U.S. drops financial crisis-era prosecution of four Wilmington Trust executives

July 6 (Reuters) - The U.S. government on Tuesday ended its criminal case accusing four former Wilmington Trust Co executives of hiding troubled loans from regulators after the 2008 financial crisis, leading to the company's sale at a fire-sale price.

U.S. Attorney David Weiss in Delaware made the decision after a federal appeals court set aside the May 2018 jury convictions of Wilmington's former President Robert Harra, Chief Financial Officer David Gibson, Controller Kevyn Rakowski and Chief Credit Officer William North.

In a statement, Weiss said the likelihood of obtaining new convictions, together with his office's focus on combating violent crime, opioid overdoses and terrorism "counsel in favor of declining to retry" the defendants.

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Prosecutors charged the defendants with underreporting "past due" commercial real estate loans to the Federal Reserve and the Securities and Exchange Commission to make Wilmington's finances look better and help raise $273.9 million in a stock offering.

But the 3rd U.S. Circuit Court of Appeals in Philadelphia unanimously concluded on Jan. 12 that the reporting rules were ambiguous and had more than one reasonable interpretation.

The court acquitted the defendants of making false statements and certifications, while saying they could be tried again for conspiracy and securities fraud.

"My client is relieved. 10 years of a living hell," Harra's lawyer Michael Kelly of McCarter & English said in an email. "He can never regain what he lost."

Gibson's lawyer Kenneth Breen of Paul Hastings said it "regrettably" took a decade to exonerate his client. Rakowski's lawyer Henry Klingeman of Klingeman Cerimele said his client "has always been innocent and now there is no doubt."

North's lawyer could not immediately be reached.

The du Pont family founded Wilmington in 1903. M&T Bank Corp (MTB.N), of Buffalo, New York, bought Wilmington in 2011 at 46% below its market value, reflecting the loan losses.

Wilmington was indicted in 2016, the first recipient of federal bailout money under the Troubled Asset Relief Program to be charged. It reached a $60 million settlement in 2017.

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Reporting by Jonathan Stempel in New York; editing by Richard Pullin

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