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December 17, 2018 at 05:55 PM
Wilmington Trust headquarters. Photo: RevelationDirect/Wikimedia Commons
Two of Wilmington Trust’s former top executives were each sentenced to six years in prison Monday for their roles in a massive reporting scandal that hid hundreds of millions of dollars in bad loans from regulators and investors, leading to the bank’s collapse.
Robert V.A. Harra, Wilmington Trust’s former president, and David Gibson, who served as the bank’s chief financial officer, were the first of four defendants to be sentenced this week by U.S. District Judge Richard G. Andrews, after a federal jury convicted them of multiple crimes stemming from the bank’s downfall in 2011.
Both men received fines of $300,000 and are expected to turn themselves in to federal custody Feb. 19, pending an appeal. Two other executives, William North and Kevyn N. Rakowski, were scheduled to appear for sentencing Wednesday, an attorney for Harra said.
“It’s a sad day for me, and it just breaks my heart … because he’s the most honorable man I ever met,” Harra’s attorney, Michael P. Kelly, said of his client. “It hurts my heart that he’s being sentenced to prison, and I look forward to the appeal.”
In May, Harra, Gibson, North and Rakowski were convicted on 15 counts of fraud and conspiracy for failing to report the amount of toxic and past-due loans on Wilmington Trust’s books between October 2009 and November 2010. At the time, North and Rakowski served as Wilmington Trust’s chief credit officer and controller, respectively.
Gibson was convicted on three additional counts of making false certifications in financial reports. His attorney, Kenneth M. Breen said Monday that, “We are planning to of course appeal this sentencing decision.”
The U.S. Attorney’s Office for the District of Delaware, which brought charges in 2015, said Monday that the downfall of Wilmington Trust was a “tragedy” for the bank’s former employees and investors.
In a statement, U.S. Attorney David C. Weiss blamed Harra for an “aggressive sales culture that ignored sound risk assessment in commercial real estate lending.” He said that Gibson for years certified the bank’s financials as accurate, despite knowing the true nature of its portfolio.
