Fraud Friday – Community Banker Guilty of “Extend and Pretend” or “Delay and Pray” Loans

August 8, 2014

By Bob Coleman
Editor, Coleman Report

Brian Bailey faces five years in prison with his guilty plea to one count of conspiracy to causing a bank to make a false entry in a report to deceive the FDIC and the Federal Reserve.

His crime?

Working with others in the bank to extend the maturities of loans that later defaulted – “extend and pretend” or “Delay and Pray” loans.

Charles M. Oberly III – United States Attorney says, “ . . . take another step forward in bringing to justice those individuals whose criminal conduct participated in and contributed to the failure of the Wilmington Trust Company.

“Mr. Bailey’s participation in both conspiracies showed a violation of both the public trust and an abuse of power. Mr. Bailey’s over-arching criminal conduct in approving improper supplemental financing for the failing Wilmington Trust’s borrowers contributed substantially to the bank’s demise. His conduct, and that of others, enabled the bank to falsely report its level of non-performing loans to Federal Regulators and the public by hundreds of millions of dollars, as you heard today in the courtroom.

“We hope that this conviction will demonstrate my office’s continued commitment to protecting the integrity of financial institutions and that individuals like Mr. Bailey will pay the price if they violate those rules and violate the law . . .

Check out the earlier reportings of his indictment

Read the indictment here