The chapter trustee of the GWG Litigation Belief has filed a 156-page lawsuit in opposition to regulation agency Holland & Knight LLP and legal professional William “Invoice” Banowsky, alleging a posh fraudulent scheme that price GWG Holdings Inc. greater than $100 million.
Michael L. Goldberg, the GWG Litigation trustee, is looking for a minimum of $148.4 million, together with treble damages, pre- and post-judgment curiosity, legal professional charges and a jury trial for all claims.
Neither Holland & Knight nor its regulation companion Banowsky instantly responded to requests for remark.
The trustee’s criticism accuses Holland & Knight and Banowsky of taking part in a legal enterprise with Bradley Ok. Heppner, the corporate’s former board chairman, to defraud the group between 2019 and 2020.
“Heppner-controlled intermediaries into an entity that had for twenty years functioned as Heppner’s private slush fund,
Highland Consolidated LP,” alleged the lawsuit. “From there, the funds flowed into Heppner-affiliated trusts and entities for his and his household’s private achieve, straight opposite to representations Defendants made to GWG’s decision-makers that Heppner couldn’t management HCLP and wouldn’t profit from GWG’s advances.”
Court docket paperwork declare legal professional Banowsky knowingly hid Heppner’s relationship with Highland Consolidated throughout a vital interval, which allegedly enabled the fraudulent actions. The lawsuit additionally alleges Banowsky “deliberately and fraudulently disguised” Heppner’s connections in ways in which deviated from normal authorized skilled conduct.
One instance from the lawsuit the place Banowsky allegedly “deliberately and fraudulently disguised” Heppner’s connections is detailed within the February 2019 Litigation Opinion. On this doc, Banowsky allegedly falsely represented that Keith Martens, not Heppner, finally managed Highland Consolidated Nominees LLC.
This assertion was incorrect and materially deceptive as a result of, on the time, Heppner was truly the supervisor of HCI, not Martens, the go well with claims.
HCI, or Highland Consolidated Investments is a Texas restricted legal responsibility firm shaped in December 1996 by Bradley Ok. Heppner, Marcy Heppner Thiesen, and Jeffrey Ok. Hinkle in his capability as Trustee of the Bradley Ok. Heppner 1996 Household Belief. HCI initially managed Highland Consolidated, L.P., and later served as its basic companion. HCI performed a job within the management construction of HCLP Nominees, LLC (HCLP), because it was concerned within the administration and organizational hierarchy of the entities associated to HCLP.
Moreover, Martens was allegedly an in depth buddy of Heppner and took marching orders from him, indicating that Heppner nonetheless had de facto management over HCLP, in accordance with allegations. This alleged fraudulent misrepresentation was a part of a broader scheme to hide Heppner’s management over HCLP and associated entities, thereby deceptive GWG and its Particular Committee into believing that HCLP was an unbiased third-party lender.
The lawsuit claims a number of counts of misconduct, together with alleged violations of the Racketeer Influenced and Corrupt Organizations Act or RICO, conspiracy, civil conspiracy, fraud, negligent misrepresentation and aiding and abetting breaches of fiduciary obligation.
