United States District Court, D. Delaware
before the Court is Defendants' Motion Regarding
Potential Presentation of False Testimony to the Grand Jury
(D.I. 390) and related briefing (D.I. 400, 403, 498, 502,
504). In their motion, Defendants request discovery to
determine whether false testimony was knowingly presented to
the grand jury that returned the Third Superseding
Indictment. Defendants also request that I hold an
evidentiary hearing on this matter. For the reasons that
follow, Defendants' Motion requesting discovery and an
evidentiary hearing is denied.
allege the Government may have presented false testimony to
the grand jury that returned the original indictment when it
elicited the following testimony from an FBI agent:
Q: Did you have an opportunity or your fellow agents have an
opportunity to ask Mr. Corkery and Mr. Fomunyan whether they
were aware that the bank engaged in a practice of waiving
loans from past due reporting?
Q: And what was their response?
A: Neither of the two were aware of the practice.
(D.I. 393, Exh. 2 at pp. 78-79). Defendants argue that the
agent's response, "Neither of the two were aware of
the practice, " is inconsistent with an FBI interview
report from 2013. The 2013 report states in part,
"FOMUNYAN recalled that WT never reported their matured
loans but instead had a 'perpetual extension' process
where by loans were extended with no formal process or
analysis." (D.I. 393, Exh. 1 at p. 2). Defendants argue
that this apparent inconsistency between the grand jury
testimony and the 2013 interview report suggests the
Government may have secured the indictment based on the
knowing presentation of false testimony to the grand jury.
(D.I. 391 at 2). Citing Bank of Nova Scotia v. United
States, 487 U.S. 250 (1988), Defendants argue the Court
may be required to dismiss the Third Superseding Indictment
if the Government did present false testimony. (Id.
Government responds that Defendants "mischaracterize a
single question-and-answer exchange" before the grand
jury. (D.I. 400 at 6). The Government argues that the
reference in the 2013 interview report to Mr. Fomunyam's
awareness of matured loans was made in the context of
discussing information he learned during credit file reviews.
(Id.). According to the Government, these credit
file reviews occurred three months after Wilmington
Trust's capital raise that is the subject of the
indictment. (Id. at 8). Further, the Government
cites to a portion of the 2013 interview report, which the
Government argues demonstrates that Mr. Fomunyam stated he
had no knowledge of the Waiver Practice. (Id. at 7).
At the hearing I held on September 16, 2017, the Government
proffered that Mr. Fomunyam's interview
statement is related to "four specific
findings" made in the December 2010 examination report.
(D.I. 516 at 214:19-23).
having reviewed the briefing and Exhibits, I find that the
agent's grand jury testimony is consistent with Mr.
Fomunyam's interview statement. First, it appears the
grand jury testimony and the interview report refer to two
entirely different issues. In particular, the grand jury
testimony appears to refer to Mr. Fomunyam's knowledge of
Wilmington Trust's practice of waiving its matured loans
from public reporting-that is, the Waiver
Practice. The interview report, on the other hand,
appears to refer to Wilmington Trust's reporting of its
matured loans directly to Mr. Fomunyam during the Federal
Reserve's examination of the bank.
interpretation is directly supported by the 2013 interview
report. It is also consistent with the Government's
explanation of the report. The first sentence under the
"Matured Loans" heading must be read together with
the two sentences that follow it. The report states in
FOMUNYAN recalled that WT never reported their matured loans
but instead had a 'perpetual extension' process where
by loans were extended with no formal process or analysis.
FOMUNYAN never received any information (i.e. spreadsheet of
matured loans) from WT listing their matured loans but
instead learned of the practice from reading a memo or
reviewing a credit file. FOMUNYAN asked WT to provide
information on their matured loans, Working Capital Lines of
Credit (WCLOC) and Ten Percent Rule (TPR) Loans but was
always told that they couldn't locate the information in
(D.I. 393, Exh. 1 at p. 2). When read together, these
sentences can be reasonably understood to mean that
Wilmington Trust allegedly never disclosed its matured loans
directly to Mr. Fomunyam. Nowhere in this portion of the
interview report is there mention of Wilmington Trust's
reporting of matured loans in public filings.
contrast, the agent's testimony before the grand jury
refers to Wilmington Trust's "practice of waiving
loans from past due reporting." (D.I. 393, Exh. 2 at p.
79). It is clear from the eighty-four-page transcript (D.I.
498, Exh. A) produced by the Government that the agent's
grand jury testimony related almost entirely to Wilmington
Trust's public reporting obligations and to its practice
of omitting matured loans from public filings. Thus, it is
apparent that the question-and-answer before the grand jury
regarding Mr. Fomunyam's knowledge of the bank
"waiving loans from past due reporting" refers to
his knowledge of the bank's reporting of those loans in
public filings. I therefore do not believe the statements
not persuaded by Defendants' argument that Mr.
Fomunyam's interview statement about what the Federal
Reserve would have done "if the true extent of the
aforementioned practice was known to the FRB in October of
2009" shows that he was aware of the Waiver Practice.
(D.I. 403 at 3 n. 3). The portion of the interview report
preceding that statement shows that the "aforementioned
practice" refers to the practice of renewing matured
loans without a formal process, not to the practice of
waiving loans from past due reporting. (See D.I.
393, Exh. 1 at pp. 2-3). Although the interview report refers
to "waived" loans (see id.), it is clear
that any such reference does not relate to loans
"waived" from public ...