Former First NBC Bank CEO found guilty of fraud, faces prison

A federal jury has found Ashton Ryan Jr., the former president and CEO of the failed First NBC Bank in New Orleans, guilty on dozens of fraud and conspiracy charges connected to the company's failure in 2017.

The verdict followed a monthlong trial in New Orleans that walked jurors through bank records showing Ryan approved multiple seven-figure loans to borrowers who could not repay.

The U.S. Attorney's Office for the Eastern District of Louisiana said in court documents and public statements that Ryan and other former executives then made new loans to these same borrowers and used the proceeds to pay off existing loans. This created a cycle that played out over years, from 2006 to 2017, defrauding the bank and its shareholders, according to prosecutors.

When First NBC failed, the borrowers collectively owed about $260 million. The bank's failure cost the Federal Deposit Insurance Corp.'s Deposit Insurance Fund nearly $1 billion. Ryan resigned from the bank shortly before it became the largest failure in Louisiana history. 

"This was a theft of epic proportions that grew from within," and "that ultimately harmed the New Orleans economy," U.S. Attorney Duane Evans said Friday in a press release announcing the jury's decision, which occurred a day earlier.

Rudy Bierhuizen

According to the charges, Ryan and other bankers received millions of dollars in compensation from the bank during the course of the conspiracy, and Ryan financially benefited from several phony borrower relationships.

Evans said Ryan and other bankers conspired to defraud First NBC by disguising the true financial status of certain borrowers and their troubled loans, as well as concealing the progressively weakening condition of the bank from directors, auditors and regulators. 

In total, Ryan, 75, was convicted on all 46 counts he faced. For each of the charges, the maximum penalties include 30 years in prison. A sentencing date was not immediately made available.

Ryan's co-defendant, former First NBC loan officer Fred Beebe, was found not guilty on the seven counts of fraud and conspiracy he faced. 

Investigators from the FBI, FDIC Office of Inspector General and Federal Reserve pursued the case against Ryan and reviewed millions of pages of emails, account records and loan documents to uncover the fraud, officials said.

Ryan's "willingness to ignore and flaunt all sound financial practices left the American taxpayers to foot the $1 billion bill which remained following First NBC's collapse," Douglas Williams Jr., special agent in charge of the FBI's New Orleans office, said in the release. "It is my hope" the guilty verdict "will result in some measure of justice for the more than 500 people who lost their jobs, and the countless stockholders who lost their financial investments."  

In 2022, Robert Calloway, the bank's onetime executive vice president, pleaded guilty to conspiracy to defraud the bank. He was accused of working to conceal the financial condition of a borrower from the bank's board, auditors and examiners. 

William Burnell, the bank's former chief credit officer, pleaded guilty to the same charge last year. Both men face up to 30 years in prison. Sentencing for both was scheduled for March.

Ryan had previously said he founded First NBC after Hurricane Katrina in 2005 to help rebuild New Orleans. The bank grew to nearly $5 billion of assets before it failed. It was the largest bank failure in the post-financial-crisis era.