Federal prosecutors charged a San Diego developer Tuesday with bilking an investment company formed by about 50 local river pilots out of more than $400,000 in 2009.
Mark Hofmann faces a single count of wire fraud. According to a seven-page bill of information — an indication that Hofmann has struck a plea deal — he persuaded the river pilots to invest $3 million in a project to build a medical office complex on five acres beside the Lakeview Regional Medical Center in Covington.
But instead of pouring the money into the project, Hofmann siphoned some of it for himself, paying off personal expenses and debts.
Then he and another man — referred to in the charging documents only as “T.M.” — doctored bank statements to hide the thefts. T.M. appears to be Timothy Monahan, according to records in a civil lawsuit filed against Hofmann and Newtrac Companies LLC.
Hofmann was a no-show in that lawsuit, failing to appear before an arbitrator, and U.S. District Judge Eldon Fallon agreed with the arbitrator’s ruling that Hofmann and his company should pay about $2.8 million in damages to Bolivar Investors Group, LLC, formed by the river pilots.
Only recently have they started garnishing Hofmann’s wages, said Michael Bopp, one of the plaintiffs.
“We’ve probably got about $5,000,” Bopp said.
“He just put it all in his account and was paying himself and paying his office and fixing his cars and paying lawsuits. He’s a thief,” Bopp said. “These grifters, they burn one person and try to pay that guy back by taking your money.”
Bopp said Hofmann made a compelling pitch for the project, flying out numerous times from California.
It was the largest real-estate undertaking to date by the group of river pilots, who ply the waters from just above Head of Passes in Plaquemines Parish to the Henry Clay Street Wharf in New Orleans, guiding ships upriver.
The investor group comprises about half of the pilots in the Crescent River Port Pilots Association, Bopp said. The two entities are separate, he said.
“There’s just a group of us that started investing a little in real estate,” Bopp said. According to the civil court record, none of the pilots held more than about a 3.5 percent stake in the project. Some of them borrowed for it, Bopp said. The group invested all of the $3 million from January to June 2009.
“It’s been awhile,” Bopp said. “We’re still paying for it.”
Bopp, a river pilot for 17 years, said the group still retains some of the land purchased for the development, which never got off the ground, and has sold some as well.
He said he expects that Monahan, the other person authorized to write checks on the account where the group’s money was held, will be charged later.
Officials from acting U.S. Attorney Dana Boente’s office declined to comment on the case.