The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1891-08-11
The Crooked Methods Of a Chicago
Building, Loan and Savings
Association
One Bona Eide Loan Made as a
Bait for Many Other
Investors.
Two of tho Managers Arrested, but the
Chief Of the Crooks Makes
His Escape.

loan Association of North America, were
arrested to-day by Postoffioe Inspector
Stuart, charged with using the mails for
fraudulent purposes. 1t is charged that
these mon, who have been conducting the
association, have swindled thousands of
people from every state in the Union. They
have taken in from 5000, 600 to $3.50, 600, Civ
ing nothing in return. The victims are
found in all classes OF people. From
facts already in the possession Of
the authorities the scheme will parallel
that Of the great "Fund' 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 be-
lieved they got away with most of the
funds. For more than six months letters
have been received from all parts of the
country by postottlce and city authorities,
protesting that the company was not what
it was represented to be, that it was collect
ing money and making no loans. Inspector
Stuart has been working on the case four
months. He found that the concern lad
agents in every state in the union,
who were selling the $50, 600 900 of stock the
company had for sale. These agents were
sent circulars and documents showing the
association to be gilt edged. When In
speetor Stuart took charge of the case
Lewis +. Mortimer, general manager and
secretary, was apparently tho responsible
man and handled the cash received In large
amounts every day. Stuart visited the
company's Office frequently, disguised as q
lottsr carrier, in order to secure evidence.
Several weeks ago Mortimer disappeared,
ana to-day, having waited in vain for his
return, Stuart decided to secure the other
visible members of the combination.
George o. Ferguson, Of Lincoln, Neb.,
representing about sixty victims in his city,
was summoned here. With his assistance
the necessary evidence was completed and
the arrests made. Three young lady clerks
were taken into custody as witnesses. Mr..
Ferguson, in an interview, said the asso-
oiation was represented in Lincoln by q
local firm acting in good faith. Nebraska
people are very much in favor of building
and loan associations, and offers of this
ooncern were snapped up quickly. 1t
sold shares for so cents each with monthly
payments for ninety-six months of $1l.O5.
At the end of that time the $1,000 loan
would be paid for. Then there was a
''membership'' fee of $50, eppraisement
fee of $40, $45 for three months payment
in advance, thus making $95. The concern
made one $500 loan that was genuine and
this was just enough bait to induce other 8
to invest, and hundreds sent money to
Chicago expecting on the strength of the
loans to make contracts for homes. Stores
were let and buildings begun. '"Fhe money
never came and we wrote to Chicago to
learn what was the trouble. Finally Prof.
Ellwood. of the Wesleyan university, who
investigate. Manager Mortimer seemed to
be such fine business man and gave such
assurances that the loan would be forth
coming that Elwood went back satisfied.
bat the money never came and finally
laid the case before the postofiice authori-
ties. Inspector Stuart and District Attor-
ney Gilohrist went over the concerns books
and found that seventeen legitimate loans
had been made in as many different states.
These, it would seem, were made to allure
other investors"
No records of any other loans could be
had been received from hundreds of people
in places where single loan was placed.
A rough estimate Of the amount received
is $4,000 in the year and a half the asso-
sociation has been in existence. The books
show that the association had agents in al
states, but the most active were i'll ON aha,
Denver, Dos Moines, Portland, Galveston,
Olympia, San Francisco and Minneapolis.
These agents transmitted hundreds of dol
lars daily in checks. drafts, money orders
and registered letters. Until within few
months, it is said, the concern did a heavy
authorities there made inquiries which re-
suited in the manager leaving.
When the association was organized, Feb.
81, 1890, the officers were: Alfred Downing,
president; N. b. Tollman, vice president;
Lewis +. Mortimer, general manager and
secretary. Mortimer seemed to be the lead
ing spirit in the enterprise. and at once in :
corporated the concern with capitol of
$20,00000O. Ho was good manager and
soon had money flowing In at rapid rate.
Everything went smoothly until the closing
of the Philadelphia branch, when Morti-
with his business associates. Fin
ally Fe ousted Downing, elect
ing one +. A. Wentworth president.
Downing threatened trouble and Mortimer,
saving his son was very ill i'll Philadelphia,
left suddenly and has not been heard of
since. 1t il said that he took about 500, COO
that the association had in bank here. leav-
ing about $4,000 which Downing had tied
up by an injunction. Mortimer was last
heard of July TO- in Now York city. Down
ing and Tolman both admitted that enor-
nous sums had been tal1.r in but asserted
alleged that they never received more
than small salary out of the affair.
Downing added, Mortimer got it all. We
started in what believed to be an honest
building and loan business. l believed
Mortimer to be an honest man, rs l had
known him in the insurance business a
number OF years previous"
Inspector Stuart said he was we'll salts
fied that both the president and vice presi-
dert are not so innocent as they pretend.
Both got badly bitten" said he, but both
were in the deal and knew nll about the
swindling going on. They did not get much
of the money, Mortimer getting the bulk
of 1t. and have not the least doubt that he
got away with S15000O. If ever there WAS
slick man it was Mortimer. have gone
to his office time and time again disguised
RS letter carrier, and have seen him sign
hundreds Of fat registered letters contain
ing large amounts of money, and he smiled
Bwsetly every time letter came in. He il
clever talker and smooth man generally,
and would convince almost anyone who
talkod with him five minutes that he was
tho squarest business man on EARTH"
Downing and Tollmau we're hold in 81, 900
bonds each by Commissioner Hoyno. Both
had lawyais on hand and Tollman WAS
quickly bailed out. Downing was unable
to secure bondsnen and spent the night in
the custody of deputy marshal. One OF
the attorneys for the men said there was no
doubt tho ooncern was rotten to the col 9,
but ho believed Downing and Tollmnn were
simply victims of Morimer's guile.
One of the peculiar features of the case il
the fact that the association was endorsed