Larry Hillblom: The H in DHL, the Scrubbed Mansion and the Children He Never Named
Updated: Oct 6
When Larry Hillblom's seaplane went into the Pacific in May 1995, he left behind a fortune somewhere north of half a billion dollars, a will that gave nearly all of it to medical research, and a house on Saipan that somebody would soon go through with acid and a backhoe. What he didn't leave behind was a body. That turned out to matter a great deal, because within weeks the children started coming forward.
It's one of the strangest inheritance fights in American legal history. It's also a story about a man who built one of the world's biggest delivery companies and spent his later years preying on teenage girls across Asia and the Pacific, and about how DNA science found his children even after someone tried very hard to make sure it couldn't.
Quick Answers
● Who was Larry Hillblom? The H in DHL. He co-founded the courier company in 1969 with Adrian Dalsey and Robert Lynn, then moved to the tax haven of Saipan in the Northern Mariana Islands.
● How did he die? His vintage seaplane crashed off Saipan on 21 May 1995. The other two men's bodies were recovered. His never was.
● Why was there a fight over his estate? His 1982 will left almost everything to medical research but said nothing about children. Under local law, children born after a will can still claim a share.
● How many children did he have? DNA testing confirmed four: one each from Palau and Vietnam and two from the Philippines. Several other claimants weren't matched or refused testing.
● How much did they get? Roughly $90 million each before fees and taxes, which left each child with around $50 million or less.
From a Peach Farm to the H in DHL
Hillblom was born in 1943 in Kingsburg, in California's Central Valley, and grew up without a father on the family's peach farm, according to Fortune's review of James D. Scurlock's 2012 biography King Larry. He graduated from Fresno State in 1964 and paid his way through law school at Berkeley's Boalt Hall partly by working as a courier for a shipping firm, the San Francisco Chronicle reported. He never really practised law.
The Chronicle says the DHL idea came together after he got talking to Adrian Dalsey outside a supermarket on California Street in San Francisco. In 1969 the pair, plus investor Robert Lynn, started hand-carrying shipping documents on commercial flights between San Francisco and Honolulu. The logic was simple. Cargo ships were getting faster, and the paperwork needed to clear goods at the other end was taking longer to arrive by post than the goods themselves. Put the papers in a courier's luggage and the ship could be unloaded the moment it docked.
It grew into a global network. By 1994 DHL was turning over $3.1 billion a year, according to the Chronicle. Hillblom, who once told friends he wanted to be like Howard Hughes, had got his wish at least as far as the money went.
King of Saipan
In the early 1980s Hillblom moved to Saipan, a US commonwealth in the western Pacific where he could keep far more of his money away from the IRS. He built an empire there. The Chronicle lists the Bank of Saipan, a cable television company, a partnership with Continental Airlines in Air Micronesia, real estate across Micronesia, the Philippines, Maui, France and Idaho, and more than $50 million sunk into property in Vietnam while the US trade embargo was still in force.
The jewel of the Vietnam portfolio was the Dalat Palace, a French colonial hotel in the central highlands that had opened in 1922 as the Lang-Bian Palace. Hillblom bought it in 1993 and spent around $40 million restoring it, according to Grand Hotels of the World, along with a golf course that later came to be ranked among Vietnam's best. It reopened under Sofitel management in 1995, the same year he died. He never really got to enjoy it.
He wasn't a quiet investor. Fortune describes him dressing like a surfer, driving around in a DeLorean and turning into a full-blown germaphobe. He owned a pawnshop and sometimes worked behind the bar. He fought Frank Lorenzo's Continental for control of Air Micronesia, and the legal paper Daily Journal ran an excerpt of Scurlock's book under the headline Legal sleight-of-hand: Taking down Continental Airlines. He even sat as a special judge on the Northern Mariana Islands' Supreme Court. Fortune's review of Scurlock's book summed him up as "a business monster" and it's hard to argue with the label.
The Girls Behind the Fortune
This is the part of the story that the charity that now bears his name doesn't mention, so it's worth being straight about it. Hillblom spent years in the bars of Manila, Palau and elsewhere, and the evidence that came out after his death showed that he sought out girls who were children.
The mothers who later came forward were very young when they met him. The Chronicle reported that Kaelani Kinney was 16 when she met him in a bar in Palau in 1983, and that Julie Cuartero was a 14-year-old dancer in Manila when she says he got her pregnant in 1994. A Los Angeles Times report from 1996 says a third mother, Mercedez Feliciano, was 16 and had lived with him on Saipan for a year before his death. Her daughter was born seven months after the crash.
Scurlock's biography, as Fortune summarises it, says Hillblom procured young girls, some of them very young, in the Philippines, Vietnam and elsewhere. There's no ambiguity here. Whatever else he was, Hillblom was a man with vast wealth who used it to abuse children in some of the poorest places in the region, where he knew nobody was likely to stop him. It's the same pattern of power and impunity that let figures like Jimmy Savile operate for decades.
The First Crash and the Mole
Hillblom loved flying but wasn't very good at it. On 15 August 1993 he crashed a single-engine Cessna into the jungle on Saipan. His face was caved in and he lost an eye, according to the Chronicle, and the Federal Aviation Administration fined him $10,000 because his pilot's licence had expired in 1990.
He flew to San Francisco for reconstructive surgery. During that treatment a mole was removed from his face and preserved in a block of wax at Davies Medical Center. Nobody gave it a second thought. Two years later it would be one of the most fought-over bits of tissue in legal history.
The Last Flight: 21 May 1995
On Sunday 21 May 1995 Hillblom set out for Pagan, a volcanic island about 290 miles north of Saipan, aboard a vintage Republic Seabee amphibious plane flown by pilot Robert Long. With them was Jesus P. Mafnas, vice speaker of the Northern Marianas House of Representatives. "They were going to explore mining ash from a volcano," a spokesman for the governor told reporters, per the Spokesman-Review's wire report, but bad weather forced them to turn back. The plane went down about 45 miles north of Saipan.
The early reports were a mess. That first wire story said Hillblom's and Mafnas's bodies had been found and that the pilot was still missing. In the end it was the other way round. The pilot and Mafnas were recovered. Hillblom never was. Accounts don't even agree on the plane; most say it was a Seabee, but the LA Times called it a Cessna.
Hillblom was 52. And the lack of a body is what turned his death from a sad footnote into a decade of litigation.
A Will Written in 1982
Hillblom's will dated from 1982. It left $300,000 to his brothers and the rest to a charitable trust for medical research, with particular attention to the University of California's teaching hospitals, according to the Chronicle. It named the Bank of Saipan, which he owned, as executor. What it didn't do was mention children at all.
That mattered because Saipan's probate law protected what lawyers call pretermitted heirs, children born after a will is made and not mentioned in it. If Hillblom had fathered children after 1982 and hadn't expressly cut them out, they could claim a share of everything. Lawyer Ben Scales, who was involved in the case, later wrote on his firm's site that the will's silence meant the children were legally entitled to the whole estate.
Kaelani Kinney filed on behalf of her son, Junior Larry Hillbroom, and in July 1995 she asked the court to make Hillblom's mother and brothers give DNA samples. The executor fought it. In September 1996 the Northern Mariana Islands Supreme Court ruled that the executor could use estate money to defend the will against the children, according to the court's published opinion.
Then things got political. The Chronicle reported that a so-called Hillblom Bill, which would have retroactively disinherited children born outside marriage in the Marianas, went through the local House without a public hearing. The LA Times said lawyers for the children claimed it had followed a promise from Hillblom's longtime lawyer, Peter Donnici, of "substantial" trust money for Saipan charities. Scales describes the estate's associates shepherding a special law through the legislature. It stalled in the Senate, and it didn't stop the children.
The Mansion That Was Scrubbed Clean
With no body, the children's lawyers needed Hillblom's DNA from somewhere. His house on Saipan was the obvious place to look. They found almost nothing.
According to Scales, the house and car had been scrubbed, muriatic acid had been poured down the drains, and his clothes and personal effects had been buried in a field behind the house. The SF Weekly's Matt Smith, in a 2000 story reproduced by DNA-View, reported a deposition in which one of Hillblom's former girlfriends said she'd been told to clean the house and put his things in plastic bags. Someone then turned up with a backhoe and buried them. The children's lawyer David Lujan tracked down the backhoe operators and had the bags dug up, but the clothes had been laundered.
A later search turned up more buried items near the villa's tennis court: clothes, sandals, combs and a toothbrush, according to SFGate. Lujan was blunt about what he thought it all meant: "It was about DNA, all about DNA, to get rid of the DNA." Nobody was ever charged over the clean-up, and the sources don't establish who ordered it.
How DNA Found His Children Without Him
The mole should have settled things. It hadn't been touched since 1993 and it was sitting in wax in a San Francisco hospital. A court in Saipan ordered it to be tested, according to the LA Times. California's deputy attorney general, whose office was protecting the charitable bequest, wasn't convinced: "There are many questions about this mole, about the chain of custody," he told the LA Times.
He had a point. When investigator Peter Barnett retrieved it, the SF Weekly reported, it turned out not to be Hillblom's tissue at all. How that happened has never been fully explained.
So the lawyers tried two other routes. One was Hillblom's family. His mother and brothers had refused to give samples, but a judge eventually ordered his mother and brother to be tested or face financial penalties, per the SF Weekly. The other was cleverer. Mathematician Charles Brenner, who runs DNA-View, was brought in to see whether the children could prove they were related to each other without any sample from the father.
His own write-up of the case on DNA-View explains how it worked. Children from different mothers in different countries shouldn't share a father unless they really do. By comparing each child's DNA with the others, and stripping out what came from each mother, he could calculate how likely it was that they were half-siblings. Of the first four children tested, three came back as related and one didn't. The three-way comparison gave a likelihood ratio in the millions. Brenner told the SF Weekly it was "a million times more likely" that the children shared a father.
A fourth child later joined them. In the end, four were confirmed: Junior Larry Hillbroom from Palau, two girls from the Philippines (Jellian Cuartero and Mercedez Feliciano's daughter) and a Vietnamese boy called Lory.
The Settlement
Faced with the DNA, the estate settled. According to Scales, the four children were confirmed in spring 1998 and each took 15% of the estate, 60% between them, rather than gamble on the full 100% the law might have given them. Brenner puts each child's share at about $90 million on an estate of around $600 million. SFGate reported that four other claimants who wouldn't be tested got about $1 million each, and the University of California side took about 40%, around $240 million.
That $90 million didn't survive contact with lawyers and the taxman. The SF Weekly said each child ended up with about $50 million. The final details were still being argued over in a Saipan courtroom as late as April 2000.
The $12.4 Million Offer Junior Turned Down
Here's a twist most write-ups miss. Before any of the DNA came good, the estate tried to buy Junior off. In 1996, when he was 12, his side was offered a deal worth $5 million up front, $50,000 a month and $500,000 every five years. The LA Times reported it as a $17 million offer that Kaelani Kinney rejected.
That decision became the subject of an academic paper. In 2004 two UCLA business school professors, Steven Lippman and Kevin McCardle, published Sex, Lies, and the Hillblom Estate in the journal Decision Analysis. They valued the offer at $12.4 million in present-value terms and then worked through what Junior's side was actually gambling on. They estimated a 60% chance the Hillblom Bill would pass, a 30% chance it would survive a constitutional challenge if it did, an 80% chance of getting usable DNA and a 70% chance it would match.
On a straight average, fighting on was worth more, about $20.6 million on their numbers. But once you allow for the fact that a family with nothing can't afford to lose everything, they concluded that taking the deal was the smarter choice by a huge margin. By their reckoning, the three years of delay, the fees and the risk meant the bigger payout he eventually got was worth less to him than the offer he'd turned down. With hindsight the gamble paid off on paper, but as the next section shows, paper and reality turned out to be two very different things.
What Happened to the Children
Junior Larry Hillbroom, the boy from Palau whose mother had been the first to come forward, has had a rough time with his inheritance. In 2010 he sued his former lawyers in federal court on Guam, claiming his fund had been gutted. According to Courthouse News, he alleged that a 38% contingency fee agreed in 1998 had been raised to 56% in 2000 without his approval, and that of roughly $90 million, about $12 million was left.
In 2016 he was arrested in Palau for allegedly arranging for two women to smuggle methamphetamine in from Manila. He pleaded guilty under a plea deal and got probation, a $50,000 fine and compulsory rehab, according to the New Straits Times. When he failed a drug test, he was jailed, went on the run for two days and was found at his girlfriend's house. The paper noted he'd said the year before that mismanagement meant his inheritance was now much smaller.
Did Larry Hillblom Fake His Own Death?
You can see why people wonder. A billionaire who's just rebuilt his face after one crash dies in another, the body's never found and his house is stripped of DNA just as a string of paternity claims is about to land. The 2009 documentary Shadow Billionaire, directed by Alexis Manya Spraic and reviewed by Slant Magazine, didn't hurt the rumours either.
But the evidence for it is basically zero. As The Cold Cases points out, nobody has ever produced a credible sighting, a money trail or any communication from him after May 1995. Two other men died on that plane, and some of the aircraft was recovered. It's worth remembering that the DNA clean-up happened after he was gone, and didn't need him to be alive to happen. Most people who've looked closely think he's at the bottom of the Pacific, and for once the mundane answer is probably the right one.
He's in good company. The Belgian financier Alfred Loewenstein vanished out of his own plane over the Channel in 1928 and people are still arguing about that one. And the British MP John Stonehouse showed in 1974 that faking your death is a lot harder to pull off than it looks.
The Foundation's Version
The medical research money did go ahead. The Larry L. Hillblom Foundation was set up in 1996 and says on its website that it's handed out around $150 million in 317 grants, mostly for diabetes and diseases of ageing at University of California campuses.
UCSF got the foundation's first-ever grant in 1999. In November 2002 the foundation gave the university more than $12 million in one go, according to UCSF: $8 million towards the Larry L. Hillblom Center for the Biology of Aging at the new Mission Bay campus, $2 million for diabetes research and $1.7 million for work on Alzheimer's and dementia. Chancellor J. Michael Bishop, a Nobel prize winner, called the foundation "a partner in our efforts to improve human health." The Hillblom name is still on that centre today. It's funded real science and helped real patients.
Its biography of its founder is a different matter. It describes a farm boy who got a law degree, helped rescue Continental Airlines, served as a justice on the Northern Mariana Islands Supreme Court and "often donated substantially to the underprivileged". There's nothing about the girls, the children or the backhoe. Both versions of Larry Hillblom are true in their way. Only one of them had to be dug out of a Saipan garden.
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Further Reading
Want the full story? King Larry by James D. Scurlock is the full-length biography of Larry Hillblom.
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Sources
2. A Dead Man, 3 Bar Girls, His Mole and His Money (Los Angeles Times, via Seattle Times, 20 May 1996)
