Almost exactly a year to the day from when a jury found him guilty of running a bond pricing scheme at his now-defunct Chesterfield mortgage firm Live Well Financial, Michael Hild returned to the same Manhattan courthouse last month as part of his continued fight to avoid a federal prison sentence.
The embattled Richmond businessman and his legal team made their case on April 29 before Judge Ronnie Abrams, arguing for either an acquittal of his prior conviction or at the very least a new trial, based mainly on the claim that his prior attorney was wrongfully ineffective due to personal conflicts.
And while he had to wait nearly a year to make that argument to the judge in person, Hild — who remains free — now must wait once again to learn his fate.
The judge did not rule one way or the other at the hearing, as she now weighs whether Hild’s argument warrants a change of course in the case.
Abrams is likely to choose one of three paths: she could grant Hild’s request for a new trial or acquittal; deny his request, uphold the guilty verdict and set a sentencing date; or decide that more information is needed and call for an evidentiary hearing.
Since the jury verdict on April 30, 2021, Hild and his new attorney have mounted an ongoing post-trial defense hinging on allegations of faulty legal representation from his prior attorney. And that prior attorney, Benjamin Dusing, has added fuel to Hild’s claims by getting into legal hot water of his own, including being suspended from practicing law, in part due to bar complaints made by Hild.
Hild claims that Dusing, a childhood friend of Hild’s, hid from his client the fact that he was fighting two custody cases with two mothers of his children back in his home state of Kentucky in the midst of Hild’s three-week trial in New York.
Hild claims those custody cases were not only a distraction for Dusing, but also pushed Dusing to speed up the defense’s portion of the trial to make sure the case concluded in time for him to make it to a pressing hearing back in Kentucky.
At the recent April 29 hearing, Hild’s new attorney, Brian Jacobs of New York law firm Morvillo Abramowitz Grand Iason & Anello, rehashed Dusing’s alleged conflicts, including a claim that he did not call an expert witness to testify on Hild’s behalf.
That expert, Jacobs said, would have prolonged the case for Dusing but could have been able to refute some of the government’s evidence regarding the disputed value of reverse mortgage bonds from Live Well. The value of those bonds is the crux of the charges against Hild.
Abrams, at the hearing, tried to discern whether Dusing’s personal issues truly were an actual conflict.
“How is this different from so many lawyers who have lots of different cases at the same time?” the judge asked Jacobs, according to a transcript of the hearing.
Jacobs reminded the judge that Dusing was facing potentially legal and professional punishment related to his custody battles with two separate mothers of his children.
“Each of those things, his personal culpability here, dramatically distinguish this case from the run-of-a-mill case where a lawyer has multiple obligations,” Jacobs said. “This is his own case where he’s facing jail time, professional sanctions, personal consequences in the underlying custody dispute, and potentially an investigation.
“The decisions made in the course of the defense case, there’s no telling whether those decisions were made in Mr. Hild’s interests or in Mr. Dusing’s interests in getting the trial over and done with as quickly as possible to protect his personal interests,” Jacobs said.
Abrams asked Jacobs whether there’s any legal precedent that compares to the Hild-Dusing matter and could serve as a guide.
“This is an extremely rare situation. I don’t know that there’s any other case in any circuit where the facts line up perfectly with this one,” Jacobs said.
Abrams agreed but asked where the court should draw the line in gauging when important matters in a lawyer’s personal life become an actual conflict.
“The line is when it adversely affects performance…” Jacobs said in response.
Assistant U.S. Attorney Jordan Estes, who prosecuted Hild, disagreed with Jacob’s take.
“This is not an actual conflict. This is a scheduling issue,” Estes said of Dusing’s concurrent custody cases.
Abrams then posed another hypothetical, this time to Estes.
“Let’s say you have a lawyer who has a vacation coming up in a robbery case and the lawyer doesn’t call an alibi witness because it would take too long and the lawyer would miss his or her, their vacation. Is that an actual conflict?” Abrams asked.
Estes urged caution on that line of thinking.
“If we expand the actual conflict standard here, defendants in every case are going to start firing their attorneys after trial and saying ‘oh, he was preoccupied with child-care issues during trial; he was preoccupied with these other cases during trial, you know, he was worried about his ailing mother during trial.’
“That really can’t be the standard, where we’re prying into defense attorneys’ personal lives after every case,” Estes told Abrams.
Estes, pointing to a lengthy affidavit Dusing filed post-trial after Hild’s claims, stated that Dusing made his decisions during the trial based on strategy, rather than any personal conflicts.
Abrams questioned whether Dusing’s affidavit can be relied upon, given his recent legal troubles and law license suspension. That saga includes Dusing threatening a judge and other lawyers in a bizarre, widely publicized online video.
“Can I rely on his affidavit in light of all the various allegations? Can I, should I, assume it to be true in all respects?”
Estes said the answer is yes and questioned whether Hild can be trusted in this stage of the case.
“The contrary story here is a story presented by Mr. Hild, who has at all times presented as somebody who is not credible and cannot be trusted,” Estes said. “I would just remind your Honor that Mr. Hild took the stand at trial, and we would submit that he committed perjury.”
Estes alleged that Hild perjured himself on the stand when testifying about whether and when he knew the company’s reverse mortgage bonds were illiquid, and also related to his testimony about his personal guarantees of Live Well’s debt.
Jacobs said a hearing is warranted to be able to call additional witnesses, including paralegals who worked the Hild case with Dusing and the expert witness who never appeared at trial.
The judge entertained that idea by asking who each side would call as a witness, before ending the hearing.
Hild faces a combined maximum of 115 years in prison on counts including securities fraud, mail fraud and bank fraud, though his sentence will surely be lower. He also faces a maximum fine of $5 million.
The government indicted and arrested Hild for helping mastermind a scheme to defraud Live Well’s lenders by falsely inflating the value of a portfolio of reverse mortgage bonds, in order to induce lenders into loaning more money to Live Well than they otherwise would have.
Hild’s defense at trial was built largely on arguing that the prices presented were based on the best estimate of their market value, despite them being difficult to value.
While Hild pleaded not guilty, two of his former Live Well lieutenants — CFO Eric Rohr and head trader Darren Stumberger — have pleaded guilty to similar charges and await their fate. Their sentencing dates have been repeatedly pushed back due to their involvement in the Hild case as cooperating witnesses for the prosecution.
Meanwhile, Live Well’s bankruptcy liquidation remains ongoing. The bankruptcy trustee has filed multiple lawsuits, including against Hild, his wife Laura and more than a dozen business entities tied to the couple seeking to recoup a total of $110 million in damages. The trustee alleges that Hild looted the once fast-growing reverse mortgage company by masterminding the scheme and that Laura helped her husband in hiding the proceeds by parking them in LLCs, which were all in Laura’s name.
The Hilds have yet to file a response to the trustee’s complaint.
The trustee has also sued Stumberger and Rohr, the latter having recently settled the matter.