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Florida Property Developer Indicted for Allegedly Defrauding First NBC Bank Out of $123 Million

etienne-martin-2_K82gx9Uk8-unsplash-300x200Federal prosecutors have charged a property developer from Florida for allegedly conspiring to defraud a failed New Orleans bank out of at least $123 million.

Gary Gibbs, 66, of Niceville, Florida was charged with one count of conspiracy to commit bank fraud. It is unclear if he has acquired the services of an attorney.

According to court filings, the accused property developer allegedly had a banking relationship with the now-defunct First NBC Bank from 2010 through 2017. During that period, he is accused of submitting false documents that misrepresented his financial position in order to qualify for loans.

The accused was regularly unable to pay existing loans or overdrafts on his bank accounts, sources indicate. He and three bank officers—referred to in filings as “Bank President A,” “Bank Officer B,” and “Bank Officer C”—allegedly conspired together to disguise his true financial condition by providing him with new loans to pay off his existing loans and cover his overdrafts.

The bank officers falsely stated in loan documents that he was able to pay off his loans with funds generated by his businesses. They allegedly hid the fact that they provided him with new loans by keeping that information out of month-end reports made to auditors, examiners, and the bank’s board of directors.

The property developer’s projects in Mississippi included a $44 million senior-living facility in Howell Village and an affordable housing project in Baton Rouge. The projects were both heavily funded by the state bond commission.

When the accused informed the bank officers that he was thinking of filing for bankruptcy because of his inability to pay back the loans, Bank President A purportedly told him the bank could not afford for him to default. They continued to make false statements and omissions in loan filings to hide the alleged fraud scheme and prevent his businesses from defaulting.

The trio “unjustly enriched themselves by disguising the true financial status of the property developer, his entities, and other borrowers; concealing the true performance of loans; and misrepresenting the nature of payments to him Gibb’s and his entities,” according to the indictment.

Sources have identified the two of the bank officers as chief credit officer William Burnell and loan officer Robert Brad Calloway. They are reportedly facing regulatory actions and lawsuits related to their conduct.

The property developer’s charges are the latest in a string of alleged frauds uncovered after First NBC Bank’s collapse three years ago. He is the second major former client to be charged by federal prosecutors in the past three weeks, after the indictment of Arvind “Mike” Vira in mid-June for allegedly defrauding the bank of up to $39 million.

First NBC Bank was shut down in spring 2017 by the Federal Deposit Insurance Corp. (FDIC) after it was discovered to be near collapse, with hundreds of millions of dollars in bad loans. With the FDIC on the hook for $1 billion in deposits, it remains the largest U.S. bank failure since the 2008 financial crisis.

South Florida Bank Fraud Attorney

Are you involved in a bank fraud case? Contact Brian Silber, P.A. to set up a free initial consultation with one of South Florida’s most experienced bank fraud attorneys.

Source: 7.1.20 Developer charged with conspiracy to defraud bank of $123 million.pdf

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