Tag Archives: Wesport National Bank

Did Greenwich Bank & Trust do the dirty with Bernie Madoff?

That’s what our aspiring senator but still, to his intense frustration, Attorney General Richard Blumenthal says he is investigating. In fact, he’s poking around GB&T’s parent, Westport National Bank, but same thing; all are owned, mostly, by Greenwich’s William Berkley, he with the huge spread up on Doubling Road and the insurance building on the corner of Steamboat Road.

NEW YORK, April 6 (Reuters) – The Connecticut Attorney General said on Tuesday he was looking into whether Westport National Bank and a Connecticut pension consultant aided and abetted Bernard Madoff in his $65 billion Ponzi scheme.

Connecticut Attorney General Richard Blumenthal said in a statement that his office and the Connecticut Department of Banking have been conducting “a wide-ranging investigation” into federally chartered Westport National Bank, pension consultant PSCC Services Inc and its owner Robert Silverman.

“Our investigation is focused on allegations that Westport National Bank, PSCC and Mr. Silverman operated investment funds that fed cash into Madoff’s massive fraud, skimming millions of dollars in fees for themselves,” Blumenthal said in the statement.

“I expect to make a decision soon regarding possible legal action.” Legal action could be aimed at recovering money for investors as well as fees.

Madoff is serving a 150-year prison sentence after pleading guilty to running the Ponzi scheme in which scores of investors were defrauded.

Connecticut Governor Jodi Rell said in a statement on Tuesday that the probe suggested that clients of the bank had invested some $59 million with Madoff, but received statements from the bank showing that they had invested in “shares” or “units” with specific market values.

“The probe found information indicating that Silverman and PSCC Services allegedly steered clients toward pooled investments for which Westport National Bank served as the nominal custodian and which were to be managed exclusively by Madoff’s company,” Connecticut Department of Banking Commissioner Howard Pitkin said in a statement.

Silverman and PSCC received more than $14 million in fees and Westport National Bank got $2.5 million in fees for managing the investments, the governor’s statement said.

UPDATE: Silverman seems to be a Wilton residence with a “pension consulting” practice  a half block from Westport National.

And there’s this, from the (February 9, 2009) New York Times:

The arrangement seemed odd to specialists on bank custodial services.

Custody accounts typically involve an array of specific services, explained Marshall N. Carter, the retired chairman and chief executive of State Street Bank, one of the largest custodial banks in the world. Those include settling customer trades, insuring safekeeping of the securities, servicing customer transfers and providing information about the portfolio.

In this case, no customer trades were settled and the safekeeping of securities was apparently left to Mr. Madoff. Finally, although the bank said it provided record keeping, tax reporting and “other ministerial services” to the custodial clients, Mr. Silverman was also being paid a “record keeping” fee.

Together, the fees paid to the bank and PSCC Services were almost 4 percent of the customers’ assets — well above normal levels for those services, according to Charles Ruffel, founder and director of Plan Sponsor, a financial information business serving institutional investors.

The bank’s custody fee was about three times the going rate, Mr. Ruffel said, and he called the record-keeping fee paid to PSCC “unconscionable.”


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