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

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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, Gibbs 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.

Gibbs 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 Gibbs with new loans by keeping that information out of month-end reports made to auditors, examiners, and the bank’s board of directors.

Gibbs’ 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 Gibbs 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 that 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 Gibbs’ businesses from defaulting.

The trio “unjustly enriched themselves by disguising the true financial status of Gibbs, his entities, and other borrowers; concealing the true performance of loans; and misrepresenting the nature of payments to Gibbs 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.

Gibbs’ 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

After Mississippi Took Her Money, Ashley Phillips Fought to Get It Back

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travel-778338_1920-300x200In February 2017, Ashley Tami Renee Phillips was stopped at Medgar Wiley Evers International Airport in Jackson, Mississippi by a Transport Security Administration officer. The TSA had discovered Phillips was carrying $30,000 in cash in her checked luggage. He seized the cash.

Law enforcement attempted to take her cash using civil asset forfeiture. This is the procedure where police may take an individual’s money or property if they suspect it is involved in a crime. In Phillips’ case, the Jackson Airport Police Department brought in their drug dog to test the cash. When the dog detected narcotics on the money, the police had found their justification to take the cash. This is despite a study demonstrating that more than 75 percent of currency in the U.S. has cocaine residue on it.

The Jackson Airport PD claimed that Phillips had attempted to hide the money, claiming it was “concealed in several different items of clothing in the checked luggage.” Phillips hired a lawyer to fight the seizure. More than 18 months after the seizure, in October 2018, prosecutors settled with Phillips, returning $25,000 of her money.

For most people, however, contesting a seizure is prohibitively expensive once you take into account the cost of a lawyer and court filing fees. In the 18 months from July 2017 through to December 2018, Mississippi law enforcement departments reported 315 seizures averaging $7,490 per seizure. Details of these seizures are contained in Mississippi’s new civil asset forfeiture database.

Former Attorney General Jeff Sessions championed civil asset forfeiture as a means of fighting drug cartels. It is, he said, “a key tool that helps law enforcement defund organized crime, take back ill-gotten gains, and prevent new crimes from being committed.” Despite this, only 137 of Mississippi’s civil forfeitures were drug-related.

Additional details can be hard to find in the database. The circumstances that led to the seizure are outlined in fewer than 30 percent of seizures. It is hard to tell, therefore, how many of the 137 seizures were, in fact, drug-related. For example, even though she was not charged with a crime, not linked to the illegal drug trade, and her money was eventually returned, Phillips would have been listed as having a drug-related seizure.

Cash seizures accounted for 47 percent of forfeitures in the state, while vehicles accounted for 17 percent.

This insight into the state of civil asset forfeiture in Mississippi comes at a time of change in the state. Last summer, the law allowing what are known as “administrative forfeitures” lapsed. Administrative forfeiture was used for seizures totaling less than $20,000 and was favored by law enforcement as they did not have to file paperwork and there were few safeguards to protect innocent owners.

Last year, I reported on how law enforcement agencies were still using administrative forfeiture three months after the law had lapsed. The Mississippi Bureau of Narcotics said at the time they had been unaware of the change in the law and later returned cash and property worked $42,000.

While there have been some large busts in Mississippi—notably a bust of Rankin County vape shops that were selling synthetic cannabinoids which led to over $600,000 of seizures—for the most part, civil asset forfeiture in Mississippi has been used to for seizures of far lesser value. If you remove the Rankin County cannabinoid seizures from the tally, the average value of civil asset forfeitures in the state is $5,422.

Civil Asset Forfeiture Attorney

If your lawful property has been seized, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced civil forfeiture defense attorneys.

Sources

2019-01-10 Progress on Asset Forfeiture, but Significant Problems Remain

2019-01-16 A Look Inside the World of Civil Asset Forfeiture

Mississippi Police Seized Property for Months With No Legal Authority

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sunset-49383_1920-300x225For more than three months, police departments in Mississippi have seized property from individuals with no legal authority. Law enforcement agencies say they did not notice the relevant law had lapsed.

That law had allowed police agencies to seize cash or property suspected of being involved with illicit drugs unless the owner challenged it in court within 30 days of the seizure. This procedure is called “administrative forfeiture” and was used for seizures which totaled less than $20,000. For larger sums, “judicial forfeiture” was used. Judicial forfeiture requires law enforcement agencies to sue in court in order to have a judge sanction the forfeiture. The burden of proof for judicial forfeitures is also higher than for administrative forfeitures.

State Rep. Joel Bomgar (R–Madison) outlined the differences between the two laws: “The judicial forfeiture had safeguards built in, but with the administrative forfeiture, your stuff was basically guilty until proven innocent, and you had to sue the state to get it back.”

Both judicial and administrative forfeiture are types of civil asset forfeiture. Civil asset forfeiture is a legal process where law enforcement can take an individual’s property even without that person being convicted of or even charged with a crime. All that is required is a suspicion that the property was in some way involved in criminal activity.

In Mississippi, law enforcement agencies retain 80 percent of the proceeds from the forfeiture if only one agency was involved in the seizure. In cases where two or more agencies were involved, law enforcement keeps 100 percent of the proceeds. This has led to critics across the political spectrum saying that police are incentivized to carry out civil asset forfeitures since these funds directly benefit them.

The law which allowed administrative forfeitures contained a sunset clause which came into effect on June 30. Sunset clauses are common in Mississippi laws. They are designed to ensure laws are periodically reviewed by the state legislature. However, the bills which would have allowed administrative seizures to continue died in committee earlier this year.

Unaware of this, law enforcement agencies across the state continued seizing property using the lapsed law. At least 15 agencies have filed 60 civil forfeitures under the law since June 30. This amounts to at least $200,000 in property. Since there is no requirement to track civil forfeitures in Mississippi, the amount may be considerably higher.

“Honestly, we were unaware of the sunset provision,” said John Dowdy, director of the Mississippi Bureau of Narcotics. “We thought that had been fixed in the legislative session.”

The Mississippi Bureau of Narcotics has said they will now return cash and weapons worth $42,000. District Attorneys on the Gulf Coast have also announced they will also return seized property.

Dowdy is working with lawmakers in the hopes of bringing back administrative forfeiture. “The loss of the administrative forfeiture law will hamper our efforts to fight drug dealers and the poison they peddle in our communities,” wrote District Attorney Tony Lawrence.

However, J. Robertson of the conservative nonprofit Empower Mississippi argues that the lapsing of the administrative forfeiture law places the state “among the front-runners of having taken steps to protect property owners.”

Civil Asset Forfeiture Attorney

If your lawful property has been seized, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced civil forfeiture defense attorneys.

Source

2018-10-09 Police in Mississippi Took Property Without Legal Authority