Third Circuit Court of Appeals Reverses Convictions of 4 Wilmington Trust Officers

4963

The Third Circuit Court of Appeals has reversed the convictions of four Wilmington Trust officers who were convicted in 2018 for lying to the Federal Reserve, the SEC and the public regarding millions in past-due loans.

Former Bank President Robert Harra and former CFO David Gibson were each sentenced to 6 years in prison and ordered to pay a fine of $300,000 in December of 2018. Former Chief Credit Officer William North was sentenced to four and a half years, and former Controller Kevyn Rakowski three years. All four were allowed to remain out of prison pending their appeal.  (Read more about it HERE and HERE )

According to the Court Opinion, it “will vacate Defendants’ convictions on Counts One and Two and remand for a new trial limited to the mass-extension theory of fraud.”

“For these reasons, we will reverse Defendants’ false statement and certification convictions, remanding on those counts for the entry of judgments of acquittal, and we will vacate Defendants’ convictions for conspiracy and securities fraud, remanding on those counts for a new trial.”

This is not the end – as the Third Circuit’s ruling could be appealed to the U.S. Supreme Court – or the defendants could face a new trial in District Court.

STATEMENT OF U.S. ATTORNEY DAVID C. WEISS
ON U.S. THIRD CIRCUIT COURT OF APPEALS RULING
REGARDING FORMER WILMINGTON TRUST EXECUTIVES

Today the Court of Appeals for the Third Circuit reversed defendants’ convictions for lying to the Federal Reserve, the SEC, and the public about millions of dollars in past-due loans.  In a matter of first impression, the Court held that the government was required to establish that the defendants’ statements were false under any “objectively reasonable” interpretation of the applicable reporting instructions – even in a circumstance where a defendant never believed in that interpretation and intended to lie to the regulators all along.  Needless to say, I am disappointed with this result.  We are currently analyzing the Court’s opinion and evaluating our options, including, as the Court of Appeals authorized, retrying the defendants for conspiracy and securities fraud.
After the guilty verdict in this case, I described the prosecutors and agents who worked on this case as being among the finest professionals in law enforcement.  I stand by that statement today.