Court tosses convictions of former Wilmington Trust execs

DOVER, Del. (AP) — A federal appeals court has overturned the convictions of four former executives for the only financial institution to be criminally charged in connection with the federal bank bailout program.

A three-judge panel on Tuesday reversed the convictions of the former Wilmington Trust executives for making false statements to federal regulators and ordered that acquittals be entered. The court also ordered a retrial of conspiracy and securities fraud charges.

The ruling marks a stunning reversal in the government’s case against former Wilmington Trust president Robert Harra Jr., former chief financial officer David Gibson, former chief credit officer William North and former controller Kevyn Rakowski. They were convicted in 2018 of fraud, conspiracy and making false statements. The bank itself was also criminally charged but reached a $60 million settlement with prosecutors just as a trial was set to start.

Harra and Gibson were sentenced to six years in prison. North received 4½ years and Rakowski was sentenced to three years. All four remained free on bail pending appeal.

“My client and our team are obviously very happy, and incredibly relieved, that the Third Circuit panel unanimously agreed that these convictions were wholly unfair and unjust,” said Michael Kelly, Harra’s lead trial attorney.

“In my view, this case was an incredible waste of taxpayer dollars that literally ruined the lives of four innocent people,” Kelly added.

The U.S. Attorney’s Office for Delaware had no immediate comment.

Prosecutors alleged that in the wake of the 2008 financial crisis, the executives misled regulators and investors about Wilmington Trust’s massive amount of past-due commercial real estate loans before the bank was hastily sold in 2011 while...