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.

“These actions do not define defendants’ lives. As you’ve heard, they were successful and productive both professionally and personally,” Weiss said in the statement. “But, they did violate the law. They committed serious federal crimes and failed in their responsibilities to the bank, its employees and shareholders. Justice demands accountability. ”

According to the 2015 indictment, Wilmington Trust avoided mandatory disclosures to the U.S. Securities and Exchange Commission and the Federal Reserve Bank by “waiving” matured loans from the reporting requirements for past due loans.

Prosecutors said that by the end of 2009, the bank reported just $10.8 million of the $344.2 million in commercial real estate loans that were past due by 90 days or more, giving investors and regulators a false impression of the Delaware financial institution’s health. Under pressure to eliminate the past due and matured loans, the executives hatched a plan to “mass-extend” more than 800 commercial loans worth around $1.3 billion.

Once the public learned the scope of the toxic loans, Wilmington Trust was purchased in a fire sale by M&T Bank in November 2010 for just $3.84 per share—about $9.41 per share less than its value when the bank raised $273.9 million in a public offering nine months prior, according to the indictment.

Wilmington Trust’s former chairman and CEO Ted Cecala was never charged, but the bank itself became the first financial institution to face criminal charges in connection with the federal government’s Troubled Asset Relief Program, or TARP.

Prosecutors had lobbied for a sentence of eight years for Harra, but Kelly, chairman of McCarter & English, asked Andrews to hand down a sentence of probation, which would have allowed Harra to stay out of prison and continue his charitable work.

He said Harra was not in good health and had been made a scapegoat for the bank’s decline.

“He’s lost a lot, but we’ll see what happens,” Kelly said. “I’m confident we will win on appeal.”