By Jasper Ward
WASHINGTON (Reuters) -Bradley Heppner, the former chair of bankrupt financial services company GWG Holdings and founder of alternative asset firm Beneficent, was indicted on five charges including securities fraud and wire fraud, the U.S. Department of Justice said on Tuesday.
The charges stem from allegations that Heppner engaged in a scheme to steal more than $150 million from the then publicly traded GWG while serving as its chairman, according to an indictment unsealed in the Southern District of New York where the charges were filed.
The indictment also alleges that Heppner, 59, was able to do this by extracting funds from GWG through a “series of misrepresentations about and self-serving transactions with” Highland Consolidated, a shell company that the department says he controlled.
“As alleged, Heppner abused his role as a public company executive to loot the company and to funnel money into his own pockets,” Jay Clayton, the U.S. Attorney for the Southern District of New York, said in a statement.
Heppner served as chairman of both Beneficient and GWG Holdings from 2019 to 2021. GWG filed for bankruptcy in 2022 with $2 billion in debt amid an investigation by the Securities and Exchange Commission into the company’s accounting.
A lawyer for Heppner declined to comment. Heppner was also charged with false statement to auditors and falsification of records, according to the indictment.
The Justice Department said Heppner used the funds he received for personal expenses, including to fund his lifestyle and renovate his Dallas mansion, after taking control of the company from GWG’s shareholders and installing himself as chairman while appointing friends and associates as executives and board members.
“Once Heppner exhausted his ability to siphon GWG’s assets for himself, he separated himself from GWG. GWG filed for bankruptcy shortly thereafter, causing losses exceeding $1 billion to thousands of investors and bondholders,” the indictment read.
(Reporting by Jasper Ward; Editing by Lincoln Feast.)
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