credit manager admits conspiring to defraud First NBC Bank | USAO-EDLA

NEW ORLEANS – United States Attorney Duane A. Evans announced that WILLIAM J. BURNELL (“BURNELL”)The 72-year-old Kenner, Louisiana resident pleaded guilty today to conspiring to defraud First NBC Bank (“Bank”), the New Orleans-based bank that went bankrupt in April 2017.

According to court documents, from 2006 or around April 2017, BERNELL was the bank’s credit manager. He was responsible for the overall quality of the Bank’s lending function; credit policies and administration of the Bank; the Bank’s loan collection and recovery efforts; and the Bank’s monitoring and management of delinquent loans, including approval of the Bank’s internal list of delinquent loans. BERNELL was responsible for compiling month-end reports, including lists of overdrawn borrowers and delinquent loans. These reports should have accurately shown the quality of the Bank’s assets, including loans. Misrepresentations in these reports made a true assessment of the Bank’s overall financial health impossible. BERNELL was also responsible for approving credit risk ratings before the Bank decided to lend to its clients.

Others involved with the Bank, including the Bank’s Board of Directors, external auditors, and federal and state regulators, relied on BERNELL as Chief Credit Officer to advise them of issues related to the quality of the Bank’s assets, including lending issues. However, BERNELL conspired with Bank President Ashton J. Ryan, Jr., Executive Vice President Robert B. Calloway, Senior Vice President Fred V. Beebe, and others to conceal material information and defraud the Bank. For instance, BERNELL, Ryan and Calloway knowingly withheld material information about borrower Gary Gibbs from the board of directors, auditors and reviewers. Further away, BERNELL served as an additional approving agent for loans to borrower Warren Treme, who was Ryan’s business partner. Beebe was Treme’s loan officer. BERNELL, Ryan and Beebe made misrepresentations in Treme’s loan documents and to the board of directors, auditors and reviewers in a way that financially benefited Ryan. Calloway, Gibbs and Treme have all previously pleaded guilty to conspiracy to defraud the Bank, as have Bank General Counsel Gregory St. Angelo, Borrower Kenneth Charity, Borrower Jeffrey Dunlap and Borrower Arvind Vira . The trial of Ryan, Beebe and borrower Frank Adolph is scheduled to begin on January 3, 2023.

“Today’s guilty plea demonstrates once again that the FDIC’s OIG and our law enforcement partners in the United States Attorney’s Office, Eastern District of Louisiana; Federal Bureau of Investigation; and the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau and the Office of Inspector General will continue to investigate these individuals, including bank managers and executives responsible for managing institutions. but are causing harm to our nation’s banking industry,” said Anand Ramlall, Special Agent in Charge, Dallas Area, Office of the Inspector General of the Federal Deposit Insurance Corporation.

“Today’s plea agreement illustrates the FBI’s unwavering commitment to bringing to justice those who commit white-collar crimes, like Mr. William J. Burnell,” said Douglas A. Williams, Jr., special agent in charge of the FBI New Orleans. “We thank our partners at the United States Attorney’s Office, Eastern District of Louisiana; Federal Deposit Insurance Corporation, Office of Inspector General; and the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Office of the Inspector General for their strong partnerships in protecting the integrity of the US banking system.

“Today’s plea sends a clear message that bank executives who commit fraud and deliberately mislead regulators will be brought to justice for their actions. I commend our agent and his federal law enforcement partners for their hard work and perseverance, which ultimately led to this outcome,” said Stephen Donnelly, Acting Special Agent in Charge, Eastern Region, Office of the Inspector General of the Federal Board of Governors. Reserve System and the Bureau of Consumer Financial Protection.

BERNELL pleaded guilty to one count of conspiracy to commit bank fraud, contrary to Title 18, United States Code, Sections 1344 and 1349. The maximum penalties that may be imposed on conviction are thirty years in prison ; a fine of up to $1,000,000, or the greater of two times the winnings at BERNELL or double the loss suffered by a victim; up to five years of probation; and a mandatory $100 special assessment fee.

Judge Eldon E. Fallon expected BERNELLit is sentencing for March 16, 2023, at 2:00 p.m.

This case is being investigated by the Federal Bureau of Investigation; the Federal Deposit Insurance Corporation, Office of Inspector General; and the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Office of the Inspector General. Assistant U.S. Attorneys Matthew R. Payne, Nicholas D. Moses, J. Ryan McLaren and Rachal Cassagne are charged with the prosecution.