Wilmington Trust Agrees to $210M Settlement in Shareholders’ Bank Fraud Lawsuit

TheAssociated Press报道说，起诉威尔明顿信托的股东要求联邦法官批准拟议的2.1亿美元bank fraud沉降reached with the bank. The plaintiffs contend that the bank fraudulently hid billions of dollars in bad loans while bank officials misled investors and regulators about overdue commercial real estate loans prior to its sale to M & T Bank Corp. (MTB) several years ago.

As part of the settlement, Wilmington Trust would pay $200M. KPMG, an auditing firm, would pay $10M.

The wrongdoing alleged in the shareholder lawsuit addresses a longer time period than what was noted in a parallel criminal case, in which four ex-Wilmington Trust executives were convicted on conspiracy and fraud charges. Wilmington Trust is the only financial institution to be subject to criminal charges related to TARP (Troubled Asset Relief Program) to date.

In 2008, the government issued $33M in bailout funds to Wilmington Trust. In 2010, the bank raised $273.9M in a sale that was supposed to pay back the funds. Wilmington Trust told regulators that it had only $10.8M in commercial loans that were overdue 90 days even though, according to prosecutors, that number was actually $334M and going up.

According to the lawyers for the plaintiffs, the proposed $210M settlement is nearly 40% of the maximum damages that are expected to be recovered. This maximum figure was offset in a settlement agreement arrived at between prosecutors and Wilmington Trust Corp. A $44M civil forfeiture from that deal is supposed to go to the shareholders of the bank.

Former Wilmington Trust Executives Were Found Guilty

In their criminal trial, ex-Wilmington Trust president Robert Harra Jr., ex-CFO David Gipson, ex-chief credit officer William North, and former controller Kevyn Rakowski were convicted of conspiracy, securities fraud, and making false statements. They were accused of hiding the bank’s failing commercial real estate loan portfolio. All four of them are now asking a judge to overturn the convictions. They claim that the evidence wasn’t solid enough to support the guilty verdicts.

同时，包括贷款官员彼得·海斯（Peter Hayes），前副总统约瑟夫·特拉诺瓦（Joseph Terranova）和特拉华州市场官员布莱恩·贝利（Brian Bailey）在内的另外三名前威明顿信托基金高管对他们的刑事指控表示认罪。商人的同谋萨尔瓦托·利昂（Salvatore Leone）必须支付78.4万美元，并服役一年零一天。另一位同谋，前中间社区银行首席执行官詹姆斯·拉迪奥（James Ladio）必须支付70万美元的赔偿，并在监狱里呆了两年。

Prosecutors accused Leone of conspiring with developer Michael Zimmerman, who is now deceased, of turning in fraudulent requests to Wilmington Trust related to construction loans. The two of them are accused of using the funds for other purpose, including their own expenses.

威尔明顿信托基金（Wilmington Trust）于10月达成了6000万美元的和解，以解决相关的刑事指控。其中包括2014年与美国证券交易委员会达成的1600万美元和解协议。政府指责银行隐藏了从10/209到11/bob200体育2010的逾期贷款，并不告诉监管机构，它有一个习惯“放弃”贷款已经成熟并被指定为最新的利息。在解决刑事案件时，威尔明顿信托公司不承担责任。但是，它对其行为承担责任，并承认这笔4400万美元与“非法活动”有关。

Contact our银行欺诈律师at Shepherd Smith Edwards and Kantas, LTD LLP today.

更多的博客文章from SSEK Law Firm:

SEC Proposes “Regulation Best Interests” that Would Prevent Brokers from Merely Calling Themselves Investment Adviser，股票经纪人欺诈博客，2018年4月20日

Ex-Wells Fargo Broker Barred for Alleged $180K Elder Financial Fraud, Stockbroker Fraud Blog, February 26, 2018
据报道，公司高管意识到针对高级摩根士丹利经纪人的家庭暴力指控多年, Stockbroker Fraud Blog, April 12, 2018

Wedbush Securities Faces Failure to Supervise Charges Over Broker’s Pump-And-Dump Scam，股票经纪欺诈博客，2018年3月28日