, 1891-08-11
A GIGANTIC SWINDLE.
Sudden Collapse of a Building
and Loan Association.
President and Vice President of
the Concern Arrested.
Lots of Money Taken In, but
Little Paid Out.

America, were arrested today bv Post
office Inspector Stuart, charged with using
the mails for fraudulent purposes. 1t is
charged that the men who have been con-
Quoting the association have swindled
thousands OF people from every state 10
the union; have taken in from 5000. 900
to S350,000, giving nothing in return.
Victims are found in all classes of people.
From facts already IN the possession Of
the authorities the scheme will parcllel
that OF the great fund W." swindle
which was broken up about five years ago.
There are still two men at liberty, they
having disappeared several weeks ago,
and it is believed they got away with most
of the FUNDS.
TO more than SIX months letters have
been received from all parts of the coun-
try by the postofice and city authorities
protesting that the company was not
What II was represented to be; that it
was collecting money and making no
loans. Inspector Stuart has been work
ing on the case for four months and he
found that the concern had agents in
every state in the Union, who were selling
the $40, DOC, 900 OF stock the company
had for sale. These agents were sent cir
culars and documents showing the asso-
cation to be gilt edged. When ~Insrec.
tor Stuart took charge of the case Lewis
+. Mortimer, general manager and secre-
tary. was apparently the responsible man
and handled the cash received in large
amount every day. Stuart visited the
company's Office frequently, disguised as
letter carrier, in order to secure evidence.
Several weeks ago Mortimer disappeared,
and TODAY, having waited in vain for his
return, Stuart decided to secure the other
visible members of the combination.
George y. Ferguson. of Lincoln, Neb.,
representing about sixty victims in his
city, was summoned here. With his as
sistance the necessary evidence was com
pleted and the arrests made. Three young
lady clerks were taken into custody as
witnesses. Mr.. Ferguson, in an inter
view. said:
THE association was represented 10
Lincoln by a local firm acting in good
faith. Nebraska people are very much
in favor of building and loan associations,
and the offers of this firm we're snapped
up quickly. 1t sold shares for fifty cents
each, with a monthly payment for ninety
SIX months Of $ll.05, at the end of which
time the 81 900 loan would be paid for.
Then there was a membership fee OF $50;
appraisemcnt feet $40; S45 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 induce
others to invest, and hundreds sent money
to Chicago expecting, on the strength of
the loans, to make contracts for homes.
Stores we're let and building began. The
money never came and we wrote to
Chicago to learn what was the trouble.
Finally Prof. EllwoOd of the Wesleyan
university. who was a heavy investor,
came to Chicago to investigate. Manager
Mortimer seemed to be such a fine bust
ness man and gave such assurances that
the loans would be forthcoming, that
Ellwood went back satisfied. But the
money never came and finally we laid the
case before the postofices authorities.
inspector Stuart and District Attorney
Gilchrist went over the concerns books
and found that seventeen legitimate loans
had been made in as manydifferent states.
These. it would seem, were made to allure
other Investors. No records OF any Other
loans could be found, although tho books
show that money had been received from
hundreds of people in places where a single
loan had been placed. A rough estimate
of the amount received is Sl75, 900 in the
Fl year and a half the association has been
in existence. The books show that the
association had agents in all states, but
the most active were in Omaha, Denver,
Des Moines Portland, Ore, Galveston,
Olympia, San Francisco and Minneapolis.
These agents transmitted hundreds got
dollars daily in checks, drafts. money or
ders and registered letters. Until within
a few months, it is said. the concern did a
a heavy business in Philadelphia, but it
appears that the authorities there
made inquiries which resulted in the
manager leaving.
when the association organized, Feb.
81. 1890, the officers were: Alfred Down
ing, president: N. b. Tollman, vice pres.
ident; Lewis +. Mortimer, general mana
ger aud secretary. Mortimer seemed to
be the leading spirit in the enterprise, and
at once Incorporated the concern with a
capital OF $50, 900, 900. He was a good
manager, ana soon had money flowing in
at a rapid rate. Everything went smooth
" until the closing of the Philadelphia
branch, when Mortimer came back here
ana began rambling with his business as
soclates. Finally he ousted Downing,
electing one F. A. Wentworth president
Downing threatened trouble, and Morti-
mer, saying his son was very Ill in Phila-
delphla, left suddenly and has not been
seen since, 1t is said that he took about
$50. 600 that the association had IN oank
here, leaving about $1,000 which Down
ing had tied up by injunction. Mortimer
was last heard of July 10 In New York
city. Downing and Tollman both admit
ted that enormous sums had been taken
in, but asserted that they were not in it.
Both alleged that they had never re-
ceived more than a small salary out of
the affair.
Downing added: Mortimer got it all.
We started in on what | believed to be
an honest building and loan business. /
believed Mortimer to be an honest man,
as | had known him in the insurance
business a number OF years previous"
Downing. who came here from Peoria,
refused TO talk further about the work of
the association. He is a 5rather poorly
dressed mar. and does not look as though
he bad been sharing enormous profits.
Vice President Tollman, on the
contrary, looks extremely prosperous.
although asserting that he made nothing
IRON he association. He says he is an
artist, and Mortimer, who was his friend.
asked permission to use his name as an
incorporation. He consented, receiving no
money. He added that several weeks ago
he and Downing decided to send out
circulars to the stockholders to "see if
some settlement could be reached" They
were discussing these negotiations when
arrested. Tollman admitted that since
the association formation he knew of
$Sl. GOO having been received.