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United States v. Gibson

United States District Court, D. Delaware

August 30, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
DAVID R. GIBSON, ROBERT V.A. HARRA, WILLIAM B. NORTH, and KEVYN N. RAKOWSKI, Defendants.

          Robert F. Kravetz, Esq., Lesley F. Wolf, Esq., Jamie M. McCall, Esq., Assistant United States Attorneys, for the Government.

          John S. Malik, Esq., LAW OFFICE OF JOHN S. MALIK, Wilmington, DE; Kenneth M. Breen, Esq., John P. Nowak, Esq., Phara A. Guberman, Esq., PAUL HASTINGS LLP, New York, NY, for Defendant David R. Gibson.

          Michael P. Kelly, Esq., Steven P. Wood, Esq., Geoffrey N. Rosamond, Esq., MCCARTER & ENGLISH, Wilmington, DE; Andrew M. Lawler, Esq., ANDREW M. LAWLER, P.C., New York, NY, for Defendant Robert V.A. Harra.

          David Wilks, Esq., R. Stokes Nolte, Esq., Andrea S. Brooks, Esq., WILKS, LUKOFF & BRACEGIRDLE LLC, Wilmington, DE; Thomas A. Foley, Esq., THOMAS A. FOLEY, Wilmington, DE, for Defendant William B. North.

          Bartholomew J. Dalton, Esq., Ipek K. Medford, Esq., Andrew C. Dalton, Esq., DALTON & ASSOCIATES P.A., Wilmington, DE; Henry Klingeman, Esq., Helen Nau, Esq., KROVATIN KLINGEMAN LLC, Newark, NJ, for Defendant Kevyn N. Rakowski.

          MEMORANDUM OPINION

          ANDREWS, U.S. DISTRICT JUDGE

         On May 3, 2018, Defendants David Gibson, Robert Harra, William North, and Kevyn Rakowski were convicted on one count of conspiracy, one count of securities fraud, nine counts of making false statements to federal regulators, and four counts of making false entries in federal banking records. Gibson was also convicted on three counts of making false certifications in financial reports. At the close of the Government's case and again after trial, Defendants moved for judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29. Defendants also moved in the alternative for a new trial pursuant to Federal Rule of Criminal Procedure 33. For the reasons that follow, those motions (D.I. 743, 744, 745, 746, 816)[1] are denied.

         I. Background [2]

         On August 2, 2016, a federal grand jury returned a Third Superseding Indictment charging Defendants and the Wilmington Trust Corporation[3] with various crimes related to the Bank's reporting of its loans that were past due 90 days or more. (See D.I. 243). The crux of the Government's allegations was that from approximately October 2009 to November 2010, Defendants, all senior employees of Wilmington Trust, caused the Bank to conceal from federal regulators and the public, millions of dollars in "past due" commercial real estate loans, via the so-called "Waiver Practice." According to the indictment, the Waiver Practice involved "waiving," that is, omitting from the Bank's public reports filed with the Securities and Exchange Commission ("SEC") and the Federal Reserve Bank, matured loans that were designated as "current for interest" and in the "process of extension." That practice, the indictment alleged, caused the Bank to file public reports that materially misrepresented its amount of loans that were past due 90 days or more.

         In connection with those alleged misrepresentations, the nineteen-count indictment charged Defendants and the Bank with conspiracy in violation of 18 U.S.C. § 371 (Count 1), securities fraud in violation of 18 U.S.C. § 1348 (Count 2), making false statements in documents filed with the SEC in violation of 15 U.S.C. §§ 78m(a) & 78ff (Counts 3, 4, and 6), making false statements to the SEC and the Federal Reserve in violation of 18 U.S.C. § 1001 (Counts 5 and 11-16), and making false entries in banking records in violation of 18 U.S.C. § 1005 (Counts 7-10). The indictment also charged Gibson with making false certifications in financial reports in violation of 18 U.S.C. § 1350 (Counts 17-19).

         Trial was originally scheduled to begin on October 10, 2017. That morning, the Government and Wilmington Trust announced they had entered a settlement agreement. (See D.I. 592). I thereafter continued the individual defendants' trial to March 2018 (D.I. 582) and entered an order dismissing Wilmington Trust from the case (D.I. 583).

         Following jury selection, trial began on March 12, 2018. The Government called twenty-two witnesses. On April 11, 2018, the Government rested its case-in-chief. Defendants filed motions for judgment of acquittal pursuant to Rule 29. I held oral argument on April 16, 2018. I stated in open court the following day that I would reserve decision on those motions. (Trial Transcript ("Tr.") at 6348:8-18).[4] I explained that while I was "fairly convinced that the Government ha[d] put forth enough evidence on all relevant issues other than essentially the mental state of the defendants," I would defer ruling on the motions given the complexity of the mental state issue. (See id). Defendants presented their case-in-chief that same day. The parties completed closing arguments by April 25, 2018. On May 3, 2018, the jury returned guilty verdicts against Defendants on each count of the indictment.[5] Defendants subsequently filed a joint motion for judgment of acquittal pursuant to Rule 29, or, in the alternative, for a new trial pursuant to Rule 33. (D.I. 816).

         II. Motions for Judgment of Acquittal

         A. Legal Standard

         Rule 29 of the Federal Rules of Criminal Procedure directs the Court to enter a judgment of acquittal if "the evidence is insufficient to sustain a conviction." Fed. R. Crim. P. 29(a). In ruling on a Rule 29 motion, the Court must "review the record in the light most favorable to the prosecution to determine whether any rational trier of fact could have found proof of guilt beyond a reasonable doubt based on the available evidence." United States v. Smith, 294 F.3d 473, 476 (3d Cir. 2002) (quoting United States v. Wolfe, 245 F.3d 257, 262 (3d Cir. 2001)). The Court is required to "draw all reasonable inferences in favor of the jury verdict." United States v. Anderskow, 88 F.3d 245, 251 (3d Cir. 1996). "Thus, a finding of insufficiency should be confined to cases where the prosecution's failure is clear." Smith, 294 F.3d at 477 (citation omitted). Indeed, the defendant faces a "very heavy burden" in demonstrating that the evidence is insufficient to support the conviction. United States v. Soto, 539 F.3d 191, 194 (3d Cir. 2008).

         The Third Circuit has cautioned that in reviewing the sufficiency of the evidence, the Court "must be ever vigilant. . . not to usurp the role of the jury by weighing credibility and assigning weight to the evidence, or by substituting its judgment for that of the jury." United States v. Brodie, 403 F.3d 123, 133 (3d Cir. 2005) (citations omitted). The verdict will stand if there is substantial evidence, direct or circumstantial, to support the conviction. See United States v. Iglesias, 535 F.3d 150, 156 (3d Cir. 2008); United States v. Gambone, 314 F.3d 163, 170 (3d Cir. 2003). Indeed, "the Government may defeat a sufficiency-of-the-evidence challenge on circumstantial evidence alone." Iglesias, 535 F.3d at 156.

         The Court "doe[s] not view the government's evidence in isolation, but rather, in conjunction as a whole." Brodie, 403 F.3d at 134. In other words, it "must determine whether all the pieces of evidence against the defendant, taken together, make a strong enough case to let a jury find [the defendant] guilty beyond a reasonable doubt." United States v. Coleman, 811 F.2d 804, 807 (3d Cir. 1987).

         B. Discussion

         Defendants advance various arguments in support of their motions for judgment of acquittal. They principally challenge the sufficiency of the evidence supporting their convictions. Defendants also challenge their convictions on Due Process grounds.[6]

         1. False Statement and False Banking Entry Counts

         Defendants challenge the jury's verdict as to the false statement and false banking entry counts charged in the indictment. They are Counts 4 to 16. Counts 4 and 6 charged Defendants with making false statements in documents required to be filed with the SEC. Counts 7 to 10 charged Defendants with making false entries in federal banking records. Counts 5 and 11 to 16 charged Defendants with making false statements to the SEC and the Federal Reserve. Defendants argue that the Government failed to prove the falsity and mens rea elements of those counts. Defendant North additionally argues that the Government failed to prove that he aided and abetted others in committing those counts.

         a. Falsity

         Defendants argue that no rational juror could have found the statements at issue false. More specifically, they contend that the reporting requirements for documents filed with the SEC and the Federal Reserve do not unambiguously define the term "past due." (See D.I. 824 at 10; D.I. 825 at 25; D.I. 826 at 7; D.I. 828 at 19). Absent such a definition, they argue, the Government was required and failed to prove beyond a reasonable doubt that the "past due" loan amounts reported by the Bank were not based upon a reasonable interpretation of those reporting requirements. (D.I. 828 at 20).

         i. "Past Due" Loan Reporting Requirements

         Before addressing Defendants' ambiguity arguments, I provide here a brief overview of the reporting regulations relevant to this case.

         As noted above, the Third Superseding Indictment charged Defendants with materially misrepresenting Wilmington Trust's amount of loans that were past due 90 days or more in documents filed with the SEC and the Federal Reserve. Those documents included Call Reports and monthly regulatory reports filed with the Federal Reserve as well as Forms 10-K and 10-Q filed with the SEC.

         As to Call Reports, the instructions for "past due" loan reporting are found in "Schedule RC-N - Past Due and Nonaccrual Loans, Leases, and Other Assets." (See GX 86A). Schedule RC-N requires banks to disclose their loans that are 90 days or more past due. (Id.; Tr. at 2975:14-2979:22). The instructions state in relevant part:

Definitions
Past Due - The past due status of a loan or other asset should be determined in accordance with its contractual repayment terms. For purposes of this schedule, grace periods allowed by the bank after a loan or other asset technically has become past due but before the imposition of late charges are not to be taken into account in determining past due status. Furthermore, loans, leases, debt securities, and other assets are to be reported as past due when either interest or principal is unpaid in the following circumstances: . . .
(3) Single payment and demand notes, debt securities, and other assets providing for the payment of interest at stated intervals are to be reported as past due after one interest payment is due and unpaid for 30 days or more.
(4) Single payment notes, debt securities, and other assets providing for the payment of interest at maturity are to be reported as past due after maturity if interest or principal remains unpaid for 30 days or more.

(GX 86A, pp. 1-2).[7]

         Forms 10-K and 10-Q, on the other hand, are divided into two primary sections. The first is Management's Discussion and Analysis ("MD&A"). (Tr. at 1321:2-7). The second is the Financial Statements section. (Id.).

         The MD&A section is governed by Regulation S-K, which directs bank holding companies to Industry Guide 3. (See Id. at 1322:1-10, 1325:18-19). Industry Guide 3 in turn instructs bank holding companies to state their "[a]ccruing loans which are contractually past due 90 days or more as to principal or interest payments." (GX 12, p. 7; Tr. at 1328:17-24). Industry Guide 3 additionally states, "No loans shall be excluded from the amounts presented . . . ." (GX 12, p. 8).

         The Financial Statements portion is governed by Regulation S-X. (See Tr. at 1322:24-1323:2, 1331:12-13). Regulation S-X refers to Generally Accepted Accounting Principles ("GAAP"), codified by the Financial and Accounting Standards Board ("FASB"). (See Id. at 1331:12-25). The relevant GAAP provision requires securities registrants to state their "policy for determining past due or delinquent status (that is, whether past due status is based on how recently payments have been received or contractual terms)." (GX 993, p. 5; Tr. at 1334:7-10).

         ii. Ambiguity in Reporting Requirements

         As an initial matter, I previously held that the Call Report instructions were not ambiguous as a matter of law. (See D.I. 740). More specifically, I found that the instructions made clear that a loan's "past due status" is controlled by its "contractual repayment terms." (Id. at 4). I noted also that, pursuant to those instructions, banks are required to report their loans that are past due for principal or interest payment under their contractual terms in the five circumstances listed. (Id.). Those include Circumstance 4, pursuant to which banks must report, "Single payment notes, debt securities, and other assets providing for the payment of interest at maturity ... as past due after maturity if interest or principal remains unpaid for 30 days or more." (GX 86A, p. 2).[8]

         Defendants argue additionally, however, that the SEC reporting requirements outlined above are similarly ambiguous. (See D.I. 826 at 7; D.I. 828 at 20). As support, Defendants point to the testimony of the Government's SEC expert, Donald Walker. (See D.I. 826 at 7; D.I. 828 at 20). According to Defendant Gibson, Mr. Walker's trial testimony demonstrates that "banks are forced to consider and interpret multiple open-ended (and occasionally conflicting) sources when calculating past due loans for reporting purposes." (D.I. 828 at 20). Not one of those sources, Defendants argue, defines "past due." (Id. at 21; D.I. 825 at 25; D.I. 826 at 7).

         In my opinion, that the "sources" identified by Mr. Walker do not expressly state "a past due loan is . . ." does not mean the SEC's reporting requirements for "past due" loans are ambiguous. Nor do I think they are ambiguous because there are "multiple" sources of guidance. Rather, what is important is that the reporting requirements make clear when a loan must be reported as "past due." I think they do. As outlined above, Industry Guide 3 instructs bank holding companies to disclose their "[a]ccruing loans which are contractually past due 90 days or more as to principal or interest payments." (GX 12, p. 7). I think the plain language of that requirement makes clear that where a loan contract provides that a principal or interest payment is due and the principal or interest goes unpaid for 90 days or more beyond that date, that loan must be reported to the SEC as "past due." I am hard pressed to see how that reporting requirement is ambiguous. Indeed, other than arguing that the term "past due" is not expressly defined, Defendants do not explain how any specific word or phrase in Industry Guide 3 is subject to multiple reasonable interpretations.[9]

         Nor am I persuaded by Gibson's argument that the SEC reporting requirements are ambiguous because "the limited guidance offered by these sources often actually contradicts each other." (D.I. 828 at 21). Gibson points to Industry Guide 3's reference to "contractually past due" loans and FASB 310-10-5 0-6(e)'s reference to "how recently payments have been received or contractual terms." (Id.). As the Government points out, however, Mr. Walker explained that FASB 310-10-50-6(e) governs banks' reporting of their significant accounting policies for determining "past due" status, and "50-7" requires them to report loans pursuant to that policy. (See Tr. at 1335:13-18; D.I. 829 at 18 n.7). That the SEC allows for banks to adopt a policy for determining a loan's "past due" status according to something other than the loan's contractual terms does not, in my opinion, render ambiguous Industry Guide 3's reference to "contractually past due" loans.[10]

         Even assuming the SEC reporting requirements are ambiguous, however, I do not think the Bank's interpretation of those requirements is reasonable. Whether Defendants' asserted understanding of the reporting requirements is reasonable is a question of law. See United States v. Prigmore, 243 F.3d 1, 18 (1st Cir. 2001) ("[I]f the evidence at trial gives rise to a genuine and material dispute as to the reasonableness of a defendant's asserted understanding of applicable law, the judge, and not the jury, must resolve the dispute." (citations omitted)). Defendants maintain that a reasonable interpretation of the Bank's reporting obligations was that it could omit from its public reports matured loans that were "current for interest" and in the "process of extension."[11]

         I disagree. Under that interpretation, a loan with principal due one year from the date of the loan need not be reported as "past due" where the principal goes unpaid for 791 days (see Tr. at 1888:1-3) beyond that date, that is, the loan's maturity date, so long as the loan is in the "process of extension." That interpretation ignores the plain meaning of the reporting requirements that where principal (or interest) goes unpaid for 90 days or more beyond the date it is due under the loan contract, the loan must be reported as "past due." Accordingly, I do not think the Bank's purported understanding is a reasonable interpretation of the SEC reporting requirements.[12]

         In short, I think the standard was clear against which to judge the falsity of the statements at issue, both as to the Bank's Call Reports and its SEC reports. And in light of that clear standard, I believe a rational juror could have found the statements at issue false.[13]

         The evidence at trial showed that the Bank submitted false "past due" loan amounts in the public reports identified in the indictment, by omitting from those reports millions of dollars in loans that were 90 days or more past due for principal repayment under their contractual terms.

         In its Form 10-Q for the third quarter of 2009, for example, the Bank reported only $17.4 million in loans past due 90 days or more, omitting $297, 697, 881.04 in 90-day past due loans from that amount. (Tr. at 4220:12-18). And, in its Form 10-K for 2009, which the Bank incorporated into its Offering Prospectus in connection with its capital raise in February 2010, the Bank reported only $10.9 million in loans past due 90 days or more, omitting $303, 639, 546.99 in 90-day past due loans from that amount. (Id. at 4220:22-221:3).

         Thus, in my opinion, the Government presented sufficient evidence on the falsity element of Counts 4 to 16.

         b. Criminal Intent

         Defendants further challenge their false statement and false banking entry convictions on the basis that the Government did not prove the requisite criminal intent.

         i. Counts 5, 11-16 (18 U.S.C. § 1001)

         As to Counts 5 and 11 to 16, the Government was required to prove that each Defendant acted knowingly and willfully. See 18 U.S.C. § 1001; United States v. Starnes, 583 F.3d 196, 209-12 (3d Cir. 2009). That meant it needed to prove that Defendants acted "deliberately and with knowledge" that the Bank's representations in regard to its amount of loans that were past due 90 days or more were false, and that Defendants were aware "at least in a general sense" that their conduct was unlawful. See Starnes, 583 F.3d at 212.[14]

         Viewing the evidence as a whole and in the light most favorable to the Government, I think there is sufficient circumstantial evidence from which a rational jury could have found beyond a reasonable doubt that each Defendant acted with the requisite criminal intent under that standard.

         At trial, the Government established that the Bank had a practice of omitting from its regulatory reports filed with the SEC and the Federal Reserve matured loans that were designated as "current for interest" and in the "process" of "extension" or "renewal," despite those loans being 90 days or more past due for principal repayment under their contractual terms. (See, e.g., Tr. at 1550:13-1552:12, 1863:1-15, 2839:19-2840:6, 3869:22-3870:17). Defendants Gibson, Harra, North, and Rakowski were each aware of that practice. (See, e.g., GX 418; GX 476/476A; GX 524).

         In regard generally to the process of waiving loans, Tosha Styles, a reporting manager in the Bank's asset review group, explained essentially that the practice began with a document known as the "Delinquency Report." (See Tr. at 1846:11-1853:10, 1849:7-1855:13, 1867:1-1871:24). That report was generated using "past due" loan information from the Bank's internal loan accounting system, known as "SHAW." (Id. at 1850:22-1851:8). The Government presented evidence at trial supporting the reasonable inference that Defendants were generally aware of the SHAW system (see GX 418; GX 472), and understood that SHAW tracked the Bank's loans using loan "documentation ... input onto" the system (see GX 418). The Delinquency Report was separated into two sub-reports, which were filtered such that loans that were "waived" from the Delinquency Report were not subsequently included in the Bank's total amount of "past due" loans submitted in its public reports. (See Tr. at 1867:1-1881:13). The Delinquency Report was provided to the Controller's office. (Id. at 1836:20-1837:1). The Controller's office used the data from that Report to create the Bank's report of "Past Due and Nonperforming Loans," known as the "Past Due Report." (Id. at 2835:3-2840:6). I think this evidence shows that the Bank's process, starting with the Delinquency Report and ending with the Past Due Report, served no other purpose than to prepare the amount of "past due" loans to be reported in the Bank's public filings.

         Further, the Government presented evidence at trial supporting the reasonable inference that each Defendant was aware that the amount of "past due" loans in the Past Due Report, which excluded "waived" loans, was ultimately reported in the Bank's SEC reports, Call Reports, and monthly regulatory reports filed with the Federal Reserve. (See Id. at 2839:19- 2841:19). Thus, they each understood how the Waiver Practice impacted the Bank's public reports. And, as noted above, the Government presented substantial evidence demonstrating the extent of that impact during the relevant time period.

         Evidence adduced at trial demonstrated further that Defendants were aware that the practice of waiving matured, current-for-interest loans from Wilmington Trust's public reports "just because a renewal was 'in process, '" was a "decades old issue" at the Bank. (See GX 418, p. 2). And in January 2010, that "long-standing problem" was "unfortunately ... on the 'radar screen' of [the Bank's] internal and external auditors." (Id., p. 1). In an email dated January 10, 2010, Richard Conway, the Bank's chief operations officer for the mid-Atlantic market, wrote to Defendants and other Bank employees, that to "fix[]" the problem by April 30th, the goal was to get "all 1, 253 loans renewed/extended to appropriate new maturity dates." (Id.).

         Further, in January 2010, plans were underway at the Bank to phase out the practice of waiving matured loans. (See id.). The Government presented evidence from which a reasonable jury could have inferred that Defendants North, Harra, and Gibson participated in the process of eliminating the practice. (See GX 473 (North writing to Gibson, Harra, and Ted Cecala, "Obviously during our conversation the week before last it was decided that we would not waive a matured/current loan if documents were not executed.")). The Bank continued to waive matured loans, however, throughout the second quarter of 2010. (See GX 421). Further, in its Form 10-Q for the first quarter of 2010, the Bank stated that "[m]ost of the increase" in the Bank's "commercial construction loans past due 90 days or more" was "associated with commercial construction loans that are performing, have matured but have not paid off, and for which underwriting extensions are underway." (Tr. at 2934:6-12). Thus, the Bank was telling the public that "past due" loans included "waived" loans, which (1) indicated an understanding that "waived" loans needed to be reported as "past due," and (2) at the same time, showed that what the Bank actually did was contrary to that understanding.

         Evidence presented at trial showed that the Bank ultimately eliminated the Waiver Practice in approximately July 2010. (See, e.g., GX 421). Defendants did not inform federal regulators that the Bank's practice for reporting "past due" loans had changed. (See, e.g., Tr. at 3016:l-23).[15]

         The Government also presented the following evidence relevant to each individual Defendant. I address Gibson's, Harra's, North's, and Rakowski's mens rea in turn.

         Defendant Gibson was the Chief Financial Officer ("CFO") of Wilmington Trust during the relevant time period. (E.g., GX 435, p. 22). As CFO, Gibson "was in charge of all finance functions" for the Bank. (Tr. at 3678:8-14). Ellen Roberts, the Bank's director of investor relations, testified that in preparing Wilmington Trust's public filings, she "sought [the most] input from Mr. Gibson and other members of his staff or Ms. Rakowski's staff." (Id. at 3607:8-15). Evidence at trial also supported the inference that Gibson had familiarity with the Bank's reporting obligations in Call Reports. (See GX 534). Gibson, along with Defendant Rakowski, made the final decisions in regard to the Bank's financial reporting in SEC reports and Call Reports. (Id. at 3679:1-5). Further, as CFO, Gibson signed those reports, either electronically or in hard copy. (E.g., GX 1, GX 76). that "waived" loans needed to be reported as "past due," and (2) at the same time, showed that what the Bank actually did was contrary to that understanding.

         Evidence presented at trial showed that the Bank ultimately eliminated the Waiver Practice in approximately July 2010. (See, e.g., GX 421). Defendants did not inform federal regulators that the Bank's practice for reporting "past due" loans had changed. (See, e.g., Tr. at 3016:l-23).[15]

         The Government also presented the following evidence relevant to each individual Defendant. I address Gibson's, Harm's, North's, and Rakowski's mens rea in turn.

         Defendant Gibson was the Chief Financial Officer ("CFO") of Wilmington Trust during the relevant time period. (E.g., GX 435, p. 22). As CFO, Gibson "was in charge of all finance functions" for the Bank. (Tr. at 3678:8-14). Ellen Roberts, the Bank's director of investor relations, testified that in preparing Wilmington Trust's public filings, she "sought [the most] input from Mr. Gibson and other members of his staff or Ms. Rakowski's staff." (Id. at 3607:8-15). Evidence at trial also supported the inference that Gibson had familiarity with the Bank's reporting obligations in Call Reports. (See GX 534). Gibson, along with Defendant Rakowski, made the final decisions in regard to the Bank's financial reporting in SEC reports and Call Reports. (Id. at 3679:1-5). Further, as CFO, Gibson signed those reports, either electronically or in hard copy. (E.g., GX 1, GX 76).

         At trial, the Government presented evidence regarding Gibson's own understanding of the term "past due." In particular, the Government introduced a July 7, 2010 email in which Gibson wrote in regard to matured, current-for-interest loans that had not been extended or renewed with loan documentation, "Those are past due! We need those loans where we have executed agreements. . . . The maturity dates are known. These should be done at least 30 days in advance to allow for the documentation process to happen. We need to discuss accountability." (GX 421). The Government also introduced a statement made by Gibson during a July 23, 2010 earnings conference call. During that call, Gibson remarked that certain loans were "current on interest, but technically, because they have matured, they are past due their principal. . . . But, as a technical matter, a matured loan is past due principal." (GX 104R, p. 22).

         In arguing that the Government failed to prove that he acted with the requisite criminal intent, Gibson argues, "[T]he government relied exclusively on [these] two statements . . . both of which were taken out of context and made by Mr. Gibson after the conspiracy period, addressing the Bank's definition of 'past due loans' only after the Bank eliminated its waiver practice." (D.I. 828 at 15 (emphasis omitted)).

         First, the Government did not rely solely on the two statements made by Gibson during July 2010. Rather, it also presented the various pieces of evidence cited above, which, considered together and in the light most favorable to the Government, support the reasonable inference that Gibson was sufficiently familiar with the Bank's SEC and Federal Reserve reporting obligations such that he understood the Bank was required to report its loans that were contractually past due for principal repayment, and knew that by omitting certain contractually past due loans via the Waiver Practice, the Bank misrepresented its amount of "past due" loans in documents filed with federal regulators. That evidence further supports the reasonable inference that Gibson understood that failing to report accurately the Bank's amount of "past due" loans was unlawful. Second, the conspiracy period charged in the Third Superseding Indictment is October 2009 through November 2010. (D.I. 243 ¶ 65). Thus, Gibson's statements made in July 2010 fall within the relevant time period. Third, while both statements were made around the time the Bank chose to eliminate the Waiver Practice, I think the jury could nonetheless have reasonably inferred that those statements reflected Gibson's understanding of the term "past due" just several months prior. The applicable reporting requirements did not change. The only thing that changed was that Gibson and the others decided to change the Bank's practices in complying with those requirements.

         Gibson additionally argues that none of the evidence presented by the Government showed "secrecy" around the Waiver Practice or otherwise demonstrated that Defendants concealed that practice from auditors or federal regulators. (D.I. 828 at 13-18). Indeed, evidence adduced at trial showed that the Waiver Practice was long-standing and widely known and discussed throughout the Bank. (E.g., Tr. at 4041:19-23, 1713:19-1714:11). Further, evidence showed that the Bank provided documents to auditors and federal examiners alluding to the Waiver Practice (see, e.g., Id. at 2672:18-2674:8 (examiner James Corkery acknowledging that a document in the Federal Reserve's work papers describes the Bank's Waiver Practice)), and documents from which examiners could glean the practice's impact on the Bank's public reports (see, e.g., Id. at 2604:17-2606:15 (Mr. Corkery acknowledging that the Federal Reserve received a commercial loan ...


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