Magazine article American Banker

Ex-Wilmington Trust Execs Face Civil, Criminal Charges

Magazine article American Banker

Ex-Wilmington Trust Execs Face Civil, Criminal Charges

Article excerpt

Byline: Robert Barba

Four former officers of Wilmington Trust have been charged with fraud by the Securities and Exchange Commission, which accused the bankers of intentionally understating past-due loans in 2009 and 2010. Two of the bankers face criminal charges.

The SEC complaint, filed in federal district court in Wilmington, Del., on Wednesday, names as defendants: David R. Gibson, former chief financial officer; Robert V.A. Harra, former chief operating officer and president; Kevyn N. Rakowski, former controller; and William B. North, former chief credit officer.

The U.S. Attorney's Office for the District of Delaware indicted North and Rakowski on Wednesday for their alleged roles in making false statements to government agencies.

The civil and criminal charges against the four come about nine months after Brian Bailey, who oversaw the company's lending activity in Delaware, pled guilty to conspiracy charges related to his concealing of the company's financial condition. Two years ago, Joseph Terranova, a former Wilmington Trust loan officer, pled guilty to bank fraud.

Banks are required to fully disclose the amount of loans that are 90 or more days past due, but the SEC complaint claims that Gibson, Rakowski and North didn't disclose $351 million of such past due loans in the third quarter of 2009. At the time, the $11 billion-asset company reported a mere $38.7 million of past due loans. The following quarter, the SEC claims, the four bankers didn't report $330.2 million of past due loans. …

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