(Reuters) - Four former Wilmington Trust Co executives were convicted on Thursday of U.S. charges that they concealed from regulators the amount of troubled loans still on the bank’s books after the 2008 financial crisis, prosecutors said.
The verdict by a federal jury in Wilmington, Delaware, came in one of the few criminal cases in which federal prosecutors sought to hold top executives at a well-known financial company accountable for conduct tied to the crisis.
The former Wilmington Trust executives are President Robert Harra, Chief Financial Officer David Gibson, Controller Kevyn Rakowski and Chief Credit Officer William North.
Jurors found them guilty on all counts they faced, including securities fraud, conspiracy and making false statements to federal regulators, prosecutors said.
No date was set for U.S. District Judge Richard Andrews to consider what if any prison sentences to impose. Lawyers for all four of the former executives said they planned to appeal.
“I am stunned,” Michael Kelly, a lawyer for Harra, said in a statement. “My client is an innocent and honorable man who never in his life ever even thought about committing a crime.”
David Wilks, a lawyer for North, said his client “remains steadfast that he never engaged in any criminal wrongdoing or that he took part in a criminal conspiracy to defraud the government or the public.”
In October, Wilmington Trust, now owned by M&T Bank Corp, reached a $60 million deal resolving related charges, a sum that included $16 million it paid in a U.S. Securities and Exchange Commission settlement in 2014.
Founded by the du Pont family in 1903, Wilmington Trust received $330 million of federal bailout money in 2008 under the Troubled Asset Relief Program, or TARP, which was meant to bolster U.S. lenders following the real estate market crash.
Two years later, Wilmington Trust raised $273.9 million in a February 2010 sale with the intention of repaying the TARP funds.
At the time, it reported to regulators just $10.8 million in commercial loans that were 90 days past due, but prosecutors said the real figure was $344 million, and continued to grow. Prosecutors accused the defendants of hiding the bank’s deteriorating finances.
Mounting losses from construction loans and commercial mortgages led to Wilmington’s November 2010 agreement to be acquired by Buffalo, New York-based M&T Bank for $3.84 a share, a 46 percent discount to the previous closing price.
The case is U.S. v. Wilmington Trust Corporation, et al, U.S. District Court, District of Delaware, No. 15-cr-00023.
Reporting by Nate Raymond in Boston; Editing by Marguerita Choy and Peter Cooney