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After Hild Guilty Verdict He Gets 44 Months But Wants Pending Appeal on Dusing Grounds

By Matthew Russell Lee, Patreon, Podcast Vlog

SDNY EXCLUSIVE, Jan 27 – Michael Hild was arraigned for fraud on Live Well Financial's reverse mortgages and home equity conversion mortgages by U.S. District Court for the Southern District of New York Judge Ronnie Abrams on September 5, 2019. Inner City Press covered it, here.

On January 27, 2023, Hild was sentenced to 44 months (and, it seems, $22 million in forfeiture). Inner City Press was there and live tweeted, here

OK- now at sentencing of mortgage fraudster Hild, which starts an hour late

Hild's lawyer contests loss amount, says it "may well be zero." Judge rejects argument. Says loss may be over $69 million, 24 level enhancement.

 Judge: The guidelines will be higher than the sentencing I am considering. But I am imposing the 2 levels for obstruction of justice. He made false statements under oath. Hild's lawyer: Yes he got over $1 million, but it was for his work.

 Judge: Guideline is 324 to 405 months. The parties agree to a variance, but not as to how much. 

Hild's lawyer: His wife and brother in law are here. They lived modestly. He has 40 letters. We want zero to 36 months

 Hild's lawyer: He is not a risk to re-offend. We rest on our papers AUSA: He paid himself large personal guarantee payments to the end. We are asking for 15 years. It was about greed.

 [Hild shakes his head]

Hild: Can I use the podium? I'm sorry to all impacted

Hild: I'm sorry to the City of Richmond, and to those seeking to preserve the Chesapeake Bay. I have a bottomless pit of remorse. My wife's life and career have been devastated. There has been a stalker.

 Judge Abrams: Mr Hild's conduct was brazen. He cashed out with millions. He looked for a "slimy" counterparty. There were recorded calls. He tried to hide money by transfers to his wife. There is a need for general deterrence.  I sentence Mr Hild to 44 months. [$22 million forfeiture mentioned]

Hild's lawyer: We want bail pending our appeal, which has a novel issue.

Judge Abrams: I don't think Mr Dusing's outrageous conduct will result in a new trial. AUSA: We'll brief.

Judge: I won't set a surrender date yet.

After the guilty verdict, one of the Hild jurors requesting anonymity has told Inner City Press: "The 3 week trial was definitely an interesting and wild one that's for sure but I'm happy that it's finally coming to a close after a year and eight months since our verdict. The background for me was easy from having experiences with reverse mortgages in the past so everything that was described in court was straight forward. I thought Hild's attorney did a fine job in representing him, I think the evidence against Hild was just too high of a mountain to climb and get out.

"The most damaging part of the case was obviously the testimony from Stumberger and Rohr. Knowing that they were cooperating with the government. I had my doubts on what they were saying at first and tried to have an open mind. But once the recordings were played I think everyone in that courtroom all knew what they were doing was wrong. I think the quote from Hild on the recording was something along the lines of the Scenario... I forgot the number... was a self generating money machine. Between all of the recordings, the visualizations of the HECM IO bonds being grossly inflated and increased perfectly which is something that would never happen.

 I think once they realized that IDC was publishing their pricing exactly, it opened up all of those opportunities. I think Hild testifying really didn't do that much for me. When he first got on the stand I wanted to believe him and was keeping an open mind with all of the evidence presented before hand. But I think once he got on the stand I think he realized what he did was wrong and once he started crying on the stand it reminded me of crocodile tears.

The final nail in the coffin was when Rohr resigned and the new exec. didn't want to sign the statements as they understood the walls were caving in to the whole plan and didn't want to be a part of it for how much they inflated the portfolio.

  Once we went into deliberations that morning, I think we all looked at each other and within 30 minutes we all knew that we were all on the same page with a guilty verdict on all the counts and there really was no doubt for how well the government proved their case.

That's the reason why it only took us less than half of the day to deliberate, the evidence against Hild was far too strong for anyone to get him out of that hole. We went count by count taking the evidence that was provided and seeing what would place a guilty verdict for each and it was clear.

One or two of us tried to play devil's advocate and tried to raise any sort of doubt in the government's evidence but if any doubt was made at one thing there was a mountain of five or six other things to back it up.  Other than that, I'm curious to see what the court's sentence is going to be next Friday and love following you and your other cases you report on."

  It was said Hild's sentencing would be on September 10. But on September 3 Hild submitted an affidavit trashing his trial attorney Dusing, that he refused to using funds he was given for expert witnesses, and "did not cover the subjects we have previously agreed he would in my direct examination."

In March 2022, the Ohio Supreme Court joined Kentucky in temporarily suspending Dusing from practicing law after Dusing threatened two attorneys in a profanity-laced video played in court.

On March 7, 2022, this: "ORDER as to Michael Hild. As discussed with the parties, the oral argument scheduled for March 8, 2022 is adjourned to April 29, 2022 at 2:00 p.m. The Court shall hold the argument in Courtroom 1506 at the U.S. Courthouse, 40 Foley Square." Inner City Press wrote, Be there or be square. And Inner City Press was there, see below.

Now on January 13, 2023, Hild has filed his sentencing submission - and he wants probation, or "a sentence below 37 months imprisonment." The US's memo is due next week. Watch this site.

Back on April 29 Hild's new lawyer argued. Inner City Press live tweeted, thread here (vlog here)

Hild's new lawyer starts by saying trial evidence was inadequate. Now against Dusing on conflict of interest "in his Kentucky litigation."

Hild's new lawyer: Dusing had to appear in Kentucky on May 4 in his own case so he shortened the Hild defense case. Dusing's affidavit is inaccurate and "stunning."

 Hild's new lawyer: Dusing then lied to the court in Kentucky, that they'd be on trial in NY until the end of May. Cites video of "unprepared" lawyer in Kentucky

 Hild's new lawyer: Mr Dusing has since been suspended, not only in Kentucky but also Ohio.

Now AUSA says evidence was sufficient. Says Dusing's was not an actual conflict, just a "scheduling issue."

Now Hild's new lawyer in reply says Dusing violated ethical rules, Dusing threatened to kill a judge who then recused himself and called law enforcement.  Wants to cross examine Dusing.

 Judge Abrams: I'll take it under advisement

 On April 29, after Hild took the witness stand and claimed he was just along for the ride, an SDNY jury in less than four hours of deliberation declared him guilty on all counts. "HILD, 46, of Richmond, Virginia, was convicted of 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." Photo here.

  Hild's post-trial motions include allegations of conflict of interest of prior counsel. Judge Abrams to her credit put into the record an email of May 7, Katy Lawrence saying Joe and Paul joked about getting KFC for lunch one day, so maybe we can cater in KFC for everyone? With covid restrictions, I wasn't sure if a mailed package of some Kentucky / Cincinnati specific items would be acceptable like Skyline chili or Graeter's ice cream (can be mailed with dry ice)."

Now on August 3 from Judge Abrams, this: "ORDER as to Michael Hild: The Government's motion to permit Defendant's prior counsel to provide statements responding to the allegations of ineffective assistance is hereby GRANTED. Dkt. 106. By separate order, the Court will sign and docket the Government's proposed order on the matter. See id. Defendant also requests that the Court order the Government to "disclose... any 'information' not previously disclosed on which the government is relying... including all past communications with prior counsel, if any, regarding the issues raised in defense counsel's post-trial motions, such as emails, text messages, and notes from telephone calls." Dkt. 111. The Court has previously issued an order confirming the Government's obligations pursuant to Brady v. Maryland, 373 U.S. 83 (1963), Giglio v. United States, 405 U.S. 150 (1972), and their progeny. See Dkt. 34. The Court presumes that the Government remains well aware of these obligations and has, and will continue to, comply with them fully. The Clerk of Court is respectfully directed to terminate the motions pending at docket entries 106, 108 and 111. (Signed by Judge Ronnie Abrams on 8/3/2021)." Watch this site

On May 12, approval of new counsel for Hild, and a delay in his sentencing: "MEMO ENDORSEMENT as to Michael Hild on re: [68] LETTER MOTION filed by Michael Hild addressed to Judge Ronnie Abrams from Attorney Brian A. Jacobs dated May 12, 2021 re: Extension of Time For Post-Trial Motions and Sentencing. ENDORSEMENT: Application granted. Mr. Jacobs is substituted as counsel on behalf of Mr. Hild. The deadline to file post-trial motions is extended until July 27, 2021. The sentence date is adjourned to September 10, 2021."

More than a year after that, on December, 7, 2022, Judge Abrams ruled: "OPINION & ORDER as to Michael Hild. Hild's motions are denied. The Clerk of Court is respectfully directed to terminate the motions pending at docket entry 102. Sentencing is hereby scheduled for January 27, 2023 at 4:00 p.m. The parties shall refer to the Rule 10(A)(i) of the Individual Rules and Practices in Criminal Cases for the appropriate filing timeline for their sentencing submissions. (Signed by Judge Ronnie Abrams on 12/7/2022)." Full Order on Inner City Press' DocumentCloud here.

On December 28, 2022, Hild's lawyer threw a Hail Mary, noting that since Judge Abrams recused herself from the US v. Bankman-Fried case due to her husband's partnership in Davis Polk, why not on Hild, where David Polk represented Hild victim Mizuho?

On January 3, 2023, Judge Abrams denied the motion. From the docket: "ORDER as to Michael Hild. Defendant Hild is scheduled to be sentenced by this Court on January 27, 2023. By letter dated December 28, 2022, his counsel "ask[s] that the Court address whether possible conflicts in this case should have led this Court to disqualify itself pursuant to Section 455, Title 28, United States Code," and whether it should recuse itself for purposes of sentencing. Dkt. 141. Without citing any caselaw, Hild suggests that recusal is appropriate because the law firm of Davis Polk & Wardwell LLP, at which my husband is a partner, appears to have represented parties whose interests are "potentially adverse" to Hild. Id. at 2. Specifically, it lists Davis Polk's representations of Mizuho Bank and Industrial and Commercial Bank of China Limited (ICBC)---two of numerous victims of Hild's fraud---and Intercontinental Exchange---the owner of Interactive Data Corp. (IDC), which the government contended Hild "controlled" to perpetrate his fraud---as requiring recusal in this action. The Court was unaware of these representations until the filing of Hild's letter, and my husband has had no involvement with any representation of these clients. For the reasons set forth below, and based on longstanding interpretations of Section 455 by both the Second Circuit and the Advisory Committee on Judicial Ethics, the Court declines to recuse itself from this action....[*** See this Order ***]... Courts in this district have thus regularly declined to recuse themselves from proceedings wherein partners at a spouse's law firm have represented an interested party. See, e.g., Couri v. Pavia, No. 19-cv-5436, 2019 WL 3553357, at *3 (S.D.N.Y. Aug. 5, 2019) (denying recusal motion where the Court's husband was a partner at the law firm Proskauer Rose LLP, to which plaintiff claimed to be an "adversary"); Six W. Retail Acquisition, Inc. v. Sony Theatre Mgmt. Corp., No. 97-cv-5499, 2003 WL 282187, at *57 (S.D.N.Y. Feb. 7, 2003) (denying recusal motion where the Court's husband was a partner at the law firm Cahill Gordon & Reindel, which represented interested parties); see also Gench v. Hostgator.com, LLC, No. 14-cv-3592, 2015 WL 4579147, at *2 (S.D.N.Y. July 29, 2015) (this Court denying recusal motion where partners at Davis Polk may have represented an interested party in an unrelated matter). Accordingly, the Court concludes that recusal in this matter is unnecessary. SO ORDERED. (Signed by Judge Ronnie Abrams on 1/3/2023)." Watch this site.

 Back on April 14, Judge Abrams started the trial. Inner City Press live tweeted the morning, below, and noted that Hild worked at Capital One, and was building an empire in South Richmond which some locals denounced as gentrification. Hild, of course, has another story.

And on April 27, defendant Hild took took the witness stand, which is rare. Inner City Press tweeted, here:

Hild: At Capital One, I worked to get them into the mortgage industry.... Livewell Financial was founded in 2005: he and a bunch of papers in my kitchen.

Hild: We needed $20 million. We went to Customers Bank. They said they could do it, they had to go to the credit committee but it should be no problem. Still, there would be delay and we were at the limit of our Zenith Bank warehouse line. So we went with re-po

OK - defendant Hild now continues on direct examination after lunch break. He hired people - who have testified against him in this trial as cooperators. This cross-examination should be a doozy.

 Watch this site.

Back on Saturday, April 24, the US filed this: "Re: United States v. Michael Hild, 19 Cr. 602 (RA) Dear Judge Abrams: The Government writes in advance of the charge conference scheduled for April 26, 2021, to propose an addition to the Court’s jury instructions. Given the testimony and cross-examination on the disclaimer that Live Well provided to IDC (Tr. 153-55, 388-89, 918, 1078-79), the Government proposes that the second paragraph on page 28 of the draft charge be revised as follows, with proposed additions in bold: Any testimony that you may have heard from any witness with respect to whether a particular fact would or would not have been important to him in general reflect that witness’s individual views. Although you may consider such testimony, it is not controlling. It is for you to determine whether a particular fact would have been significant to a reasonable person in making an investment decision. In considering whether a statement or omission was material, let me caution you that it is not a defense if the material misrepresentation or omission would not have deceived a person of ordinary intelligence. Nor does a disclaimer regarding the accuracy of information render that information immaterial as a matter of law." We'll see...

On April 15, cooperator Darren Stumberger was asked on cross examination how he selected when to tape record, and when not. He tried to dismiss selectivity, tying his recording to the "Scenario 14 era."

  Simultaneously on April 15, in Stumberger's separate case before SDNY Judge J. Paul Oetken, 19-cr-608, his lawyer "asked the Court to seal Docket Number 13." That's appears to be an unnumbered Minute entry of a motion hearing for withdrawal of counsel. There is no item numbered 13 anymore, not even "sealed document placed in vault." Why not? Why now?

On April 19, as the trial continued, the abrupt closure of Live Well was portrayed, with a lending who flew from Detroit to demand a meeting to Hild on the stand. Hild had refused to meet; later the lender was told that a warehouse line of credit might be paid back over time.

On April 20, the US Attorney's Office asked Judge Abrams to "impose a deadline for the defendant to decide whether he will waive the attorney client privilege in support an of advice- or presence of counsel defense... prior to the completion of the direct testimony of Eric Rohr, Live Well's form CFO."

 There is Hild's line that every business failure is not a criminal act. On this one, we'll see. The trial continue on April 21.

From April 14: Assistant US Attorney, in opening, says it unraveled in 2018 when lenders asked for more info. $200 million stolen; the cooperating witness are criminals, sure, AUSA says, but they have accepted responsibility. 

Next up: Ben Dusing. And he's laying it on thick
[Note: "“It is the Yankee Stadium of financial fraud worldwide,” Dusing told Cincinnati ABC affiliate WCPO shortly after his hiring in March]
[And: Hild has a website of his endeavors, here]

 Ben Dusing: I'm from Kentucky, I speak with an accent, you're going to hear it a lot. My daddy told me, A trial is a search for the truth. We begin together to search for the truth. And that's the exciting thing. We can all be proud. These are interesting times

 Ben Dusing: Never before have I been confined by plexi-glass. We'll have to lean over more, to find the truth. But it is a common purpose. We haven't seen any proof yet.  At the end I will ask you to find Mr. Michael Hild not guilty based on the facts and law

 Ben Dusing: It will come down to, did Mr. Hild intend to defraud people. It's complex. You're going to hear about pre-payment speed. Truth is found within the complexity, not despite it.

 Ben Dusing: This case is about throwing people under the bus. Bigger fish. I thank you for the sacrifice you are about to make.  [Then a 5 minute break, during which: Could you tell them not to clean the windows now? Courtroom 110 is big, with a lot of history]

It's 11:25 am and Judge Abrams is back with more jury instructions: "You must follow the law as I explain it to you, whether you agree with it or not," etc.

 First government witness against Michael Hild of Live Well is a cooperator, who previously worked at Morgan Stanley then Goldman Sach

As this witness Darren Stumberger, drones on, Inner City Press has looked up the transaction being asked about: "Ernie Calabrese and Vice President Dan Foster who will also join Live Well alongside Stumberger.

On April 13, Judge Abrams picked a jury of 12, with three alternates, in the large Jury Assembly Room of the SDNY, with the venire in masks and individual chairs, socially distanced. Inner City Press was there.

  The Juror Questionnaire asked about any links to or knowledge of Bank of New York, Customers Bank, First Bank of Tennessee, Flagstar Bank, ICBC, International Data Corporation (IDC), Mizuho Securities, NRMLA, Nomura, Republic Bank, U.S. Bank and others.

 In the run-up to the trial, which starts on April 14 at 10:15 am and which Inner City Press will cover, the US Attorney's Office filed a motion in limine seeking to preclude "evidence suggesting that IDC or the lenders were negligent or careless in failing to stop the fraud."

 Echoes of the Eaze trial of US v. Weigard, earlier this year before Judge Jed S. Rakoff, unsealing order won by Inner City Press here.

   Again, beyond mortgage fraud, we note for now that Hild worked at Capital One, and was building an empire in South Richmond which some locals denounced as gentrification. Hild, of course, has another story. Watch this site.

The case is US v Hild, 19-cr-602 (Abrams). There is and will be more on Patreon, here.

sdny

***

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