Jay Clayton, U.S. Attorney for the Southern District of New York | Department of Justice
Federal prosecutors in New York have charged Bradley Heppner, the founder of Beneficient and former chairman of GWG Holdings, Inc., with multiple counts including 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 orchestrated a scheme to extract funds from GWG Holdings through a shell company he controlled called Highland Consolidated Limited Partnership (HCLP). Heppner was arrested in Dallas, Texas and is expected to appear in court in the Northern District of Texas. The case will be overseen by U.S. District Judge Jed S. Rakoff.
“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, between 2018 and 2021 Heppner used his position at GWG Holdings—a Nasdaq-listed financial services firm known for selling L bonds primarily targeting retirees—to facilitate payments from GWG into Beneficient under false pretenses. These funds were then routed through HCLP before ultimately reaching accounts controlled by Heppner himself.
Heppner is accused of making misleading statements about HCLP’s independence when questioned by a special committee within GWG’s board about proposed investments into Beneficient intended partly for debt repayment purposes. Contrary to his representations that HCLP was independent from him or his associates—and that he would not personally benefit—prosecutors allege HCLP was under his control throughout.
The indictment also states that during audits required for SEC filings due to GWG's substantial interest in Beneficient, Heppner created backdated documents and fraudulent communications designed to mislead auditors regarding relationships between himself, HCLP, and others involved.
In late 2020 when facing an SEC subpoena related to ongoing investigations into both companies’ activities, prosecutors allege that Heppner altered board meeting minutes retroactively so it appeared he had disclosed prior borrowing activity involving HCLP—information which had not actually been shared with either company's boards.
After resigning from GWG’s board in June 2021—and following separation between Beneficient and GWG later that year—GWG filed for Chapter 11 bankruptcy protection with over $1 billion owed largely to retail bondholders.
Heppner faces several charges each carrying up to 20 years imprisonment; conspiracy charges carry up five years each if convicted.
Mr. Clayton praised the efforts of the FBI on this case as well as assistance provided by the U.S. Securities and Exchange Commission.
The prosecution is being led by Assistant U.S. Attorneys Thomas Burnett, Daniel G. Nessim, and Alexandra Rothman from SDNY’s Securities and Commodities Fraud Task Force.
