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TexasTowelie

(116,849 posts)
Fri Aug 30, 2019, 01:20 AM Aug 2019

Former CEO Of Live Well Financial Charged In $140 Million Bond Fraud Scheme

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of MICHAEL HILD, the founder, former chief executive officer, and controlling shareholder in Live Well Financial, Inc. (“Live Well”). HILD’s arrest was in connection with a scheme, from in or about September 2015 through in or about May 2019, to fraudulently inflate the value of a portfolio of bonds owned by Live Well in order to induce various securities dealers and at least one financial institution into loaning more money to Live Well – through repurchase (“repo”) agreements and collateralized loans – than they otherwise would have had they known the actual value of Live Well’s bond portfolio. The scheme allowed Live Well to grow its bond portfolio exponentially, from approximately 20 bonds with a stated value of $50 million in 2014 to approximately 50 bonds with a stated value of $500 million by the end of 2016. In May 2019, in conjunction with an effort to wind down the company, Live Well wrote down the value of its portfolio by approximately $141 million.

In addition, Mr. Berman announced today the unsealing of charges against ERIC ROHR, the former chief financial officer at Live Well, and DARREN STUMBERGER, the former head trader at Live Well, for their participation in the scheme. Both ROHR and STUMBERGER have pled guilty and are cooperating with the Government.

HILD was arrested in Richmond, Virginia, this morning. HILD will be presented and arraigned later today in the United States District Court for the Eastern District of Virginia. HILD’s case is assigned to United States District Judge Ronnie Abrams. ROHR’s case is assigned to United States District Judge Edgardo Ramos, and STUMBERGER’s case is assigned to United States District Judge J. Paul Oetken.

On August 28, 2019, the Government obtained a post-indictment restraining order restraining assets – including various real properties and business interests in the Richmond area – owned directly or indirectly by HILD and, as alleged, purchased with proceeds of the scheme.

Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, Michael Hild orchestrated a scheme to deceive Live Well’s lenders by fraudulently inflating the value of its mortgage-backed bonds by over $140 million. This allegedly enabled Live Well to borrow money well over the value of the collateral it put up. In turn, Hild used these ill-gotten funds to gain control of the company and increase his own compensation by nearly 700 per cent, while exposing lenders cumulatively to $65 million in unsecured loans to the company, which is now in bankruptcy.”

Read more: https://www.justice.gov/usao-sdny/pr/former-ceo-live-well-financial-charged-140-million-bond-fraud-scheme

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