Settlement signed in Ponzi lawsuits

A Jacksonville financial adviser whose clients accused him of running a Ponzi scheme after a nearly-fatal car fire has signed a settlement agreement to end a multimillion-dollar string of lawsuits.

Robert Hetsler agreed to give up real estate and business assets worth at least $7.5 million to repay customers whose money couldn’t be found while Hetsler was comatose from a November 2017 fire that severely injured him.

The settlement’s value was more than the $6.5 million that dozens of clients had entrusted to his business, Hetsler Mediation & Valuation, but short of the total $8.6 million in claims lodged for lost cash and “consequential damages” that were sometimes disputed.

The agreement is “fair, adequate and reasonable,” an attorney hired by a company liquidating Hetsler’s business wrote in a motion asking Circuit Judge Adrian Soud to approve the deal.

After closing costs and other expenses are covered, selling the real estate and Hetsler’s other assets could yield 70 to 80 percent of the clients’ lost money, said the motion from attorney Bradley Markey.

Winning at trial and paying all the needed expenses might have recovered just half the money, he added.

If Soud approves the settlement, attorneys for Hetsler’s clients and the liquidating company, Michael Moecker & Associates, agreed to contact the U.S. Attorney’s Office and report their clients don’t favor filing criminal charges.

Hetsler said in August he had been interviewed by FBI agents, but had never tried to cheat his clients and was adamant that they would get their money back. He had spent more than a year in hospitals and rehabilitation centers before returning home in April, scarred by the unexplained fire that had covered most of his body with third-degree burns, costing nine fingers and the ability to walk.

Clients who called the FBI about Hetsler had hired his company to act as an intermediary in real estate deals so they could lower their federal income tax bills.

To avoid being paying capital gains taxes when they sold land, money from the sale had to go directly to the intermediary company, where it could be held up to six months before being used to buy “like kind” replacement property for the client.

The problem was that, after the explosion, no one could find the money when Hetsler was near death, and clients who had real estate deals to close were deluging his office with calls demanding their cash. The first lawsuit was filed just 12 days after the explosion.

Hetsler’s estranged wife, who was also vice president of his business, hired the liquidating company to settle the business’s accounts as fast as possible. The settlement agreement, signed last week, is designed to resolve a court case a Moecker executive started in December 2017 that ultimately showed Hetsler had invested money from his clients’ land deals in a series of his own land purchases. Hetsler's lawyer has argued he was free to use the money as long as it was returned to clients on schedule, but the fire created an unforeseeable disruption.

The liquidating company executive, Mark Healy, “contends [the funds] were improperly diverted from Hetsler Mediation,” the settlement says, but adds that Hetsler asserts defenses to claims from Healy. The settlement would mean those disputes would be irrelevant.

The agreement would transfer 18 pieces of real estate between Central Florida and South Georgia to the liquidating company. Hetsler would keep his house off Heckscher Drive, which was part of the suit, but he'd take out a $500,000 mortgage if selling the other properties didn't produce at least $7.5 million. 

Soud had told attorneys to be ready for a trial in December if the case wasn’t resolved by then.

Steve Patterson: (904) 359-4263