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NEW ORLEANS -- A former CEO of a Central Progressive Bank headquartered in St. Tammany Parish was charged by federal prosecutors, according to U.S. Attorney Jim Letten.

Richard Blossman Jr., 52, of Covington, was charged one count of bank fraud and one count of false statements, according to the U.S. Attorney's Office.

In December 2011, the North Shore bank failed and was taken over the Federal Deposit Insurance Corporatiion, according to the U.S. Attorney's Office, and the assets were sold to First NBC.

The U.S. Attorney's Office said, Blossman allegedly had the bank buy a $200,000 yacht, and 'through a surrogate, formed a strawman company to purchase the vessel from a subsidiary of Central Progressive Bank for less than $30,000.' The company was used to hide Blossman's ownership of yacht, and 'Blossman instructed a branch of Central Progressive Bank to cash the $130,000 check and to give the cash to his designee. Blossman ultimately received some of the cash,' said a statement from the U.S. Attorney's Office.

In addition, Blossman allegedly gave bonuses of $5,000 to 11 board members of the bank, according to the U.S. Attorney's Office.

'Although the bank minutes reflected that the bonus was for the directors, continued support and hard work for the bank, the $5,000 per director bonus was really an illegal campaign contribution. The next calender day, the bank deposited $5,000 into the eleven directors' accounts, but had each account subsequently debited for $5,000 and a $5,000 bank check in the name of each individual director was sent to a campaign for a total of $55,000 from CPB,' said a statement from the U.S. Attorney's Office.

If convicted Blossman faces a maximum term of 30 years in jail on each count, a maximum fine of $1,000,000.

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