NEW ORLEANS – U.S. Attorney Duane A. Evans announced that a federal jury has convicted GLENN E. DIAZ, age 72, of Arabi; PETER J. “PETE” JENEVEIN, age 58, of Panama City, Florida; and MARK S. GRELLE, age 69, of Chalmette, of federal bank fraud and money laundering charges related to defrauding First NBC Bank (“Bank”), the New Orleans-based bank that failed in April 2017. All three defendants are originally from St. Bernard Parish, and DIAZ previously worked as an assistant district attorney for St. Bernard Parish for over thirty years. Between June and December 2016, the defendants defrauded First NBC Bank out of more than $550,000.
The jury convicted DIAZ of bank fraud conspiracy, money laundering conspiracy, and eight counts of bank fraud. The jury was hung on 21 counts of bank fraud against DIAZ, for which the court declared a mistrial. JENEVEIN was convicted of bank fraud conspiracy, money laundering conspiracy, and 29 counts of bank fraud. GRELLE was convicted of conspiracy to commit bank fraud, conspiracy to commit money laundering, and 17 counts of bank fraud. GRELLE was acquitted on one count of bank fraud.
U.S. District Judge Jane Triche Milazzo presided over the six-day trial during which the government called twelve witnesses and presented over 450 exhibits. According to the evidence presented from at least April 2016 through December 20, 2016, DIAZ, JENEVEIN, and GRELLE conspired to defraud First NBC Bank through a series of false invoices and other fake documents for work purportedly done at a Florida warehouse owned by DIAZ.
DIAZ was a customer of First NBC Bank from 2006 through the bank’s closure in 2017. By late 2015, DIAZ had been overdrawing his checking account for purported business expenses. In reality, DIAZ was depositing these overdrafts into his personal account at another bank. In April 2016, First NBC Bank officers asked DIAZ for additional information about the use of the overdrafts. In June 2016, bank officers required that DIAZ provide invoices as proof that he was spending bank funds to improve the Florida warehouse. DIAZ used this warehouse as collateral for his First NBC Bank loans. Subsequently, bank officers rejected several of DIAZ’s checks that did not involve warehouse improvements.
In response to the Bank’s requirement, DIAZ had JENEVEIN and GRELLE provide fake invoices for warehouse improvements that were purportedly performed by GRELLE’s company, Grelle Underground Services LLC. Bank officers then approved the overdrafts based on these invoices. However, after DIAZ wrote the check to GRELLE’s company in payment of the fake invoice, GRELLE would then write a check back to DIAZ. DIAZ would then deposit this check into his personal account at JPMorgan Chase bank, to hide it from First NBC. DIAZ then used the money for personal expenditures unrelated to the warehouse including, vintage automobiles, plastic surgery, precious metals, and online shopping. In total, DIAZ, JENEVEIN, and GRELLE executed 17 round-trip transactions through GRELLE’s accounts. DIAZ and JENEVEIN also created other fake invoices and credit card itemizations claiming false business expenses as well as fabricating business names to make DIAZ’s personal expenses appear to be legitimate Florida construction expenses. The fake documents also included invoices from non-existent companies and fake invoices from real companies.
As to bank fraud conspiracy and each count of bank fraud, the defendants may face a maximum sentence of up to 30 years in prison, a maximum fine of the greater of $1,000,000 or twice the gross gain to the defendants or twice the gross loss, and up to five years of supervised release. For money laundering conspiracy, the defendants face up to 20 years in prison, a maximum fine of the greater of $500,000 or twice the value of the property involved in the transaction, and up to three years of supervised release. As to each count of conviction, the defendants face payment of a $100 mandatory special assessment fee. Judge Milazzo scheduled sentencing in this case for July 26, 2023, at 9:30 a.m.
U.S. Attorney Evans said, “This case reaffirms our office’s commitment to prosecuting white collar criminals who act as if their wealth or power puts them above the law. Glenn Diaz’s claims of owning tens of million dollars of assets and property throughout the United States and elsewhere in North America, did not give him the right to lie to a bank. As co-defendants Peter Jenevein and Mark Grelle discovered after today’s jury verdict , our office will hold anyone accountable for defrauding and conspiring to defraud a financial institution and commit money laundering through acts of deceit. I commend the First NBC trial team for its continued work prosecuting the individuals who defrauded First NBC Bank.”
“We are pleased to work with our law enforcement partners in bringing to justice those who conspire to defraud financial institutions regulated and supervised by the Federal Reserve Board,” said Stephen Donnelly, Acting Special Agent in Charge, Eastern Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau.
“As a former prosecutor, Mr. Diaz knew his conduct was illegal and egregious,” said FBI New Orleans Special Agent in Charge Douglas A. Williams, Jr. “Diaz and the other defendants in this case engaged in a scheme to enrich themselves. The FBI thanks its partners for their assistance in achieving justice in this case.”
This case was investigated by the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Office of Inspector General, and the Federal Bureau of Investigation’s New Orleans Field Office. Assistant U.S. Attorneys Matthew R. Payne and Nicholas D. Moses of the Financial Crimes Unit, J. Ryan McLaren of the Appellate Unit , and Rachal Cassagne of the Violent Crime Unit are in charge of the prosecution.
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