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Chief Credit Officer of Failed Louisiana Bank Pleads Guilty to Conspiracy and Faces Up to 30 Years in Prison and a $1 Million Fine

New Orleans, Louisiana – United States Attorney Duane A. Evans announced that William J. Burnell (“Burnell”), age 72, a resident of Kenner, Louisiana, pleaded guilty on September 13, 2022, to conspiracy to defraud First NBC Bank (“ Bank “), the New Orleans-based bank that failed in April 2017.

According to court records, Burnell was the Bank’s Chief Credit Officer from roughly 2006 to April 2017. He was in charge of the overall quality of the bank’s lending function, as well as credit policies and administration, loan recovery and collection operations, and the monitoring and management of past-due loans, including the approval of the bank’s internal list of past-due loans. Burnell was in charge of creating month-end reports, which included listings of overdrawn borrowers and past-due loans. These reports were supposed to accurately depict the quality of the Bank’s assets, which included loans. Misrepresentations in these reports made it hard to judge the Bank’s overall financial health.

Burnell was also in charge of approving credit risk ratings before the bank chose whether or not to lend to its customers.

Other people engaged with the bank, such as the board of directors, external auditors, and federal and state regulators, relied on Burnell as Chief Credit Officer to keep them informed of issues with the bank’s asset quality, particularly loan concerns. Nonetheless, Burnell, along with the Bank’s President Ashton J. Ryan, Jr., Executive Vice President Robert B. Calloway, Senior Vice President Fred V. Beebe, and others, colluded to conceal material information and defraud the Bank. Burnell, Ryan, and Calloway, for example, willfully withheld key information concerning borrower Gary Gibbs from the board, auditors, and examiners.

Further, Burnell functioned as an additional authorizing officer for loans to borrower Warren Treme, who was Ryan’s business partner. Treme’s loan officer was Beebe. Burnell, Ryan, and Beebe lied in Treme’s loan documents and to the board, auditors, and examiners in ways that benefited Ryan financially. Calloway, Gibbs, and Treme have all previously pled guilty to conspiracy to defraud the bank, as have the bank’s General Counsel Gregory St. Angelo, borrowers Kenneth Charity, Jeffrey Dunlap, and Arvind Vira. Ryan, Beebe, and borrower Frank Adolph’s trial is set to commence on January 3, 2023.

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

“Today’s plea agreement illustrates the FBI’s steadfast commitment to bringing those who commit white collar crimes to justice, like Mr. William J. Burnell,” said Douglas A. Williams, Jr., Special Agent in Charge, FBI New Orleans. “We thank our partners from 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, Consumer Financial Protection Bureau, Office of Inspector General for their strong partnerships in protecting the integrity of the American banking system.”

“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. I commend our agent and their federal law enforcement partners for their hard work and persistence, which ultimately led to this outcome,” said Stephen Donnelly, Acting Special Agent in Charge, Eastern Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection.

Burnell pleaded guilty to one count of conspiracy to commit bank fraud under Title 18, United States Code, Sections 1344 and 1349. On conviction, the maximum penalties are thirty years in prison, a $1,000,000 fine, or the greater of twice the gain to Burnell or twice the loss to any victim, up to five years of supervised release, and a $100 required special assessment fee.

Burnell’s sentencing has been set for March 16, 2023, at 2:00 p.m. by Judge Eldon E. Fallon.

The Federal Bureau of Investigation, the Federal Deposit Insurance Corporation, the Office of Inspector General, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, and the Office of Inspector General are all investigating this case. The prosecution is led by Assistant United States Attorneys Matthew R. Payne, Nicholas D. Moses, J. Ryan McLaren, and Rachal Cassagne.

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