Michael Hild, the former CEO of defunct reverse mortgage lender Live Well Financial, has filed a motion for acquittal or a new trial after alleging that his prior counsel was unable to provide effective representation in the proceeding which resulted in his conviction for a bond fraud scheme. This is according to court documents obtained by RMD.
In a document filed with the Southern District Court of New York, Hild’s attorney Brian A. Jacobs alleges that Mr. Hild was “deprived of the chance to mount an effective trial defense because his counsel was secretly laboring under serious conflicts of interest stemming from counsel’s own misconduct,” a letter filed by Mr. Jacobs reads.
Hild’s attorney during the trial, Benjamin Dusing, served as head of Hild’s second legal team in the case after he previously dismissed his New York-area attorneys in 2020. Dusing and Hild were acquaintances since childhood, having both attended high school in Kentucky in the 1990’s.
Request for acquittal or new trial
In a letter filed with the court in late July, Hild’s current counsel requests either a judgment of acquittal or the commencement of a new trial. The request for an acquittal — which would essentially vacate the verdicts on all five criminal counts reached by a jury in April — is because attorneys for the U.S. government failed to prove its case against the former reverse mortgage executive, Hild’s counsel says.
“[T]his Court should enter a judgment of acquittal on all counts […] because […] the proof at trial failed to establish beyond a reasonable doubt that Mr. Hild committed any of the charged crimes,” the letter reads. “The charges all rest on the government’s assertion that Mr. Hild misrepresented (or caused others to misrepresent) the value of bonds held by Live Well Financial to induce lenders to loan additional cash. But the evidence at trial failed to prove that Live Well misrepresented the bond values, or that Mr. Hild had intent to defraud.”
Should the request for an acquittal not be granted by the presiding judge, however, Hild’s attorney requests a new trial on account of an allegation of ineffective counsel on the part of Hild’s previous legal team led by Mr. Dusing, the letter reads.
“Mr. Hild’s trial counsel, Benjamin Dusing and Brandy Katy Lawrence, were laboring under actual undisclosed and un-waived conflicts of interest that adversely affected their performance,” the letter reads in part. “In particular, during Mr. Hild’s trial […] Mr. Dusing and Ms. Lawrence were secretly litigating serious custody cases in Kentucky (where Mr. Dusing was a party, represented by Ms. Lawrence) in which Mr. Dusing had been sanctioned for his behavior.”
Both sides of the described custody cases in Kentucky filed “multiple lengthy motions” during the period in which Dusing was engaged in representing Hild, and Dusing had faced “the threat of additional sanctions and jail time for his misconduct there,” the letter alleges. Additionally, a scheduled hearing in early May had the potential to conflict with dates in Hild’s trial, the letter alleges. Because of this, Dusing and his partner Ms. Lawrence found themselves in conflict between the needs of the described custody cases and their representation of Mr. Hild, and did not disclose those conflicts to the judge in Mr. Hild’s case, the letter alleges.
“Because Mr. Dusing’s and Ms. Lawrence’s conflicting Kentucky obligations inherently conflicted with plausible defense strategies […] prejudice to Mr. Hild is presumed and a new trial is required,” the letter reads in part. “Mr. Dusing and Ms. Lawrence also provided ineffective assistance of counsel in the traditional sense by committing numerous errors at trial.”
A new trial is “required.” Hild’s counsel says, not only because of ineffective representation on the part of Dusing, but because the verdict was reached by the jury that was “against the weight of the evidence,” according to Hild’s attorney.
Shortly after Hild’s attorney filed the letter detailing the allegations of improper representation and an improper verdict, the government filed its own response requesting sworn testimony from Hild’s prior counsel to determine the veracity of the claims against them. Hild’s attorney responded shortly thereafter in an effort to limit the scope of questioning by the government solely to issues related to the allegation of deficient performance instead of including the alleged conflict of interest.
“Here, the defendant has neither shown nor argued that prior counsel’s personal and professional preoccupations precluded […] any course of conduct that would have been available to an unconflicted attorney,” the government responded. “Rather, he argues at most that they influenced counsels’ tactical decision-making in a way that was inconsistent with the defendant’s best interests.”
The government disputes that any of the alleged conflicts existed, saying that any request aimed to limit the scope of information gathering “is merely a tactic to avoid developing facts that will undercut [Hild’s] meritless argument,” a response letter said.
In a letter dated August 3, Judge Abrams agreed with the government’s request for sworn statements from prior counsel and has rejected the request for a narrower line of questioning from Hild’s representation. After such sworn statements are received and the government processes the information from Hild’s prior legal team, then the question of a new trial will be determined by Judge Abrams.
RMD learned that Live Well Financial had halted funding for new loans in early May 2019, and the company abruptly closed shortly thereafter, laying off over 100 employees. A coalition of the lender’s former creditors filed suit to force the remains of Live Well into bankruptcy and a court-supervised liquidation, and shortly afterward Michael Hild was arrested by the Federal Bureau of Investigation (FBI) due to his alleged connections with a bond fraud scheme.
After enlisting New York-area attorneys initially, Hild dismissed them in favor of Mr. Dusing. After the trial was initially delayed due to the COVID-19 coronavirus pandemic, it commenced on April 13, and the jury handed in its verdict on April 30 after four hours of deliberations. Shortly after the verdict was reached, Hild enlisted his new representation and successfully delayed his sentencing from mid-August to early September.
Last month, Live Well Financial’s court-appointed trustee filed suit against Hild, Hild’s wife, alleged co-conspirators in the bond fraud scheme and several additional companies Hild founded in Virginia seeking to recover over $100 million in damages allegedly levied against the former reverse mortgage company.
Immediately prior to the news of its closure, Live Well Financial was the seventh-largest reverse mortgage lender in the industry, recording 1,707 Home Equity Conversion Mortgage (HECM) endorsements across both retail and wholesale channels in the 12-month period ending in February 2019, according to data compiled by Reverse Market Insight (RMI). It took several months for Live Well to fall out of the top 10 rankings due to its levels of business prior to shutting its doors.
This story has been updated with a response to the government’s information request by the presiding judge.