Live Well Financial founder pleads not guilty in multimillion-dollar bond scam

by Ryan Smith09 Sep 2019

The founder and former CEO of a collapsed reverse-mortgage lender has pleaded not guilty to charges that he orchestrated a multimillion-dollar mortgage-bond fraud.

Michael C. Hild, 44, who founded Virginia-based Live Well Financial in 2005, pleaded not guilty to counts of conspiracy to commit securities fraud, conspiracy to commit wire and bank fraud, and one count each of securities fraud, wire fraud and bank fraud, according to a report by The Richmond Times-Dispatch.

Hild served as CEO of Live Well Financial until the company abruptly ceased operations in May. At the time it shut down, the company provided little explanation, merely citing “unexpected circumstances” on its website. In the ensuing weeks, however, Live Well was sued by a former employee who claimed that the company had not paid her or her coworkers what they were owed, sued by creditors who claimed it owed them millions of dollars, and forced into involuntary bankruptcy.

Earlier this month, the Justice Department accused Hild of orchestrating a scam to fraudulently inflate the value of Live Well’s bond portfolio in order to induce financial institutions to lend the company more money. According to the US Attorney’s Office for the Southern District of New York, 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 against the company, which is now in bankruptcy.”

Prosecutors said that Hild inflated the value of Live Well’s mortgage-bond portfolio by more than $140 million, according to the Times-Dispatch.

Also charged in the scam were Eric Rohr, Live Well’s former CFO, and Darren Stumberger, the company’s former executive vice president and head trader. Rohr and Stumberger have each leaded guilty to five criminal counts and are cooperating with federal prosecutors, the Times-Dispatch reported.

Hild’s trial date has been set for Oct. 13, 2020. If convicted on all five counts, he faces up to 115 years in prison and a fine of up to $5 million.