He wanted to build mom a grocery store. Now he’s indicted, and all we’re left is political satire.
An artist's concept of the plan for a grocery store and revitalized Main Street of Hesston, Kansas. (Kansas Reflector screen capture from hesstongrocerystore.com)
A grocery store like you’ve never seen.
Sometimes there’s a small-town voice in my head that wants to believe, that chides me for being too skeptical, that wants me to join the boosterism chorus. It’s me from another dimension. And it whispers things like this:
I mean, it was going to be a grocery store like the Ritz is a hotel. Yeah, it would be a place where you could buy milk and eggs and maybe some Hamburger Helper for dinner, but that’s like saying you go to Vegas to buy a lottery ticket. Know what I mean? The damn grocery store was going to be a certifiable work of art, a place — no, a destination! — that would draw people from all over just to say they shopped there.
You wouldn’t even have to park outside.
All underground parking, so you don’t have to get wet in the rain or cold in the snow. Lots of lighting and climate-controlled. Even parking and charging stations for your golf carts. No stairs to climb. An elevator would take you up to the store, just like you was going to heaven.
That was the pitch, right down to the parking. You can look it up yourself. Jobs for up to 50 people, a “Delicatessen-style restaurant,” a bakery and German food items in keeping with local heritage. The price tag was something like $20 million, and while there are cheaper ways to get a grocery store, they lacked the vision of this one rich guy.
It would be smack in the middle of this town in Kansas, a little place called Hesston that has 3,500 people tops, a nice town founded in 1886. It’s about 40 minutes north of Wichita. You know the kind of place, full of nice folks where you’d feel safe raising your kids. But like a lot of these burgs it’s been struggling lately, and the last grocery store went bust a few years ago.
That’s where the rich guy comes in.
His name is Brad Heppner. He’s 59 and lives in Texas, but he grew up at Hesston. There’s a video of him at a town meeting last year, and he talks about his connection to the town, about how he’s a sixth-generation Kansan and his people were one of the three founding families of the town way back when, and it’s like listening to somebody read all those begats from Genesis. It’s easy to understand why people trusted him.
He’s kind of a Sunflower Gatsby, see?
He made a lot of money in finance. Started a company and sold it to Lehman Brothers — yeah, the firm that went bust in 2008 — and he has a mansion in Dallas called “Sunfields Manor” where he has these big parties for his rich friends. He also has an estate named after himself out in the middle of nowhere Texas with its own heliport. Can you imagine that?
He founded this other company with a funny name — Beneficial or Beneficient or something, but Brad just calls it “Ben” — with this genius idea of creating a pawnshop for the rich. No, really. I guess the rich need pawnshops like the rest of us do, except instead of your dad’s Stratocaster they’re hocking their private equity or art treasures or vintage Duesenbergs for quick cash.
Brad came back to Kansas and set up a subsidiary for this pawnshop deal because his 80-something mom told him there wasn’t a grocery store in town anymore. He promised to build her one. That’s the story he told just about everyone. He told it to the town, to lawmakers, to the governor. You can look at this video of him saying it. He convinced just about everybody to get on board with the idea, and four years ago he convinced the state Legislature to let him launch the world’s first TEFFI — that’s the name for this kind of pawnshop, and it stands for technology and fiduciary and some other things, but it kind of makes my head hurt to think about it. See, the lawmakers were smart and ignored the Kansas bank commissioner who said there ought to be more regulation, because regulation just stifles business. It was all fine, because 2.5% of every transaction would be earmarked for economic development and, you know, the grocery store.
It would all go through a private nonprofit foundation run by Brad and his wife and their friends and associates, so you knew the money would be safe. Heck, the Heppners even gave $6.5 million to get it started. I mean, this was a great deal, and although nobody really understood how the pawnshop worked, everybody could see the potential. This is why there was such bipartisan support for it in Topeka.
What could go wrong?
Brad said Ben would be so successful there would be lots of TEFFIs popping up in Kansas, maybe 40 or 50 in a couple of years, and the money would roll in, all at no risk to Kansans. That money would come from rich people all over the world, maybe even people in Russia, he said. Imagine that! All those rubles helping to fund a grocery store in Kansas. Only in America!
There was going to be so much money to burn that the plan for the grocery store kept getting bigger and bigger. And it wasn’t just going to be a grocery store, it was going to be an entire shopping experience in downtown Hesston, with buildings made to look like they were straight out of 1886 and new spaces for the city offices. There would be child care and public transportation and all sorts of family-friendly fun.
Then Ben — the big company out of Texas — merged with an even bigger company and its stock went public and was being traded on the NASDAQ. That was a couple of years ago, and shares were going for more than $600. But you know, things have been tough since then, and last time I checked the price of a share was about 50 cents. That might sound bad, but it’s really a great opportunity to invest. Got a buck in your pocket? You could own a couple of shares of Ben.
And I hate to even mention this part, but the feds were looking into some of Brad’s past deals, right from the start. Then this summer some attorneys began asking questions about accounting procedures, and Brad was like, Hey, don’t you know all I’ve done for you? So he resigned rather than answer questions. Can you blame him? Talk about ingratitude. Brad even said it might be about time to shut down the company.
Even after Brad left, people wouldn’t leave him alone. You know how people are. Especially the government.
The feds arrested Brad on Nov. 4 and charged him with securities fraud, wire fraud, conspiracy, making false statements to auditors and falsification of records. Can you believe it?
The indictment alleges Brad misappropriated more than $150 million from a firm, GWG Holdings, forcing it into bankruptcy and causing $1 billion in losses to its investors. The feds claim the money was funneled through a shell company, and about $40 million was used to renovate the mansion in Dallas and his ranch estate. The feds also say he spent half a million bucks on jewelry.
Get this, here’s what the federal prosecutor, a guy named Jay Clayton, said:
“As alleged, Heppner abused his role as a public company executive to loot the company and to funnel money into his own pockets. When executives like Heppner lie and cheat to enrich themselves at the expense of everyday investors, they corrupt the integrity of our public markets.”
Whoa! Where does this guy get off? He just doesn’t get that Heppner is a job creator, somebody who gets things done, an individual who just wanted to help his hometown. I don’t see the feds rushing to build a grocery store for Hesston.
Now the foundation that’s in charge of building the grocery store says it’s going to have to scale back the plans. No climate-controlled underground parking.
For crying out loud, they’re going to ruin things for all of us.
Beneficient is run by different folks now, and they admit that Brad might have oversold the pawnshop idea. But, they said, the idea might still work and that they were committed to building “fundamental value,” whatever that is. They seem like nice folks. The interim CEO told lawmakers that the company was on the same side as law enforcement.
“You don’t have to be a Venezuelan drug cartel boat driver to know that you want to be on the government side of that,” he said, which I thought was kind of a weird thing to say, if you want to know the truth.
Brad entered a “not guilty” plea on Monday, Nov. 10, so I guess he’s going to fight. The feds arrested him in Texas but hauled him to New York, where the charges were filed. Figures. According to the indictment, they’re looking to take away Brad’s mansion and the ranch.
He’s presumed innocent until proven guilty.
Damn right!
This all reminds me somehow of a book I was made to read in high school about a guy named Gatsby. You know the story. Gatsby’s the hero, and he gets the girl and has this big house and has all these parties. I didn’t make it to the end of the book because it was so long, but I do remember something about a green light.
That’s what we all want out of life, right? A green light.
That’s not what it means. And Gatsby winds up dead.
Shut up!
When I was a kid, the highlight of my week was when I’d go with my mom to the local Piggly Wiggly and maybe be allowed to get a comic book from the rack near the front. Imagining the $20 million grocery store Brad was going to build, I had kind of the same feeling. You didn’t know if you were going to get a Fantastic Four or a Spider-Man, but you knew it was going to be good.
There won’t be any comic books for us now, just a lousy Bazooka Joe wrapper.
But the thing that bothers me most is thinking about Brad’s mom. She’s in her 80s, and everybody says she’s a great lady. It looks like she’ll never have the chance to go to the dream grocery store with Brad and park underground and go up the elevator. That makes me sad in the same way as when I think about when I learned there wasn’t a Santa Claus. I’ll bet it makes her sad, too.
Okay, we finally agree.
Max McCoy is an award-winning author and journalist. Through its opinion section, the Kansas Reflector works to amplify the voices of people who are affected by public policies or excluded from public debate. Find information, including how to submit your own commentary, here.