By Alexander Gladstone
Brad Heppner, a Texas-based businessman who served as chairman of financial-services companies Beneficient and GWG Holdings, was indicted Tuesday by federal prosecutors on fraud charges tied to more than $1 billion of investor losses.
After founding Beneficient, which aimed to provide liquidity to high-net-worth individuals, Heppner led his firm into a merger with GWG Holdings, an established financial enterprise known for selling bonds to retail investors. For over two years between 2019 and 2021, Heppner served as chairman of both companies while GWG made a series of financial contributions to Beneficient in return for equity.
Heppner induced GWG to invest in Beneficient by making false statements to board directors and falsifying audit documents, federal prosecutors alleged. Beneficient used funds from GWG to make payments to a shell entity that Heppner controlled, according to a federal indictment unsealed Tuesday in the Southern District of New York.
Prosecutors charged Heppner with wire fraud, securities fraud, conspiracy, false statements to auditors and falsification of records. Heppner was arrested Tuesday morning and taken into custody by the police department of Irving, Texas, a city in the Dallas metropolitan area, police records show.
A lawyer for Heppner declined to comment. He has previously denied wrongdoing in court papers and through representatives and said that transactions between him and Beneficient were legal and properly disclosed.
Prosecutors accused Heppner of "a fraudulent scheme to loot more than $150 million from GWG through a series of misrepresentations about, and self-serving transactions with, Highland Consolidated Limited Partnership," which they said was a shell entity operated for his benefit. Heppner created a $141 million debt owed by Beneficient to HCLP, then made false statements to GWG board directors that he had an arm's length relationship with HCLP's manager, according to the indictment.
"HCLP was controlled by Heppner," the indictment said. "And when GWG authorized payments to satisfy what it believed were arm's length debts owed to a third-party lender, those funds flowed through multiple corporate entities and ultimately to Heppner's personal accounts."
GWG filed for bankruptcy in 2022 with over $2 billion of debt, about $1.3 billion of that owed to retail investors who had purchased its bonds. By then, Beneficient had separated itself as an independent enterprise, which later went public through a merger with a special-purpose acquisition company.
Earlier this year, Heppner resigned from Beneficient after board directors identified evidence that Heppner had "participated in fabricating and delivering fake documents" to the company regarding his relationship with HCLP, Beneficient said in a July securities filing.
A Beneficient spokesman said Tuesday that Beneficent parted ways with Mr. Heppner earlier this year, "immediately after learning facts related to his alleged fraud on the company and others. Beneficient will continue to pursue its own potential claims against Mr. Heppner on behalf of its shareholders. Beneficient has and continues to cooperate with the government's investigation of Mr. Heppner."
Prosecutors are seeking the forfeiture of a property Heppner owns in Dallas as well as an estate that he owns in Eastern Texas known as the Bradley Oaks Ranch, according to the indictment.
Write to Alexander Gladstone at alexander.gladstone@wsj.com
(END) Dow Jones Newswires
November 04, 2025 16:55 ET (21:55 GMT)
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