Developer Admits to Conspiring with First NBC Bank President to Defraud First NBC Bank
For Immediate Release
U.S. Attorney's Office, Eastern District of Louisiana
NEW ORLEANS – The United States Attorney’s Office announced that WARREN G. TREME (“TREME”), age 55, a resident of Metairie, Louisiana, pleaded guilty today to conspiracy to defraud First NBC Bank, the New Orleans-based bank that failed in April 2017.
According to court documents, from in or around 2008 through April 2017, TREME had a banking relationship with First NBC Bank, individually and through various entities he controlled. TREME also co-owned several entities with Ashton J. Ryan (“Ryan”), President of First NBC Bank. Because of this conflict of interest, Ryan should not have been involved with TREME’s loans. However, Ryan exercised authority over TREME’s loans with William J. Burnell (“Burnell”), the Bank’s Chief Credit Officer. Throughout TREME’s borrowing relationship at First NBC Bank, TREME lacked sufficient income and cash flow from his businesses to pay his loans and personal expenses. Ryan and Burnell disguised TREME’s true financial condition by making new loans to pay TREME’s existing loans. TREME is the third person to be charged for defrauding First NBC Bank through a business relationship with Ryan, while hiding the fraud from the Bank’s Board, auditors, and examiners. Jeffrey Dunlap, a contractor on Ryan’s project with TREME, has already pled guilty to conspiring with Ryan to fund both that project and his lifestyle by defrauding the Bank. More recently, Arvind “Mike” Vira was charged with conspiring to defraud the Bank, with Ryan’s help, by submitting false financial documents to the Bank while Ryan was personally borrowing from Vira. In addition, on July 10, 2020, a grand jury indicted Ryan, Burnell, First NBC Executive Vice President Robert B. Calloway, and borrower Frank J. Adolph for their roles in the conspiracy to commit bank fraud against First NBC, including fraud involving the TREME loans.
Court documents further describe a scheme by Ryan and Burnell to take $400,000 from TREME’s business partners as part of a settlement. Rather than using the $400,000 to pay down an outstanding loan debt owed by TREME and his business partners, Ryan and Burnell gave $300,000 to TREME. TREME spent the money on gambling, a trip to the Caribbean, and expenses related to a real estate development company TREME co-owned with Ryan. During a subsequent Board meeting, Ryan and Burnell falsely stated that the $300,000 was used to pay down the outstanding loan debt owed by TREME and his business partners.
“The FBI and our law enforcement partners have dedicated significant time and resources toward investigating the failure of FNBC, which resulted in nearly a billion dollar loss to the FDIC. Individuals like Mr. Treme who engage in fraudulent schemes that impact the security of financial institutions are being held accountable. His guilty plea today should be a deterrent to others who would attempt to defraud our nation's banking system,” said Bryan Vorndran, FBI New Orleans Special Agent in Charge.
“We will hold accountable those wrongdoers whose fraudulent actions materially impact financial institutions regulated and supervised by the Federal Reserve Board. I commend our agent and law enforcement partners for their hard work that ultimately led to today’s guilty plea,” 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.
“We are pleased to join our law enforcement colleagues in bringing Mr. Treme to justice,” stated Laurie Younger, Special Agent in Charge of the Federal Deposit Insurance Corporation, Office of Inspector General.
TREME pleaded guilty to one count of conspiracy to commit bank fraud, in violation of Title 18, United States Code, Sections 1344 and 1349. The maximum penalties that may be imposed upon conviction are thirty years in prison; a fine of $1,000,000, or the greater of twice the gain to TREME or twice the loss to any victim; up to five years of supervised release; and a $100 mandatory special assessment.
Judge Sarah S. Vance set TREME’s sentencing on January 6, 2021, at 10:30a.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, Consumer Financial Protection Bureau, Office of Inspector General. Assistant U.S. Attorneys Sharan E. Lieberman, Nicholas D. Moses, Matthew R. Payne, and J. Ryan McLaren are in charge of the prosecution.
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Updated September 2, 2020