UPDATE: Feds plan to try and seize properties, businesses owned by Manchester developer Michael Hild in fraud case

UPDATE: Feds plan to try and seize properties, businesses owned by Manchester developer Michael Hild in fraud case

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.

Update (9/10/19):

From Richmond BizSense:

The federal government would look to seize dozens of properties in and around Manchester, as well as a new brewery, donut shop and café on Hull Street, if it’s successful in prosecuting local mortgage executive Michael Hild.

New documents filed late last week in the criminal case against the embattled founder and CEO of Chesterfield-based Live Well Financial list in detail the assets owned by Hild and his wife, which the government claims “constitute proceeds of Hild’s fraudulent scheme.”

Hild, who ran Live Well until its collapse into bankruptcy this summer, was arrested last month on counts of securities fraud, mail fraud and bank fraud.

The 44-year-old has pleaded not guilty and remains free on a $500,000 bond. His only comment publicly since his arrest last month has been through his attorneys, who stated “every business failure is not a corporate crime.”

Continue reading here.

Original (8/30/19):

The FBI has arrested a well-known local businessman who is accused of taking part in an alleged $140 million bond fraud scheme. Michael Hild, the founder, former chief executive officer, and controlling shareholder in Live Well Financial, Inc., was arrested Thursday 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. The alleged crime was perpetuated through repurchase agreements and collateralized loans that masked 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, charges were unsealed 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 authorities.

Hild was presented and arraigned Thursday in the United States District Court for the Eastern District of Virginia.  On August 28th, 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.

Hild and his wife Laura Dyer Hild have also started a handful of businesses, mainly in the Manchester neighborhood, including Hot Diggity Donuts, The Butter Bean Market & Café, and also own neighborhood news website The Dogtown Dish.

“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,” said Manhattan U.S. Attorney Geoffrey S. Berman. “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%, while exposing lenders cumulatively to $65 million in unsecured loans to the company, which is now in bankruptcy.”

In a separate action, the Securities and Exchange Commission filed civil charges against Hild.

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