1560. East Hampton Bank & Trust Company (East Hampton, CT)

Bank Information

Episode Type: Suspension → Closure
Bank Type: trust company
Start Date: July 16, 1936
Location: East Hampton, Connecticut (41.576, -72.503)

Metadata

Model: gpt-5-mini
Short Digest: 807695e3

Response Measures

None

Description

The bank was closed by the state banking commissioner in mid-July 1936 after discovery of fraud (stolen securities used as collateral) and the commissioner applied to be receiver; articles describe a permanent receivership/liquidation and prosecutions. No run or depositor panic is reported, and there is no indication the bank reopened.

Events (2)

1. July 16, 1936 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Closed after discovery of fraudulent loans using stolen securities as collateral; state banking commissioner declared capital 'seriously impaired' and arrests were made for conspiracy to defraud totaling about $32,000.
Newspaper Excerpt: The East Hampton Bank & Trust Co., which closed its doors yesterday after state police had arrested on bench warrants four men... The East Hampton Bank & Trust Co., was closed by order of the state banking commissioner today
Source: newspapers

2. July 17, 1936 Receivership

Newspaper Excerpt: State Banking Commissioner Walter Perry said today that he would apply in superior court next week for appointment as receiver for the closed institution. It will mark the first time since the passage of the bill that its provisions have been exercised in a new closing.
Source: newspapers

Newspaper Articles (8)

1. July 17, 1936 The Waterbury Democrat Waterbury, CT

Article from The Waterbury Democrat, July 17, 1936

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BANK IS CLOSED IN EAST HAMPTON Will Come Under Culhane Act-Waterbury Man Is in Muddle The Easthampton Bank & Trust Co., which closed its doors yesterday after state police had arrested on bench warrants four men, one a Waterburian. on charges of conspiracy to defraud, will be the first new bank receivership in the state to come under the provisions of the Culhane banking act of the 1935 general assembly. The bill, introduced by Senator George Culhane of this city provides that the state banking commissioner shall be appointed receiver for any closed bank and shall direct the bank's affairs until the receivership has been completed. Dave M. Berman Involved Dave M. Berman, who left this city several months ago to make his home in Hartford, is reported to be one of the four men involved. each of whom faces 10 specific Berman was freed late counts. last night on bonds of $15,000. He is being represented by his brother. Attorney Sully Berman, formerly of this city, it was said today. Culhane Bill Used Before The Culhane bill has been employed a number of times before, but in each case it was used only to transfer a receivership from pri(Continued on Page 2.)

2. July 17, 1936 The Waterbury Democrat Waterbury, CT

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Easthampton Bank Is Closed (Continued from Page 1) vate hands into those of the state Brott, Easthampton, who resigned as treasurer June 1, Harry E. Price, bank commissioner. Commissioner West Hartford, real estate operator; Walter Perry said today that he Dave M. Berman, Hartford, and would apply in superior court next James Vallon, East Haven. week for appointment as receiver for the closed institutoin. It will Each was placed under $15,000 bond for trial in superior court durmark the first time since the pasing the September term at Middlesage of the bill that its provisions town. have been exercised in a new closThe arrests were made by state ing. police late yesterday after the bank Conspiracy Charge closing hour. They were arraigned The four men charged with conat a special superior court session spiracy are alleged to have mulcted before Judge Ernest A. Inglis. the bank of at least $32,000. Depositors of amounts up to $5,000 are Depositors Some Protected protected by the Federal Deposit InH. M. Stillman, Boston, supersurance corporation, while bank ofvising examiner of the Federal Deficials declared today that all deposit Insurance Corporation, anpositors would be paid in full, whatnounced that depositors were proever the size of their accounts. tected up to $5,000 each for savings, Senator Culhane said today that commercial and Christmas club ache believed his bill would expedite counts and that the government the receivership. He said: "The would begin repayments as soon as bank commissioner can take over an inventory was completed. the receivership and expedite the Assistant U. S. State's Attorney handling of the affairs of the closed George H. Cohen, at Hartford, said bank. It will benefit the depositors stolen securities had been used as and the bank." collateral for fraudulent loans and Culhane Won His Bill that the department of justice was The Culhane bill was passed by investigating the source of the sethe 1935 General Assembly after the curities, believed obtained outside local senator had spoken for it sevof the state. eral times from the floor. He inA fifth man. described as E. S. troduced the measure after he had Dallman, New York, a lottery opermade a detailed study of bank reator, was believed non-existent. ceiverships in the state, which Charges Cover Over Year previously were in private hands. After the bill had been passed, Ten charges were lodged against the accused, covering a period of every then existent receivership was then turned over to Bank Comslightly more than one year. Two of the counts alleged the signature of missioner Perry and his department. William E. Cunneyworth, Montreal, Easthampton, Conn., July 17.(UP)-The East Hampton Bank & Can., business man. had been forged to a note for $15,000. Another loan Trust Co., was closed by order of was said to have been secured by the state banking commissioner today and four men, one a former oftwo $1,000 bonds of the City of Taunton, Mass., Cohannet school ficer, were under charges of defrauding the institution of more loan, which were said to have been stolen. than $32,000 through fraud. The accused were George D. State Banking Commissioner Wal-

3. July 17, 1936 The Waterbury Democrat Waterbury, CT

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Brott, Easthampton, who resigned as treasurer June 1, Harry E. Price, West Hartford, real estate operator; Dave M. Berman, Hartford, and James Vallon, East Haven. Each was placed under $15,000 bond for trial in superior court during the September term at Middletown. The arrests were made by state police late yesterday after the bank closing hour. They were arraigned at a special superior court session before Judge Ernest A. Inglis. Depositors Some Protected H. M. Stillman, Boston, supervising examiner of the Federal Deposit Insurance Corporation, announced that depositors were protected up to $5,000 each for savings, commercial and Christmas club accounts and that the government would begin repayments as soon as an inventory was completed. Assistant U. S. State's Attorney George H. Cohen, at Hartford, said stolen securities had been used as collateral for fraudulent loans and that the department of justice was investigating the source of the securities, believed obtained outside of the state. A fifth man, described as E. S. Dallman, New York, a lottery operator, was believed non-existent. Charges Cover Over Year Ten charges were lodged against the accused, covering a period of slightly more than one year. Two of the counts alleged the signature of William E. Cunneyworth, Montreal, Can., business man, had been forged to a note for $15,000. Another loan was said to have been secured by two $1,000 bonds of the City of Taunton, Mass., Cohannet school loan, which were said to have been stolen. State Banking Commissioner Walter Perry was to make application to superior court next week for apas receiver of the closed a law bank. pointment Under passed the commis- by the last general assembly sioner becomes receiver for all suspended state bank and trust companies. Bank President Chauncey G. Bevins said today that all depositors would be paid off in full and that the institution would assume liability for all accounts over the insured limit of $5,000. The bank. the only one in town, has about 2,100 depositors. Its closing caused considerable concern among merchants who, at the height of the summer resort season, were unable to obtain ready cash.

4. July 21, 1936 The Waterbury Democrat Waterbury, CT

Article from The Waterbury Democrat, July 21, 1936

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BANK AUDITORS WORK ON REPORT May Soon Tell Status of East Hampton Bank and Trust Company East Hampton, Conn., July 21.(UP)-A report by auditors working on the books of the closed East Hampton Bank & Trust company, to be soon State is expected Banking Commissioner submitted Walter to Perry, now temporary receiver of the $1,000,000 institution. He will then report their findings to the Middlesex county superior court on or before August 19, when a hearing to confirm his appointment in to be held. Meanwhile department of justice agents are seeking to establish a connection between the theft of valuable securiteis from the New York branch of the Bank of Nova Bootla on September 15, 1934 and their appearance in the East Hamptoo Bank several months ago. which resulted in the inquiry which led to the closing of the bank and the arrest of four men on charges of conspiracy and defrauding. No Date for Payments No date has been set for the beof the ginning payments to deposi- Insurtorn by the Federal Deposit ance Corporation because of involved affairs of the bank and several legal questions which must be settled. The department of justice Is trying to solve a possible connection with stole securities of William O. Krueger, allas Krauss, who was arrested in Cincinanti, Ohio, July 22, 1935 and taken to Trenton, N. J., on charges of transporting to New Jersey securities valued at $150,000, including 2,600 shares of Noranda mining stock stolen from the Bank of Nova Scotia. Some of this stock, owned by William C. Cunneyworth, an official of the Montreal branch of the Bank of Nova Bcotia, has been found in East Hampton.

5. August 6, 1936 The Waterbury Democrat Waterbury, CT

Article from The Waterbury Democrat, August 6, 1936

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Market Made Some Good Advances in Its Late S STATE BANKING Where Landon Will Launch Fight Climbed Frac ain Must Protect COM. PERRY SUED More Than Tu American Property Middletown, Aug 6-(UP)-State Banking Commissioner Walter (Continued from Page 1) Perry, receiver for the closed East Industrial, Railroad Divisions H Hampton Bank and Trust Co., and diplomacy of President Luis Comrican property in Spain. Fred B. Clark, Colchester, were deGood Business News Still K panys. elin was instructed to infendants today in a 20,000 damage As the result of the crisis, the he Spanish government that suit instituted by Chauncey G. emergency Catalonian government ted States cannot admit that a high BY ELMER C. WALZER Markham, East Hampton. is to be reformed with left parties, October. property, whether in the (United Press Financial Editor) including labor unions of the exThe suit complains Markham of American nationals or Second borrowed 500 from Clark in Decem. treme left wing and Allanti-fascist New York, Aug. 6-(UP) - The arily abandoned by them beearnings elements, represented, directly or ber 1930, and gave a 87500 mortgage stock market climbed fractions to f existing conditions, may be bringing indirectly, in the cabinet. as collateral. The mortgage, on ments. ed with by Spanish authormore than 2 points today in an adJuan Casanovas, of the left reproperty in East Hampton and Colday ind th impunity. vance which spread through the inpublican party, who assumed the chester. was turned over to the Must Look to Spain dend pay dustrial and railroad division. prime ministry of an emergency East Hampton bank "as a pledge had tota elin informed the Spanish Trading continued lethargic. UtiliCatalonian government last Saturor collateral security for a note 497 com ecretary of state that the ties lagged behind the other dividay, presented his resignation to executed No said bank by Clark in dull ope States must look to the sions. President Companys. a sum unknown to the plaintiff." vanced 1 government to afford that The comfortable cushion of good Casanovas said that his governthan a I business news continued to be the The bank was closed up by Perry on to American property in Where only cries of "Fore!" ment as formed-with the more connew hig which is required by interon July 16 after a former execuprime factor for the advance rather servative elements holding portfolios have been heard, thunderissues we tive and three other persons were 1 law for foreign properties. than any new development. Railroad -might prove a source of friction dera con arrested on charges of fraud. American action was becar loadings to be announced toous cheers and applause will and resentments, rather than of COa new buying. to have been hastened by The property later was foreoperation by all. echo late in August when Crucib for of the American automobile morrow the year likely while will July show gross income high closed, Markham allegs, and he President Companys persuaded vance in of the carriers likely will establish Barcelona belonging to the suffered the resultant loss. an army of republicans Casanovas to remain in office. He for 2% go Motors and the Ford com-

6. November 7, 1936 The Waterbury Democrat Waterbury, CT

Article from The Waterbury Democrat, November 7, 1936

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15 STATE BANKS IN RECEIVERSHIP Commissioner Asks Appointment of Additional Member of Legal Staff Petition was entered in superior court today by State Bank Perry, Walter Commissioner receiver for the Naugatuck Bank and Trust Company, to add Attorney Walter Walsh, of New Haven, to the staff of lawyers engaged in aiding the liquidation of banks in Connecticut, in the process of receivership. With the addition of the East Hampton Bank and Trust Company 1:2 July of this year, to the list of banks in receivership, the total number of such banks became 15, and although assistance is given by the office of the attorney general, the work is considered too cumbersome for the staff employed. Two additional attorneys have already been engaged and approved by the courts, to aid in the liquidation work. The petition also seeks permission to pay Attorney Walsh $5,134 per year for his services, in the event he is approved. The allowance will be made in monthly payments.

7. May 12, 1937 The Waterbury Democrat Waterbury, CT

Article from The Waterbury Democrat, May 12, 1937

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JUDGE THOMAS . HAS FIXED DATE Hartford, Conn., May 12.-(UP)Federal Judge Edwin S. Thomas today set May 17 as plea day for George D. Brott, East Hampton, and Harvey E. Price, West Hartford, against whom indictments were returned by a grand jury yesterday charging violation of the national stolen property act in connection with the closing of the East Hampton Bank and Trust Co. The men are now serving terms in Middlesex county jail on charges of defrauding the bank of about $32,000 through loans for which the collateral allegedly was stolen securities. Brott was former treasurer of the bank. The bank was closed last July after state bank commissioner Walter Perry said its capital was "seriously impaired." The men were arrested shortly thereafter. Brott was sentenced to a year in jail while Price was sentenced to nine months on each of two counts of conspiracy to defraud, the terms to run consecutively.

8. July 19, 1937 The Waterbury Democrat Waterbury, CT

Article from The Waterbury Democrat, July 19, 1937

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86% OF DEPOSITS IN STATE INSURED Connecticut Banks Af= filiated With FDIC-An= nual Report Published (Special to The Democrat) Washington, July 17.-Connecticut ranks fourth from last on the list of staets in percentage of insured deposits of banks under the FDIC, although 86 per cent of the deposits of the commercial banks in the state are insured. This is according to the annual report of Federal Deposit Insurance Corporation. Connecticut's commercial banks reported deposits averaging $460,089,000 during 1936. Of this 86.3 percent was insured under provisions of the FDIC. Four states, Arizona, Utah, Vermont and Wyoming reported 100 per cent insured deposits while the average for the entire coun: y was 97 per cent. Kansas, North Dakota and Rhode Island report a smaller per cent of insured deposits than Connecticut. The East Hampton Bank & Trust company of East Hampton is one of the 44 banks suspending operations during 1936. This Connecticut bank, not a member of the federal reserve system, had deposits totaling $1,050,371, of which $876,441 was insured, $48,124 subject to offset, and $125,806 uninsured, unsecured, not preferred and not subject to offset. P...ments to the 3,607 depositors of the bank by FDIC and receivers totaled $796,512 with $79,929 yet unpaid.