United States Attorneys Office for the Middle District of Alabama Commemorates National Police Week 2023
Montgomery, Alabama - George L. Beck, Jr., United States Attorney for the Middle District of Alabama, announced today that:
The recent convictions of Hulse Sr., Mock, and Teers follow the June 5, 2012 guilty plea of Paul Hulse, Jr. to an information charging conspiracy to make a false statement to a bank.
According to court filings, Paul Hulse, Sr. (“Hulse”) was a director of H&H Worldwide Financial Service, Inc., Paul Hulse, Jr. (“Hulse Jr.”) was H&H’s president, Steven P. Mock was an attorney in the Houston area, and Frank J. Teers was a bond broker employed by Tri-Star Financial Services in Houston. Beginning in 2003, Hulse began soliciting various persons and businesses for loans based on the false representation that he controlled a large portfolio of bonds—the amount ranged from tens to hundreds of millions of dollars—that could be used as collateral for the loans. Mock and Teers made false statements to the prospective lenders that supported Hulse’s claim that he owned a substantial bond portfolio. In fact, Hulse did not have a bond portfolio. None of the solicited institutions, which included Western National Bank of Midland, Texas, MetLife, UBS Securities, and Jefferies and Co. agreed to make a loan to Hulse or H&H.
In February 2005, Hulse began soliciting loans from the Federal Land Bank of South Alabama (the “Bank”) in Montgomery, Alabama. During the course of the discussions:
The Bank made two loans to H&H totaling $68.5 million in August and December 2005. H&H used more than half the money to buy the bonds that were to serve as collateral for the loan. A significant amount of the loan proceeds were used for the personal benefit of Mock, Hulse, and members of the Hulse family. Teers made more than $600,000 in commissions from the buying and selling of bonds on behalf of H&H. By Spring of 2007, the relationship between H&H and the Bank had deteriorated. In an effort to convince the Bank to allow the principal of the bonds to be used to make the quarterly loan payment, on June 28, 2007, Mock, Hulse, and Hulse Jr. sent a letter to the Bank that (a) falsely claimed that H&H was on the “doorstep” of obtaining a loan from Wells Fargo that would allow the Bank to be paid in full, and (b) described how the loan proceeds had been used without disclosing the fact that more than half the loan proceeds had been used to buy the bond collateral.
“Protecting the people who entrust their money in our banks, credit unions and other financial institutions is essential to a healthy economy,” stated U.S. Attorney George L. Beck, Jr.. “My office will continue work diligently to protect the people who entrust their money to these banks and credit unions. Those criminals who commit frauds and attempt to commit frauds on the banks in the State of Alabama will be prosecuted to the fullest extent of the law.”
“The FBI will continue to ensure that those in a fiduciary position who solicit and handle other people’s money exercise their duties based on legal parameters and obligations, not fraudulently with an intent to illegally profit from their illegal schemes and deceit,” stated Stephen Richardson, FBI Special Agent in Charge, Mobile Field Division.
Mock and Teers face a statutory maximum sentence of 30 years imprisonment per count. Hulse Sr. faces a maximum prison sentence of 10 years; Hulse Jr. faces up to five years. Hulse Jr.’s sentencing is set for August 6, 2013. Sentencing for Mock, Teers, and Hulse Sr. has been scheduled for August 21, 2013.
The case was investigated by the FBI and was prosecuted by Assistant United States Attorneys Andrew O. Schiff and Denise O. Simpson. Assistance was also provided by the Internal Revenue Service, Criminal Investigations in Houston, Texas.
PRESS CONTACT: Clark Morris
Telephone: (334) 551-1755
Fax: (334) 223-7617