Hild’s second attempt at new trial denied by federal judge

Michael Hild, who was found guilty of fraud in a bond pricing scheme, is seeking acquittal or a new trial at a hearing next month. (BizSense file)

Michael Hild’s latest attempt to win a new trial has been shut down by a federal judge, but the former Live Well Financial CEO still has at least one other shot at overturning his fraud conviction and avoiding prison time.

Hild earlier this month was denied in his continued quest to be granted a redo of the 2021 jury trial that found him guilty of five counts of fraud related to a bond pricing scheme that toppled his once fast-rising Chesterfield-based reverse mortgage company.

U.S. District Court Judge Ronnie Abrams ruled in a 26-page, Sept. 12 opinion that a new trial is not warranted, despite Hild’s claim that new evidence had been discovered in his case post-trial.

Hild, who has remained free on bond, first made the argument in late May, after it was found that the victims in his case – several large lenders to Live Well – had in fact pocketed tens of millions of dollars in interest by holding onto the Live Well reverse mortgage bonds they had lent against prior to the company’s collapse.

After forcing the company into bankruptcy, the lenders essentially foreclosed on the bonds as collateral and reaped interest through so-called coupon payments paid on the bonds from investors. Hild claims those payments were unknown to his defense team during the trial two years ago and may contradict the testimony of the lender representatives at trial.

The federal courthouse in Manhattan where Hild’s case is playing out.

Hild’s attorney argued in May that the existence of those coupon payments proves what Hild argued at trial: that he had no intent to defraud the lenders in part because he thought the lenders would be made whole from the interest payments in the event of a Live Well default.

The amount of the payments was brought to light earlier this year as Hild was fighting with prosecutors over the amount of criminal restitution he should pay to those same lenders as part of his conviction, which also includes a 44-month prison sentence.

Federal prosecutors fired back at the request in June, arguing the embattled local businessman does not deserve a new trial and that the disclosure of the coupon payments should not be considered new evidence.

Judge Abrams agreed. “Although this latest argument appears compelling at first blush… the Court cannot conclude the documents pertaining to coupon payments received by the lenders constitute newly discovered evidence” under federal rules cited by Hild, Abrams said in her opinion.

Abrams added that just because the lenders may have ultimately made money off the bonds, that doesn’t make a fraud scheme less fraudulent.

“It is well established that actual harm is not an element of any of the offenses for which Hild was convicted,” Abrams states. “It was therefore irrelevant to Hild’s guilt, as a matter of law, whether any of the lenders lost any money—or even actually profited from—his fraudulent scheme.”

Abrams further ruled that the existence of any bond proceeds also would not have affected the jury’s deliberation in the April 2021 trial.

“The question for the jury’s purposes, as the Government argued throughout trial, was thus simply whether Hild knowingly caused the bonds to be marked at prices that were not obtainable in the market in order to receive inflated loans from lenders.”

Judge Abrams is the same judge who oversaw Hild’s trial and struck down his first request for a new trial last year, when he sought to blame his previous attorney for faulty representation.

While Abrams squashed the new trial request, she’s letting another judge help resolve the ongoing dispute between the government and Hild over the amount of restitution that’s appropriate in the case.

The government and the lenders claim they are owed a total of $69 million in restitution from Hild and his two co-conspirators. Hild and his attorneys have argued that potentially no restitution is owed. Abrams referred that negotiation and calculation to a magistrate judge.

Hild’s co-conspirators, former Live Well CFO Eric Rohr and former Live Well bond trader Darren Stumberger, both pleaded guilty and were key witnesses in prosecutors’ case against their former boss.

Meanwhile, Hild continues to fight for his freedom in federal appeals court, where he’s asked for both the guilty verdict and the 44-month sentence to be overturned. The appeal was filed in January, shortly after Abrams sentenced him and left him free on bond while the appeal plays out.