Trump was fined $350 million in February for fraud. He is said to have presented his assets too rosy, which allowed him to negotiate favorable loans for years. Trump appealed, but had to pay his fine (plus interest of up to 454 million) immediately, unless someone wanted to stand surety for him. Ultimately, the bail was reduced to $175 million.
Initially, Trump tried to have major insurers guarantee the deposit. Companies such as Allianz, Axa and Swiss Re did not want to burn their fingers with a controversial politician known for not paying back his debts. Knight Specialty Insurance, one of Don Hankey’s companies, came to the rescue. Although Hankey considers himself a Trump supporter, he called posting bail “a business decision, not a political decision.”
Cash and shares
“This is what we do,” Hankey told CNN, doing business with customers deemed by other companies to be under-creditworthy. As collateral for the bail, Trump provided cash and stock, Hankey said. He also pays an undisclosed, but according to Hankey ‘modest’ fee for the deposit. Typically, such compensation amounts to 1 to 2 percent of the principal amount.
Don Hankey’s net worth is estimated at $7.4 billion. He lives on Xanadu, a Malibu estate once owned by singer Olivia Newton-John. Hankey started his career in 1958 as a car washer at the Ford dealership in which his father had a stake. He later took over the company. He specialized in buyers who did not receive a loan from the bank because they had too low an income, had gone bankrupt or had not repaid previous loans. Hankey provided them so-called subprimeloans (also called junk mortgages) at high interest rates. That was a success, although customers were often in the showroom arguing about the unfavorable conditions.
With the company Westlake Financial Services, Hankey focused on these car loans, the interest of which could rise to almost 24 percent, according to the Forbes in 2015. According to the magazine, there were 336 thousand auto loans at Westlake that year. On average, 250 cars per day were reclaimed due to non-payment.
In 2015, the company was fined $48 million for unfair practices. For example, some customers were wrongly told that their car would be repossessed if they did not pay promptly. Nevertheless, his company served an important social function, Hankey countered Forbes. ‘I believe we help many people finance a car they need to get to work. The alternative is that they pay in cash, which means they have to wait years for a car, or take the bus.’
