Lawyers for the U.S. government and former Live Well Financial CEO Michael Hild are clashing over the proposed restitution to victims of a fraud scheme for which Hild was sentenced in January, with the government stating that Hild, along with former Live Well executives Eric Rohr and Darren Stumberger, would be “jointly and severally liable” for $69,853,850.20 in restitution.
However, attorneys for Hild argue that the amount proposed by the government has been “improperly asked” for, due in part to attorneys for the government allegedly failing to confer with Hild’s counsel prior to a restitution submission, according to court documents.
In a submission filed with the Southern District Court of New York (SDNY) earlier this week, the U.S. government contends that the $69.8 million in restitution aligns with the stated losses from victim impact statements submitted to the court by representatives of ICBC, Mirae, Flagstar Bank, and Customers Bank.
“On the basis of those statements, the Court found at sentencing that, as a result of the criminal conduct of the defendant and his co-conspirators, ICBC suffered a principal loss of approximately $29 million, Mirae suffered a principal loss of approximately $20 million, Flagstar Bank suffered a principal loss of approximately $13 million, and Customers Bank suffered a principal loss of approximately $7.6 million,” the government stated in its letter.
Hild’s attorneys contend that the government’s request was improper and should not be considered by presiding Judge Ronnie Abrams.
“The Court should deny the government’s request — which it has made without honoring its own representations to the Court that it would first confer with the defense and also seek a schedule for submissions sufficiently in advance of the deadline — and decline to order restitution in this matter based on the lack of evidence of victims’ actual losses directly resulting from the offense of conviction,” Hild’s attorneys argue.
Government lawyers responded to Hild’s filing less than 24 hours later, stating that there is enough factual support for the restitution amount.
“[T]he record amply supports the Government’s reasonable estimate of restitution, and the defendant’s claim that the Government’s submission is in some way inconsistent with its prior position is both incorrect and irrelevant,” the government said.
Judge Abrams weighed in the following day in a filing, finding merit in certain arguments made by Hild’s attorneys.
“The government now seeks to rely upon the same affidavits it used to establish ‘loss’ for the purposes of calculating Hild’s Sentencing Guideline range in order to establish the amount owed in restitution—the very same affidavits it previously acknowledged were ‘not sufficiently detailed’ to determine restitution at sentencing,” Abrams said.
Judge Abrams states that without additional justification, she will not impose a restitution amount, though restitution was ordered at sentencing. If a restitution amount is not determined by the parties after 90 days, the judge may order one.
Hild was sentenced in January to 44 months in prison for a conviction related to a scheme that fraudulently inflated the value of the lender’s bonds to convince creditors to lend the company more money. Hild has been granted bail by Judge Abrams pending the outcome of his appeal, stating that Hild represents neither a flight risk nor a danger to his community.