Michael C. Hild, founder and CEO of the now defunct Chesterfield County-based Live Well Financial, has been arrested by federal officials and charged with five criminal counts in a $140 million bond fraud scheme.
In a separate action, the U.S. Securities and Exchange Commission filed civil charges against Hild.
Hild was arrested in Richmond Thursday morning, federal officials said, in connection with a scheme they alleged that he fraudulently inflated the value of a portfolio of bonds owned by Live Well Financial in order to induce various securities dealers and at least one financial institution into loaning more money to the fast growing mortgage lender and servicer.
The scheme, which took place between September 2015 through May 2019, allowed Live Well to grow its bond portfolio exponentially
"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," Manhattan U.S. Attorney Geoffrey S. Berman said in a statement.
"This allegedly enabled Live Well to borrow money well over the value of the collateral it put up," he said. "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.”
A judge in the U.S. Bankruptcy Court in Delaware on July 1 granted a motion by three creditors of Live Well Financial to put the former mortgage lender and servicer into involuntary bankruptcy protection.
In addition to charges against Hild, the federal government also charged Eric Rohr, the company's former chief financial officer, and Darren Stumberger, Live Well's former head trader.
Rohr and Stumberger have pled guilty and are cooperating with the government, Berman said.
On Wednesday, federal law enforcement officials obtained an order restraining assets – including various real properties and business interests in the Richmond area – owned directly or indirectly by Hild that he allegedly purchased the properties or businesses with proceeds from the scheme.
Hild, 44, is charged with five counts: one count of conspiracy to commit securities fraud; one count of conspiracy to commit wire and bank fraud; one count of securities fraud; one count of wire fraud; and one count of bank fraud.
Live Well Financial abruptly shut down on May 3 and laid off its 103 employees, most of whom worked at the company’s corporate offices in the Boulders office complex in Chesterfield.
Hild founded the fast-growing mortgage company in April 2005.