United States Attorney for the Southern District of New York, Jay Clayton, announced that Bradley Heppner, founder of Beneficient and former chairman of GWG Holdings, Inc., has been charged with securities fraud, wire fraud, conspiracy to commit securities fraud and wire fraud, false statements to auditors, and falsification of records. The indictment alleges that Heppner and others extracted funds from GWG Holdings using a shell company under his control named Highland Consolidated Limited Partnership (HCLP). Heppner was arrested in Dallas, Texas.
“As alleged, Heppner abused his role as a public company executive to loot the company and to funnel money into his own pockets,” said U.S. Attorney Jay Clayton. “When executives like Heppner lie and cheat to enrich themselves at the expense of everyday investors, they corrupt the integrity of our public markets. The women and men of the SDNY and our law enforcement partners will continue to work tirelessly to protect investors and the markets.”
FBI Assistant Director in Charge Christopher G. Raia stated: “While serving as chairman of GWG, a publicly traded company, Bradley Heppner allegedly misappropriated more than $150 million. In furtherance of this scheme, Heppner allegedly falsified documents, made misleading statements to investors and auditors, and obstructed an investigation by regulatory authorities. GWG’s subsequent bankruptcy resulted in over $1 billion in losses to retail investors. The FBI will continue to hold accountable any individual who defrauds investors for their own gain.”
According to the indictment unsealed in Manhattan federal court, Heppner created a $141 million debt that Beneficient purportedly owed HCLP. After gaining influence over GWG Holdings—a Nasdaq-listed financial services firm known for selling L bonds mainly to retirees—Heppner became board chairman and appointed associates as board members.
Between 2018 and 2021, prosecutors allege that Heppner provided false information to a special committee of GWG’s board so they would authorize investments by GWG in Beneficient. This was partly intended to pay off Beneficient’s supposed debt to HCLP. When questioned about HCLP’s control structure, Heppner reportedly denied personal involvement or benefit from these payments; however, authorities say he controlled HCLP directly. Funds authorized by GWG ultimately went through various entities before reaching Heppner’s personal accounts; he is accused of receiving over $150 million from these transactions.
The indictment also details how in 2019 Heppner is alleged to have prepared false documents for auditors during preparation of financial statements required by the Securities and Exchange Commission (SEC). These actions included backdated paperwork and fraudulent emails designed to mislead auditors about relationships between himself and those managing HCLP.
In late 2020 after receiving an SEC subpoena regarding an enforcement investigation into GWG and Beneficient, authorities say Heppner falsified meeting minutes submitted as evidence that he had disclosed relevant borrowing history—information prosecutors claim was never actually shared with either company.
By June 2021 Heppner resigned from GWG’s board; later that year Beneficient separated from GWG which subsequently filed for Chapter 11 bankruptcy due largely to its inability to meet obligations exceeding one billion dollars owed primarily to retail bondholders.
Heppner faces multiple charges carrying maximum sentences ranging up to 20 years each for most offenses; conspiracy charges carry a maximum five-year sentence. Sentencing decisions will be determined by the presiding judge.
Jay Clayton praised both the FBI’s efforts on this case as well as support received from the U.S. Securities and Exchange Commission. The prosecution is being managed by SDNY’s Securities and Commodities Fraud Task Force with Assistant U.S. Attorneys Thomas Burnett, Daniel G. Nessim, and Alexandra Rothman leading.
