The New York herald., 1869-02-13

The Alleged Custom House Frauds-The
Amount Involved s7a0,000-Commcncc
mcnt OF the Exa sssi a alton of the Parties
Accused.
Before Commissioner Jones.
The parties accused OF being Implicated In certain
frauds alleged TO have been made on the govern
ment by means oil false claims Tor drawback for
duties paid goods Of domestic manufacture, after
wards exported. were brought up for examination
yesterday morning. The reader Is referred to the
statement Of District Attorney Tracy. gwen below.
for fuller insight into the nature OF the case. The
following are the names OF the prisoners and the
counsel appearing for them:--Wian J. Korn, Troy
Il Place; o. v. Wilson, Sedgwick and Mcdonald;
G. ]. Theriot, purdy 4 Goldsmith; L. L. Laidlaw,
William II. Hollis; II. A. Dickinson, Adriance a
Wood. For the government. District Attorney Tracy
and Assistant District Attorney Paris appeared.
OPENING STATEMENT or THE DISTRICT ATTORNEY.
District Attorney Tracy, n opening case for the
government said:-Thc cause for which the defend
ants, Wilson, Theriot, Korn and Dickinson, are ar
rested IL briefly this:--About 1862 law was first
passed imposing an internal revenue tax upon do
mesfic manufactures. with the provision that If any
articles OF manufacture subject TO internal revenue
and Oh which the tax had been paid should AFTER
wards be exported from the United States draw.
back equal 10 the should be allowed tn the person
exporting them. rms provision OF the law became
necessary because the manufacturer was compelled
10 pay the tax on the goods Immediately after the
sale and after the goods had gone into the
general markets OF the country. Some OF them
were manufactured for export at the time, ana
some were exported alter they had been
sold from 10 two or three different
msl chants successvely. The exporter OF the
goods n he could establish the fact that these goods
had paid an internal revenue TAX. was entitled TO
receive from the Treasury drawba equal TO the
| amount OF tax paid. Regulations for the purpose
! OF securing that drawback and preventing govern
ment from being defrauded by means OF fraudulent
claims were adopted from time TO time by the rrea-
| sury Department and put into execution. It now
transpres that In the latter part Of 1896 scheme
was formed In the city 0f New York for dcfraudlna
| drawback, and that scheme was put into ex.
ecution IN November and December, 1886 ana
has been continued, ~ think the evidence IN this
case will disclose. from that period down To tho pre-
sent time. From time TO time parties have been
brought into the arrangement, and think il viii
appear that II has come down the present defend
| ants by regular succession, ana those who are
| recently In the transactions arc simply new men,
| bers taken INTO the irm and VINO followed out the
original scheme. The plan OF operations so lar as
have been able 10 possess self OF It, has neen hs:
The frst step necessary IN the consummation OF this
fraud 70 procure from the Collector certificate
that the manufacturer Of certain goods had paid the
/ tax on particular articles mentioning the same in
the certificate. The next step was 20 take printed
forms constituting the regular forms authorized for
4 presentation for claims Tor drawback using these
certncates as the basis. fiing up these cnims 10
correspond with tho ccrtin Gates from the Collector
\ having y properly certined through the Cusiom
| House OF the city OF New YORK that the zoo
| mentioned IN The Collectors certificate mad
bees exported w the person named a. IN,