Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1880-12-24
STOCK SWINDLE.
How they Set up Jobs to go Through the
Unwary Country Stock Gambler.

NEW YORK, Dec. 22.-Inspector Burnes' de-
tectives arrested this afternoon, on bench
warrant, Michael P. Coffe, Laurent Defossa,
and Chas. Wyant, president, treasurer and
secretary of the Mutual Stock Operating COM
pany, recently supplanted by the Guaranty u
Income company, at No. AZ Broadway. They
are charged with obtaining money on false
pretences, and have been indicted by lhe grand
jury.
The history of the swindling operations of
the Mutual Stock Operating company extends
over the entire year, in which time probably
as many as 200 persons have been robbed by it
OF sums ranging from IS to more than $1,000.
The efforts of the stock exchange brought
final exposure.
The plan with which the swindle was or
ganized was neither ingenious nor plausible,
but none the less successful. In November,
1879, Michael P. Cote and Earnest Defoosa,
who composed the firm of Michael P. COTE &
Co., organized a mutual stock operating COM
pany, eleeting themselves president and treas
urer and Chas. Wyant secretary of the concern.
The capital was at first $15, 900, but was grad
ualfy raised to 100000. The par value of
shares was IS. Circulars and advertisements
that were scattered everywhere set forth that
the company possessed key by
which the managers were enabled
to fortell with certainty the upward and
downward movements Of all stocks, and thus
enabled them to invest the company's capital
to great advantage. Purchased sale of stocks
was represented as made in stock exchange
through brokers employed by the. company.
This part of the programme was, however,
omitted while sales of shares went briskly on
and grew until it became necessary to increase
the capital.
At the office a man received constant
stream of gullibie investors, to whom the
privilege of fexaming the books of the concern
was cheerfully extended. Entries of purchas-
es and sale of stocks that showed handsome
balances on right side of ledger were exhibited,
but evasive excuses were made to those more
than ordinarily inquisitive. If Il person per-
sisted, he was informed that the books were
the private property of Michael Cofe & Co.,
and could not be exhibited, as they would
at once disclose the key upon which the pros
perity of the company rested.
These answers usually shut off inycstiga-
ton. The company had absorbed probably as
much as 5000, 900 from the pockets of credu-
lous investors and has declared every month
| imaginary dividends of 10 or Is per cent. of
par value of stock. When early in October
the government stopped the mails of several
concerns of similar character the Mutual Stock
company was not mOlested, but the exposure
compelled it to suspend operations for a while
and its last declared dividend" was not
paid. Harrassed by persistent efforts
of the stock exchange to drive them out of
uuSlHCSo VhiCIdCl l. SOlC ~ W. dPpCdlCu "
stockholders of the concern to show their
faith in the management by signing an agree
ment giving Coffe & Co. the right to hold
their shares and invest the money us they
liked. Nearly three ee-fourths of the stockhold-
ers signed the agreement and received in eX-
change for their stock in the
Mutual Stock Operating company
shares the par value of which were $50 in
Guaranty and Income company" founded by
the same firm, at 40 and ~ Broadway, with a
capital of s3,000,O0O. The new company did
not get fair start however The law COM
mittee of the exchange, aided bya police in
spector and detective, had watched for months
| for chance to trip up the swindlers.
| The exposure in October had been accom-
panied by an advertisement in the papers, call
ing upon swindled stockholders in the Mutual
Stock Operating Company to give their as
sistance to the law committee and their at
| torneys. Many responded and civil action was
| commenced in their behalf to dissolve the
company. Enough evidence had been accu-
mulated to bring the case before
the grand jury, and an indictment
was found against three officers of the
company for obtaining money under false pre-
lenses. Hence their arrest to-day. Coffe, who
| is said to have been the moving spirit of the
concern, is a son of a merchant of standing in
| the city. Defossa is said to be Frenchman
of noble family who the police say, fed the
country whom accused of serious Offense and
was convicted by contumacy. Wyant was
formerly merchant The prisoners will be
arraigned in court tomorrow.