James Ladio, a former chief executive of MidCoast Community Bank in Wilmington, Del., was sentenced to two years in prison for his role in a fraudulent loan scheme.
Ladio pleaded guilty last year to charges of bank fraud and money laundering, related to a scheme in which he persuaded MidCoast customers to apply for loans and then wire the loan proceeds back to him. U.S. District Court Judge Richard Andrews sentenced Ladio on Nov. 24.
During the sentencing hearing, it was also discovered that Ladio was involved in an illegal loan-swap agreement with a former Wilmington Trust banker, Brian Bailey. The two bankers provided loans to each other over the span of a decade. Ladio used the proceeds from those loans to pay off personal debts.
Bailey in August pleaded guilty to conspiracy charges, related to his involvement in concealing Wilmington Trust's actual financial condition. Bailey was the second Wilmington Trust banker charged with filing false call reports with federal regulators.
The $231 million-asset MidCoast had agreed in March 2013 to be acquired by Bryn Mawr Bank, but the deal was later terminated after Ladio pleaded guilty. The $99 billion-asset M&T Bank in Buffalo, N.Y., acquired Wilmington Trust in May 2011.
Ladio's case was investigated and prosecuted by several federal agencies, including the Office of the Special Inspector General for the Troubled Asset Relief Program and the Justice Department.