January 20, 2023
Fraud Friday – “He Lost it All” Says Defense Attorney in First NBC Bank Trial
While many bank executives and borrowers involved in the First NBC Bank fraud case pleaded guilty, the bank’s Founder and former President, Ashton Ryan, began his trial last week. Ryan is being accused of nearly 50 different counts related to the 2017 downfall of the bank which ultimately cost the FDIC almost $1 billion. He is being tried with the First NBC Vice President, Fred Beebe, who also pleaded not guilty.
The defense attorney, Eddie Castaing, argued that First NBC Bank was started to help the community rebuild after Hurricane Katrina and that the loans were made in good faith with no intention of hurting the bank. Ryan’s attorney states, “He lost it all. There was no golden parachute. He probably lost more than anyone else in the failure of the bank.”
The government is alleging that Ryan and others conspired to fund more than $263 million worth of bad loans to six borrowers. The U.S. Attorney Matthew Payne says, “This case is not about bad banking, it’s not about risky banking, it’s about outright fraud.”
Fred Beebe’s attorney, Sara Johnson, characterized Beebe as a good-natured, low-level loan officer who did not have the authority to approve or disapprove loans. She also stated that Beebe recorded other bank officials and brought the recording to the FDIC and FBI when he suspected that things were going wrong. “These are not the actions of a fraudster,” says Johnson in the opening statement.
After the opening statements from the attorneys, the first witness took the stand. Carl Chaney, the CEO and President hired in February 2017, informed the jury that the bank was $400 million dollars deep in bad loans when he started at First NBC. The FDIC came on April 30, 2017, seized the bank’s assets, and ordered the bank to shut down.
The case involving two bank executives and 10.5 million documents is expected to last for weeks.
Read Our Previous Reporting:
Fraud Friday – Bank CEO Hides Nearly $1 Billion in Fraudulent Loans from Regulators – 2/12/21
Fraud Friday – Bank Executive Vice President Pleads Guilty to Conspiracy to Defraud his Bank – 8/5/22
Fraud Friday – First NBC Fraud Costs Almost $1 Billion – 8/12/22
Fraud Friday – Loan Officer’s Warnings Ignored in Massive Bank Fraud – 1/6/23