Sentences in this case were appropriate, and it is good that the executives got time behind bars. Too often white collar criminals are coddled.
Excerpts from the Article:
The former president of the only financial institution criminally charged in connection with the federal bank bailout program was sentenced Monday to six years in prison for covering up the bank’s troubled condition in the wake of the 2008 financial crisis. Former Wilmington Trust President Robert Harra Jr., who also was ordered to immediately pay a $300,000 fine, declined to address the court before he was sentenced. Harra, 69, showed no visible reaction afterward, other than blowing out a heavy sigh through puffed cheeks while huddling with his lawyers.
Harra’s attorneys vowed to appeal both his conviction and his sentence, maintaining that he is an “innocent, honorable man.” “The government tapped into the anger of people who lost money. … I think the jury was looking for a scapegoat,” defense attorney Michael Kelly said after Monday’s hearing.
Prosecutors were seeking a sentence of eight years, while Harra’s attorneys asked for probation, citing a long history of charitable work and community service that has earned him several tributes, including a 2006 “Citizen of the Year” award from the Boy Scouts. “Justice would be served if your honor would sentence Mr. Harra to probation so he could continue his legendary community service,” Kelly told U.S District Judge Richard Andrews. “His reputation has been destroyed. His reputation is everything to him,” Kelly added. “Honor is everything to him, and this verdict has caused him much anguish.”
Prosecutors argued that Harra deserved prison time, saying he lied about a fundamental metric used by regulators and investors to gauge the health of a financial institution and that his conduct epitomized “unbridled hubris.” “When the lies were finally uncovered, it was too late to do anything about them,” prosecutor Robert Kravetz told the judge.
Harra, along with former Wilmington Trust chief credit officer William North, chief financial officer David Gibson and controller Kevyn Rakowski, was convicted of fraud, conspiracy and making false statements. The four were convicted on all charges in May after a six-week trial.
North and Rakowski face sentencing Wednesday.
Prosecutors said the defendants misled regulators and investors about Wilmington Trust’s massive amount of past-due commercial real estate loans before the bank was hastily sold while teetering on the edge of collapse. In the fourth quarter of 2009, for example, Wilmington Trust officials reported only $10.8 million in commercial loans as 90 days or more past due, concealing more than $316 million in past-due loans subject to an internal “waiver” practice.
“Not once, however, did defendant Harra disclose the waiver practice,” prosecutors noted in their sentencing memorandum, citing witness testimony. “Instead, defendant Harra told the lead bank examiner in one meeting, ‘Tell your boys in Washington that they’re damn lucky we’re here in Delaware because we’re doing well.”
The century-old bank, founded by members of the du Pont family, imploded despite receiving $330 million from the federal Troubled Asset Relief Program. Before its 2011 fire sale to M&T Bank, Wilmington Trust raised $287 million in a 2010 stock offering, intended in part to help repay the TARP funds, while concealing the truth about its shaky financial condition from investors, prosecutors said.
Wilmington Trust Corp., which was also criminally charged in the case, reached a $60 million settlement with prosecutors last year on the eve of a scheduled trial. The agreement included a civil forfeiture of $44 million and $16 million previously paid by Wilmington Trust to the Securities and Exchange Commission in a related lawsuit.
In a separate civil action, a federal judge last month approved a settlement in which Wilmington Trust agreed to pay $200 million cash to settle a shareholder lawsuit alleging that the bank fraudulently concealed billions of dollars in bad loans. Auditing firm KPMG agreed to pay an additional $10 million as part of the settlement. — (AP)