Defense attorneys representing four former Wilmington Trust executives accused of bank fraud called on religious leaders and accounting experts to attest to their clients’ good character during the sixth week of their trial.
On Tuesday, attorneys for Robert Harra, David Gibson, William North and Kevyn Rakowski argued data, emails and character testimony indicate there was no criminal intent in their handling of past due loans.
Prior to witness testimonies, Judge Richard Andrews deferred ruling on a motion for acquittal from the defense.
The defendants are accused of hiding millions in bad loans on the bank’s books from the Federal Reserve, the Securities and Exchange Commission, and the public between October 2009 and November 2010.
Federal prosecutors claim the four schemed to hide the true volume of losses. By the end of 2009, the bank reported just $11 million in past due loans while waiving more than $360 million worth, prosecutors allege. They contend the bank never disclosed its financial circumstances to investors.
In October, Wilmington Trust reached a $60 million deal with the U.S. Attorney’s Office to settle criminal charges against it.
On Tuesday, Laura Simmons, an economic consultant in litigation matters, said she reviewed loan delinquency reports and Wilmington Trust SEC filings to conclude, in certain quarters, only 3 percent of the total amount of loans were waived.
Prosecutors suggested her conclusions do not paint a complete picture. While the trial is focused on commercial loans, Simmons’ data included retail loans. Prosecutors also point to the fact certain banks were not included in her data.
Simmons testified eliminating retail loans, or including other banks in the data, would not have changed the outcome by more than half a percent.
Her testimony also focused blame on Joseph Terranova, the former Wilmington Trust loan officer who pleaded guilty to conspiracy to commit bank fraud in 2013. Simmons testified that, in one quarter, about 49 percent of waived loans were managed by Terranova, and he managed more waived loans than anyone else in the company.
Prosecutors argued her testimony hides the fact the remaining percentage of past due loans would be associated with other loan managers, possibly the defendants.
Defense attorneys also used emails from Harra expressing the importance of contacting past due clients on a month-by-month basis and keeping renewal commitments current to prove there was no criminal intent.
They also presented text from the federal Office of Comptroller of the Currency to argue the defendants’ practice of waiving and extending loans was not criminal. If management has extended a loan while borrowers continue to pay contractual monthly interest payments, the text states, the loan would not be past due.
Meanwhile, the prosecution focused on a portion of the text that states an extension should be for a limited and reasonable length of time, and the bank should get the extension in writing.
Religious leaders also were called on to testify in favor of defendant Harra.
The Rev. Samuel E. Lathem of Cornerstone Fellowship Baptist Church in Wilmington said he met Harra in 2004 while doing charity work.
“He’s a good man, he’s an honest man, I’ve never questioned his integrity,” he said.
Brother Ronald Giannone, Ministry of Caring executive director, said he met Harra in the ‘80s while the defendant co-chaired an auction that raised money for the group’s charity program Emmanuel Dining Room.
“I’ve always known him of a man integrity and compassion and a man committed to the least of our community,” he said.