Man Sentenced to Two Years in Prison for Defrauding River Boat Pilots in Louisiana
From the U.S. Attorney's Office in the Southern District of California
Mark A. Hofmann of San Diego, California, was sentenced today to two years in prison for his role in an investment fraud scheme whereby Hofmann misappropriated more than $400,000 in investment funds of a Louisiana riverboat pilots association known as Bolivar Investors Group, LLC.
During a hearing before U.S. District Judge Dana M. Sabraw, Hofmann was also ordered to pay more than $400,000 in restitution to members of the riverboat pilots association – the victims of Hofmann’s white collar crime.
According to court documents, Hofmann solicited $3 million from Bolivar Investors Group, LLC, as part of a joint venture to allegedly develop office buildings next to a medical center in Covington, Louisiana. As part of their deal, Hofmann agreed to open a bank account in San Diego, California, in order to use the investment funds to pay project expenses. Hofmann promised the investors in Bolivar Investors Group, LLC that they would have access to the bank account and would be able to review the statements online. However, Hofmann, and his co-conspirator, Timothy Monahan, were the only signatories on the bank account, and were the only ones with access to the bank account details. To conceal his fraudulent scheme, Hofmann provided the riverboat pilots that invested through Bolivar Investors Group with falsified bank records and other fraudulent financial documents.
According to court documents and Hofmann’s admissions, rather than spend the money on project expenses, Hofmann misappropriated more than $400,000 of funds that belonged to Bolivar Investors Group, LLC, for his own personal use and expenses, which were unrelated to the land development deal. In addition, as mentioned during the sentencing hearing today, Hofmann also withdrew from the joint venture bank account more than $230,000 in cash and checks that he wrote to himself, which was also unrelated to the land deal.
During the sentencing hearing, two of the riverboat pilots from Louisiana told the Court that Hofmann’s fraud had destroyed personal relationships between generations of pilots dating back 100 years. The two pilots said the victims are constantly reminded each month of Hofmann’s fraud because they continue to pay monthly interest and principal on loans they had taken out to invest in the joint venture with Hofmann.
United States Attorney Laura E. Duffy said, “Today, justice was served on behalf of the riverboat pilots association in Louisiana, who placed their trust in Mr. Hofmann. We hope that this case serves as a deterrent to those raising capital for joint ventures who might seek to take advantage of their investors and misappropriate their funds.”
This case was investigated by the New Orleans Division of the Federal Bureau of Investigation and presented for prosecution to the U.S. Attorney’s Office in the Eastern District of Louisiana. The case was transferred to the Southern District of California for entry of the guilty plea and for sentencing.