Houston-Area Men Charged in an Alleged $68 Million Bank Fraud

June 18, 2012

The Federal Bureau of Investigation (FBI) on June 15, 2012 released the following:

“MONTGOMERY, AL— George L. Beck, Jr., United States Attorney for the Middle District of Alabama, and Lanny Breuer, Assistant Attorney General, Criminal Division, U.S. Department of Justice, announced today:

  • The indictment on June 6, 2012 of three Houston, Texas-area men: Paul Hulse, Sr., age 64, of Kingwood, Texas; Steven P. Mock, age 68, of Houston, Texas; and Frank J. Teers, age 49, of Montgomery, Texas, on federal conspiracy, wire fraud, and bank fraud charges.
  • The guilty plea on June 5, 2012 of Paul Hulse, Jr., age 42, of Kingwood, Texas, 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 stockbroker 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.

According to the indictment, 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:

Hulse falsely represented that he had a large bond portfolio that could serve as collateral for the loans to H&H and submitted documents that concealed Hulse’s plan to use approximately half the loan proceeds to purchase the bonds that were going to serve as collateral for the loans.

Mock falsely claimed that he was Hulse’s “senior trust officer” and that the “trust agreements” permitted the use of $15 million of trust bonds in connection with the proposed loan.

Teers falsely represented that he managed a significant bond portfolio for Hulse, provided documents to Hulse that Hulse used to support his claim of ownership, signed documents that represented that bonds were on account at Tri-Star and failed to disclose to the bank and to Tri-Star that he had been interviewed by IRS criminal investigators about Hulse’s fraudulent activities.

According to the indictment, 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 benefits of Mock, Hulse, and members of the Hulse family. Teers made more than $600,000 in commissions from the buying and sale of bonds on behalf of H&H. By spring 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.

Each count of the 10-count indictment carries a statutory maximum sentence of 30 years’ imprisonment. The conspiracy charge to which Hulse, Jr. pled guilty carries a statutory maximum sentence of five years’ imprisonment.

Hulse and Mock were arraigned yesterday before United States Magistrate Judge Terry F. Moorer. Teers had his arraignment before Judge Moorer on June 13, 2012. Each defendant pled not guilty, and each was released on a $25,000 unsecured bond. Trial is set for February 11, 2013 before United States District Judge Myron H. Thompson.

Hulse, Jr. pled guilty before Chief United States Magistrate Judge Susan R. Walker, who released him on a $25,000 unsecured bond. Hulse, Jr. is scheduled to be sentenced on September 19, 2012 before Chief United States District Judge William Keith Watkins.

The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Andrew O. Schiff and Fraud Section Trial Attorney Ryan S. Faulconer.”

Federal Bank Fraud Crimes – 18 U.S.C. 1344

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

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Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Lakecia Motley Sentenced to 63 Months in Federal Prison for Tax Fraud Conspiracy

August 23, 2011

The U.S. Attorney’s Office Middle District of Alabama on August 22, 2011 released the following:

“MONTGOMERY WOMAN SENTENCED IN TAX FRAUD CONSPIRACY  
  
Montgomery, Alabama – Lakecia Motley, 32, of Montgomery, was sentenced to 63 months in federal prison for tax fraud announced, George L. Beck, Jr., United States Attorney for the Middle District of Alabama. Motley was also ordered to pay $676,465.49 in restitution to the United States.

On August 12, 2011, Motley pleaded guilty to conspiracy to file false and fraudulent federal income tax returns, in violation of Title 18, United States Code, Section 286. At the plea and sentencing hearings, the United States proved that between 2005 and 2007, Motley and her co-conspirators filed numerous fraudulent tax returns using stolen identity information. The United States lost a total $676,465.49 from the false tax returns.

The case was investigated by Internal Revenue Service, Criminal Investigation, and the United States Secret Service. The case was prosecuted by Assistant United States Attorney Jared Morris.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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George L. Beck, Jr. Sworn in as U.S. Attorney for the Middle District of Alabama

July 6, 2011

The U.S. Attorney’s Office Middle District of Alabama on July 6, 2011 released the following:

“Montgomery, Alabama – George L. Beck, Jr., was sworn in today and immediately took over his duties as the United States Attorney for the Middle District of Alabama. Mr. Beck was nominated by President Obama on March 31, 2011, and confirmed by the U.S. Senate on June 30, 2011.

George Beck, a resident of Santuck, Alabama, was sworn in this morning as United States Attorney for the Middle District of Alabama by United States District Judge W. Keith Watkins. Mr. Beck was born in Geneva, Alabama. He served as Deputy Attorney General for the State of Alabama for eight years and Judge Advocate General for the Corps of Alabama Army National Guard for over thirty years, retiring at the rank of Colonel. He joined the private law firm of Capell & Howard in January 2004 where he remained until he was confirmed as U.S. Attorney. Mr. Beck has successfully handled numerous class actions and participated in at least two landmark Alabama Supreme Court class action decisions.

Mr. [Beck] received his undergraduate degree from Auburn University and his law degree from the University of Alabama. He is married to Carlotta and has 3 children and 8 grandchildren.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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Fourteen Federal Trial Courts Selected for Digital Video Pilot Study

June 22, 2011

The U.S. Courts – The Third Branch in June 2011 released the following:

“Fourteen federal trial courts have been selected to take part in the federal Judiciary’s digital video pilot, which will begin July 18, 2011, and will evaluate the effect of cameras in courtrooms. All 14 courts volunteered to participate in the three-year experiment.

The courts were selected by the Judicial Conference Committee on Court Administration and Case Management (CACM) in consultation with the Federal Judicial Center, the Judiciary’s research arm. The participating courts are:

  • Middle District of Alabama
  • Northern District of California
  • Southern District of Florida
  • District of Guam
  • Northern District of Illinois
  • Southern District of Iowa
  • District of Kansas
  • District of Massachusetts
  • Eastern District of Missouri
  • District of Nebraska
  • Northern District of Ohio
  • Southern District of Ohio
  • Western District of Tennessee
  • Western District of Washington

The pilot will provide for participation by more than 100 U.S. district judges, including judges who favor cameras in court and those who are skeptical of them. Districts volunteering for the pilot must follow guidelines adopted by CACM. The pilot is limited to civil proceedings in which the parties have consented to recording.

No proceedings may be recorded without the approval of the presiding judge, and parties must consent to the recording of each proceeding in a case. The recordings will be made publicly available on http://www.uscourts.gov and on local participating court websites at the court’s discretion.

The pilot recordings will not be simulcast, but will be made available as soon as possible. The presiding judge can choose to stop a recording if it is necessary, for example, to protect the rights of the parties and witnesses, preserve the dignity of the court, or choose not to post the video for public view. Coverage of the prospective jury during voir dire is prohibited, as is coverage of jurors or alternate jurors.

Electronic media coverage of criminal proceedings in federal courts has been expressly prohibited under Federal Rule of Criminal Procedure 53 since the criminal rules were adopted in 1946, and by the Judicial Conference since 1972. In 1996, the Conference rescinded its camera coverage prohibition for courts of appeals, and allowed each appellate court discretion to permit broadcasting of oral arguments. To date, two courts of appeals—the Second and the Ninth—allow such coverage. In the early 1990s, the Judicial Conference conducted a pilot program permitting electronic media coverage of civil proceeding in six district courts and two courts of appeals.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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James E. Moss, Who Owned and Operated “Flash Tax,” was Federally Indicted with Four of His Employees By A Federal Grand Jury Sitting in Montgomery, Alabama

June 16, 2011

U.S. Department of Justice on June 16, 2011 released the following press release:

Five Alabama Tax Return Preparers Charged with Tax Fraud

WASHINGTON – A group of five tax return preparers were indicted in the Middle District of Alabama on tax fraud charges, the Justice Department and Internal Revenue Service (IRS) announced today. James E. Moss, who owned and operated “Flash Tax,” was charged with four of his employees by a grand jury sitting in Montgomery, Ala. Moss along with Lutoyua N. Thompson, Chiquita Q. Broadnax, Avada L. Jenkins and Melinda M. Lambert were each charged with one count of conspiracy to defraud the United States and 27 counts of assisting in the preparation of false tax returns.

According to the indictment, the group conspired to knowingly place false information on taxpayers’ returns in order to obtain higher tax refunds from the IRS. The indictment further alleges that the group sought at least $129,266 in fraudulent tax refunds from the IRS.

An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, each defendant faces a maximum of 86 years in prison.

The case is being investigated by IRS-Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Todd Brown and by Tax Division Trial Attorneys Charles M. Edgar, Jr. and Michael Boteler.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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