Another former bank executive has been indicted on charges of bank fraud in connection with the federal recession-era banking industry rescue program known as TARP, or Troubled Asset Relief Program.
Brian D. Bailey, 51, of Middletown, Del., was charged with nine counts of bank fraud and one count each of conspiracy to commit bank fraud, conspiracy to commit bank bribery, corruptly receiving a gift for procuring a loan, corruptly providing a gift with intent to influence a bank employee, and money laundering, according to a government statement.
The indictment was announced by Christy Romero, special inspector general for TARP, and Charles M. Oberly III, U.S. district attorney for Delaware.
Bailey was the head of commercial real estate and Delaware market manager at Wilmington Trust Corp., a TARP recipient in Wilmington, Del. He is the second officer charged with bank fraud conspiracy at the bank, which later was acquired by another bank that benefited from TARP.
The indictment alleged that Bailey and a senior executive at another bank approved approximately 23 loans and loan modifications worth more than $1.5 million for each other through their respective positions at the financial institutions.
"Bailey is charged with a 12-year bank fraud conspiracy involving James Ladio, former president and CEO of MidCoast Community Bank, who pleaded guilty in this investigation to bank fraud involving MidCoast. Bailey stands accused of approving Wilmington Trust loans to Ladio outside of the normal process and lying to the bank that interest-only loans to Ladio were related to real estate when he knew Ladio was using the money for personal purposes," Romero said.
Bailey allegedly used the funds to buy a Ford F-150 pickup, an E-Class Mercedes-Benz, a Porsche sports car and a boat, and to pay off more than $45,000 in credit card debt.
The case is being investigated by SIGTARP, the FBI and the IRS.
The most serious charges could bring maximum penalties of up to a 30-year prison term, $1 million fine, five years of supervised release and mandatory restitution.
Follow me on Twitter: @marciegeff.