The Bank of Butterfield acted as custodian to a fraudulently run offshore mutual fund that filed for bankruptcy.

Evergreen Security went bankrupt in January last year and is insolvent by approximately $200 million. The Bank has not been named in any lawsuits but disgruntled investors are seeking to reclaim more than $8 million that was allegedly fraudulently transferred by way of commission to promoters of Evergreen by corporate and individual defendants in countries around the world.

A Bank of Butterfield spokesman said yesterday: "We don't comment on client's accounts, current or former."

Both the Bank of Bermuda and the Bank of Butterfield act as custodians and the two had a combined total of $60 billion in global custody arrangements in 1998.

Defendants in the Evergreen lawsuits include The Private Trust Corporation, being sued for $116,000, Lion's Gate Management Ltd., being sued for $436,374, and United Republic Ltd., being sued for $3,013,816, all domiciled in the Bahamas, and International Wealth Management Ltd., of Bristol, England, being sued for $1,025,260.

Several other corporate and individual defendants are also being sued from countries such as Canada and Japan, although the majority are from the US.

The lawsuit was filed by R.W. (Bill) Cuthill Jr. this month against 76 individuals and corporations and claims the fund's brokers acted as either financial advisor or broker in the sale to public investors of Evergreen Certificates.

A statement released by Mr. Cuthill said: "The brokers aided in Evergreen's operation of a Ponzi Scheme to defraud investors."

According to Mr. Cuthill, Evergreen was formed primarily to operate as an offshore mutual fund and most funds invested in Evergreen were nominally held in the name of various trusts.

They included Intrados, SA, a Costa Rican corporation, Ansbacher (Bahamas) Limited, a Bahamian corporation, and surety Bank & Trust Company Limited, also a Bahamian corporation.

Mr. Cuthill's statement also said that Investment advisors included West Side Advisors, Atlantic Portfolio Analytics & Management, Inc., and International Portfolio Analytics, while custodians included the Bank of Butterfield and Bear Stearns.

For the last ten years, Evergreen is alleged to have defrauded 2,000 people around the world of $214 million.

The lawsuits seek to recover only the commissions that the salespeople received, not the principal that was invested.

Mr. Cuthill said as trustee for the creditors in Evergreen's Chapter 11 bankruptcy case he was not permitted to seek a return of the capital. He said only the investors could pursue the money they lost.

Due to the high cost of litigation, Mr. Cuthill is only suing sales people who he believed received $25,000 or more in commissions, which, when based on reported commissions of between ten and 12 percent, would mean people who funnelled more than $200,000 each into the funds run by Evergreen.

Cuthill expects to recover only $30 million to $50 million or about 25 percent of the money owed to investors.