Public Company CEO And Chairman Convicted Of Fraud

United States Attorney for the Southern District of New York, Jay Clayton, announced today that BRADLEY HEPPNER, the former chairman of GWG Holdings, Inc., a publicly traded company, was found guilty by a jury following a three-week trial before U.S. District Judge Jed S. Rakoff. HEPPNER was convicted of securities fraud, wire fraud, conspiracy to commit securities fraud and wire fraud, and false statements to auditors in connection with a scheme to fraudulently extract more than $150 million from GWG.

"A unanimous jury has found former public company CEO and Chairman Bradley Heppner guilty of fraudulently extracting $150 million," said U.S. Attorney Jay Clayton. "Heppner used shell companies to hide his scheme. When his house of cards began to collapse, he did not come clean. Instead, he doubled down by falsifying emails and backdating documents to lie to the auditors, directors, and the SEC. Our world-leading capital markets are built on trust and transparency. The honesty and candor of C-Suite executives is essential, and this action should send a message: C-Suite executives who breach the public trust will be pursued by the SDNY's Securities and Commodities Fraud Task Force and our dedicated partners at FBI, vigorously. That is what investors and the American people want and deserve."

As established during the trial:

Between 2018 and 2021, HEPPNER, as chairman of GWG Holdings, Inc.-a Nasdaq-listed financial services company that raised capital through bonds sold predominantly to retail investors and retirees-executed a scheme to fraudulently divert GWG funds to his own benefit through a shell company he controlled, the Highland Consolidated Limited Partnership ("HCLP").

To effectuate the scheme, HEPPNER fabricated a $141 million debt that Beneficient, a subsidiary of GWG that HEPPNER had founded, purportedly owed to HCLP. Under the guise of repaying that debt, HEPPNER told the board of directors of GWG that it was necessary to transfer millions of dollars to Beneficient. When a special committee of GWG's board inquired about who controlled HCLP and would receive the debt payments, HEPPNER falsely represented that HCLP was independent and disclaimed any personal financial interest in payments made on the purported debt. Those representations were false. HCLP was controlled by HEPPNER, and when GWG authorized payments to satisfy what it believed were arm's-length obligations to a third-party lender, those funds flowed through multiple corporate entities and ultimately into HEPPNER's personal accounts. HEPPNER used the proceeds for personal expenses, including renovating his Dallas mansion and purchasing a private jet travel and jewelry.

To conceal the scheme, HEPPNER made false and misleading statements and caused the preparation of backdated and fraudulent documents to deceive auditors in connection with their assessment of whether HCLP was independent of HEPPNER. After GWG received a subpoena from the SEC, HEPPNER also falsified the minutes of an October 2019 board meeting, adding language to create the false appearance that he had previously disclosed to Beneficient his history of borrowing funds from HCLP, and caused the falsified minutes to be transmitted to the SEC.

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HEPPNER, 60, of Dallas, Texas, is scheduled to be sentenced by Judge Rakoff on October 7, 2026. He faces a maximum sentence of 20 years in prison on each of the counts of securities fraud, wire fraud, and false statements to auditors, and a maximum of five years in prison on the conspiracy count.

The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation. Mr. Clayton also expressed appreciation for the assistance of the U.S. Securities and Exchange Commission.

This case is being handled by SDNY's Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Daniel G. Nessim, Alexandra Rothman, and Kyle Wirshba are in charge of the prosecution.