Louisiana minister admits to defrauding churchgoers, school of nearly $900K 

Reuters/Mark Blinch
Reuters/Mark Blinch

A prominent Baptist minister in Louisiana has pled guilty in federal court to defrauding his church, a school and others of approximately $889,000. He could be sentenced to as much as a decade in prison.

The Rev. Charles Southall III, the 64-year-old pastor of the First Emanuel Baptist Church in New Orleans and Baton Rouge, pled guilty to one count of money laundering on Tuesday before U.S. District Judge Jay Zainey of the Eastern District of Louisiana.

According to a U.S. Department of Justice announcement, Southall "defrauded FEBC and some of its members in several ways." The pastor is accused of using donations and tithes for personal expenses, diverting around $150,000 of income from the rental of properties owned by his church and its affiliated housing ministries for personal use and diverting funds from a financial account for the Spirit of Excellence Academy to his personal use.

"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," the DOJ statement reads. 

"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."

Southall and others created the Spirit of Excellence Academy to offer a charter school in New Orleans and received grant funding to launch a similar school in Baton Rouge in 2013. However, the Baton Rouge school never opened. Under state law, charter school board members are prohibited from receiving compensation for providing services to the school other than reimbursements of expenses.

When combining all of his alleged indiscretions, the Justice Department estimates that Southall "obtained approximately $889,565.86 through his fraudulent schemes."

As part of his plea, Southall agreed to pay restitution, including $85,351.97 to Spirit of Excellence Academy "or its designee," $687,805.51 to FEBC, $10,000 to one unnamed victim and another $106,408.38 to a second unnamed victim.

Sentencing for Southall is scheduled to take place on Jan. 17, 2023. The pastor faces the possibility of up to 10 years in prison, as much as three years of supervised release, a maximum fine of $250,000 and a mandatory special assessment fee of $100.

Southall addressed his legal situation in a video posted to his Facebook account on Tuesday evening. He disputed some of the reporting on his plea agreement.

"It was not money laundering, at all," Southall insisted. "It was something that went against the banking laws that I plead to. Because they said it was illegal for me to move money from an account that I have to an account that I have."

"That plea was basically all that I had to go forth with the judge. The judge accepted it, and it was called a plea deal simply because they had a whole lot of other stuff that went away, simply because a lot of it was untrue."

Southall said it was a "very difficult day for my family, my friends, my loved ones and my church," adding that "according to the law, I made some missteps." He said he is "remorseful" for those errors.

"But I accepted the responsibility that they said when I moved the money from an account that I have to an account that I have that it was wrong," he continued. "I did not think it was, but it went against federal banking laws."

"I am sorry for whatever I may have done that caused me to be in this position."

Southall asked viewers to keep his family and congregation in their prayers.

"God's got this, and when God has it, we need to keep our hands off of it," he said. 

In September, Southall was charged with one count of money laundering, which alleged that the pastor improperly transferred $100,000 to a personal investment account in March 2020.

According to the bill of information regarding the money laundering count, Southall is to forfeit a 2017 Mercedes Benz and around $100,000 in "proceeds contained in JP Morgan investment" held in his name.

Follow Michael Gryboski on Twitter or Facebook

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