Paul J. Silvester and Ben F. Andrews, Jr.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19566 / February 15, 2006

SECURITIES AND EXCHANGE COMMISSION v. PAUL J. SILVESTER, ET AL., (United States District Court for the District of Connecticut, No. 3:00CV1941 (EBB))

UNITED STATES OF AMERICA v. BEN F. ANDREWS, (United States District Court for the District of Connecticut, No. 3:00CR217 (EBB))

COMMISSION OBTAINS FINAL JUDGMENT OF DEFAULT AGAINST BEN F. ANDREWS, JR. FOR INVOLVEMENT IN CONNECTICUT TREASURER'S OFFICE SCANDAL

The Commission announced today that, on January 30, 2006, the Connecticut federal district court entered a final judgment of default against Ben F. Andrews, Jr., 66, of Simsbury, Connecticut, in connection with a fraudulent scheme involving the investment of Connecticut state pension fund money. The final judgment permanently enjoins Andrews from violating the antifraud provisions of the federal securities laws and orders him to pay disgorgement totaling $382,834.79 and a civil penalty in the amount of $5,000.

In October 2000, the Commission filed a civil fraud action against Andrews, Paul J. Silvester, the former Treasurer of the State of Connecticut, two private equity firms, three of their officers, and four others involved in the fraudulent scheme. The Commission alleged that the defendants participated in a scheme where Silvester awarded investments of hundreds of millions of dollars of state pension fund money in exchange for lucrative fees paid by the private equity firms to Silvester's friends and political associates, including Andrews. According to the complaint, Silvester, who served as Treasurer from July 1997 until January 1999, solicited, among others, Landmark Partners, Inc., a private equity firm, to pay substantial finder's fees to Andrews. In order to secure the state's investment of $150 million of pension fund money, Landmark agreed to pay Andrews $1.5 million. Andrews agreed to kick back part of this finder's fee to Silvester.

Andrews was specifically enjoined from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. All but one of the defendants have previously settled with the Commission in that action, and the Commission's case remains pending against Charles Spadoni.

On May 2, 2005, in a related criminal case in the District of Connecticut, Andrews was sentenced to 30 months in prison followed by five years of supervised release. In addition, on May 23, 2005, Andrews was ordered to pay a fine of $250,000. The sentencing followed Andrews's October 29, 2003 conviction by a federal jury on nine counts involving federal bribery, mail and wire fraud, conspiracy to launder money, and making false statements to federal agents.

For further information, see Litigation Release Numbers 16759 (October 10, 2000), 16834 (December 19, 2000), 18436 (October 30, 2003), 18460 (November 17, 2003), 18461 (November 17, 2003) and 19241 (May 31, 2005).