Businessman Convicted Of Fraud And Money Laundering Involving $1.2 Million School Construction Contract
Wednesday, October 5, 2016
BATON ROUGE, LA - United States Attorney Walt Green announced today that NATHIAN D. HOSSLEY, age 50, of Baton Rouge, has been convicted of wire fraud and money laundering in connection with a contract worth over $1.2 million that his construction company entered to build a charter school in Baker, Louisiana. His sentencing date has not yet been set.
This morning, HOSSLEY plead guilty before U.S. District Judge John W. deGravelles to multiple counts of wire fraud and money laundering. These convictions arose from HOSSLEY’s ownership and operation of First Millennium Construction (“First Millennium”), a local commercial construction company headquartered in Baton Rouge, and Spice Bistro, a local restaurant that HOSSLEY co-owned.
During the guilty plea hearing, HOSSLEY admitted to a factual summary which detailed his crimes. According to that summary, HOSSLEY submitted a bid to Bouma Construction (“Bouma”) for First Millennium to work as a subcontractor on construction of the Impact Charter School in Baker, Louisiana, in 2014. During the bidding process, HOSSLEY submitted an application for the job (called a “Qualification Statement”) to Bouma in which he represented that he had never been indicted or convicted of a crime, when, in fact, he had multiple federal convictions for wire fraud, bank fraud, conspiracy to commit bank fraud, and providing a false statement in connection with a bank loan. HOSSLEYalso represented that there were no civil matters pending in which he was involved, when, in fact, he was in civil litigation with a former business partner.
Bouma ultimately hired First Millennium for the Impact Charter School project and the companies entered into a contract for $1,221,163.00. Bouma’s payments to First Millennium were to be made in installments. The payment arrangement between the HOSSLEY’s company and Bouma required that HOSSLEY submit a payment application each time he wanted a new installment payment. HOSSLEY submitted multiple payment applications to Bouma which falsely understated or omitted money owed to certain sub-subcontractors or vendors he had hired to work on the job. Because of this, HOSSLEYwas able to conceal from Bouma that he was using money paid to him by Bouma for the project on personal expenditures such as American Express card bills, cash withdrawals, and money transfers to a restaurant he had recently opened and co-owned, called Spice Bistro.
Then, in October of 2014, HOSSLEYcontacted an executive with Bouma and told him that four sub-subcontractors which HOSSLEY had hired to assist him on the Impact Charter School project needed to immediately be paid $96,125, collectively. Because Bouma had already paid First Millennium over $849,000 on the project, the executive insisted that the payments be issued as joint checks to First Millennium and each individual sub-subcontractor. He additionally insisted that HOSSLEY obtain lien waivers and signed “Joint Check Agreements” from the four sub-subcontractors. HOSSLEY agreed to this arrangement, but rather than obtaining the signatures of the four sub-subcontractors on these documents, he and one of his employees forged the signatures on the documents themselves, including the endorsements on the joint checks. HOSSLEYthen caused the checks to be deposited into First Millennium’s bank account.
After the checks were deposited into First Millennium’s bank account, HOSSLEY made a $29,474.34 payment on his American Express card from the First Millennium bank account, and then, on October 30, 2014, he made a $22,000 transfer of funds from the First Millennium bank account to the bank account of his restaurant, Spice Bistro. The total of these two transactions exceeded the amount of money in the account previous to the deposit of the four joint checks by over $10,000. These transactions formed the basis of HOSSLEY’s money laundering conviction.
The matter is being handled by the United States Attorney’s Office for the Middle District of Louisiana and the Baton Rouge office of the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Ryan Crosswell, Rene Salomon, and Cal Leipold.