Two former officers of Wilmington Trust have been indicted on charges of making false statements to regulators about problem loans.
A number of former officers of Wilmington Trust and other banks have been charged in connection with problem loans and other dealings. Click here for other stories.
William North, the former Chief Credit Officer and Kevyn Rakowski, the former Controller, of Wilmington Trust, face charges for their respective roles in making false statements to agencies of the United States government, according to a release from the office of the U.S. Attorney for Delaware.
The charges include one count of making false statements to the Securities and Exchange Commission (SEC), and three counts of making false statements to Federal Reserve. The charges stem from North’s and Rakowski’s involvement in concealing from the market and the Federal Reserve the total quantity of past due loans on the bank’s books during October and November 2009.
Wilmington Trust was required to report in its quarterly filings with both the SEC and the Federal Reserve the quantity of its loans for which payment was past due for 90 days or more.
According to the indictment, North, 55, of Bryn Mawr, PA, and Rakowski, age 61, of Lakewood Ranch, FL, helped conceal the truth about the quality of Wilmington Trust’s loan portfolio from the investing public and from the bank’s regulators.
The release noted that In November 2010, Wilmington Trust was acquired by another bank (M&T) at a discount of approximately 46 percent. from the bank’s share price the prior trading day.
In announcing the Indictment, United States Attorney for the District of Delaware Charles M. Oberly, III, stated, “This Indictment represents another significant step forward in holding accountable those individuals whose criminal conduct contributed to the decline of Wilmington Trust. As the Chief Credit Officer and Controller of Wilmington Trust, North and Rakowski knew that the false information being provided to the Bank’s regulators and shareholders masked the true condition of its loan portfolio. Their respective roles in compiling and providing this false information to regulators during the Fall of 2009 are addressed in the Indictment returned today by the Grand Jury.”
“We are committed to holding accountable wrongdoers whose fraudulent actions impact the safety and soundness of financial institutions regulated by the Federal Reserve Board,” said Mark Bialek, Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau.
The case is being investigated by the Federal Bureau of Investigation, the Department of Treasury’s Special Inspector General for the Troubled Asset Relief Program, the Internal Revenue Service’s Criminal Investigative Division, and the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau.
The Securities and Exchange Commission has also contributed to the investigation.
