Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1881-07-13
INSURANCE FRAUDS.
A Decree Of Over 13OO.OO0 Against Con
GPhrinS Ohioera.

Decree Of Over 03OO,OOO Against Con.
sPtrinS Onioera
Philadelphia Press.
A decree has just been issued by Judge
Allison, OF common pleas court No l, in
favor of the assignees of the National fire
insurance company, against the late 0 fiji
GERS and several of the directors Of the
company, involving the sum of 1881 992.-
81. The decree in form is against John
e. Stein administrator of Simon J. Stein,
deceased WhildOn Halfman. Jacob
Huntzinger. Of POttsville, and Jacob II.
Eby, of Harrisburg. The aggregate
amount Of the decree against Stem. Half
man and Huntzin.er is S37S, 533 81, and
against Eby, $50, 1866. The suit was in
stituted against Stein, the late president
and treasurer. Halfman, the secretary,
and against Ely and Huntzinser as di-
rectors, for frauds perpetrated on the COM
pany while they were officers, and was
begun in the spring Of 1871, in common
pleas court No. l.
Organized in September, 1871, the Ma
tiOnal fire insurance company was granted
charter by the Legislature, and began
business with a nominal capital Of 5000,
900 with the right to increase it to 81 ,OOO,
600. Halfman obtained control of the
charter for the purpose of cffecting per-
sOnal advantages, which finally assumed
the form of i series of StupcndOus frauds,
and succeeded in perSua'liny Simon j.
Stein, Of Lebanon, to associate with him
in the scheme. Upon becoming an accom-
plicc Stein was offered the dual position of
president anu treasurer Of the company,
and the board Of directors was filed up
by IIalfman with men subservient to his
will. After q forma! organization of the
board Stein was elected president an.I
treasurer and Haltman secretary, and at
the succeeding meeting the first fraudulent
step was taken in i proposition to the di-
rectOrs by Stein and llalfman to purchase
all the stock Of the company. valued at
$2O0, 900. for one third of its par value, or
$66, GG6. .GG. Ben. SubServient to Half
man, the board voted tOaccept the prOpD-
sitiOn, and on the same day all Of the stock
WAS assigned to Stein and IIalfmau, and
they paid for it chiefly in notes. In order
to carry his scheme still further iIlfman
charged $40, 900 for. the charter, SD that
the company only received 556, 900 for its
$2OO, 900 worth Of stock. Some time after
this transaction Eby and lIuntZinger be-
came aware of the croohcdncss, and Eby,
being also vice president of the company,
demanded of Stein and lIalflnan that they
would divide the profits of their transac-
ton. This dcmand resulted i'm an amica-
ble partnership between the four cOnspir:s-
tors.
In order to do business in those states,
particularly in New York, where insur-
ance examiners were required to examine
companies assets, it became necessary
to increase the capital stock to $500, 900,
which was done at !. meeting held in Leb-
anon. On this occasion it was decided
that one share of stock should be given to
each director for every two shares that
might be sold by him. These frauds OH
the company and the motion to increase
the stock were concealed from the stock
holders, and no mention was male Of them
in the minutes of tho meeting. Only
SlO0, 900 of the proposed increase Of $780,
600 was actually issued, the directors be-
ing unable to sell more. Tho company
was wonderfully successful in getting bus
mess, and in a short time had outstanding
$50, 900 900 of risks. 1t lost heavily, how
ever, by the Chicago, Boston and Oshkosh
fires, and was very much embarrassed in
consequence. Strenuous efforts made by
the officers to save the institution We're un-
successful, and OH March 16, 1876, it made
IN assignment for the benefit of its crcdi-
tors.