Rock Island daily Argus. (Rock Island, Ill.) 1886-1893, 1891-08-11
FRAUD SQUELCHED.
A Pretty Scheme for Swindling
Broken Up.
THOUSANDS OF PEOPLE MULCTED,


drel Gets Away with the Bulk of the
Boodle-A Loan Association That Made
Precious Few Loans, but Pocketed
Much Wealth-Pian of Operations.
CHICAGO, Aug 11.-Alfred Downing, n.
H. Taliman, and three young women
clerks-occupants of the office of the "Na-
tional Capital Savings Building and Loan
Association of North America" room S.
Rookery building-were arrested yester-
day by United States Marshals Hitchcock,
Allen, and Charles and the entire epistol-
airy contents of the place taken to the office
of United States District Attorney Mil
christ. Downing and Tallmen were taken
before United States Commissioner Hoyne,
charged with using the United States
mails for fraudulent purposes, and placed
under $1,000 bonds for hearing Thursday,
Aug. 20. The three clerks, Misses Down
ing, Bartholomew, and Wadley, were no
titled that they were wanted as witnesses
at the hearing.
Charged With Wholesale Fraud.
1t is charged that the men who have
been conducting this association have
swindled thousands of people from every
state in the union, taken in from 5000. 600
TO 49,, 000 and given not one penny in re-
turn. There are still two men at liberty,
they having disappeared several weeks ago.
These two men, it is believed, got away
with most of the funds. The strangest
part of the whole gigantic swindle seems
TO be that it was Endorsed by the leading
commercial agencies of the land The
conductors of the nefarious enterprise did
not stop at forgery either, as among the
papers found in the Office is a paper
signed by the auditor of public accounts
of Chicago" TO the effect that the concern
was substantial one and did good bus
mess. There is no such officer in Chi
cago
Discovered Gigantic Swindle.
For six months and more letters have
been received from all parts OF the coun-
try protesting that the National Capital
Savings Building and Loan association of
North America" was not what its proprie
tors represented it TO be, and that il was
collecting money and making no loans. In
spector Stuart took charge of the matter
about four months ago, and has worked
ever since to make case against the OIL
GERS OF the association. He found that the
concern was gigantic in its reach. and
had agents in every state in the Union
who Were selling the SD, coo, 900 of stock
the company was issuing. At the time
Captain Stuart took hold of the case the
head man Of The institution was Louis I.
Mortimer, the general manager and sec
Rotary. He seemed to be the responsible
man and handled all the cash.
Rich Harvest at Lincoln.
Several weeks ago Mortimer and his
father disappeared and neither have since
been heard from. \ short time ago Cap
tain Stuart sent Inspector Gardner TO
Lincoln, Neh., where the harvest seemed
to be the richest. Here Mr.. Gardner found
George o. Ferguson, who represented
about sixty people that had been swindled.
Mr.. Ferguson came TO Chicago with In
spector Gardner and the result was the
captures made yesterday. After the ar
rests We're made Mr.. Ferguson explains
the modus operandi of the gang that had
been fleeing the citizens of his town.
They were represented in our town ~
Chase Bros" said Mr.. Ferguson, "who
acted in good faith The people of Ne
braska are very much in favor of tne
building and loan association plan, and
the offers of this concern were snapped UP
quickly.
How the Scheme Was Worked
1T sold shares for so cents each, with
payment of sll05 each month for ninety
six months, at the end of which time a
81, 900 loan would be paid for. Then there
was membership fee of $50, an appraise-
ment fee of $50, and SIS for three months
payment in advance. thus making sos.
The concern made one $500 loan that was
genuine, and this was just enough bait
to lead others to invest. Hundreds sent
hair 70 h.
strength of the loan they expected to
make, contracts for homes and stores were
let and building begun, but the money
never came"
A Bonanza for the Managers
Inspector Stuart and District Attorney
Milchrist went over the associations
books and found seventeen loans had been
made in as many states. A rough esti-
mate of the amount of money the associa-
ton received is S1T5,0U0 in the yeartand
half the association has been in existence.
The books of the association show that it
had agents in all the states, but the most
active were in Omaha, Denver, Des
Moines, Portland, Galveston, Olympia,
San Francisco and Minneapolis. Up to
within several months ago the association
did big business in Philadelphia where,
however. the authorities got after the
manager and drove him away.
Mortimer Was a Smooth Man.
President Downing and Vice President
Tallman admitted after their arrest
that enormous sums had been taken in,
but they said that they had never been
ain it." I'VE took in something over
$50, 900 that ! know Of" said President
Downing, "but never got more than a
poor salary out of it, and Tallman didn't
get as much as did,
''They got badly bitten both of them"
said Inspector Stuart, "but they were in the
deal aud knew all about what was going
| on. Mortimer got the bulk of the money,
| and haven't the least doubt that he got
| away with $4,000. Mortimer is clever
| talker and smooth man generally"
Endorsed by Bradstreet and Dun.
One of the peculiar features of the case
is the Endorsement of the scheme by the
Bradstreet and Dun agencies. The officers of
| both agencies examined the association
end it. affairs, but the evidences of pros
Derity ,vere 81 great that the agents made