Former Covington Bank CEO Charged with Bank Fraud and False Statements

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NEW ORLEANS,—Richard S. Blossman, Jr.,age 52, a resident of Covington, Louisiana, was charged today in a one-countbill of information alleging one count of bank fraud and one count of falsestatements, announced U.S. Attorney Jim Letten.
According to the bill of information,Blossman was the chief executive officer (CEO) of Central Progressive Bank,headquartered in Lacombe, Louisiana in St. Tammany Parish. In December of 2011Central Progressive Bank (CPB) failed and was taken over by the Federal DepositInsurance Corporation (FDIC). The assets of Central Progressive Bank were thensold to FNBC Bank.
Count one of the bill of informationalleges that Blossman caused Central Progressive Bank to purchase a yachtvalued at $200,000 from a distressed property website. Blossman then, through asurrogate, formed a strawman company to purchase the vessel from a subsidiaryof Central Progressive Bank for less than $30,000. The strawman company wasformed to hide Blossman’s ownership of the yacht. Blossman then subsequentlysold the boat for approximately $130,000 in 2005. The bill of informationfurther alleges that Blossman instructed a branch of Central Progressive Bankto cash the $130,000 check and to give the cash to his designee. Blossmanultimately received some of the cash.
Count two of the bill of informationalleges that in March of 2007, Blossman, as CEO of Central Progressive Bank,issued a $5,000 bonus to 11 of the members of the board of directors of CentralProgressive Bank. Although the bank minutes reflected that the bonus was forthe directors’ continued support and hard work for the bank, the $5,000 perdirector bonus was really an illegal campaign contribution. The next calenderday, the bank deposited $5,000 into the 11 directors’ accounts but had eachaccount subsequently debited for $5,000 and a $5,000 bank check in the name ofeach individual director was sent to a campaign for a total of $55,000 fromCPB.
Blossman faces a maximum term of 30years’ incarceration on each count, a maximum fine of $1,000,000, and a maximumof five years of supervised release.
United States Attorney Letten reiteratesthat bill of information is merely a charge and that the guilt of the defendantmust be proven beyond a reasonable doubt.
The case was investigated by the FederalDeposit Insurance Corporation Office of Inspector General and the FederalBureau of Investigation and was prosecuted by Assistant U.S. Attorney Carter K.D. Guice, Jr.