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Defunct Wilmington Trust Corp. indicted on federal charges

Delaware Public Media

The defunct Wilmington Trust Corp. now joins four of its former top executives in being indicted on federal conspiracy charges.

Delaware U.S. Attorney Charles Oberly announced Wednesday that a federal grand jury added Wilmington Trust to the case already pending against former senior executives Robert Harra, David Gibson, William North and Kevyn Rakowski.

Oberly,  in a statement, said the indictment is the first against a company that received bailout funds from federal Trouble Asset Relief Program (TARP) following the 2008 financial crisis.  Wilmington Trust received $330 million in relief.

The company and execs are accused of hiding hundreds of millions of dollars of past-due loans in quarterly reports made to the Securities and Exchange Commission and the Federal Reserve in 2009 and 2010. Those numbers are also available to stockholders to assess the health of the company.

"I did not make the decision lightly to seek charges against the Wilmington Trust Corporation.  Ultimately, I have determined that bringing the Second Superseding Indictment is necessary to achieve justice and attempt to make whole those members of our community who suffered significant financial harm as a result of the alleged criminal conduct perpetrated by Wilmington Trust Corporation and its multiple senior bank officers," said Oberly in his statement.  "Wilmington Trust Corporation had an obligation, to its shareholders and to the public, to accurately report the important financial metrics which enable investors to make informed decisions.  Difficult financial times may present significant business challenges, but they do not excuse anyone or any entity from complying with the law."

Buffalo, New York-based M&T Bank bought Wilmington Trust at a steep discount in 2010 after sour real estate loans left the company in dire financial straits. M&T Bank assumed Wilmington Trust's assets and liabilities as part of that deal.

Tom Byrne has been a fixture covering news in Delaware for three decades. He joined Delaware Public Media in 2010 as our first news director and has guided the news team ever since. When he's not covering the news, he can be found reading history or pursuing his love of all things athletic.
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