Dr. Charles J. Southall, III sentenced to 5 years in prison for more than $889,000 fraud

Additionally, Judge Zainey ordered SOUTHALL to pay $889,565.86 in restitution to the victims of his offenses and a mandatory $100 special assessment fee.

According to court documents, SOUTHALL has served as the Executive Pastor of First Emanuel Baptist Church (FEBC) since about 1989. FEBC maintained houses of worship in New Orleans, Louisiana, and Baton Rouge, Louisiana, owned multiple parcels of real property in New Orleans, and created housing ministry entities to provide affordable housing to low-income New Orleans residents and to receive income from renting some of the properties FEBC owned.

As Executive Pastor, SOUTHALL led and counseled the FEBC congregation, participated in the administration and operation of charitable organizations affiliated with FEBC, including its housing ministries, and solicited donations purportedly for specific repair, developmental, and charitable projects and tithes in support of FEBC and its mission. SOUTHALL received a salary in accordance with the terms of his employment contract, as well as monetary gifts from the FEBC congregation throughout the year.

Exploiting his position as Executive Pastor, SOUTHALL defrauded FEBC and some of its members in several ways. First, SOUTHALL solicited tithes and donations from several members and then improperly diverted the money to his personal use. For example, SOUTHALL solicited a $10,000 tithe from Victim A in July 2019, the proceeds of which he deposited into his personal financial accounts and used to pay for personal expenses. Between August 2016 and July 2020, SOUTHALL solicited multiple donations from Victim B ostensibly for various charitable purposes and the improvement of FEBC's New Orleans building.

SOUTHALL improperly diverted approximately $106,408.38 of the funds Victim B donated to FEBC to financial accounts under SOUTHALL'S personal control and to pay for SOUTHALL'S personal expenses unrelated to FEBC or its mission without the knowledge or authorization of Victim B.

Second, SOUTHALL diverted approximately $150,000 of income that resulted from the rental of properties owned by FEBC and its affiliated housing ministries to his personal use and benefit without the knowledge or authorization of FEBC.

Third, SOUTHALL developed and implemented a scheme to defraud FEBC by causing real properties owned by FEBC to be sold and diverting a portion of the profit from the sale of the real properties to and for SOUTHALL'S personal benefit without the knowledge or authorization of FEBC or the FEBC Board of Trustees. In total, SOUTHALL improperly caused approximately $537,805.51 of profit from the sale of FEBC-owned real properties located on Amelia Street, Fourth Street, and Baronne Street to be diverted to SOUTHALL'S personal benefit improperly and without authorization.

Additionally, SOUTHALL and others created the Spirit of Excellence Academy for the purpose of operating a charter school in New Orleans. In about 2013, SOUTHALL secured funding to create an affiliated school in Baton Rouge. Although Spirit of Excellence received funding in the form of grants and loans, the Baton Rouge school never opened. According to rules promulgated by the State of Louisiana, Board Members of charter schools were prohibited from receiving compensation for providing services to the school other than for reimbursement of actual expenses. As President of the Board of Directors of Spirit of Excellence Academy, SOUTHALL submitted financial statements that represented he had no personal or financial interest with Spirit of Excellence Academy.

Notwithstanding these representations, in about September 2013, SOUTHALL hired Person A to be employed and compensated by Spirit of Excellence Academy for consulting work related to the creation of Spirit of Excellence Academy - Baton Rouge. Between about September 2013 and September 2017, Spirit of Excellence Academy paid Person A approximately $220,600, all of which was deposited into a financial account SOUTHALL and Person A jointly controlled. SOUTHALL regularly diverted a portion of the funds paid to Person A to SOUTHALL'S personal use, including by transferring some of the funds from one or more of the accounts he controlled jointly with Person A to other financial accounts under SOUTHALL'S control or causing the funds to be used to pay SOUTHALL'S personal credit card bills. In total, between about September 2013 and September 2017, SOUTHALL improperly caused approximately $85,351.97 of the funds paid to Person A by Spirit of Excellence Academy to be diverted to SOUTHALL'S personal benefit and use in the manner described above.

In total, SOUTHALL obtained approximately $889,565.86 through his fraudulent schemes. SOUTHALL then engaged in a series of financial transactions using the proceeds of the criminally derived proceeds he obtained, including negotiating a check in the amount of $11,841 to purchase tickets, using funds originating from the sale of the Fourth Street property in the amount of $100,000 to open and fund a JPMC individual investment account for himself; negotiating a cashier's check in the amount of $95,000 to purchase a vehicle; and negotiating a cashier's check in the amount of $10,764.11 for the down payment of another vehicle.

U.S. Attorney Evans praised the work of the Federal Bureau of Investigation and Forensic Accountant Josephine M. Beninati, CPA, CFE in this matter. Assistant United States Attorneys Jordan Ginsberg, Chief of the Public Corruption Unit, and Monetary Penalty and Asset Recovery Unit Asset Forfeiture Coordinator Alexandra Giavotella were in charge of the prosecution.

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Original text here: https://www.justice.gov/usao-edla/pr/dr-charles-j-southall-iii-sentenced-60-months-prison-money-laundering-obtaining-over