the attorney in fact listed in the bond, the power of attorney listed in the bond, and the fact, and here's the critical part, that no financial statement for the bonding company was posted. Sure, in the bond they said they were duly authorized to post bonds in New York, you know, the magic language in New York, but where was the finances? Why weren't they posted? And now we know why, because you don't even need a microscope. If you just look at the plain language of their filing, they've got a major problem on solvency, which is why the New York Attorney General has smartly called the bond, asked for the bond to be proven. That's a term of art for a procedure in New York and in other states where the bonding company has to step forward in a hearing, in an evidentiary hearing, and prove that it can post the bond for

which the piece of paper is written. Now, the financials that I've taken a look at for this Los Angeles-based company that are now public record, we'll put them up on the screen, is a pretty meager and measly balanced statement. They submitted a financial statement. By the way, it doesn't say it's an audited financial statement. See, this is Donald Trump's problem. He doesn't have audited financial statements, he doesn't use audited financial statements,

he cooks the books and changes the numbers on his financial statements, and he goes and gets a bonding company that submits a piece of paper that says, we'll back the $175 million required undertaking to stop the enforcement of the judgment when that company doesn't even use audited financial statements. Look, we all know that Mr. Hankey, and sometimes I can't get that out with a straight face, that Mr. Hankey controls Knight Specialty Insurance Company, and he also controls Axos Bank.

I get it, he's an eight billionaire. He makes decisions based on his gut. We also know, for instance, that Don Henke is a supporter of Donald Trump. No shit, that he donated, along with his wife and family members, a lot of money to Donald Trump's campaign. But that's not why Donald Trump is beholden

to Don Henke moving forward and to Axios Bank is because when they collectively have lent or taken your bacon out of the fire to the tune of over $500 million in refinancing your properties when nobody else would and stepping forward to do the $175 million bond, you may owe this person your financial life. And that's what Don Henke is buying. And so when you look at the not audited financial statements, meaning an independent, well-accepted accounting firm or auditing firm applying generally accepted accounting or auditing principles has reviewed your books and certified them, all I see here is another piece of paper.

It's another piece of paper just pulled out of the backside of the company with numbers on it. I could create this. It's not gonna take me long. It'll have about as much value as this one. It says assets are listed at just under, just a tad under $540 million. Sounds like a lot of money,

but it's not a lot of money for a bonding company that has to post $175 million bond, right? It's like 30% of their total assets would be for this bond if Donald Trump defaults. And I don't think the judge is gonna like that. It shows a bit of insolvency around the company if the bond goes bust, in this case the judgment debtor Donald Trump doesn't pay. Cash on hand for the company is listed at just $27 million.

They have bonds for a million, other bonds for $242 million, if I had to guess they're mortgage backed securities, stocks of $240 million. Well, that's not as liquid as it sounds. They have agents balances or uncollected P, whatever that is, of $9,545,000. I guess that's money that's owed them. They have accrued interest of $1,003,000 and other admitted assets that aren't listed. That's a good plug number, other admitted assets. But try that the next time you fill out a balance sheet or financial statement for a bank.

Just list other admitted assets and list $19 million or $18.5 million. And then on liabilities, they say that they have unearned premiums of $20 million, a reserve for claims and claim expenses, meaning related to other bonds and insurance that they've issued of $39 million, funds held under reinsurance treaties with other reinsurance companies, $300 million, and then they have a reserve of $7.5 million and other liabilities without listing them at $33.5 million, showing a total of liabilities or expenses of over $400 million against just $539 million of assets, meaning they are only net positive about $139 million. That's less than the bond amount. You see the problem with this math so far?

Besides the fact that most of these things on here, because none of them are being audited, most of these things in here are just self-serving labels placed on assets without a list of what the assets are. But even here, the best they can say is, we're only above water, about $139 million. Then they say there's capital stock, paid in surplus, and unassigned surplus, and surplus to policyholders. So they put in order to do double entry accounting, they say that's the total of $539 million. Forget that. They are underwater.

If Donald Trump goes bust and they have to do a hundred and seventy five million dollar payment They're gonna be they're gonna be short based on their own balance sheet right now about thirty five million dollars Which I guess they're gonna have to borrow from other people like Don Henke and Then they say that Amit Shah not even Don Henke who's the CEO and the chairman But the president of the company this poor guy guy, Amit Shah, has to certify that the foregoing statement is correct exhibit of the assets and liabilities of the company as of 31st of December, 2023, right? So that's three months ago.

We don't know what the financial condition is now. And then that's notarized. With a grown family, I've been trying to save even more money, but it seemed like my bank account was stuck. Thankfully, I heard about Rocket Money and gave it a try. It turns out I had a number of subscriptions I was paying for that I'd forgotten about. Rocket Money helped me cancel some of them, and now I have more money than before.

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the bonding company. And they're, I don't know, slightly better. They have claimed assets of $2.1 billion. This is the parent company with cash of $56 billion, bonds of $519 million, stocks of $937 million, then other investments not listed, just a random number, $197 million, notes receivable, money that's owed to them. They don't say how or the terms of the note. $183 million. They don't say if that's an intra-company loan from another company controlled by Don Henke. Uncollected premiums of 74 million, accrued interest of 3 million, giving them total assets of 205 million. But their liabilities of that company is more than half. They've got liabilities of 1.1 million

against assets of 2.1 million, sorry, billion. So they got about a billion dollars of excess there, which I guess they could loan the specialty company making the bond in a pinch, but that's not how this is supposed to work. A cascade of dominoes in order to pay money. And then you've got Pora Meachaw, president of Knight Insurance Company, also certifying that that's true and correct as of December 23rd with no updated financials through March, which is also odd. You can see why Judge Angoran, based on that read, is concerned and why the New York Attorney General has called the bond and asked for it to be quote unquote proven in the court of

law in front of Judge Angoran later in April. I mean, this is what happens when you have no credit or low credit like Donald Trump and you have to go to your lender and bailer outer of last resort, Don Henke, who made his fortune as the king of the subprime loan to people with no credit or low credit. How embarrassing that Donald Trump has to go hat in hand to the person who only lends money at high rates and high premiums to people who can't get loans anywhere else. That's who people wanna send to the White House. That's who people think isn't financially compromised

and subject to being bribed or compromised by foreign assets knowing that this presidential candidate is on the balls of his ass financially. That seems to be okay with people. Not okay with me, but it seems to be okay with a lot of people that have R next to their name or when they vote. And so we're going to continue to follow this fast moving story about the bond. I can tell you who doesn't like the bond that was originally posted.

The clerk's office, the New York attorney general, and Judge Angoron. And the new bond that was posted with the financial statements that were missing actually created I think more problems for Donald Trump and Knight Specialty Insurance Company than before. Because now it just laid bare that at least as of three months ago, right, in an unaudited financial statement, they barely, they're underwater, they don't have enough money to cover the bond. And then they show the consolidated financial statements for Knight Insurance Company, the parent company, which is slightly bigger, maybe a billion dollars in alleged net assets after expenses are deducted.

But there's no discussion in any of the submissions about what's the relationship between the parent company and night specialty company. Is there going to be some sort of requirement to loan them money from the parent company? Does Don Hanke step in when there's a shortfall? Who makes this company solvent if the person they've laid the bet on, Donald Trump, decides not to pay the judgment and they got to come up with $175 million. Is it worth the paper it's written on? And that's what Judge Angkoran is going to have to get to the bottom of. We're going to continue to follow it. There's going to be a hearing. There's going to be a filing by the New York Attorney General on the issue of the bond. The bonding company

has to prove itself in court. There's a submission that's due from the Trump organization and then the judge is going to hold an evidentiary hearing. This same judge had already found that Donald Trump's organization committed persistent fraud to the tune of $469 million over the last 10 years. That judge and Goran. And then here's the questions that are going to be asked at the hearing. Why aren't the financial statements audited?

What do all these entries mean that seem to just be other liabilities not listed, other assets not listed, the money that's owed to them, it's from whom, it's pursuant to a contract? What is the fundamental relationship between the parent company and the subsidiary? Is there an obligation or something in writing that obligates the parent company or Don Hanke to step in and make up a shortfall if the company is insolvent? None of that has been revealed, hence the need for an evidentiary hearing. Now look, I know Chris Keiss, the lawyer for Donald Trump, I guess the Coke bottle spun on him and now he's got to be the one instead of Alina Haba making crazy statements, has said, this is a witch hunt, a witch hunt again. This is just a waste of time. I'm sorry, Chris, I'm talking to you. Post a proper bond from a bonding company somebody's heard of that's solvent.

How about one of the major insurance companies out there? How about one of the major surety companies that's out there? Maybe one that's even publicly traded and has audited financial statements and that's been recognized in New York. But they don't want to do that because none of those companies will touch them with a 10-foot pole. I mean, Don Anke says he put up all cash. I'm not even sure that's true and they're going to get to the bottom of it in the hearing.

What is the collateral behind this bond? Now we're going to find out where the cash is, what the cash is, where the cash came from. Is it from a foreign source? Is it from an American source? What asset that Donald Trump put up to back this bond? And is that sufficient? Because that's going to be the argument by the bonding company. Well, we have four fully collateralized dollar for dollar, judge, because Don Hecke is going on CNN or he reported to CNN that he got all the collateral. It's all cash. He doesn't know where Donald Trump got the cash from.

That's interesting. That's very interesting because the bonding company, like any financial services company, has a duty to know your customer. That's what it's called. Know your customer, KYC. It's part of the anti-money laundering statutes and the Bank Secrecy Act statute and the Patriot Act statute that came after 9-11. You're supposed to know the source of the person's funds. It's not okay for Don Hanke to tell people in his reporting to CNN, I don't know where

he got the cash from. That's actually a violation. And I'm sure it will be investigated by the New York attorney general and raised at the evidentiary hearing. We'll continue to follow it on Legal AF right here on the Midas Touch Network every Wednesday and Saturday at 8 p.m. Eastern time and on Hot Takes just like this one. And if you like the law and you like politics, you're gonna love our new Patreon page. It's at patreon.com legalaf. We get down the molecular level of the law and help you

understand these concepts that we're talking about in our hot takes and on our podcast. It's like a Ted talk and a law school had a baby. So until my next hot take, until my next legal AF, this is Michael Popak reporting. Hear ye, hear ye. Legal AF Law Breakdown is now in session. Go beyond the headlines and get a deep dive into the important legal concepts you need to know and we discuss every day on Legal AF. Exclusive content you won't find anywhere else, all for the price of a couple of cups of coffee. Join us at patreon.com slash legal AF. That's patreon.com slash legal AF.