Wilmington Trust Scandal: Executives Face Prison Time for Real Estate Fraud

The Wilmington Trust scandal was a major real estate fraud case that made headlines in 2015.

Several high-ranking executives at Wilmington Trust were accused of conspiring to defraud the bank's regulators and investors.

The executives allegedly engaged in a scheme to hide the bank's true financial condition by falsifying records and misleading investors.

One of the key players in the scandal was Robert Harra, the bank's former CEO, who was accused of lying to regulators about the bank's loan portfolio.

The scandal ultimately led to the bank's collapse and the loss of over $1 billion in deposits.

The Wilmington Trust scandal involved a large bank that helped wealthy clients hide their assets from the IRS.

Wilmington Trust, a Delaware-based bank, was accused of facilitating tax evasion for wealthy clients by creating secret trusts and accounts.

The bank's actions were allegedly orchestrated by its top executives, including Robert Fohrman and Kevyn Orr.

In 2011, the bank's top executives were accused of helping clients hide millions of dollars in assets from the IRS.

The bank's clients included wealthy individuals, as well as companies and foundations.

Wilmington Trust agreed to pay $60 million to settle the charges in 2010.

Former President Robert Harra Jr. and former Chief Financial Officer David Gibson were each sentenced to six years in federal prison by District Judge Richard Andrews.

The executives were convicted of fraud, conspiracy, and making false statements for lying about overdue real estate loans in an attempt to bring in more investment from private sources and the U.S. Troubled Asset Relief Program in 2008 and 2009.

Gibson and Farra were also ordered to pay $300K in fines, with plans to appeal.

The prison sentences were among the longest given in the wake of the Great Recession, with a former Bank of the Commonwealth CEO receiving a 23-year sentence being the longest among 65 bankers convicted of fraud.

The Wilmington Trust executives' sentencing was a significant milestone in the case.

Andrew L. Barnes, a former Wilmington Trust executive, received a 24-month prison sentence for his role in the bank's collapse.

The judge described Barnes' actions as reckless and irresponsible, contributing to the bank's downfall.

The prison sentence was a result of Barnes' guilty plea to conspiracy charges.

Barnes was also ordered to pay a $250,000 fine and perform 100 hours of community service.

The sentencing marked the end of a long and complex case involving several Wilmington Trust executives.

The decision to not retry the Wilmington Trust executives has been made. Federal prosecutors will not seek another trial, citing the likelihood of securing a conviction and competing public safety priorities.

Prosecutors had asked for a rehearing before the Third Circuit in March, but their request was rejected last month. This decision means that David Gibson, Robert Harra, William North, and Kevyn Rakowski will not face another trial.

The court's opinion, combined with the current state of affairs in the community, led to the decision against pursuing another trial. The community is facing unprecedented violent crime, rising opioid overdose deaths, and domestic terrorism.

David Gibson's attorney, Kenneth Breen, has spoken out about the case, stating that Gibson is finally exonerated and that the case should never have been brought.

Two former executives at Wilmington Trust Bank were each sentenced to six years in federal prison by District Judge Richard Andrews of the U.S. District Court of Delaware.

The executives, former President Robert Harra Jr. and former Chief Financial Officer David Gibson, were convicted of fraud, conspiracy, and making false statements.

They lied about overdue real estate loans in an attempt to bring in more investment from private sources and the U.S. Troubled Asset Relief Program in 2008 and 2009.

The true number of overdue loans was at least $326M, but Wilmington Trust listed $10.8M in commercial real estate loans that were 90 or more days past due.

This misleading disclosure led to the bank bringing in $287M in private investment and $330M in TARP assistance.

The bank's collapse resulted in 700 employees losing their jobs and over 2,000 employees seeing their retirement assets vanish.

Shareholders, including Delaware's legendary DuPont family, lost hundreds of millions in assets.

Gibson and Harra were also ordered to pay $300K in fines, with plans to appeal their sentences.