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Northshore Contractor Pleads Guilty to Conspiracy to Defraud First NBC Bank

October 22, 2018 / Source: FDICIG



Wednesday, October 17, 2018

Northshore Contractor Pleads Guilty to Conspiracy to Defraud First NBC Bank

NEW ORLEANS – The U.S. Attorney’s Office, Eastern District of Louisiana announced that JEFFREY DUNLAP, age 44, a resident of Slidell, Louisiana and owner of Phoenix Civil Contractors (“Phoenix”) pleaded guilty today to one count of conspiracy to defraud First NBC Bank, the New Orleans-based bank that failed in April 2017.

According to the Bill of Information, from March 2009 through April 2017, Phoenix and DUNLAP had a banking relationship with First NBC Bank. During that timeframe, Bank President A acted as the loan officer for Phoenix and DUNLAP, reviewing and approving new loans, lines of credit, and advances and incremental increases. The largest Phoenix loan was a revolving line of credit secured by eighty-percent of Phoenix’s accounts receivable. At the direction of Bank President A, DUNLAP submitted false financial statements and inflated accounts receivable for Phoenix to justify incremental increases on the line of credit. Bank President A caused these false supporting documents to be placed in First NBC Bank’s records.  

As alleged in the Bill of Information, the purpose of the conspiracy was for the defendant, DUNLAP, Bank President A, and others to unjustly enrich themselves, disguise Phoenix’s true financial status, and conceal the accurate performance of Phoenix’s line of credit. The defendant, DUNLAP, Bank President A, and others sought to obtain money from First NBC Bank, in part, so that Bank President A and Owner B could continue using Phoenix on projects involving Company A, which was co-owned by Bank President A and Owner B. As a result, Bank President A and Owner B benefited by not having to use their own funds to pay Phoenix for work involving Company A.

The false and fraudulent financial statements, accounts receivable, and other documents submitted by DUNLAP disguised Phoenix’s true financial condition from First NBC Bank, bank regulators, investors, and others. By April 28, 2017, First NBC Bank had advanced approximately $22 million to Phoenix on the line of credit, based on these false statements.

DUNLAP could face up to 30 years imprisonment, a fine of more than $1 million, five years of supervised release, and a special assessment of $100.

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 and Matthew R. Payne, Nicholas D. Moses and Ryan McLaren are in charge of the prosecution.

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