Guilty plea from Wilmington Trust official tied to bank’s failure (video)

Brian Bailey, a former Wilmington Trust executive, entered guilty pleas on two counts of defrauding the government and conspiracy.

Accompanied by two attorneys, Bailey, 51, of Middletown, Del., was at the U.S. District courthouse in Wilmington on Monday to accept the government’s case against him. Bailey will plead guilty to the two felony charges; an additional 12 charges against him will be dropped.

The case dates back to 2009, when Wilmington Trust was heavily invested in the commercial real estate market. At the time, Bailey was in charge of lending to companies. According to prosecutors, Bailey falsely reported the past-due status of the loans, resulting in as much as $463 million in underreported loans to the FDIC.

Bailey also admitted his guilt to a second count, in which he accepted favorable loan terms for personal use from Richard Ladio, president of MidCoast bank. Bailey allegedly borrowed up to $1.5 million, some of which was used to refinish his kitchen.

Accepting the plea agreement, U.S. District Judge Richard Andrews asked Bailey if his superiors and subordinates knew about what Bailey was doing. Bailey, who stared straight ahead throughout the hearing, answered that they did.

U.S. Attorney Charles Oberly said that Bailey’s actions “showed a violation of public trust and an abuse of power.” Oberly said that his office will continue to work to make sure that everyone connected with the demise of Wilmington Trust will be brought to justice.

Released on his own recognizance, Bailey will be sentenced on Dec. 5. He could face consecutive terms of five years in prison, a $250,000 fine per count and three years of probation.

He must also pay restitution, although neither the defense nor the U.S. Attorney’s office knew the exact total. Bailey left the courthouse without speaking to reporters.