NEW YORK (Reuters) - The U.S. government on Monday rejected as "patently frivolous" the suggestion by Wilmington Trust Corp and four former executives that prosecutors knowingly presented false grand jury testimony, tainting their indictment for hiding soured loans.
In a court filing, prosecutors urged a federal judge in Wilmington, Delaware not to grant a defense request for a hearing on possible dismissals or permission to gather evidence related to the alleged taint.
Prosecutors accused the defendants of hiding Wilmington's deteriorating finances from October 2009 to November 2010 by underreporting matured past-due loans, through what the government called a "waiver" practice.
Wilmington was the first recipient of federal bailout money during the 2008-2009 financial crisis to be indicted.
It is now owned by Buffalo, New York-based M&T Bank Corp, which was not accused of wrongdoing.
In an Aug. 22 filing, the defendants said the grand jury testimony contradicted a statement by a former Federal Reserve senior bank examiner that federal officials had known about Wilmington's loan reporting practices, "putting the lie" to the idea there was any deception.
But in Monday's filing, prosecutors said the defendants took the examiner's statement out of context.
"Defendants' instant attack on the grand jury process - including the personal character and integrity of the prosecutors and federal agents involved in this case - is patently frivolous," the government said.
It is unclear when U.S. District Judge Richard Andrews will rule, ahead of a scheduled Oct. 10 trial.
The individual defendants charged include Wilmington's former President Robert Harra, former Chief Financial Officer David Gibson, former Controller Kevyn Rakowski and former Chief Credit Officer William North.
The case is U.S. v. Wilmington Trust Corp et al, U.S. District Court, District of Delaware, No. 15-cr-00023.
(Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman)