Trump’s Civil Fraud Bond Backer Is Even Shadier Than We Thought

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The company underwriting Donald Trump’s $175 million bond is owned by a man whose seedy business practices were flagged by Trump’s own administration.

Billionaire Don Hankey, also known as the “king of subprime car loans,” was sued by the Justice Department just nine months into Trump’s presidency, after it was discovered that another one of Hankey’s companies, Westlake Services, had illegally repossessed 70 cars belonging to service members, violating the Servicemembers Civil Relief Act, The Daily Beast reported Wednesday.

Westlake settled with the Trump administration in just 10 days, according to a settlement agreement, with the company agreeing to pay $700,000 in damages to affected members and getting fined more than $60,000 by the federal government.

“Westlake and Wilshire specifically target servicemembers, including junior enlisted servicemembers, as customers for their subprime and near-subprime loan products,” prosecutors wrote.

But it wasn’t the first time Hankey’s companies had been penalized by the feds. Two years before the alleged misconduct, Westlake and one of its subsidiaries, Wilshire, were hit by the Consumer Financial Protection Bureau for “illegal debt collection tactics,” according to the Beast. That resulted in an even larger penalty, including more than $44 million in restitution payouts.

That’s all a part of the game to Hankey, who carved out his $7.4 billion fortune through those kinds of predatory practices, targeting low-income customers with high-interest auto loans.

Hankey’s Knight Specialty Insurance Company is the group that underwrote Trump’s bond for his civil fraud trial, but it’s not Hankey’s only investment in Trump’s financial situation. Hankey is also believed to be the largest shareholder in Axos Financial, according to MSNBC’s Lisa Rubin, a financial institution that in 2022 refinanced more than $50 million of Trump’s loans on Trump Tower and Trump National Doral Miami, according to documents filed with the Office of Government Ethics.

Hankey told Forbes that Knight initiated the deal with the criminally charged GOP presidential nominee, and explained that Trump had used both cash and investment-grade bonds to secure the money with his insurance company. Hankey added that he had never met Trump but had been a supporter of his previous campaigns.

“This is what we do at Knight insurance,” Hankey told Forbes on Monday. “I’d never met Donald Trump. I’d never talked to him on the phone. I heard that he needed a loan or a bond, and this is what we do. So, we reached out, and he responded.”

Meet the ‘subprime auto king’ who arranged Trump’s $175 million bond

After weeks of uncertainty, former President Trump posted a $175 million bond in his New York civil fraud case Monday with the help of little-known California billionaire Don Hankey.

Hankey’s Knight Specialty Insurance Co. underwrote Trump’s bond, allowing the former president to move forward with his appeal of the case and preventing New York Attorney General Letitia James (D) from seizing his properties.

Hankey did not respond to a request for comment.

The billionaire, known as the “subprime auto king” in Los Angeles, made his fortune financing high-interest auto loans for customers with poor credit.

He has since expanded into finance, technology, real estate and insurance, running an eight-company empire known as The Hankey Group. He is worth about $7.4 billion, according to Forbes.

Hankey said he initially reached out to Trump after hearing about the former president’s difficulties posting the original $464 million bond in the case and “had a conversation about putting together a bond of that size,” according to CNN.

Trump’s lawyers told a New York appeals court last month that, despite “diligent efforts,” it would be “impossible” to secure the full bond due to lack of cash on hand. The court ultimately reduced the bond to $175 million.

“I heard they were looking for somebody and this is what Knight insurance does,” Hankey told Bloomberg. “We have the liquidity and I’m just happy to provide it.”

Hankey, who acknowledged that he has voted for and donated to Trump in the past, emphasized to The Washington Post that his decision to underwrite the bond was not political.

“I’m chairman of the board of several companies, and we just carry on our business and we try to stay away from political issues or taking sides,” he told the Post, adding, “I will support him in the future, but I wouldn’t consider myself a major supporter.”

Hankey has had previous financial ties to the former president via his stake in Axos Bank, which provided $225 million in loans to Trump’s businesses as other lenders cut ties in the wake of the Jan. 6 insurrection, according to the Post.

However, Hankey, who is the largest individual shareholder in the bank, said he was not aware of the loans at the time.

“We would have done it for anybody else,” Hankey said to CNN of arranging Monday’s bond. “It was an easy transaction. It was put together very quickly.”

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