New-York tribune., 1877-07-10
AMERICAN POPULAR FRAUDS
DISCLOSURES FROM THE BOOKS.

DlSCLDSlRfS fRDM HE BOOhS.
MAKING UP FALSE STATEMENTS YEAR AFTER YEAR
AND SWEARING TO THEM-TRICKEi.Y AND PRE-
TENSE IN CONDITIONAL CERTIFICATES or STOCK
PERJURY ABOUT SECURITIES WHICH NEVER
WERE PURCHASED
Receiver Laurence has been for several days
deep in the investigation OF books, papers, and
counts of the American Popular Life Insurance Company,
and yesterday enabled to point out in tangible form
the evidences OF fiaud for which he has been
looking since the bankrupt placed
in his bands. Mr.. Laurence knew nothing Of
the affairs OF the company until his appointment
rs its receiver. Upon beginning examination of the
books, indications Of fraud at apparent.
The entries upon the ledger left doubt to the mat
ter The books OF the company, examined by the
ceiver and shown o TRBUSE reporter yesterday prove
that tho American Popular has been swelling Its pre-
tended assets by issuing stock 10 its directors IN the
form OF conditional certificates just before the annual
report to the State Superintendent Of Insurance. Tho
stock was bought back after the opening OF
fiscal year. Another glaring fraud
in pretended sales To outside persons for thousands
OF dollars Mortgages and bonds were taken for pay
ments, and when the Superintendent concluded his in
spection Of the affairs OF the company the pro- erty
which had been rated fictitious values, and often
nearly entirely worthless returned and the
mortgages and bonds Cancelled.
The most astonishing proofs OF rascaty to be
in the method taken the amount o; surplus
serted TO be haud. In one place it is seen that
among the items of surplus hand" Is s:}3,925 III
stocks Of various bank and trust manes The direct
blandly stated that these stocks IN Salem
bank-where their funds almost Invariably deposit
cd. Such stocks purchased and were never
deposited in the Salem bank. The task OF getting rid Of
these securities which appeared the books have been
bought, very easy one; the directors claimed to
have sold them few mouths later, thus balancing the
books. As the issue OF certificates OF stock made
by the directors most Of whom officers to themselves
is plain that they must have been cognzant of the du
plicity
The following facts taken from the books of the Amer
Popular give idea of the system of bookkeeping
used in the concern, and the with which the capital
and surplus OF the company swelled Ton paper us
occasion requred
In December 1872 at OF the years business
the found that the cash balance Of
the company represented on the books to be s73,
396 10, which should have been in hand in cash.
Very little cash found the assets consisting OF bonds
stocks. certificates There were constitutional cer-
icates in the treasury for $4,000 IN stock, sold
to persons who had given these certificates for the
These certificates accepted by the State
Superintendent Upon careful examination OF the books,
however plain that the persons To whom these Ger
tfcates issued officers and directors OF the
company as follows: Dr. T. s. Lambert. President No
reau Morris Vce-Prcsident John f. TrOw, director
DR.. W. IL. Dwne director; aud Chas. L. Buckley,
director. In the following month the books show that
the directors bought OF themselves the $4,000 OF cond-
ona certificates, which cancelled, was also the
transactions OF their sale and purchase.
Having thus provided for their cash capital for the
year 1872 directors prepared for the next annual
port for SG3 by issuing 10 themselves IN February, capt
tai stock to the amount Of 500, and in the December
following $4,000 more, making total Of S5O7Oc This
stock was bougat in from the directors by themselves,
during the year following their annual report for the
sum OF $4,000 TIE directors elaine 10 have bought
NewYor bonds OF the total value OF $4,000 in 1873,
and adding this the certificate of deposits made
total of $50 800 which existed III the books but not out
side of them The Ncw-York bonds had never been pur
chased and OF not deposited in the Ameri-
can Popnars avore bank represented to the super
ntendent In order balance their books during the
new year 74 the directors made an entry of the sale
of the mythical New York bonds for the sum pretended
to have been paid for them
In arranging their affairs for the year 1874, in their
report 10 the superintendent in the last part OF Dcce-
her the directors pursued similar methods for swelling
their capital and surplus. In December ana shortly be
fore preparing their report they issued to themselves
53 500 in capital stock called their certificates surplus
and IN the following May purchased back the stock to
the amount o $4,000 To further strengthen ION paper
the comuanys financial condition. the directors IN that
wear pretended to have bought the following property