Federal authorities have charged Bradley Heppner, founder of Beneficient and former chairman of GWG Holdings, Inc., with multiple counts of securities fraud, wire fraud, conspiracy, making false statements to auditors, and falsification of records. The charges were announced by Jay Clayton, U.S. Attorney for the Southern District of New York, and Christopher G. Raia, Assistant Director in Charge of the FBI’s New York Field Office. Heppner was arrested in Dallas and is scheduled to appear in court in the Northern District of 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.”
“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,” said FBI Assistant Director in Charge Christopher G. Raia.
According to federal prosecutors’ allegations unsealed in Manhattan federal court, Heppner controlled both Beneficient—a financial services startup—and Highland Consolidated Limited Partnership (HCLP), which was used as a shell company for personal gain. Prosecutors claim that Heppner fabricated a $141 million debt owed by Beneficient to HCLP as part of a plan for personal payout.
After gaining influence over GWG Holdings—a Nasdaq-listed financial services firm that raised capital primarily from retail investors—Heppner installed himself as chairman and appointed close associates to its board. From 2018 through 2021, he allegedly provided false information to a special committee within GWG’s board regarding investments designed partly to repay HCLP’s purported debt.
Despite telling the committee that HCLP was independent from him and denying any personal benefit from repayments on this debt, authorities say these statements were untrue; HCLP was under his control. Funds authorized by GWG ended up routed through various entities before reaching accounts controlled by Heppner himself—amounting to more than $150 million received personally out of approximately $300 million transferred from GWG.
Prosecutors also allege that in 2019 Heppner deceived auditors involved with Beneficient’s audit—which had implications for GWG’s required SEC filings—by preparing backdated paperwork and fraudulent communications meant to hide his connection with HCLP.
When an SEC investigation began in late 2020 into both companies’ activities, authorities say Heppner falsified board meeting minutes so it appeared he had disclosed certain conflicts regarding loans from HCLP when he had not done so; these doctored minutes were later sent on to regulators.
Heppner resigned from GWG’s board in June 2021; after separating Beneficient from GWG later that year, GWG filed for Chapter 11 bankruptcy protection amid obligations exceeding one billion dollars owed mainly to retail bondholders.
Heppner faces several felony charges each carrying maximum sentences ranging up to 20 years in prison; sentencing will ultimately be determined by the presiding judge if convicted.
Jay Clayton credited the FBI for its investigative efforts on this case as well as support from the U.S. Securities and Exchange Commission. The prosecution is being led by members of SDNY’s Securities and Commodities Fraud Task Force: Assistant U.S. Attorneys Thomas Burnett, Daniel G. Nessim, and Alexandra Rothman.
