Former Managing Partner Of Manhattan Accounting Firm Arrested For Fraud
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Philip Bartlett, Inspector-In-Charge for the New York Division of the U.S. Postal Inspection Service (“USPIS”), announced today that STEVEN L. HENNING, a certified public accountant who was a Managing Partner at a Manhattan accounting firm, was charged with wire fraud in connection with a scheme in which he falsely claimed to have entered into multimillion-dollar intellectual property deals and defrauded investors out of $2 million. HENNING was arrested in St. Johns, Florida, yesterday afternoon and presented before a U.S. Magistrate judge in federal court in Jacksonville, Florida, this afternoon.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Steven Henning, a CPA at a Manhattan accounting firm, established his own firm called OpportunIP, which he allegedly told victims was a company specializing in assisting other entities in taking intellectual property to the market. Henning allegedly induced victims to invest in OpportunIP by providing them with false documents showing OpportunIP’s involvement in multi-million dollar transactions that would reap millions of dollars in future profits. Ultimately, the victims learned that the deals did not exist and they were victims of an alleged scheme to defraud them out of millions of dollars.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Mr. Henning’s claims were nothing more than a bag of lies. Law enforcement reminds investors to research all investment opportunities thoroughly to avoid being scammed.”
According to the allegations contained in the Complaint unsealed today:
HENNING, a certified public accountant, was a managing partner at an accounting firm in Manhattan (the “Accounting Firm”). He was the Partner-in-Charge of Advisory Services and served on the firm’s Executive Committee. Previously, HENNING was employed as a Professor of accounting at a Texas university (the “University”) and he served as an Academic Fellow in the Office of the Chief Accountant at the U.S. Securities and Exchange Commission.
In June 2008, while employed at the Accounting Firm, HENNING formed what would later become known as OpportunIP, LLC (“OpportunIP”), a business that, at different times, had offices in Purchase and Tarrytown, New York. HENNING was the Chief Executive Officer and owned an interest in OpportunIP through an entity known as the Henning Family Partnership (“HFP”). Members of the Accounting Firm also owned interests in OpportunIP.
In May 2012, HENNING told one of his prior students from the University (“Victim-1”) about an endeavor he was involved in, OpportunIP. HENNING described OpportunIP as a business venture through which HENNING established partnerships with owners or developers of intellectual property (“IP”) and assisted them in taking the IP to market in exchange for a substantial percentage share of future profits. Over the next few years, HENNING provided Victim-1 with information about OpportunIP, including a series of IP opportunities that were in various stages of implementation. For example, he claimed that OpportunIP had signed an escrow agreement with two multi-national corporations (“MNC-1” and “MNC-2”) relating to the “license-out” of certain IP that was being represented by OpportunIP (the “Escrow Agreement”).
In fall 2014, HENNING presented Victim-1 with an opportunity to invest in OpportunIP and asked Victim-1 to help secure bridge financing for an IP owner (“IP Owner-1”) who was in financial distress and needed temporary financing while he brought his IP to market. HENNING represented that the IP owner needed a $500,000 loan to get him past certain financial hurdles and would repay the loan in six months.
Thereafter, there were ongoing communications relating to Victim-1’s purchase of an interest in OpportunIP and, at around the same time, HENNING disclosed another multi-million dollar OpportunIP License-Out deal involving an agreement between an IP owner represented by OpportunIP and a global automobile manufacturer (“AM-1”). HENNING provided Victim-1 with a copy of the License-Out Agreement (“AM-1 License Agreement) and an AM-1 corporate guarantee (the “AM-1 Guarantee”). In addition, he provided an agreement in which a second global automobile manufacturer (“AM-2”) agreed to license the same technology (“AM-2 License Agreement”).
On October 31, 2014, HENNING listed IP deals for which he had “signed deals and minimum guarantees” and proposed that Victim-1 acquire 5 percent of OpportunIP for $2 million. On November 2, 2014, Victim-1 indicated his willingness to proceed and on November 7, 2014, HENNING sent Victim-1 the purported License-in Agreement between OpportunIP and MNC-1 (“MNC-1 License Agreement”) and the “License-out Agreement” between OpportunIP and MNC-2 (“MNC-2 License Agreement”). Three days later, on November 10, 2014, HENNING emailed Victim-1 the Escrow Agreement, in which MNC-1, MNC-2, and OpportunIP purportedly agreed that, pursuant to the license agreements, $35 million would be held in escrow and OpportunIP would receive $2 million no later than December 31, 2014.
The AM-1 Guarantee, AM-1 Licensing Agreement, and the Escrow Agreement were all fraudulent documents and the deals never existed. However, based on the information and documentation provided by HENNING, on November 21, 2014, Victim-1 sent HENNING $500,000, which was the beginning of the funding for HENNING’s proposal for Victim-1 to purchase an interest in OpportunIP and was a loan to HENNING. On November 26, 2014, Victim-1 had another $500,000 wired to a bank account controlled by IP Owner-1, in order to fund the purported loan to IP Owner-1.
HENNING and Victim-1 continued to communicate about HENNING’s proposal to have Victim-1 purchase an interest in OpportunIP. HENNING proposed forming a new company with the same goals and business model as OpportunIP. Victim-1 brought in his relative (“Victim-2”) and Victim-2’s family. In spring 2015, Victim-1, Victim-2, another investor (“Victim-3”), and a corporate attorney working on the transaction on their behalf (“Attorney-1”), were communicating with HENNING about the creation of a new corporate entity through which HENNING would transfer control of the company from his Accounting Firm partners to HENNING and Victim-1.
Thereafter, the Victims’ families agreed that they, through their joint and separate investment entities, would fund an additional loan to the new HENNING venture, based largely upon confidence in the purported MNC-1 and AM-1 agreements and HENNING’s additional representations of future business opportunities.
After discussions relating to the structure of the company and requests for information from the Victims’ corporate attorney, on June 3, 2015, HENNING sent purported electronic bank records for the months of April and May for a bank account in the name of OpportunIP (the “OpportunIP Account”). He represented that “the April statement shows the amount coming in from [MNC-1] ($2 million plus remaining interest from the escrow account).” The bank statements were also fraudulent and there was no deposit of over $2 million during those months.
On October 9, 2015, Victim-1 and Victim-2 had $1 million transferred to an account in the name of an entity that was set up to be the holding branch of the new OpportunIP. Thereafter, nearly all of the $1 million was transferred to accounts controlled by HENNING.
Meanwhile, HENNING continued to make false representations about the supposed progress he was making in securing deals for OpportunIP and he indicated that he was ready to have Victim-1 become more involved in OpportunIP’s operations. Consequently, in Summer/Fall 2016, Victim-1 left his job at an investment bank to become Chief Operating Officer of OpportunIP. But, despite HENNING’s representations that business was going well, he insulated his alleged business contacts from direct interaction with Victim-1 or Victim-2 and provided them with excuses for why deals were delayed. In addition, in at least one instance in November 2016, HENNING made it appear that he had scheduled a meeting between HENNING, Victim-1 and an MNC-1 Executive (the “MNC-1 Executive”) when he actually had not. Victim-1 traveled to New York and came to the Purchase office of OpportunIP to subsequently meet with HENNING and the MNC-1 Executive. But, that meeting was never actually scheduled. To make it appear that it had been, on November 18, 2016, HENNING forwarded a fabricated email to Victim-1, which was purportedly sent from the MNC-1 Executive to HENNING, and canceled the meeting.
In August 2017, during a search of HENNING’s office at the Accounting Firm, the Escrow Agreement, the AM-1 Guarantee, and the AM-1 License-out agreement were all recovered and contained taped-on signatures of executives on their signature pages.
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HENNING, 57, is charged with wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the USPIS and the SEC Office of Inspector General.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorney Margery B. Feinzig is in charge of the prosecution.
The charge contained in the Complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
 As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.