A former executive at First NBC Bank, the New Orleans lender that failed in April 2017, has pleaded guilty to conspiracy to defraud the bank.
Robert Calloway, the bank's onetime executive vice president, was accused of working to conceal the financial condition of a borrower named Gary Gibbs from the bank's board, auditors and examiners. Ashton Ryan, the former president of First NBC, and former Chief Credit Officer William Burnell are also alleged to be part of the scheme.
"They falsely stated in loan documents that Gibbs was able to pay his loans with cash generated by his businesses," hiding "that Gibbs was only making his existing loan payments by getting new loans from First NBC Bank," the U.S. Attorney's Office in the Eastern District of Louisiana said Tuesday in a press release.
Calloway, 62, pleaded guilty to one count of conspiracy to commit bank fraud — the same charge to which Gibbs pleaded guilty in August 2020.
Ashton Ryan, the New Orleans bank's CEO, and two other officers are accused of disguising the financial condition of certain borrowers before the bank's 2017 collapse.
In addition to fines, Galloway faces a maximum penalty that includes up to five years in prison and up to three years of supervised release. U.S. District Judge Eldon Fallon set his sentencing for March 16, 2023.
"Today's plea sends a clear message that bank executives who commit fraud and deliberately deceive regulators will be brought to justice for their actions," said Stephen Donnelly, acting special agent in charge of the eastern region at the Office of Inspector General for the Federal Reserve Board and the Consumer Financial Protection Bureau.
Calloway
First NBC's failure cost the Federal Deposit Insurance Corp.'s Deposit Insurance Fund around $1 billion.
