George Heckler, son of former Hatfield mayor, pleads guilty to $20 million securities fraud

George Heckler, son of a former Hatfield Borough mayor, pleaded guilty Tuesday to federal criminal charges that he conducted a decade-long $20 million investment scam.

Heckler, 64, was a longtime business associate of Brenda Smith, the Rittenhouse Square-based investment manager charged in 2019 with stealing close to $60 million of investors’ money. Smith is imprisoned in North Jersey, awaiting trial, federal authorities said.

Heckler admitted his role in raising more than $20 million from investors through misrepresentations about trading strategy and fund performance, Rachael A. Honig, acting U.S. attorney for the District of New Jersey, said in a statement.

“Mr. Heckler accepts full responsibility for his conduct” and is cooperating with federal prosecutors and the U.S. Securities and Exchange Commission, his lawyer Larry McMichael, who is with Philadelphia-based Dilworth Paxon, said in a statement Wednesday.

“His principal goal is seeking a recovery for the investors to the maximum extent possible.” Heckler is out on unsecured $100,000 appearance bond and is not confined to his house.

Heckler spun a complex web to snare investors, according to the SEC and the U.S. Justice Department, which filed separate civil and criminal cases.

One of three sons of Howard Heckler, a former mayor of Hatfield Borough, George Heckler covered up losses from a prior fund by raising new money, court papers said. He then allegedly lied for years that the new funds were consistently generating positive returns.

In truth, according to the SEC complaint, most of the money had not been invested or was lost in Ponzi-scheme-like payments to prior investors to keep up appearances.

Between 2009 and 2019, Heckler raised at least $90 million through Cassatt Short Term Trading Fund LP, CV Special Opportunity Fund LP, and three other entities he controlled. More than $32 million was used to repay or redeem prior investors.

The SEC said Heckler stole more than $1 million to spend on himself over a decade, while the Cassatt and CV Special funds suffered significant losses due to poor investments. It’s unclear what happened to the remaining funds.

Heckler also drew up fake account statements showing phony gains.

“Clients should be able to trust their investment adviser will invest their assets as promised and tell them the truth about their investments’ performance,” said Scott Thompson, acting co-regional director of the SEC’s Philadelphia office.

Heckler lives in Charleston, S.C. He pleaded guilty by video conference before U.S. District Judge Madeline Cox Arleo to one count of securities fraud and faces up to 20 years in prison.

Heckler was a longtime business associate of Smith’s, and her arrest in 2019 had ripple effects.

A tight trio in business for years, Heckler, Smith, and onetime Citrin Cooperman accountant Mark Carrow began pointing fingers at one another, investors said. At one time the managing partner of the Philadelphia office, Carrow has since left the accounting firm and has not been charged, said his lawyer Gavin Lentz, “because he hasn’t done anything wrong.”

Smith met Carrow while he ran an accounting practice before joining Citrin Cooperman, according to investors and SEC documents. She later became a records keeper and administrator for two hedge funds run by Heckler, who was then Carrow’s client and business associate.

Smith, Carrow, and Heckler set up funds with all three of their names in offering documents and then pitched investors, documents show. Heckler made investment decisions, Carrow was the accountant, and Smith kept the books and records, according to Heckler’s lawyer McMichael.

SEC complaints and Department of Justice documents say Heckler moved funds around and promised returns that never materialized.

Smith went on to set up her own fund, exaggerated her experience and hid losses after the market went against her. She traveled extensively overseas and held at least two passports, including one for the tiny nation of Dominica, posing a flight risk, federal investigators said.

In August 2019, Smith was indicted on six counts of wire fraud and one count of securities fraud. Heckler’s arrest followed.