Trump owes US$454m for fraud, but can he actually pay it?

Nevin Al Sukari - Sana'a - Former US President Donald Trump sits inside the courtroom for the third day of his civil fraud trial in New York on October 4, 2023. — AFP pic

NEW YORK, March 22 — Donald Trump is up against a fast-approaching deadline to secure a half-billion dollar bond as he appeals his financial fraud case, facing possible bankruptcy or the seizure of his assets if he fails.

The former president, who has clinched the Republican nomination for this year’s presidential election, is appealing his US$355 million penalty, plus interest, after a New York court ruled that he, his sons and his Trump Organization company lied for years about the value of his assets, deceiving banks and insurers.

But he must put up a guarantee he’ll pay the fine if his legal fight fails.

Trump built a public profile as a property developer and businessman in New York before entering politics. But despite the real-estate mogul’s US$2.6 billion estimated net worth, his lawyers say that it’s been impossible so far to come up with the US$454 million bond, due Monday.

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Typically, such bonds would be underwritten by an insurer or specialised bond company.

But Trump’s lawyers say that after approaching 30 such companies, none will take the ex-president’s real-estate holdings as collateral, creating a “practical impossibility” to get a bond, they wrote in court filings.

Former federal prosecutor Andrew Weissmann told AFP that “it seems pretty clear to me, based on the filings, that the problem he is having is that whatever assets he has are already leveraged” against other loans.

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If Trump cannot pay, added Carl Tobias, a law professor at the University of Richmond, “he confronts the prospect of humiliation and serious financial harm.”

Multiple appeals are ongoing by the ex-president — who has denounced the judge who issued the ruling as “crooked” and a “Trump Hater” — including one at the New York Supreme Court.

But the 30-day grace period to put up the money expires Monday, raising the prospect that unless courts intervene or the New York attorney general gives him more time, Trump might need to “sell his properties or related assets, attempt to secure a bank loan, or even declare bankruptcy,” Tobias said.

Yet even bankruptcy wouldn’t stop authorities from claiming Trump’s money, with the Attorney General Letitia James able to freeze his accounts or even seize certain properties related to the case, Tobias told AFP.

“I would be forced to mortgage or sell great assets, perhaps at fire sale prices, and if and when I win the appeal, they would be gone,” Trump said in a post on social media.

“Election interference!” he charged in another post, while also calling James, who is a Democrat, “corrupt and racist.”

Last month Trump offered a US$100 million bond to partially cover him as he appealed — a move rejected by a New York Supreme Court Appellate Division judge.

As part of the fraud ruling, Trump was also banned from running businesses in New York state for three years.

He was also barred from seeking loans from institutions based in New York, though a judge has lifted that part of the ruling as Trump seeks to secure his bond.

Trump, facing 91 criminal counts in other cases, has seized on his legal woes to fire up supporters and denounce his likely opponent President Joe Biden, claiming that court cases are “just a way of hurting me in the election.” — AFP