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Feds want judge to unseal Wilmington Trust sentencing memos

November 27, 2018

DOVER, Del. (AP) — Federal prosecutors are asking a judge to unseal sentencing documents submitted by attorneys for four former executives of the only financial institution to be criminally charged in connection with the federal bank bailout program.

Former Wilmington Trust president Robert Harra Jr., chief credit officer William North, chief financial officer David Gibson and controller Kevyn Rakowski face sentencing next month for fraud, conspiracy and making false statements.

Prosecutors and defense attorneys have indicated in court filings that Harra and Gibson face 108 to 135 months in prison under sentencing guidelines, while North and Rakowski face 87 to 108 months behind bars.

In advance of the sentencing hearings, defense attorneys submitted memoranda and exhibits last week for the judge to consider before sentencing the defendants, but they filed them under seal.

Prosecutors argue that the defense has failed to overcome the presumption of public access to those documents.

“The exhibits in support of defendants’ sentencing memoranda largely consist of letters to the court authored by third parties on behalf of defendants,” prosecutors wrote in a court filing. “Defendant Harra, for example, attached over one hundred letters to his sentencing memorandum, including letters submitted by current public officials, former public officials, and other prominent Delawareans.

“Defendants did not provide the court with any pre-filing basis justifying the need to file the sentencing memoranda or supporting exhibits under seal.”

In a court filing Monday, Rakowski’s attorney, Henry Klingeman, noted that the judge had not indicated a preference as to whether the materials should be filed under seal, or publicly with redactions.

“To the extent that the government is correct that the sentencing submissions contain material that should be available publicly, defense counsel requests an opportunity to meet and confer with the government to discuss redactions that may be appropriate,” Klingeman wrote.

Klingeman also noted that Rakowski’s sentencing memorandum includes sensitive personal information, including medical information, that ordinarily would be kept confidential.

“Additionally, each of the defendants memoranda attach sentencing character letters that in many cases were written by private citizens whose contact information should remain private,” he suggested.

Prosecutors argue public access to presentencing documents helps ensure that the public has the opportunity to observe whether a defendant is being justly sentenced, especially when a judge, not a jury, is determining the sentence.

“The need for transparency is accentuated when, as here, a defendant relies on the community standing of current and former public officials to advocate for leniency,” prosecutors noted.

A federal jury convicted the four former executives on all charges in May after a six-week trial.

Prosecutors alleged that in the wake of the 2008 financial crisis, the defendants misled regulators and investors about Wilmington Trust’s massive amount of past-due commercial real estate loans before the bank was hastily sold in 2011. The century-old bank imploded despite receiving $330 million from the federal Troubled Asset Relief Program.

Defense attorneys argued that the “waiving” of millions of dollars in matured loans from reporting requirements for past due loans was appropriate because the loans were designated as current for interest and in the process of being extended.

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