Jury selection has begun for a trial to determine if four former Wilmington Trust executives are guilty of conspiracy and false statements.
The expected six-week trial is scheduled to begin Oct. 10 in district court in Wilmington before Judge Richard Andrews.
Robert V.A. Harra, 66, and David Gibson, 58, both of Wilmington, William North, 55, of Bryn Mawr, Pa. and Kevyn Rakowski, 61, of Lakewood Ranch, FL. allegedly concealed from the Federal Reserve, the Securities and Exchange Commission and the public the amount of past due loans on Wilmington Trust’s booksbetween October 2009 and November 2010.
The defendants argue the charges are unfounded because Wilmington Trust’s reporting of matured loans was transparent to the Federal Reserve and others.
The nineteen-count superseding indictment filed in 2015 charges defendants with making false statements in securities filings and to agencies of the U.S. government.
All defendants are charged with conspiracy to defraud the U.S., to commit fraud in connection with the purchase and sale of securities and making false statements to regulators.
According to court documents, prosecutors say the bank withheld about $53 million in delinquent loans 90 days past due from the report provided to the Federal Reserve, and withheld about $338 million in past due loans from the list provided to the Federal Reserve in advance of the 2010 targeted exam.
In addition, they say it withheld about $48 million in past due loans from the list provided to the Federal Reserve in advance of the 2010 Full-Scope examination.
Court documents include an email between North and Harra that allegedly post-dated the capital raise and predated the 2010 full-scope examination, stating the “Feds … never commented on matureds in the past, but I want to give them no opportunity in the future.”
There’s also a conversation between Rakowski and Gibson allegedly in advance of a required past due loans submission to the Federal Reserve that stated, “We did pull the waived loans from the Past Due report.”
Wilmington Trust ended up being acquired in a $300 million “take under” by Buffalo-based M&T after notice of the status of numerous bad loans was changed.
Lawyers for the defense have made numerous legal maneuvers in efforts to quash the federal case.
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