If former Live Well Financial CEO Michael C. Hild is convicted on allegations that he was a mastermind in a multimillion-dollar bond fraud scheme, the federal government wants to be able to seize at least 29 properties and eight businesses that prosecutors claim were funded by his “crime proceeds.”
Federal prosecutors in New York filed documents last week detailing the assets owned by Hild and his wife, Laura Dyer Hild, who together have in recent years amassed the properties in Richmond’s Manchester, Blackwell and Swansboro neighborhoods with plans to redevelop them.
The eight businesses include Hot Diggity Donuts, Butter Bean Market & Cafe and Dogtown Brewing Co. — entities that the couple opened on Hull Street in South Richmond — as well as the Anderson’s Neck Oysters farming operations along the York River in King and Queen County. The other businesses include Church Hill Ventures LLC and Gardenia LLC, entities created to buy the properties.
The government claims those properties and businesses are assets that “constitute proceeds of Hild’s fraudulent scheme.”
“Due to his participation in the scheme, Hild personally obtained at least $20 million in proceeds from the scheme,” according to documents filed with the U.S. District Court in New York that became available last Friday.
“Hild then utilized those crime proceeds to purchase various real estate and business interests,” according to the documents. “Hild personally profited from the scheme.”
Hild is the founder and former CEO of the now-defunct Chesterfield County-based Live Well Financial, which closed abruptly on May 3 and laid off its 103 employees, most of whom worked at the company’s corporate offices in the Boulders office complex.
Hild, 44, pleaded not guilty in federal court in New York City last week to 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.
His wife, who works in the Richmond office of HKS Architects, has not been charged with any crimes.
Hild could not be reached for comment. His personal attorney, Richmond lawyer Vernon E. Inge Jr. with the Whiteford, Taylor & Preston law firm, declined to comment.
The day before Hild was arrested last month, federal prosecutors obtained a restraining order prohibiting him and others from taking any actions with those assets. Prosecutors followed up with court filings last week that provided greater detail about those properties and businesses.
The court documents contained an affidavit signed by William Bolinder, a special agent with the FBI who was on the team investigating Hild. The affidavit previously had been sealed.
Hild is accused of fraudulently inflating the value of Live Well Financial’s portfolio of complex reverse-mortgage bonds in order to induce various securities dealers and at least one financial institution into lending more money to the company. Prosecutors claim he inflated the value of the mortgage-backed bonds by more than $140 million.
The affidavit detailed how the government believes the proceeds from the alleged bond scheme were used by Hild to buy the properties and fund the businesses.
Between September 2016 and June 2019, funds were transferred from the Hilds’ Wells Fargo bank account and used to recapitalize the limited liability corporations that are owned by Hild and/or his wife, the documents show.
“Many of the transfers were made by check with the phrase ‘LDH Investment’ printed on the memo line,” Bolinder’s affidavit said. “Laura Hild did not contribute to funding the Wells Fargo account; rather, the funds were the proceeds of the fraudulent scheme that Michael Hild extracted from Live Well.”
A total of $17.479 million in transfers, many of which were composed of multiple checks, were made from the Wells Fargo account to the various Hild entities, the court records show. That included transfers of $14.417 million to Church Hill Ventures, $1,000,500 to Gardenia, $565,000 to Dogtown Brewing and $437,500 to Butter Bean.
The government alleges that Hild used $18 million generated from the bond scheme to buy out the preferred stockholders in Live Well Financial. The elimination of the preferred stockholders gave Hild exclusive control of the company.
Once he gained control, Hild increased his compensation in three ways, the court records show.
Hild increased his salary. His pre-tax wages from Live Well in 2015 totaled slightly more than $1.4 million, the court document show, citing Hild’s W-2 form. Following the shareholder buyout, his salary jumped to $3.5 million in 2016 and $3.4 million in 2017.
He also paid himself director’s fees, even though Live Well’s directors had not been paid in the past. The court records say that following the buyout, Hild’s tax forms show he received $1,131,125 in director’s fees for 2017 and $171,900 in director’s fees for 2018.
Hild also receive personal guarantee fees of $1,495,480 in 2016, $5,142,902 in 2017, and $6,649,254 in 2018, the court documents show.
From Jan. 1 through May 31 of this year, Hild was paid a total of $2.804 million — $2,276,007 in guarantee fees, $42,975 in director’s fees, and $485,649 in post-tax salary, the court records show.
Even after Live Well abruptly shut down on May 3, the affidavit said, “Notably, over $100,000 in salary was paid” to Hild.
The 29 properties were bought for a total of $4.039 million, the court records indicate.
Included on the list of properties is the former Siegel’s grocery store building off Bainbridge and Hull streets in South Richmond.
The couple started restoring the building in early 2018. At the time, Hild said he and his wife expected to spend more than $1 million on the first phase, including putting on a new roof, replacing the heating and air-conditioning system, restoring the original terrazzo floors and restoring the glass panels in the front of the building.
They didn’t have a plan for what the former Siegel’s grocery store would become, but Hild said in 2018 that the building is worth saving.
“We are brainstorming and coming up with ideas and conceptual plans,” Hild said then. “We have no idea what to do, except we know we don’t want to wait and have the building deteriorate any further. It is a great building with great architecture so Laura and I said, ‘Let’s buy it and save it and find a use for it.’”