Another pleads guilty in 2017 failure of NOLA bank; top executive cops to conspiracy to defraud

A former executive of a New Orleans-based bank that failed in 2017 has pleaded guilty to conspiracy to defraud the institution, the inspector general of the federal bank deposit insurance fund said Thursday.

Robert B. Calloway, 62 of Metairie, La., entered the plea related to the collapse of First NBC Bank. Calloway had served as executive vice president of the institution.

In a release, the Federal Deposit Insurance Corp.’s (FDIC) Office of Inspector General said court documents reveal that Calloway, with Bank President Ashton Ryan Jr. and Chief Credit Officer William Burnell, conspired to conceal the financial condition of bank borrower Gary R. Gibbs from the First NBC Bank Board of Directors, auditors, and examiners.

The FDIC OIG said the trio falsely stated in loan documents that Gibbs was able to pay his loans with cash generated by his businesses, and they hid from the First NBC Bank Board of Directors, auditors, and examiners that Gibbs was only making his existing loan payments by getting new loans from First NBC Bank.

The three bank executives also, the FDIC OIG said, concealed the fact that they made loans to Gibbs to keep him and his companies off of month-end reports that went to the board, auditors, and examiners. “These month-end reports listed borrowers who were not paying their loans or whose accounts were overdrawn,” the IG said. “By keeping Gibbs and his entities off of those reports, Ryan, Burnell, and Calloway were able to conceal their scheme and thereby allowing them to continue lending to Gibbs despite his inability to pay his loans.”

Gibbs pleaded guilty in 2020 to one count of conspiracy to commit bank fraud. The charges alleged that he conspired to defraud the New Orleans bank of more than $123 million. The bill of information filed by federal prosecutors outlined a convoluted scheme allegedly involving Gibbs and executives of the failed bank over the period of 2010-17. The prosecutors alleged that Gibbs repeatedly arranged loans with the bank and, when he did not repay them, allegedly obtained new loans from the bank to pay for those he already had, with the knowledge of bank officials.

Bank Executive Vice President Admits to Conspiracy to Defraud First NBC Bank