New-York tribune., 1874-09-12
SYSTEMATIC Fp'.AUD.
THE TITLE-DEED

lho Wv >iopmentS WHICH arc u'''y aiisihs
from the scovery OF the systematic frauds comm'eu
by Che res sacia and Others and the attempt to estaD-
ls in the State OF New-Jersey nre insurance COM
many based on fraudulent ttedeeds as security form
complete chain ia the conspiracy, the full extent OF
which is not yet known. TRIBUNE reported caiieo
Yesterday on the Hon. Henry O. Kelsey secretary Oh
State of NewJersey and obtained from MN an import
ant statement. Mr. Kelsey said that unt last winter
there was no law In the State OF New'Jersey
authorizing any person. In or OUT OF ONCE
TO interfere with any insurance company
conseoueptly there was no supervision over them.
Fraudnlent companies could therefore be easily esao-
shed and pursue their nefarous operations without
official check 1t became apparent 10 the Legislature
last winter that 1t necessary to estaDsh some ID"
for the regulation of insurance companies not ohS 10
prevent fraud but to protect legitimate and honest
companies. In March law was passed py virtue Oh
which the Secretary Of State was made
NJ Insurance er o1eo, with ample powers to look into
tho affairs OF all insurance companies ana 10 proceeu
against those which not sound Inc falsaues
Insurance Company was organzed uhder an oiu
ch.rtar establishipe the Fireman's Fund Insurance
Company and the name was changed under q supple
mentary act The principal Office was stated 10 DO aI
Camden with branch at Jersey City. The Company at
Camden had for its President person named Charles
Matthew'S with Louis f. French, ST., iather Oh tne
present Secretary In Jersey CITY, as inc secreHl'
When the Secretary OF State had Deen III
vested with full powers, he visited camden ana
investigated the condition Of Company; but finding
IL in an unsatisfactory condition, he prohlDted the
officers from doing any business until the company
should receive proper certificate. Secretary Kelsey
then lost sight of the Company for time; but early In
August last he received notification from L. t. FRENCH
IT, the present Secretary, that the Company was TO DC
organized substantial basis ana that sucieh
security for capital was the hands OF the Company
On Aug 20 Mr. Kelsey had occasion to visit Jersey
nf
Of the Union Insurance Company which had
been established on rotten basis, and which
had since been closed. On the same day he visited
the Palisades Fire Insurance Company and asked the
secretary L. E. French, to describe the securities. He
SAID they were mortgages, bOnks, stocks DC Mr kel'
sey then asked for the addresses OF the persons to whom
money had been lent on bond and mortgage. French
said he did not know them. Mr.. Kelsey told French
that he thought it strange that Company should lend
money TO persons whose addresses not known and
asked to the bonds. French said they were not IN
his possesson but kept in box by Alfred M. Law
renee the treasurer whose address was either Broad
near Pearl or Pearlst. near Broad in New-York. Mr.
Kelsey asked where the money had come from that
had been lent TO the mortgasors and was informed that
IL was the proceeds OF cash subscriptions for stock Mr.
Kelsey then wanted to the minutes OF the meetings
OF the showing the entries OF moneys paid
IN for stock and loaned out on mortgage; but French
said the minuteb ebOOk in MI Saclas 0f1ce III New
ar
hibed from doing business until the books aud papers
could and examined
About the beginning of this month arrangements were
made for the examination OF the papers, and Mr. Kelsey
called at office OF the Company. The papers ap-
peared be all right, so ar as the mortgages were cO
cerned as they were all recorded in regular form,
and the record duly certified by one OF the most
had only to search for the title and finding all property
REGARDED gave his certificate TO that effect Among the
ca loans was note drawn by john L. BOugh for SOOO
the collateral being certificate (No 2sl for so shares OF
800 each in the Ocean County National Bank OF Tomas
nj float HktG
credit Of Amos r. Stanton Ii was assigned on te DacK
by Stanton, and witnessed by Hannah M Stanton; Dut
the fact that the ASSIGNMENT bore no date,
yar Often OOff r. certainly seemed strange to Hm
that certificate could pass from hand TO hand as TINS
appeared to have done for nine years ana nothing ap
another for 81 500 drawn by the same john BOugh
in Hudson County This John l.. Bongh is the keeper
Commercial Hotel IN Jersey CITY, aud has been
record OF which the police have their posse
Another paper was a mortgage purp0rtlng 10 nave
Rch & Woodord No. 27l Broadway, property at No &C
Amty-st. No. 81 Macdougal-st and No. 10 sprlng.st
Kelsey visited the Office of the firm yesterday aud saw
Gen. Woodford. who exnlDted Mr. AthOuNs slsnaiure
and. added Mr. Kelsey there Is sueh marked aner-
ence genuine and that on the mortgage
that TO any ordinary persons mind there is almost
ptna fdce evidence OF forgery IN TINS case On the va
rjous papers the signatures OF women aud IN all
cases there Is a marked similarity In the handwriting,
although in the case OF the men thc signatures dlner
some of the mortgages are on the now famous Hay
"a
walkers statement At the time OF TINS VISIT however;
French obtained the addresses OF the makers OF
the bonds: but Monday last a letter was received
ton Inn living the information that the OF the
mortgagors had been obtained ana that II Mr Kelsey
could call at Office OF the Palisades Fire Insurance
Conpapy they would be furnished to him. The arrest
of Chamberlain. Walker, and Sacia took place before
those morgagOrs had been otherwise doubtless,
arrangements would have been made u have persons
ready to represent them persons purportng TO have
received from French stating tnat as MI Sacia the
President OF the Company. had become involved in
H., l.le Erruc x
animation his TO have suspension Tor the pres
en Of the investigation as TO the aiairs OF the Com
many Mr. Kelsey thought that French would have
liked him to have suspended the investigation forever
but il thought advisable for the authorities TO have
possesslOn OF the papers which the Palisades Fire
Insurance Company bases their capital for or
ganizatiou, and he therefore consulted with the
chief of Police. An application made TO Justice
Gee for warrant OF arrest for Lous f. French and
saca on the charge OF conspiracy to defraud
officer. Mr.. Kelsey then called at the Office OF the Pal
isade Fire Insurance Company and requested TO be
allowed 10 examine the securities once more. Mr..
French left the office for few moments aud returned
with mo box of s %He eaper: err hsey s was
entered with. the warrant and arrested French,
who was saked = ts sstia rrt Gee fer pTIsaet Police
examination Tie Justice {scomnitted him TO the
charge OF the officer, who locked him mp in the First
granted hearing. Meanwhile the Office o. .he Com
paDy. with all the papers books &c, the cusdy
'"" n"iioe Until the result Qt the charge against
French Shall have Ueen uetermln9 aii MI &n9ise} say
further that the charge against French 'i " maae
more serious, he had to swear 10 the value " tNe
securites aud In that probably committed peJui|'
PROCEEDINGS AT The ToMBs.
II would appear from the proceedings of yesterday;
that nearly tue operators in the estate orgeres had
been apprehended 1t said that the police tho
track of two other men, Implicated In the fraudulent
transacohy but they unwilling at present to give
any information. All the persons thus far Mfested
Julian Columbani. Charles Ssca. Walker, Weber and
Laurence. were taken before Judge Flammer, at tho
were developed at this examination, beyond
,hosn aIready given in THE TRIBUNE An adj