The Bedford gazette. [volume] (Bedford, Pa.) 1805-current, 1863-01-09
The Army Fraud Investigation in New York
The Government Swindled out Of
100000 in that City.
One Thousand Persons implicated.

furnished rations 10 the soldiers in New York,
led to the appointment of Mr. Olcott as a spe-
cial commissioner 10 investigate the circumstan-
ces connected with each case in which the Gov
ernment was swlndled. The commission was
merely intended to collect evidence to bring the
guilty to punishment in the ordinary courts of
civilians. The military officers who are invol-
we'd in the frauds, are to be the subjects Of court
martial.
The commission was opened on the first of
November, since which time, nearly two hun
dred witnesses have been examined Two inter-
pretors, a secretary, who has taken notes Of the
examination in short hand, several copysts and
detectives have been employed The bills ex-
amined were those presented ostensbly for the
board and lodging of troops previous to their
being sworn into the United States service, and
formed into companies. For this object, twen-
ty millions OF dollars were approp .riated under
the heading, for recruiting, organiz no and drill
ing soldiers into the United States service. The
frauds which Mr.. Olcott succeeded in bringing
into public light, are of a startling character,
which show that there was conspiracy to
swindle the Government by several of its sworn
agents-wo may be numbered by hundreds
The disbursing office in White street was o.
pened on the I'd of September, and Col. Sack
EFT received $4,000 out of the fund.- with which
TO pay the bills the contractors might present.
The Office was literally run down by there gem
try, and the amount was soon divided among
them. More bills, however, came rapidly in,
till they largely accumulated. The $5, 900 was
exhausted in three days.
Soon after Col. Sackett received 100000,
with which he paid off the just claims which
came under his consideration. This sum was
also Immediately exhausted, and the bills came
in in still greater numbers than previously. 1t
was not until after the commencement of the
present year, that the frauds which are the sub
ject of the present investigation occurred. In
the spring of this year, the swindling was ex-
tensive, rs at that time there were numerous
squads of troops scattered over the city, who
were not mustered into the service of the Uni
ted States for some time.
There are two classes of contractors-one
Tho has an agreement with the State authori-
ties or United States, by proposals, to furnish
soldiers with rations-the other, the special con-
tractors, who provide squads of men newly re-
cruited, and not organized into companies or
mustered into the United States service, with
board and lodging The frauds belong to the
latter class and their abettors.
AS soon as the commission was opened MIR.
Olcott sent to the Disbursing Office and obtain
cd all bills over 800 for lodging and subsisting
troops. The commissioner then had the con,
tractors brought before him, when, in many in.
stances the startling discovery was made that
the names Of many of this class had been forg-
ed On the necessary papers to obtain the amount
Of the fraudulent bills.
In many instances the names Of private citi-
zens, who were in no way connected with pro-
viding for the troops were placed on the neccs-
sary papers; and the amounts thus certified
were at once paid.
The investigation so far has disclosed the
fact that the frauds commenced in the follow
ing manner: A large number of contractors,
who waited in vain for weeks and months at
the Disbursing Office to receive the amount of
their bills, were compelled TO sell them to bro
kers. This circumstance opened new avenue
for the thrift Of the latter class, and they soon
employed agents to run round the small con-
tractors of this city and purchase their bills at
about 25 per cent discount. The claimants
were principally lager beer saloon keepers with
whom the soldiers had boarded
When one of the German contractors would
endeavor to get this bill casned by Il broker, the
broker would state there were several informal
tiles in it, tear it up, and prepare a new ono
If the amount was, say $25, the broker would
alter it to $500, and having the contractors
signature obtain the amount without any ques,.
tions being asked at the Disbursing Office.
Several notables are involved in these frauds
Over one thousand persons are at present inn
plicatcd, and the investigation has not yet been
closed.
The name of q cabinet maker in New York
has been put on one of these bills as contrac-
tor, the amount being 500.
Over so per cent. of the six millions of dol
lars which has already been spent out of the
fund Of S;20,000,000 is supposed to have been
paid on fraudulent claims throughout the coun-
try
The Colonel of a celebrated regiment. famous
for his sympathy with the ''hero of Italian free
DOM is also implicated.
1t is understood that he has swindled the Gov
ernment and various public bodies Of New York
out of 100000.