After a three-week trial, a jury on Thursday in Manhattan convicted Bradley Heppner, former chairman of GWG Holdings and Beneficient, of all charges federal prosecutors brought against him in a corporate blow up that has caused more than $1 billion in losses to retail investors.
Heppner was guilty of four charges: securities fraud, wire fraud, conspiracy to commit securities fraud and wire fraud, and false statements to auditors. His sentencing is in October.
He faces a maximum sentence of 20 years in prison on each of the counts of securities fraud, wire fraud, and false statements to auditors, and a maximum of five years in prison on the conspiracy count.
The federal government’s charges against Heppner stemmed from a scheme to fraudulently extract more than $150 million from GWG, which collapsed into bankruptcy in 2022 and left thousands of Mom and Pop investors who bought more than $1 billion of GWG bonds from financial advisors holding the bag. GWG’s bonds, which were illiquid and did not trade, are now worthless.
According to a federal indictment from last October, Heppner, 60, received more than $150 million in payments through funneling money from GWG Holdings to a shell company, Highland, he controlled at the Dallas-based Beneficient.
“Heppner used shell companies to hide his scheme,” said U.S. Attorney Jay Clayton in a statement. “When his house of cards began to collapse, he did not come clean. Instead, he doubled down by falsifying emails and backdating documents to lie to the auditors, directors, and the SEC.”
For years, Heppner spent with a free hand on home improvements for his residence in an affluent Dallas neighborhood, eventually laying out $59 million on the eight bedroom, 12 bathroom, 22,000 foot Tudor-styled mansion, according to testimony at his trial.
From 2018 to 2022, when he was working on his mansion, his total compensation from Beneficient was close to $2.7 million, according to testimony.
Heppner acted solely on behalf of his family office to perpetrate this scheme through a shell company he controlled, according to a statement Monday morning by Beneficient. And Beneficient is also evaluating other claims against Heppner and entities associated with him in light of the verdict.
Beneficient is a financial services company that sought to buy illiquid alternative investments like private equity limited partnerships and then sell them for a profit.
Heppner founded and controlled Beneficient; it and GWG became intertwined and related when GWG in 2018 purchased a stake in Beneficient.
With the two companies linked, Heppner became chairman of both in 2019.
About 40 broker-dealers and their financial advisors sold close to $1.6 billion in GWG L bonds, so called because they were backed by life settlements, before the firm declared bankruptcy in 2022, leaving investors in the lurch.
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