The former Wilmington Trust executives found guilty of fraud last year are appealing the decision.
Filings in federal Third Circuit Court of Appeals in Philadelphia challenge the convictions of Robert Harra, William North, David Gibson and Kevyn Rakowski.
The bank officials were found guilty of conspiracy to commit fraud and each sentenced to several years in prison in one of the only criminal cases connected to the 2008 financial crisis.
The jury agreed with prosecutors that the defendants hid hundreds of millions of dollars of past-due loans in reports to the Securities and Exchange Commission and the Federal Reserve in 2009 and 2010.
The “toxic” loans led to Wilmington Trust being sold off to M&T Bank in 2011.
But the most recent court filing says the federal government failed in the trial to establish an objective standard of falsity in its definition of past due loans. It says improper handling of these loans was an accounting issue at Wilmington Trust of which the executives were unaware.
The filing accuses the U.S. District Court of Delaware of improperly excluding evidence and allowing prosecutors to “inflame” the jury by conducting a “mini-court” on the Bank’s bad lending practices.
The filing calls for a new trial.
The defendants were allowed to remain free on bail until their appeals are resolved in a court order dating back to February.
