A federal grand jury charged the owner of construction firm Phoenix Civil Contractors with conspiracy to defraud failed First NBC Bank, The New Orleans Advocate reported May 15.
For eight years starting March 2009, Jeffrey Dunlap and his firm allegedly received around $22 million line of credit from the New Orleans-based bank, after falsifying loan documents at the urging of "Bank President A," which the news report suggested might be the bank's former CEO, Ashton Ryan Jr.
In April 2017, the Louisiana Office of Financial Institutions shut down First NBC Bank, the largest bank failure since February 2015.
The Office of Inspector General said the bank ultimately failed because Ryan dominated most, if not all, operational and executive decisions. The OIG added that Ryan had broad lending authority with limited board oversight and had extended a number of large credits that resulted in significant losses for the bank.
Phoenix Civil Contractors sued Ryan in November 2017 after he allegedly stiffed around $5.5 million he owed the contractor, The Advocate reported March 3. Ryan allegedly then set up a loan and credit line for the firm at First NBC, referencing his own debt in the documents to justify the loan's creditworthiness and then extending it.
Dunlap's lawyer said he intends to plead guilty to the charge, according to the publication. He could face up to 30 years in prison and a fine of more than $1 million.
Meanwhile, Ryan, who has not been charged with any crime, denied any allegations of fraud, the report added, citing Ryan's lawyer, Eddie Castaing.