United States v. Ryan

Full title: UNITED STATES OF AMERICA v. ASHTON RYAN

Court: United States District Court, Eastern District of Louisiana

Date published: Jul 17, 2023

Facts

The case revolves around alleged fraudulent bank activity at First NBC Bank, which led to the bank’s failure and cost the Federal Deposit Insurance Corporation’s deposit insurance fund approximately $996.9 million. Ashton Ryan, a former bank auditor and president of another bank, was the leader of the group that led to the bank’s collapse. The bank’s Chief Credit Officer, William J. Burnell, was responsible for reviewing borrowers’ financial documents and composing credit analyses about their financial status and loan purpose.

A 49-count Second Superseding Indictment was entered on August 5, 2021, charging Ryan and his co-defendants with conspiracy to commit bank fraud, bank fraud, and false entries in bank records. The Indictment alleges that Bank Officers and borrowers participated in a scheme to defraud the bank and enrich themselves by lying on loan documents about borrowers’ creditworthiness, the purposes of the loans, and the method of repayment.

Evidence presented at trial concerned FNBC’s credit review process, with multiple witnesses testifying that Ryan oversaw this process and had the ultimate power to approve all loans. Loan officers developed credit risk ratings and provided them to Burnell, who testified that in multiple instances Ryan asked inferiors at the Bank to change ratings so that loans could be approved. The Government presented evidence of loan approval documents and testimony from borrowers, including Kenneth Charity, who testified that Ryan and Burnell approved loans to pay money owed to contractors and personal matters.

The defense cross-examined the witnesses and introduced its documents into evidence, with Ryan testifying on his behalf, arguing that he did not possess criminal intent to harm the bank and that members of the board, auditors, and examiners had access to FDIC/OFI Joint Examination Reports. The jury rejected Ryan’s theory of the case, finding him guilty of all 49 counts and his co-defendant Fred Beebe not guilty of all charges.

Issue

Decision

The defendant argues that three witnesses, including the Government’s forensic accountants, offered their opinions of culpability alongside misleading and prejudicial demonstrative summary charts. The defendant claims that these aggregations were incorrect and misleading, violating Fed.R.Evid. 401. The Court finds that the charts offered by the Government did not go beyond the scope of what is allowed by the Federal Rules of Evidence.

The defendant also argues that several of the Government’s witnesses gave testimony based on technical or other specialized knowledge regarding alleged violations of banking policies, practices, or civil regulations in violation of Rule 701(c). The defendant raised 701 objections throughout the trial, and the Court overruled them. The Government argues that any opinion included in the witnesses’ testimony was based on reasonable and straightforward inferences that anyone in their position interacting with the bank could have made, thus making the admission of their testimony proper under Rule 701.

The Court notes that it provided in-depth and clear instruction to the parties leading up to the trial on the proper application of Federal Rules of Evidence 701 and 702 and what kind of testimony was permissible under each rule. During the trial, the Court considered several Defendant’s 701 objections and ruled on them from the bench. The complained-of witnesses were mainly bank examiners and auditors who testified as to what they did. The Court declined to grant Mr. Ryan relief on this ground.

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