Feds indict first bank that got TARP bail-out money

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Feds indict first bank that got TARP bail-out money

January 11th, 2016

Awake Goy

A federal grand jury in Wilmington has indicted the former Wilmington Trust Corp. on criminal charges, alleging the bank illegally hid hundreds of millions of dollars in land-development loans that were so delinquent that one banker called them “credit turds.”

Although a number of larger U.S. banks were forced to sell themselves at bargain-basement prices as property values collapsed in the recession, Wilmington Trust is the only bank bailed out by the Troubled Asset Relief Program to face criminal charges, according to Charles Oberly, U.S. attorney for Wilmington.

M&T Bank Corp., the Buffalo lender that bought Wilmington Trust as it faced financial collapse in 2010, has hired lawyers in New York and Washington to defend itself.

Bank spokesman Philip Hosmer and Christopher Gunther, an attorney at Skadden, Arps who represents M&T, declined to comment.

Oberly had previously charged the bank’s former chief financial officer, Robert V.A. Harra Jr., and three other bank executives with signing off on fraudulent regulatory reports that underreported delinquent loans. The bankers have denied wrongdoing and are contesting those criminal charges, which were expanded in a Superseding Indictment that added Wilmington Trust as a defendant.