A federal jury in Manhattan found Richmond businessman Michael Hild guilty of five criminal counts on Friday for his role in a massive bond pricing scheme that toppled his once fast-growing mortgage company Live Well Financial.
The verdict came after half a day’s deliberation and brought an end to a three-week trial that included Hild taking the stand in his own defense with an at times emotional testimony.
Hild was found guilty on all counts he faced, including securities fraud, mail fraud and bank fraud. He was arrested on the charges in 2019, which coincided with the shuttering of Live Well.
The government claimed Hild helped mastermind a scheme to defraud the company’s lenders by falsely inflating the value of a portfolio of reverse mortgage bonds, in order to induce the lenders into loaning more money to Live Well than they otherwise would have.
“Lenders were hoodwinked into lending far more than they otherwise would have,” the U.S. Attorney’s Office of the Southern District of New York, which prosecuted Hild’s case, said in a prepared statement posted after the verdict Friday.
Prosecutors claimed Hild personally pocketed more than $20 million as a result of the scheme from 2015-2019. The ruse collapsed in part when the true value of the bonds was discovered by Live Well’s lenders. That left the company holding debt worth far more than the purported value of the bond collateral.
“The house of cards came crashing down with the unwinding of Live Well and the revelation to lenders that the bond portfolio had been overvalued by $200 million,” the U.S. Attorney’s statement said. “Now, Michael Hild awaits sentencing for his crimes.”
Hild is set to be sentenced on Aug. 20. He had pleaded not guilty and had since remained free on bond and continues to remain out on bond until sentencing.
Hild was represented in the case by Kentucky attorney Benjamin Dusing, who was a childhood friend of Hild’s. Dusing wasn’t available for comment after the verdict.
The five counts call for a combined maximum of 115 years in prison, though his sentence will surely be lower. He also faces a maximum fine of $5 million.
Hild’s punishment will be decided by U.S. District Court Judge Ronnie Abrams.
While Hild pleaded not guilty and left his fate to a jury, two of his former lieutenants — former Live Well CFO Eric Rohr and head bond trader Darren Stumberger — pleaded guilty to similar charges and cooperated with the government as key witnesses in the trial. They now await sentencing later this summer.