told jurors. “The evidence will show that this is a dispute about reporting.”
Prosecutors allege that Wilmington Trust concealed the quantity of past due loans on its books from October 2009 through November 2010. Specifically, authorities say Wilmington Trust failed to disclose to regulators its practice of “waiving” matured loans designated as current for interest and in the process of being extended from the reporting requirements for past due loans.
In the fourth quarter of 2009, for example, Wilmington Trust officials reported that only $10.8 million in commercial loans were 90 days or more past due, concealing more than $316 million in past due loans subject to the waiver practice, Wolf said.
Wolf told jurors that after an October 2009 meeting to discuss mature loans and “how to make them go away” by year’s end, bank officials decided on a “mass extension.” That, she said, involved temporarily extending more than 800 commercial loans worth $1.3 billion.
During that same period, North sent an email to Harra in December 2009 referring to certain loans as “credit turds.”
Kelly, the defense attorney, told jurors that Wilmington Trust had engaged in the loan waiver practice long before the period in question, and that it was no secret to federal bank examiners. He also noted that former Wilmington Trust chairman and CEO Ted Cecala, who has not been charged in the case, served on the board of the Federal Reserve Bank of Philadelphia during the time of the alleged conspiracy.
Three other former Wilmington Trust officers, vice president Joseph Terranova, Delaware Market Officer Brian Bailey, and loan officer Peter Hayes have pleaded guilty in the case and are awaiting sentencing. Bailey and Terranova are expected to testify for the prosecution at the trial of their former colleagues.
Two other co-conspirators already have been sentenced. James Ladio, former CEO of MidCoast Community Bank, was sentenced to two years in prison and ordered to pay $700,000 restitution. Businessman Salvatore Leone was sentenced to a year and a day in prison and ordered to pay $784,000.