Former CEO of Beneficient Arrested for Fraud in Texas

TOPEKA, Kansas — Brad Heppner, the former CEO of Beneficient, was arrested Tuesday after being indicted on multiple counts of fraud. The allegations involve Heppner looting over $150 million from GWG Holdings, which ultimately led to the company’s bankruptcy.

Heppner was taken into custody at his home by the Irving Police Department and faces charges in federal court in the Southern District of New York. The indictment includes counts of securities fraud, wire fraud, conspiracy, making false statements to auditors, and falsifying records.

The indictment details how Heppner allegedly siphoned money from GWG Holdings through deceptive transactions tied to Highland Consolidated Limited Partnership (HCLP), a company he controlled while simultaneously serving as chairman of both GWG and Beneficient.

“Though Heppner repeatedly described HCLP as an independent entity, it was, in fact, a shell company controlled by Heppner for his benefit,” the indictment states. It further notes that Heppner’s actions contributed to losses exceeding $1 billion for retail investors, many of whom are retirees.

Heppner allegedly misused the funds for extravagant personal expenses, including $40 million for renovations on a Dallas mansion and ranch and $10 million on various personal costs like credit card bills and private flights. The indictment seeks to recover this money and the properties in question.

In June, Heppner resigned from Beneficient amid an investigation into financial irregularities. His role at the company garnered significant attention, especially after the Kansas Legislature passed legislation that awarded Beneficient a unique bank charter.

This charter was championed by Kansas Senate President Ty Masterson during a legislative hearing in 2021. The charter allowed Beneficient to deal with investors in hard-to-sell assets. Critics, including Kansas’ state banking commissioner David Herndon, had opposed the charter and urged its repeal.

Beneficient had made political contributions to both major parties in Kansas, raising questions about whether those funds were linked to Heppner’s alleged misconduct.

This is a developing story.