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UPDATE: Bank CEO pleads guilty to fraud, money laundering

James Ladio faces federal charges

UPDATE: Banker Ladio pleaded guilty to ripping off Wilmington Trust Co., faces future sentencing, says the Wilmington News Journal here. YESTERDAY: Federal prosecutors in Wilmington, Del. say James Ladio, a Wilmington business lender whose sudden resignation as president of Mid-Coast Community Bank was followed by the cancellation of that bank's expected sale to Bryn Mawr Trust Co. this summer, is expected to plead guilty in Wilmington federal court tomorrow to charges of bank fraud and money laundering in connection with arrangements Ladio made to pay off loans Ladio owed another bank.

According to documents made public by federal prosecutor Charles Oberly's office, Ladio, who worked as an officer of Artisans Bank of Wilmington before starting Mid-Coast in 2006, borrowed money from an unnamed Wilmington bank for a series of business and investment projects in 2004-08. He later sold a property that had secured part of the debt, without paying back the loan or telling the bank. In 2010, the bank asked for its money back. Ladio asked two different Mid-Coast business customers to lend him money at higher rates of interest, to be funded by Mid-Coast loans that Ladio knew were supposed to be used by the customers for their businesses, in hopes he could use the money to pay back $700,000 that he owed. He missed payment on at least one of the loans.

The unnamed bank that Ladio owed suffered losses in the 2008 financial crisis and had to be rescued by a federal government bailout. Ladio faces counts of fraud and money laundering. He and his Wilmington lawyer didn't immediately return calls seeking comment.

Federal prosecutors have filed charges against at least two loan officers and two developers in connection with the billion-dollar bailout and forced sale of the state's largest bank, Wilmington Trust Co., and have continued to investigate bank fraud leading up to the 2008 financial crisis and its aftermath.