January 22, 2021

Caity Roach
Editor

Fraud Friday — Court Overturns Wilmington Trust Bank Executives’ Convictions

“I never understood why this case was brought,” says defense attorney, Michael Kelly. “In my view, this case was an incredible waste of taxpayer dollars that literally ruined the lives of four innocent people.” 

As a result of a recent court of appeals’ ruling, the four former bank executives may be facing years of preparing for a retrial at the district court level. “We are currently analyzing the Court’s opinion and evaluating our options, including, as the Court of Appeals authorized, retrying the defendants for conspiracy and securities fraud,” says  U.S. Attorney, David Weiss. In the meantime, the four executives have already lost over a decade of their high-wage earning years defending their institution’s lending practices. 

On January 12, 2021, a federal court of appeals in Philadelphia vacated the 2018 fraud and conspiracy convictions against four former Wilmington Trust bank executives. The court of appeals embraced the defense attorney’s objections over how past-due loans were defined in the case, and the bar prosecutors needed to clear for a jury to find the defendants’ statements false. 

Despite not reaching the legal burden of proof necessary for a conviction, a jury in the district court previously found the four executives guilty of hiding more than $316 million of bad real estate loans from bank examiners and the U.S. Securities and Exchange Commission prior to receiving $330 million from the federal TARP program.  The defense attorney attempted to argue that the waiver practice that appeared to conceal $316 million in loans 90 days or more past due had been in place for decades and was no secret, but his objections were overruled.

The four senior Wilmington Trust executives, along with two officers who were named co-conspirators, were among only a few bankers convicted of crimes related to the financial collapse that forced a spate of job-destroying bank mergers and takeovers during the Great Recession.

Sources:

Philadelphia Inquirer 

Delaware Public Media

Previous Reporting

Fraud Friday — Four Wilmington Trust Bankers Convicted

Fraud Friday — Four Wilmington Trust Bankers Fraud Trial Begins

Fraud Friday — Fraud Charges Against More Wilmington Trust Officers

Fraud Friday – Another Wilmington Trust Banker Indicted

Fraud Friday — Banker Who Wore Wire Against Colleagues Gets 21 Months in Prison

Fraud Friday — James Ladio Gets Two Years

Mug Shot Monday – Community Bank CEO Blames Personal Financial Woes for Fraud Plea 

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