Hulse Sr. and Teers Sentenced for $39M Fraud Scheme

Montgomery, AL – In a stunning reversal of fortune, Paul Hulse, Sr. and Frank J. Teers were sentenced to decades in prison for their role in a $39 million fraud scheme that targeted the Federal Land Bank Association of South Alabama.

The duo was handed down sentences by United States District Court Judge Myron S. Thompson on November 27, 2013. Hulse Sr., the mastermind behind the operation, received the statutory maximum of 10 years imprisonment for interstate transportation of property by fraud, followed by three years supervised release. Teers was sentenced to 8 years imprisonment for conspiracy to commit wire and financial institution fraud, as well as committing wire fraud and financial institution fraud, with an additional five years supervised release.

Both men were ordered to pay $39,239,561.06 in restitution. The sentencing hearing had concluded after a grueling three-day proceeding, with the court’s decision delivering justice for the victims who fell prey to their deceit.

The fraud was a sophisticated operation that began in 2003 when Hulse Sr., then director of H&H Worldwide Financial Service, Inc., and his co-conspirators began soliciting loans under false pretenses. They claimed to control a large portfolio of bonds worth tens to hundreds of millions of dollars, which they alleged could be used as collateral for the loans.

Despite no such bond portfolio existing, Hulse Sr. and his cronies, including Steven P. Mock and Frank J. Teers, duped numerous institutions, including Western National Bank of Midland, Texas, MetLife, UBS Securities, and Jefferies and Co., into believing their claims. Their lies reached as far as the Federal Land Bank of South Alabama, where they secured loans totaling $68.5 million in 2005.

The scheme unraveled when the bank’s relationship with H&H deteriorated, but not before substantial sums were funneled into personal pockets. Teers personally reaped more than $600,000 from his fraudulent activities. The letters sent to the bank attempting to justify their actions further demonstrated their brazen disregard for the law and the trust they had betrayed.

U.S. Attorney George L. Beck, Jr., emphasized the severity of the crime, stating that these sentences were fitting for professionals who violated their fiduciary duty to the citizens. As the justice system delivered its verdict, Hulse Sr. and Teers faced a future behind bars, marking a stark end to their fraudulent enterprise.

RELATED: $68 Million Bond Scam: Mock & Teers Face Justice