The Rev. Charles Southall III, pastor of the First Emanuel Baptist Church in New Orleans and Baton Rouge, has been federally charged with one count of money laundering for allegedly improperly transferring $100,000 to a personal investment account. Rather than an indictment, the charges were handed down in a bill of information — which typically indicates that the defendant will be cooperating with federal authorities — by the U.S. Attorney’s Office in New Orleans late last week.
The charging document provides few details on the source of the money, but it alleges charges that the transfer occurred on or about March 13, 2022, in the early days of the pandemic, and that the funds were acquired through wire fraud. According to the bill, Southall will forfeit a 2017 Mercedes-Benz and $100,000 from an investment account.
Along with his duties at First Emanuel, Southall is a businessman who has been involved in various real estate enterprises around the city. He was also a frequent customer at First NBC Bank, which was shuttered by regulators and declared bankruptcy in 2017. The failure cost the Federal Deposit Insurance Corp. almost $1 billion. In 2020, several First NBC executives, including former CEO Ashton Ryan, were indicted for alleged bank fraud.
The indictment charges that Ryan, along with other executives, provided false information to obtain First NBC loans for certain troubled borrowers. It’s not clear if Southall’s charges, or any agreements he has made with federal prosecutors, are related to the Ryan trial, which is currently scheduled to begin early next year. But federal prosecutors have indicated that Southall’s business relationships with the bank will be part of their case.
A 2021 court filing alleges that Ryan improperly funneled hundreds of thousands of First NBC dollars to a person identified as “Borrower L.” Though the document doesn’t identify Borrower L by name, it says he was a “reverend” who was a partner with Ryan and others in a real estate business, called Universal Pro-Vision, which owned a building on Oretha Castle Haley Boulevard. It goes on to say that Borrower L operated a mortuary business in that building.
Business records from the Louisiana Secretary of State show that Southall was involved with Ryan in Universal Pro-Vision. Property records show that the company owned a building located at 2107 Oretha Castle Haley Blvd. Southall operated a mortuary, called Gaskin-Southall Mortuary, at that location.
Southall did not respond to a request for comment. Reached Monday morning, Southall’s lawyer Clarence Roby Jr. said any comment would be “premature.”
Harney Charter School
Southall is well-known as the pastor of First Emmanuel Baptist Church on the 1800 block of Carondelet in New Orleans. The brick church with bright red doors is about one mile from the former location of Edgar P. Harney Spirit of Excellence Academy, the charter elementary school where Southall served as board chair for several years before it was shuttered by the NOLA Public Schools district for academic and financial problems among other issues.
Ryan was also a member of the Harney board.
In 2018, The Lens found the school improperly withheld tens of thousands of dollars in employee retirement contributions for weeks or months and did not fully document credit card expenses. Additionally, the school’s bank statements had been sent to Southall’s church address and his home address in Baton Rouge was the one that Harney listed with the state agency that distributes per-pupil funding to schools.
Southall gave Lisa Royal, an employee at his church, a contract for $18,000 a year from the school to work as the board secretary. Typically, board secretaries are members of school boards and serve voluntarily.
In November of 2018, following a string of problems at the school, then-Superintendent Henderson Lewis Jr. called upon the charter’s board members to step down. They eventually agreed to hand over operations of the charter school to the district.
While it is not clear if Southall’s charge has anything to do with First NBC, it came just two days after another First NBC official and Ryan co-defendant agreed to plead guilty to conspiracy to defraud the bank.
Last week, William Burnell became the latest to plead guilty to conspiracy to defraud First NBC where he’d served as chief credit officer for 11 years.
Ryan and two other executives are scheduled to stand trial in January 2023. Ryan’s attorney did not immediately respond to a request for comment.