The times., 1901-03-25
AN ARMY COAT SWINDLB
Philadelphians Accused of Stealing
From the Government.
Two Contractors Placed Under Ar
rest by Secret Service Operative
-PecuIatfons said to Have Aggre-
gated SIOO.OOO-A Unique scheme.

PHILADELPHIA, March 24.-After an
investigation lasting over several months
the Secret Service officials yesterday
placed in custody two men, whom they
charge with being the principals in one
of the most extensive swindling schemes
that has ever been unearthed- It was
only after every other agency failed that
the services Of the Secret Service opera
tives were invoked. The men were placed
In custody late yesterday afternoon by
Secret Service Operative Matthew +.
Griffin. The prisoners are Louis Cold
stein and Zudick Levy. of 1884 Washing
ton Avenue The building is sweat
shop, and is conducted by the prisoners.
who are employed by the Government as
contractors.
At a preliminary hearing before United
States Commissioner Craig, in the post
office building, the defendants were held
in $500 bail for a further hearing on
Tuesday afternoon next. A. 5. l.. Shields.
who represented the prisoners, succeeded
in having them released on bail. The
warrant for the contractors arrest was
issued by United States Commissioner
Bell charging them with entering into
conspiracy TO rob the United States Gov
ernment Commissioner Bell will conduct
the final hearing in the case.
Assistant United States District Attor-
ney Thompson. who represented the Gov
ernment at the hearing, yesterday init
mated that other arrests would probably
follow. Goldstein and Levy. he said. were
furnished with work from the Schuyikill
Arsenal and that institution will suffer
the loss their alleged peculaton Is said to
have caused. The men have been en-
ployed by the Government for a long
Fft,rr
tions are said TO cover a period of two
years During the Spanish American war
they were furnished with considerable
work, from which. it is said, they made d
phenomenal profit.
Secret Service Operative Griffin, who
made thorough investigation of the mat
ter. saws that the method utilized by the
accused men was decidedly novel, a fact
which shielded them for so long a time,
Upon receiving the army coats, wh1ch
were already cut out, the contractors are
alleged to have substituted inferior Innings
and facings, appropriating the goods fur-
nished by the Government Tor thelr own
use The material withheld consisted OF
Innings and silk facingS and q large GUAM
tity of canvas used in finishing the coats.
The material thus retained is said to
have been placed in large rag bagt lllled
with discarded clippings of cloth Every
Monday morning rag peddler is said
to have called at the establishment end
carried off the bags to warehouse,
where the sweatshop proprietors are al
legged TO have called and obtained posses
sion of the Government property which
they are accused of purloinlng. The goods.
ii is averred were sold to various pur-
chasers, who it was subsequently
certained, were innocently constituted as
middlemen in the transaction.
The case heard yesterday is but an echo
of a similar one which was first called 10
the attention of the Government several
months ago. At that time a contractor
named Samuel WeinsIein was arrested
and subsequently indicted, charged with
appropriating Government property 10 his
own use. His case will he tried at the
present term of the United States Court.
The fun magnitude of the case was not
discerned until the Secret Service officials
took the matter in hand. Three rag deal
ers who were arrested with Weinst-in
were discharged. as the evidence did not
connect them with the thefts.
The accused contractors are said 10 have
received on an average OF 80 600 unfuish-
cd coats on single assignment. The price
paid for finishing each garment was S.
cents Operative Griffin. who made au eN-
haustive enquiry into the alleged thefts.
estimates that the loss sustained by the
Government will amount To nearly 100000