The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-09-14
EXTRAORDINARY DEyEL0PnENTs.
HS8 Million Stolen from the G0vornwent
By Fest Ohee Frauds- Operations I. New
York, BSdai", Chicago and Other Points.

HiN Million Stolen from che GOvcrumens
BY Fest Office Frauds- Operations In New
York; BSdai", Chicago and Other Points.
tFrom sle Detroit Tribune, Sept. g.l
Our readers are all aware chat durlny the past sev-
eral weess parties In buuaO, New York, Washington
ana CnicaSO nave been arrested upon indictments
found by the GRAND Jury Of the United States Court
for this district charging them with being implicated
government 70 great amount. The fun particulars
OF the allesed Fraud which 1t il beheved will amount
10 over $ooooo nave not yet been fully pubisnet.
we give pelow such facts a. 1t IS deemed prudent to
present to toe public ut present and lie, ang the
manner In winch the iraads have been committed IN
the Post ONCE departments for the past seven or
eight years. anu amounting. 1t Is believed, 10 nearly
$500, 000
The first intimaton Of the fraud was received by
the postmaster General In February last, VINO was
secretly informed that fraud was being perpetrated
In his department and that his own agents were con-
cerned III IL. lie was given no clue a. to what MAS
the precise nature o. T. and conferred with the Sec
rotary Of the Treasury, requesting that tue latter
should entrust the mater to OF his agents. lear
ing that as had been reported 10 him. his were
connected with IL, whatever II might be. Mr. Fred
Carlyle, OF THIS CITY, special agent OF the Treasury
Department, was IN Washn stOn mt the tiine and to
HIM the secretary OF the Treasury entrusted tine
duty OF ferreting out the matter. lie az under
took the work, and in June reported the result Of
the investigations to the Postmaster General to the
effect that 10y conspiracy, reaching through seven
years IRON 1861 TO 1865, the govern nent mad been
agents and clerks in the II asvy Department 70 the
amour Ia the aggregate of several nundred thou
sand dollars. lie was then directed by tine secretary
OF the reaslry TO submit tue fnciS To Alfred Russell,
United states District Attorney for this district and
instruct him TO commence criminal proceed
ngs against all parties implicated In such frauds In
such district ~ Mr. Russell deemed proper. In nc
cOrdance with these instructions the ficls and eyi
dence In the case were submitted to the Grand Jury
IN session Ill this city in June last, aud indictments
were found against nine persons who have siloe
been arrested ON warrants issued from the United
States Circuit Court 81 TINS judicial circuit
And now as regards the char cter OF these frauds.
The law authorizes the Postmaster Ge1eral TO con-
tract for wrapping paper Irvine, &C. Tor The differ
ent post Offices III the United STATES and prior to
tober 1, 1885, these articles were furaisoed by con-
tract. The United States, for the convenience or
business In the Post once Department, is divided
into three districts and In each agents appointed
and denominated " Blank Agents Of the Post ONCE
Department" The headqual tiers OF the blank agent
oil the First district are at Washington, aud he sup
plies with paper, twine &c. the post offices in the
Southern States. The headquarters OF the agent OF
the post Offices of the Eastern and Middle States aad
California, and the headquarters OF the Third dis
trict are at Buffalo, which supplies the post oces OF
the western states. The agents are supplied by the
contractor upon the requisiti0n OF the Postmaster
General, based upon the estimate OF the agent, and
the post Offices supplied by the agent upon the
requistiOn of their respective pOstmasters.
Before the contractor can obtain payment from the
government Tor the articles furnished he must pre-
sent, with his account, the requsitOn OF the Post
master General and the estimate OF the blank agent.
The agent, at the end OF each quarter s required TO
furnish an account showing the quantity OF blanks,
wrapping paper anu twlnc on hand at the commence
ment OF the quarter the amounts received from the
contractor. the amounts distributed to post Offices
during the quarter and on hand ut its close, ana aS
proof Of their correctness his accounts for the pre-
viOus quarter, the duplicae acquisitions receipts
OF the different postmasters, are the evidence.
II will readily be perceived from the above mode
OF transactng the business that the contractor aud
agents are II mutual check upon each other. The
agent must first make an estimate or the articles
ded before the Postmaster General Will issue his
rcquisitiOn to the contractor, ana the contractor
must produce, in addition the receipts Of the agent
The only check as to the distribution by tile
agent is the requisitiOn or receipt Of the post
masters, and the only evidence that the guam
titles called for by the requstion OF the postmaster
have been furnished by the agents would be the
books and statements Of the Postmaster himself in
the form of receipt. IL would seem, therefore, that
no fraud could be committed by the contractor IN
less he was in cOlus0n with the agent and that the
partment, must be In collision with both the con-
tractor and the person or persons having charge VI
the lifting and passing OF these accounts.
The Investigations OF Mr.. Carlyle have developed
the OF the Post once frauds TO DC as follow"
FIRST. on the part OF the contractor the pres NATION
OF accounts falsely representing the quantities OF
Post ONCE blanks, wrapping paper and twiHc fur
nished the Post once Department., and obtaining
the nature Of receipts frauduentIy and corruptly
procured. Second, ~ to the agents rcceipting fo
false quantities TO the contractor and presentng as
vouchers for quantities distributed the requisition
Of pOstmasters which were either only partially
never filed. Third, to tho clerks in the depart
ment passing Orauditing the accounts after CON-
tractors and agents and receiving consideration
therefor.
IUt nuUlcS OI inc PARTIES appearing 10 nave ell
tered into the conspiracy are as foows:-C. +. $.
Thomas OF Buffalo, contractor for furnishing Post
Office blanks, and from 1861 to 1865 having q con-
tract for furnishing paper and twine; +. n. Howard
and ]. NJ. Johnson, partners OF Thomas from Janu-
ary 1857 and who. II is alleged have enjoyed the
benefits arising from the operations OF Thomas; w.
o. Redden blank agent OF the First district at Wash
ington; Beverly Clark, blank agent Of the Second
district Of New York, and Andrew f. Lee, blank
agent OF the Third district at Buffalo from 1850 to
1867 George W. vining OF Chicago who up to Octo-
Der, 1867 was confidential clerk OF Thomas; VIII
liam Towers, OF washington, chief clerk in the ONCE
OF the superintendent OF Public Printing in the Trea
sury Department at Washington, who passed the
counts OF Thomas for blank paper and blanks;
George L. Juverner, who from 1880 to 1888 clerk
in the Auditors once Of the Post ONCE Department
ana passed the accounts OF both Thomas and the
blank agents.
All OF the above named persons have been arrested
but those residing In Washington have been dts
charged on habeas corpus upon decision Of United
States District Judge Wylie that the defendants
must tried for the offence In the district where the
offence was committed. law passed by Congress In
1857, however gives jurisdiction 70 this district In
spracy the overt act being committed In this dis
tric Those arrested ut the other places have given
bali to appear for trial at the November term OF the
United states Circuit Court TO he held In this city
The indictments charges the above named persons
with conspiracy to deraud the United states by d.
yerine at the various post oflces in the Eastern dis
,ric Of Michigan amounts OF wrapping paper, Irvine,
post once blanks less In quantity than the requsl-
lions made by the several pOstnasers upon the
blank agents and contract0rs and causing suce
quistons o! the several pOstnaste-s ~ bc sent 10
the Post once Department ~ evidence OF the deiiy.
ery In the blank agent or contractor or the full
quantity called for the face Of the acquisitions TO
lie presented audited, approved and paid, and the
profits OF such fraudulent transactions to be divided
among the conspirators.
Two charges are made In the Indictment against
Hudson r. Lee, one beng that on March =, 1867,
upon requIsition from the Postmaster Of Detroit
for twelve reams OF paper, he delivered bat four,
transmitting the requisition for twelve reams to
Washington as q voucher. upon which he received
paw and the other charge Is that he sent March
D. 1857, upon requisition for twelve reems, only
eight reams, while he received pay for the whole
amount called for
Mr.. Carlyle has sifted the matter thorough