Former lawyer for failed First NBC charged with defrauding the bank

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https://www.nola.com/crime/2019/03/former-lawyer-for-failed-first-nbc-charged-with-defrauding-the-bank.html

Former lawyer for failed First NBC charged with defrauding the bank

Posted Mar 22, 5:59 PM

By Jennifer Larino, NOLA.com | The Times-Picayune

The former top lawyer for the failed First NBC Bank has been charged with conspiracy to defraud the New Orleans-based lender. The bank collapsed two years ago in the largest American bank failure since the 2008 financial crises. Gregory St. Angelo, the bank’s general counsel for 10 years prior to its $1 billion collapse, is accused of conspiring with two other former bank officials to defraud the bank, including falsifying personal financial statements and repeatedly taking out loans, which appeared to be paid off in bank books, but never actually were.

The bill of information identifies the two other bank officials only as “Bank President A” and “Bank Officer B.” However, the relatively detailed descriptions provided in the document indicate the unnamed officials are former First NBC President and CEO Ashton Ryan and former Chief Credit Officer Bill Burnell. Neither currently faces charges in the federal case.

Attorney Phillip A. Wittmann, who is representing St. Angelo, said his client is cooperating with Eastern District U.S. Attorney Shane Jones’ office in an “ongoing investigation.” “All I can tell you is that Mr. St. Angelo is a cooperating witness,” Wittmann said.

Edward J. Castaing Jr., Ryan’s attorney, said Ryan is not named in the bill, had no knowledge of any illicit activities at the bank and “completely denies any of the allegations in that bill of information as it would pertain to him.”

The bill of information accuses St. Angelo, 54, and the anonymous bank officials of more than a decade of fraudulent dealings starting in 2006. The goal, the documents says, was to “enrich themselves unjustly by disguising the true financial status of St. Angelo” as well as the financial health of the bank itself and that of other borrowers.

The bill claims St. Angelo repeatedly received loans from First NBC Bank based on “materially false and fraudulent” documents and statements that overstated his wealth and omitted key information. When he couldn’t pay the loans, St. Angelo borrowed more money. The new loans appeared current in bank books, helping the bank avoid reporting the older lines of credit as bad loans, the bill said.

In addition, St. Angelo and the two bank officials pushed back the maturity date on loans St. Angelo could not pay, issued loans to St. Angelo’s associates that ultimately went to him, and funded fraudulent tax credit investments in entities owned by St. Angelo, the bill said. Again, the bill claims the purpose was to avoid having to report the loans as soured assets in First NBC’s books.

Federal prosecutors estimate First NBC had advanced roughly $46 million total to St. Angelo and his entities on the eve of its April 2017 collapse. The bank had also paid St. Angelo an additional $9.6 million through the fake tax credit investments, the bill said.
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1. Link to the DoJ PR

https://www.justice.gov/usao-edla/pr/bank-general-counsel-charged-conspiracy-defraud-first-nbc-bank