New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1869-02-13
THE pRAWBACK FRAUDS
COMMENCEMENT OF THE EXAMINATION BEFORE
UNITED STATES COMMISSIONER JONES.

UNITED STATES COMMISSIONER JONES.
The case of VIM. II. KOrn, j. l.. Ludlow, Z.
J. Sheriot and H. A. Dennison charged with partcipa'
ton In the Drawback Frauds upon the Government was
called up before Commissioner Jones yesterday at II a.
m. Distrct-Atorney Tracy moved that the case Of A.
o. Wilson be incorporated with that of Korn and others
The motion was granted Mr. Tracy then proceeded TO
open the case tor the prosecution follows In 1862,
law was passed imposing Internal Revenue tax on
articles manufactured with provision that if any OF the
articles afterward exported, amount should be
paid. That called the Drawback. . IL
iranspired that in the latter part Of 1856,
for the purpose Of defraudng Government by means
of fraudulent claims for drawback II was put IN opera
able 10 show that the defendants mad taken par III ne
Custom House false certificates that the goods hau oe6
exported and thus the claims for drawback were aHe
Whole thing hinged was therefore the NewYor Custom
House, false certificates had been granted lhe
from the CusomHOuse were not only false, but were
fraudulent and some OF them forgeres mSnliest Iot
goods shipped purporng TO be signed by Charles Mar
shall of New York was forgery The person py WHOM ION
these papers were certified to was one iherot WHO nd
continued to give certificates for nearly three years ana
during that time the claims had amoupted 10 lhe 5noI
nous sum OF nearly NVOe V Wcn nSu H TSe
papers were afterward signed by the deputy
reprepentatcns made by Theriot From what had been
learned the Deputy did not appear TO DC ny an
10 blame in the matter as they could not be expected TO
make n persOpal examination TO ascertain whether all
the facts certified TO by Therot correct. Mr. Korn
was for few years operating clerk to Custom-iouse
locker lie was then about years Of and received
SO week Having something OF the pronts req GU
lied by his employer he seemed to have conceived te
idea that be also could on the business 70 uoso
he appeared TO have taken into paTneTsP Wn n aud
man named Rosenberg and also LaidaW, Mlson az "a
Dickinson Korn and Rosenberg were the principals IN
obtaining from the Internal revenue Once e. eq ec
that certain goods had Deeh SApOIe. anu aIso I
Ing the drawback claims. They obtained many OF ueso
ect"r OF fbe second internal Revenue District who
testified that the taxes had been pad on certain
ulent but NE he District Attorney thought that IT
would DC shown that Ladlaw lad signed about ls
doing Therot the Custom House clerk, was the party
BY whom certificates which certified that me goo1s
did so without any examination whatever ana III eN'
tenSaton thereof he held that he was but 3ioWng 'e
usual plan adopted by the Custom House authorties ~
would be shown that Theuot had also received money
from the accused parties IIr sS fe ~ he n
The ATst witness called for the Government Sam.
uel T. Blatchford, who testified that he was Deputy
Collector in the Custom House and was in the AUDITORS
rean Was in the Department; knew r j. Therio he
an officer in the Custom House in DeeemDeT 1eG ne was
OF the clerks in the Export Statistical B9rean Ihs
outward nanests kept in that buTeau all outward
manfests gong TO foreign countries were kept there;
then presented TO the witness the Fifth Auditors report
numbered s3, purporhng to be claim OF Zeno T. Coz
been sigued by both Laidlaw and Therot)
The papers were hee S n ~ cas S Of felt hats
and that the same goods had been exported by Leno
COZZens and they would pc reiauued within
limits OF the United States witness had examined the
parts of the paper containing the manifest and compared
II with the Custom House records there was no account
of and such Shipment on file in the Custom-Iouse
Therots signature the paper was identlhed by WIT
ness who said part of Theriots business TO com
pare the certificate with the original outward manifest
and If IL agreed with the original manifest then Thereof
signed II; his certificate the basis of all the other
guaares merchants and brokers present the papers
the clerk the Statistical Bureau The business is gen
orally done by CustOmHouse brokers' who present the
own papers to clerk whose duty IL rs to examine them
and put first check upon the papers, witness was
chief clerk in that department; the check was then
taken the Deputy Collector the cashier and the ocer
in charge Of the Custom House seal; Therlot was, he
Thought about years of there were no records In
the Custom by which TO ascertain what claims Ol
drawback had been certified TO- large number or other
reports from the Fifth Auditors Office on which claims
for drawback had been received by Korn and others
were exhibited All the papers, with one exception, had
been examined by witness aud his assistants IN the Gus
tom House, there records there OF any such
shipment as mentioned in the certificates; the names OF
The ships correct but the goods were never eX-
ported; witness had large number Of similar papers IN
possession the examination OF which had not yet been
concluded; these certificates had all been signed by
TheriOt =,
adjourned until Friday of next week. at 10 O'CLOCK ~ liz