CEO Gets 44 Months for Massive Bond Fraud

Michael Hild, the founder and former CEO of Live Well Financial, Inc., was sentenced in January to 44 months in prison for his role in orchestrating a $200 million bond fraud scheme.

Live Well was a Virginia-based company that handled government-guaranteed reverse mortgages known as home equity conversion mortgages (HECMs). In July of 2019, the company was forced into Chapter 7 involuntary bankruptcy by four of its creditors.

Hild was convicted In April 2021 of securities fraud, wire fraud, bank fraud, and conspiracy to commit fraud for falsely inflating the value of the company’s bond portfolio. Prosecutors claim Hild intended to deceive securities dealers and financial institutions so they would loan more money to Live Well than they otherwise would have.

Through Hild’s scheme, Live Well grew its bond portfolio from approximately 20 bonds valued at approximately $50 million in 2014 to approximately 50 bonds valued at more than $500 million by the end of 2016.

What is Bond Fraud?

Bond fraud is a type of securities fraud that occurs when investors are encouraged to make investment decisions based on false information that results in financial losses. The crime is often prosecuted under federal securities laws and can be charged as bank fraud, mail and wire fraud, or money laundering.

What Are the Penalties for Bond Fraud?

Bond fraud charges are subject to United States Sentencing Guidelines Section 2B1.1, which applies generally to all theft crimes.

The sentencing guidelines were enacted in 1987 to encourage uniform criminal sentencing across the country and attempt to address all of the factors that go into federal sentencing. Their application to a specific crime can be quite complex.

For crimes that are subject to Section 2B1.1, the guidelines use a points system to determine potential penalties. The guidelines consider the following factors:

• Base Points. Calculating a potential sentence begins with the base points for a crime. Fraud crimes usually carry 6 or 7 base points.
• Amount of Loss. Points are then added for the amount of loss. The greater the alleged financial loss, the more points will be added. A higher number of points will result in harsher penalties and, potentially, more prison time.
• Enhancement Factors. Certain circumstances will result in additional points. For example, points are added if a defendant used “sophisticated means” or abused a “position of trust,” the crime involved multiple victims or the victims were minors or elderly, or the defendant was in a position of leadership or used their influence to commit a financial crime.
• Mitigating Factors. Mitigating factors can reduce a potential sentence, such as if a defendant accepted responsibility for their actions or played a relatively minor role in the crime.

In Michael Hild’s case, the sentencing guidelines prescribed a sentence of 234 to 405 months—or between 27 and 33 years and nine months—in prison. However, prosecutors agreed that the maximum sentence was unwarranted and recommended a sentence of 180 months, or 15 years, in prison.

Hild’s lawyers asked for a sentence of probation or, at most, 37 to 46 months, or between three and four years in prison. His lawyers cited “dozens of letters written on his behalf by family members and longtime friends,” stated that he “lives modestly” and “has exhibited a decades-long commitment to his community,” and that his “case compares favorably with others in this district in which courts have imposed substantially below-guidelines sentences.”

In recommending a more severe sentence, prosecutors mentioned that Hild “perjured himself extensively during more than two days of trial testimony” and enhanced their sentencing recommendations based in part on his efforts to obstruct justice.

Defending Against Charges of Bond Fraud

Federal fraud charges are serious, and the penalties for a conviction can be severe. But by mounting a vigorous defense, an experienced criminal defense lawyer can cast doubt on the prosecution’s claims, which can lead to the dismissal of some of the charges, a reduction in penalties, or outright dismissal of the case.

The best defense will address the unique circumstances of your situation. Common defenses to charges of fraud often include the following.

Lack of Intent

To secure a fraud conviction, the government must prove that you willfully and intentionally defrauded someone to obtain money, property, or services. But if you simply got mixed up in something you did not understand and never intended to commit fraud, you can avoid being convicted of fraud.

Insufficient Evidence

As in any criminal case, the prosecutor must prove you guilty beyond a reasonable doubt. By identifying inconsistencies or a lack of evidence, your criminal defense lawyer can work to have the charges reduced or the case against you dismissed.

Violations of Your Constitutional Rights

In some cases, the government’s case is built on evidence that was obtained illegally in violation of the Fourth Amendment. If law enforcement agents did not have probable cause or lacked a warrant, your lawyer will raise these violations of your rights as a defense.

Charged with Bond Fraud? Contact Federal Criminal Defense Attorney Hope Lefeber Today

If you are under investigation or have been charged with fraud in federal court, you need an experienced and tenacious federal criminal defense attorney on your side.

Hope Lefeber has earned a reputation as a fierce defender of her client’s rights. She is regularly called upon to represent high-profile defendants in high-stakes criminal cases. Ms. Lefeber began her career as an Enforcement Attorney with the Securities and Exchange Commission (SEC), where she learned how the government prepares and prosecutes cases in federal court. Today, she uses that experience to defend people accused of bond fraud and other financial crimes.

To learn more about Ms. Lefeber and how she can help, contact us today to schedule a confidential consultation to discuss your situation.