MidCoast Community Bank's founder and former chief executive pleaded guilty Wednesday to charges of bank fraud and money laundering.
James Ladio, who founded the Wilmington, Del., bank and led it until he was ousted in August, admitted to charges that he persuaded MidCoast customers to apply for loans then wire the money to his own account. He entered the plea on Wednesday in a federal court in Wilmington, and could face up to 80 years in jail and a fine of $2.5 million at his sentencing in April.
Ladio, who had been expected to lead the combined company's Delaware operations, stepped down from his position as president and CEO at that time. Neither company publicly commented at the time on the reasons for the termination or Ladio's departure.
The U.S. District Attorney for Delaware charged that on two occasions, Ladio got MidCoast customers to take out lines of credit of $700,000 each and then loan the money to him.
"Ladio's serious fraudulent conduct betrayed the trust of MidCoast's shareholders, its employees, and its customers," said Charles Oberly, the U.S. Attorney for Delaware, in a news release.
The Special Inspector General for the Troubled Asset Relief Program also participated in the investigation, because MidCoast received Tarp funds.