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Former Wilmington Trust Officers Indicted for False Statements
WILMINGTON, Del. – William North, the former Chief Credit Officer, and Kevyn Rakowski, the former Controller of Wilmington Trust, were indicted today for their respective roles in making false statements to agencies of the United States government.
The charges include one count of making false statements to the Securities and Exchange Commission (SEC), and three counts of making false statements to Federal Reserve. The charges stem from North’s and Rakowski’s involvement in concealing from the market and the Federal Reserve the total quantity of past due loans on the bank’s books during October and November 2009.
Wilmington Trust was required to report in its quarterly filings with both the SEC and the Federal Reserve the quantity of its loans for which payment was past due for 90 days or more. Investors and banking regulators consider the 90-day number in evaluating the health of a bank’s loan portfolio. According to the Indictment, North, age 55, of Bryn Mawr, Pennsylvania, and Rakowski, age 61, of Lakewood Ranch, Florida, helped conceal the truth about the quality of Wilmington Trust’s loan portfolio from the investing public and from the bank’s regulators.
Notwithstanding these reporting requirements and the value of this metric to investors and regulators, North and Rakowski participated in Wilmington Trust’s failure to include in its reporting a material quantity of past due loans. North, as the bank’s Chief Credit Officer, approved the exclusion or “waiver” of such loans from internal reports that he knew would be used to generate the bank’s external financial reports. Rakowski, as Controller, approved the bank’s filings with the SEC and the Federal Reserve knowing that those reports did not include past due loans that had been “waived.”
In November 2010, Wilmington Trust was acquired by another bank at a discount of approximately 46% from the bank’s share price the prior trading day.
“This Indictment represents another significant step forward in holding accountable those individuals whose criminal conduct contributed to the decline of Wilmington Trust,” said United States Attorney for the District of Delaware Charles M. Oberly, III. “As the Chief Credit Officer and Controller of Wilmington Trust, North and Rakowski knew that the false information being provided to the Bank’s regulators and shareholders masked the true condition of its loan portfolio. Their respective roles in compiling and providing this false information to regulators during the Fall of 2009 are addressed in the Indictment returned today by the Grand Jury.”
Defendant Information:
- Defendant: William North and Kevyn Rakowski
- Criminal Charges: One count of making false statements to the Securities and Exchange Commission (SEC), and three counts of making false statements to Federal Reserve.
- City and State: Wilmington, Delaware
- Exact Date: Not specified
- Sentence or Outcome: Currently indicted
- No dollar amounts applicable
Key Facts
- State: Delaware
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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