Former First NBC Bank executive pleads guilty and will cooperate with government | Courts

A former First NBC Bank executive pleaded guilty on Tuesday to a bank fraud conspiracy charge, admitting to falsifying loan documents in an attempt to conceal the precarious financial situation of a prolific borrower before the bank imploded.

Robert Calloway, 62, of Metairie was among five defendants, including former First NBC founder Ashton Ryan Jr., awaiting trial in the blockbuster fraud case involving the bank’s epic 2017 collapse .

Calloway, Ryan and William Burnell, a former credit manager for First NBC, were charged with others in a case that was due to go to trial this summer before a dispute forced Calloway’s lawyer, Michael Magner, to leave the case.

The trial is now due to begin on January 3 and will continue with Calloway as a prosecution witness instead of a target.

“Mr. Calloway has admitted wrongdoing and has accepted full responsibility for his conduct,” his new attorney, Dane Ball, said in a statement. “Today Mr. Calloway begins a new chapter in his life, starting with his cooperation in this matter.”

Federal prosecutors have charged Calloway with conspiring with Ryan and Burnell to cover up a troubled financial situation for borrower Gary Gibbs, a Mississippi real estate developer.

According to a statement from the U.S. Attorney’s Office, Ryan, Burnell and Calloway withheld Gibbs’ name from monthly reports listing borrowers whose accounts were overdrawn.

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By the time First NBC collapsed, Gibbs and “related entities” owed approximately $123 million, according to the indictment. Gibbs pleaded guilty to a bank fraud conspiracy charge in 2020.

Calloway pleaded guilty to a single count of conspiracy. He faces a maximum prison sentence of 5 years if convicted. U.S. District Judge Eldon Fallon set Calloway’s sentence for March 16.

The 49-count indictment against Ryan, 72, and his three remaining co-defendants allege they enriched themselves by concealing “the true financial situation of certain borrowers and their troubled loans” for the conceal from the bank’s board of directors, auditors and examiners.

The scheme, which allegedly began years before the bank’s collapse, included overdrafting other accounts to make loan repayments, transferring loan proceeds from one entity to make loan payments for another, and other movements.

The government further alleges that Ryan flouted federal banking rules as he enriched himself through side deals with borrowers he was protecting.

The First NBC collapse was the worst U.S. bank failure since the 2008 financial crisis, costing the Federal Deposit Insurance Corp. nearly a billion dollars.

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