DOVER, Delaware — A prominent developer facing a September trial on federal charges involving loans he received from the failed Wilmington Trust bank was found dead in his home Friday, authorities said.
Michael A. Zimmerman, 57, was found unresponsive on his dining room floor by his brother, police said. An autopsy will be conducted, but police said no foul play or suspicious circumstances were suspected.
Just days ago, federal prosecutors asked a judge to revoke Zimmerman's pretrial release and issue a warrant for his arrest.
The judge issued an order Friday canceling all proceedings in the case.
"It is a terribly sad event. We are thinking about his family," defense attorney Dan Lyons said after speaking with Zimmerman's brother. "We hope that Mike is remembered for all of the good work and deeds that he did over the years."
Zimmerman, whose father was a state senator, was the driving force behind several developments in Delaware, ranging from shopping centers and drugs stores to office buildings, apartments and dormitories.
He was indicted in 2013 on charges of conspiracy, money laundering and making false statements to a financial institution. That same year, he was sentenced to probation after pleading guilty to state charges of making illegal campaign contributions to Democratic Gov. Jack Markell in 2008.
Federal prosecutors said Zimmerman obtained more than $37 million in financing from Wilmington Trust for three projects, then diverted construction loans for unauthorized purposes, including acquiring a personal interest in a development in the Bahamas. Prosecutors said Wilmington Trust, which sold the debt related to the Zimmerman projects in 2011, incurred a loss of more than $26 million.
M&T Bank Corp. acquired Wilmington Trust at a fire sale price in 2011, resulting in more than 700 layoffs in Delaware. The sale came after Wilmington Trust posted a quarterly loss of about $370 million because of bad real estate construction loans and said more losses were likely.
The bank's failure led to an ongoing federal criminal investigation, as well a securities class-action lawsuit. The lawsuit alleges that senior Wilmington Trust officers and executives portrayed the bank as a conservative lender but in fact played fast and loose with its real estate loan portfolio, perpetrating a fraud that led to the demise of the 107-year-old bank.
According to federal officials, Wilmington Trust had aggregate loan commitments with Zimmerman of more than $90 million by 2010, incurring millions of dollars in losses. Yet court records suggest Zimmerman had no problem getting money when he asked for it. According to an FBI affidavit, Zimmerman got $1 million from Wilmington Trust in 2008 after he faxed a request to bank executive Joseph P. Terranova saying "I have to pay my bar tab."
The affidavit also cites another incident in which Wilmington Trust wired $1 million to an account controlled by Zimmerman for a commercial project after Terranova had told Zimmerman an executed lease and plan approval were needed.
"However, not wanting my reputation for reckless abandon to be in jeopardy, I guess we can fund the $1,000,000," Terranova wrote.
The criminal probe has netted guilty pleas from Terranova, two other Wilmington Trust executives, and Zimmerman's business partner Salvatore Leone.
"Of all the people that were charged in the case, he was the only who didn't plead guilty, and the reason he didn't plead guilty is because he wasn't," said Lyons, Zimmerman's lawyer.
Last year, federal regulators said Wilmington Trust had agreed to pay $18.5 million to settle charges of accounting and disclosure fraud regarding its loan portfolio.