Former Delaware Bank CEO Sentenced In $1.5 Million Fraud Case

From the News Journal on 11/25/2014:

A former bank chief executive was sentenced Monday to two years in prison for a scheme involving the use of his bank's money to pay personal debts.

James A. Ladio, 58, who founded and headed MidCoast Community Bank in Wilmington, received what some considered a stiff sentence, considering his substantial cooperation into the federal investigation of Wilmington Trust Co.

Ladio pleaded guilty last year to two counts of bank fraud and two counts of money laundering. He had asked U.S. District Judge Richard Andrews for home detention or community confinement. Instead, Ladio will report to prison on Jan. 9.

"This is a tough day for me," said Ladio, who seemed more self-assured than he did at his plea hearing last year. "I will never, ever be able to accept the actions I did. Remorse is something that eats you from inside."

Ladio said he had gotten himself into "desperate financial circumstances" following years of mounting debt that began with a divorce. In a letter to the judge, Ladio said the debt was always manageable until he invested beyond his means in the start-up of MidCoast. When the recession hit, he was forced to borrow more money to meet his loan obligations, he said.

Unable to pay the loans he owed Wilmington Trust, Ladio convinced two MidCoast customers to withdraw loan proceeds from the bank and turn the money over to him as private loans, prosecutors say. He then used the private loan money to pay off his obligations at Wilmington Trust.

The "agonizing" reflection Ladio did over the last year resulted in the decision to make amends, he told Andrews. That meant cooperating with the government in its Wilmington Trust probe and starting a business that would allow him to repay his debts.

"During this time, I decided to move forward – I willed myself," Ladio said.

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