STATE OF CONNECTICUT

NEWS RELEASE
Attorney General Richard Blumenthal
Department of Banking Commissioner
Howard F. Pitkin
________________________________________________________________________

MONDAY, APRIL 19, 2010

ATTORNEY GENERAL, BANKING SUE WESTPORT NATIONAL BANK,

WILTON INVESTMENT MANAGER SEEKING $16.2 MILLION FOR
DEFRAUDED MADOFF INVESTORS

Attorney General Richard Blumenthal today sued Westport National Bank,

a Wilton money manager and his company seeking to recover $16.2 million for
investors in Bernie Madoff’s Ponzi scheme.

The lawsuit, filed in cooperation with Department of Banking

Commissioner Howard F. Pitkin, charges the bank, Robert L. Silverman and his
company PSCC, Inc. with multiple violations of state banking laws. The action
alleges that they:

• Ignored repeated and obvious indications of fraud;

• Failed to fulfill their duty to verify Madoff’s claimed investments;
• Miscalculated fees, resulting in millions of dollars in overcharges;
• Provided no written information on fund risks and strategies;
• Acted as investment advisors without the necessary state license.

In addition, Westport National Bank allegedly collected $2.4 million in fees

between 2000 and 2007 for performing various duties as custodian of its clients’
funds, but actually did little, handing over most responsibilities to Silverman and
his company. The bank even provided Silverman with its blank stationary for
communications with clients. Silverman’s firm earned a separate $13.8 million in
fees, so much that Madoff himself complained, causing them to be lowered.

Blumenthal is seeking all $16.2 million in fees paid to the defendants as

restitution for investors wiped out when Madoff’s Ponzi scheme collapsed.

“The bank and Mr. Silverman effectively aided and abetted Madoff’s
massive fraud, ignoring clear and compelling signals that his investments were
bogus,” Blumenthal said. “Screaming signs and sirens shouting fraud -- the same

______________________________________________________________________________
MEDIA CONTACTS
Attorney General’s Office Department of Banking
Christopher Hoffman 860-808-5324 Jim Heckman 860-2408105
securities bought and sold on the same day, the same bonds with different
maturity dates -- were repeatedly and reprehensibly disregarded.

“These investors were betrayed twice, first by Madoff and then by their
advisors who charged them millions and then hurled them into the abyss. Not
only did they mislead investors, but miscalculated fees to enrich themselves.
Silverman’s fees were so high even Madoff complained. These defendants
deceived their clients and shirked their duties, anything to keep the gravy train
running -- until it ran down their clients.

“The misdeeds in this case are staggering, revealing monumental moral rot
and malfeasance. Westport National Bank charged consumers $2.4 million for
turning over its supervisory duties to Mr. Silverman and his company. They even
provided him with bank stationary, streamlining the lie that the bank was looking
after its clients’ interests.

“I will fight to recover every penny -- $16.2 million -- for restitution to

investors. They must make their former clients whole to the greatest extent
possible, which is why we seek return of all $16.2 million in fees. In addition to
restitution, my office will seek harsh penalties -- monetary fines, court orders and
other actions -- to deter future fraud.”

Silverman and his company started doing business with Bernard L. Madoff
Investment Securities in the late 1980s. In 1999, he hired a new custodian for his
Madoff accounts, Westport National Bank in Westport. Silverman and the bank
set up two investment funds to funnel money into Madoff’s scheme, one for
general investing and the other for IRAs.

Blumenthal said that as custodian, Westport National Bank was supposed

to handle billing, do administrative work and take legal possession of securities
and other investments, verifying their purchase on behalf of investors. The bank,
however, conducted none of these activities, handing them over instead to
Silverman and his company.

Neither Silverman nor Westport National Bank ever properly verified that
Madoff made investments he claimed. They also ignored discrepancies that
indicated fraud. For example:

• Madoff would send the bank and Silverman notice of a stock

purchase, but a statement issued about the same time would list the
transaction as a sale, or vice versa;
• Madoff’s funds would provide notice of a U.S. Treasury Bill purchase
listing a maturity date, but the same bond would have a different
maturity date on the statement issued about the same time.

______________________________________________________________________________
MEDIA CONTACTS
Attorney General’s Office Department of Banking
Christopher Hoffman 860-808-5324 Jim Heckman 860-2408105
 In addition to restitution, Blumenthal is seeking a $100,000 fine for each
violation of state banking laws and the state’s legal costs.

Blumenthal said that 240 consumers -- of whom 97 live in Connecticut --

invested in the two Westport National Bank Madoff funds. He estimated that
consumers originally invested about $10 million.

Because some investors withdrew money before the funds collapsed,

possibly earning a profit, any restitution may be pro-rated, he said.

Blumenthal thanked Assistant Attorney General Patrick Ring and Assistant

Attorney General Matthew Budzik, chief of the Attorney General's Finance
Division, and for their hard work on the case.

***END***

______________________________________________________________________________
MEDIA CONTACTS
Attorney General’s Office Department of Banking
Christopher Hoffman 860-808-5324 Jim Heckman 860-2408105