The trial of Michael C. Hild — the former CEO of defunct reverse mortgage lender Live Well Financial — for an alleged bond fraud scheme is still slated to begin this coming October, as a couple of additional developments in the unfolding story have taken place that could affect its trajectory. This is according to original reporting by local news outlets, comments from involved parties and court documents obtained by RMD.
Among these developments, new counsel has replaced previous attorneys retained by Hild for the upcoming trial in the Southern District Court of New York, while Hild’s alleged co-conspirators continue to cooperate with the federal government based on recent court filings.
A class action case levied against the remains of the Live Well organization related to the abrupt dismissal of employees upon the company’s closure is in limbo, while progress on the Hild trial is expected to continue for both the prosecution and the defense in light of a prominent shakeup in the U.S. Attorney’s Office for the Southern District of New York (SDNY).
Hild enlists friend and former classmate as new attorney
Hild has dismissed his previous New York-area attorneys as representation in his upcoming trial, and has instead enlisted a friend and former classmate to defend him against the charges levied by the federal government.
Benjamin Dusing is an attorney who has primarily argued cases in the Cincinnati area as well as in his own local community in northern Kentucky, so moving from his regular areas of practice into SDNY — the venue for Hild’s bond fraud trial — makes for quite a change.
“It is the Yankee Stadium of financial fraud worldwide,” Dusing told Cincinnati ABC affiliate WCPO shortly after his hiring in March.
SDNY has previously prosecuted notable high-profile defendants including convicted Ponzi scheme mastermind Bernie Madoff and former Donald Trump lawyer Michael Cohen, among many others.
“I don’t care what the facts are; it is David versus Goliath,” Dusing added to WCPO. “There are advantages to being an outsider.”
Dusing and Hild went to Park Hill, Ky.’s Covington Catholic High School together in the 1990’s, where they played on the baseball and basketball teams together. Dusing reached out to Hild in January after hearing about the circumstances of his case, according to his interview with WCPO. After spending a weekend together at Dusing’s home discussing the case, Hild made the decision to dismiss his previous New York-based attorneys in favor of positioning Dusing as his sole representation.
“There is a comfort level with Ben,” Hild wrote in a statement to WCPO. “I think of him as a brother. I knew that he would have my best interests at heart, more-so than essentially anyone else I could ever hope to find. […] I’m looking forward to the full truth coming to light about the allegations.”
SDNY shakeup
Recently, the Southern District Court of New York has been disrupted by the prominent exit of Geoffrey S. Berman, the U.S. Attorney for SDNY who had served in the role since April 2018, and whose office was overseeing the government’s case against Hild.
SDNY confirmed for RMD that regardless of the exit of Mr. Berman, who excoriated the alleged scheme in the government’s announcement of the case, all the work put into place for the forthcoming October trial is proceeding as planned.
“The work of the office will continue,” said James Margolin, chief public information officer for the U.S. Attorney’s Office, SDNY in an email to RMD.
In terms of Mr. Hild’s defense, his lawyer Mr. Dusing similarly does not expect the proceeding to be interrupted.
“I do not believe the prosecution will be materially affected by the recent turnover of the U.S. Attorney position,” Dusing told RMD in an email. “Our defense — which is grounded in the facts — is unaffected. The truth remains the truth. At present, the trial is still scheduled for October.”
After Berman’s resignation was announced by U.S. Attorney General William Barr, Berman fired back saying he had not resigned and was determined to stay in his role. Barr then announced that Berman was actually fired from his position by President Donald Trump while naming Berman’s hand-picked deputy as his interim successor, and Berman subsequently confirmed his exit via SDNY’s social media channels.
Class action suit stalls
A week after the closure of mortgage lender Live Well Financial, a former employee filed a class-action lawsuit against the company alleging lost wages and wrongful termination under the terms of the Worker Adjustment and Retraining Notification (WARN) Act, which requires 60 days of advance notice before dismissing employees. Shortly thereafter, Live Well announced its intent to challenge the case.
According to recent court documents obtained by RMD, the case has not advanced significantly beyond its previous status primarily because Live Well, as an entity, is tied up in ongoing liquidation stemming from its forced chapter 7 bankruptcy.
As a result, the class action suit has been stayed by the presiding judge until the involved parties in the bankruptcy case advise the Court that the stay can be lifted. At that point, the way will be cleared for the suit to continue.
Alleged co-conspirators awaiting Hild trial
Alongside the charges levied against Hild by the federal government, Darren Stumberger, former Live Well EVP and Eric Rohr, former Live Well chief financial officer were also charged in the alleged scheme. Both men have pleaded guilty and are cooperating with federal authorities, according to the initial statement of the lawsuit by the U.S. Attorney’s Office.
In the case of Stumberger, Attorney Berman filed a request with the court shortly before his dismissal from SDNY last week asking for a six-month delay of Stumberger’s sentencing date, since Stumberger is expected to testify in the trial against Hild which begins this October. This is according to court documents obtained by RMD.
“The defendant has been cooperating with the government, but his cooperation is not yet complete,” Berman wrote in his letter to Judge J. Paul Oetken, who approved the request on June 16. This pushes the date of Stumberger’s sentencing to December 18.
In the case of Rohr, last August he waived his right to be prosecuted via indictment in front of a grand jury and is instead being prosecuted by “information,” similar to an indictment but which would forego a trial in front of a grand jury, according to Palm Beach, Fla. attorney Ann Fitz in describing information.
“In exchange, prosecutors view a defendant’s willingness to plead to an information as both cooperation with the government and acceptance of responsibility of criminal wrongdoing, which can result in fewer or reduced charges in an information versus an indictment,” Fitz writes.
