New-York tribune., 1893-10-29

CHANGE FIRM-INGENIOUS METHODS
BY WHICH THE MONEY WAS
TAKEN-STEALlNGs PUT IN
TO PROFITABLE STOCK
OPERATIONS.
The sequel of the discharge last September of
BENJAMIN G. Sanford. correspondence clerk OF
the Continental National Bank and the sud
den dissolution of Harris & Co. firm on the
Consolidated Stock and Petroleum Exchange
Immediately afterward. came TO hght yester-
day. 1t is another story Of a downfall through
stock speculatons, of misplaced trust In an eN-
perienced bank clerk and Of a possible loss 10
the bank of more than $4,000. 1t uhcoVers d
system of forgery and fictitious documents
which might well delude the most careful OF
bank officers. and it may teach a lesson OF
the wisdom of a more careful observance oi
comfy between financial institutions.
Sanford is under arrest, and the hrm oi Har-
ris g. Co. has been placed in the hands oi re-
ceivers Suit for the recovery OF the los.
money has been begun py the Contlheh'ai
Bank and as the concern which beneilted pE
Sanford's rascality was fortunate enough 10
make money out Of its stock operations 'heie
is a possibility that the bank may recover
part or all the money stolen from It,
MYSTERY SOLVED.
When Harris G. Co. announced l's uSsoi"-
tion on September % no adequate eXpiahatio"
of the step was given. Brokers on the O""
soudated exchange were at sea in their guesses
as to the real reason, and gosslps nave pee"
curious on the subject ever since. Yesterday
tho ooseins discovered some facts which eX-
n,ajned the mystery, and investigation OF the
racords competed the story. The firm of
Harris & Co. which had offices in the Con-
so,,dated Exchange building. was organized
ohout a wear ago The partners were Percy
M Harris BENJAMIN G.. Sanford and Alfred
n Sanford his father. The firm gradually
became noted as one Of the most active In
the Exchange and its operations last sum-
rler won for Harris the reputation OF belns
an extremely successful 'plunger In STOCKS
He never lacked for money with when 10
increase margins when they were called lor
through the Clearing House of the EXchahse'
and il was the general impression mat some
prominent Stock Exchange operator was really
hack of his deals" The complete closing
out of all outstanding contracts OF Harris
Co.. and the announcement of the dissolution
ON September 23 could not be understood. The
fact that B. G. Sanford, one of the partners had
lost his place at the Continental Bank by specu-
lating contrary to the bylaws of the bank, was
not regarded as an adequate explahation- 1t
now appears that the Continental Bank was
q contributor to the capital commanded by
Harris & Co.. unknown to and unsupported by
its officers The discharge Of Sanford on Sep
tember 90 the day before the dissolution ol
the firm, cut off this source of supply
The records in the case show a most in
genous and elaborate system, by which san
ford was able to swinde the Continental Ma
tional Bank which has offices at No. Nassau
ST. His frauds were cloaked by apparently
correct letters. vouchers. entries, etc, as 10
he indistinguishabe at the time from correct
transactions, and also concealed after
ward by means of forged accounts and re-
ports, SO as to be impossible Of detection subse-
quentIy. Persons familiar with banking meth
DDS know that Sanford as correspondence
clerk Of the bank, had especial charge Of
attending to orders for remittance or transfer
Of credits received from out-of-town banks that
were correspondents Of the Continental His
general system of fraud was conducted IN TINS
way:
HIS INGENIOUS SCHEME.
When in need Of $4,000 or $4,000 to carry
on his stock specuatons, Sanford would
present TO the cashier of the bank an ORDER
purportng to come from out-oftOwn cor
respondent bank, directing the Continental to
place with the Mechanics National Bank,
at No. 80 Wall-st., sum for that amount
TO the credit of some person in
distant city. The order, Of course. was
form of telegram. sometimes as a letter, and
sometimes as a postscript TO a letter. The
cashier of the Continental would hand San
ford a check drawn to the order Of the
Mechanics National Bank according to the
supposed Instructions Of the correspondent
bank. 1t was sanford's duty to see that the
check deposited in the Mechanics Bank,
but when he maze the deposit he would instruct
that bank TO credit il TO Harris & Co The
Mechanics National Bank would deliver to
Sanford letter of advice to the Continental,
announcing that II had placed the check to
the credit Of Harris d Co Sanford would then
alter the name TO correspond to the name he
had used in the fictitious order from the country
bank on which he had secured his cashiers
check The routine Of proceedings then re-
Qured this letter of advice TO be pinned to a
letter, announcing TO the country bank that
the transfer of funds had been made di-
rected. Sanford however would intercept these
documents before hey got in the mail-bOX and
would destroy them. The country correspondent
would thus be kept in ignorance Of the tam
pering with its name, and explanations and
investigations would be warded off.
but this uu not complete tle iorsefles that IL
was necessary for Sanford to commit to
ceal his frauds. In the ordinary course OF
business the country bank would be debited on
the books Of the Continental with the transfer
Of funds made on It's supposed order. That
debit would appear on the account current"
prepared each month 10 be sent to the cor
respondent bank. and If the statement should
reach the bank the fraud would be discovered.
Sanford careful TO secure the statement
and destroy it. after preparing another state
ment from which the fraudulent debit item
would be omitted, and transmitting IL to the
country bank The out-of- town bank would
thus receive a statement of its true credit
balance at the Continental. but the books Of the
Continental would carry against the cor
respondent the false entry, made when Sanford
had secured his cashiers check on the fictitious
order for the transfer BY this complete method
of fictitious orders, altered letters Of advice
from the Mechanics National Bank. the false
entries secured the books of the Continental
Bank by the spurious documents. and intercept
ton and suppression Of statements which would
have revealed the game he was playing. the
correspondence clerk able to conceal his
stealings and set at Taught the safeguards of
the Contnentals ofiicSs.
AMOUNT OF:TIIE FRAUDS.
Sanford genefally selected name for the
dummy firm, which he used in the fictitious
orders of transfer Of credits, which he could
easily substitute for Harris e. Co. when he
had obtained the acknowledgment from the