WILMINGTON, Del.–A decade after the financial crisis, the first of four former bankers here has been sentenced to prison for crimes related to efforts to cover up sinking real estate values.
Robert V.A. Harra, Jr., 69, the former president of Wilmington Trust Corp., was sentenced to 72 months in federal prison for conspiracy to defraud the U.S. government and private enterprises. Three other Wilmington Trust execs were also found guilty in May of this year and still await sentencing.
In addition to the prison sentence, U.S. District Judge Richard Andrews also fined Harra $300,000, and called his offenses the “worst financial crime” in Delaware in 35 years.
Federal prosecutor Robert Kravetz had called for a longer sentence, saying Harra’s cover-up of the bank’s losses as it kept luring investors contributed to the bank’s failure and its sale at a deep discount in 2010 to M&T Bank, according to the Philadelphia Inquirer.
Harra and the other Wilmington Trust execs were found utility of lying as they sought to raise more capital by hiding real estate development losses in a desperate bid to attract government and private investors to shore up the bank, which eventually collapsed, costing more than 700 employees their jobs and stripping more than 2,000 workers of retirement assets.
“The four are among the few bankers to face federal prosecution for their actions during the financial crisis of 2008 to 2009, in which banks and brokerages at first resisted acknowledging the collapse in property values underpinning loans and bonds,” noted the Inquirer.
Former Wilmington Trust CFP David Gibson, former chief credit officer William North, and former Controller Kevyn Rakowski are to be sentenced this week.
All of the defendants were accused of filing false financial reports to hide hundreds of millions of dollars in loans to developers that went bad in the Great Recession so they could replace losses with new money from the government and private investors.