New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-12-08
Wholesalers IN FRAUDS.
HELP FIRE SWINDLES.
Indictments Soon To BE Found
against Members of a Big Firm.

AS result of confession made by men
implicated in recent fire insurance frauds
indictments are soon TO be found against mem
bers of a prominent wholesale firm in this city.
and these probably viii be followed by indict
ments against other wholesale and nanufact-
uring concerns which have aided the swindlers
in robhing insurance companies. These firms
have made themselves liable to big fines by
aiding in the preparation Of fraudulent proofs
Of loss by fire, although it is not known that
they prohted in any manner by the frauds. 1t
is a crime under the law 10 aid in the prepara-
ton OF fraudulent proof OF loss, even if there
is no direct gain in the transaction.
1T is amazing" said an official thoroughly
conversant with the facts TO a Tribune reporter
yesterday, that firms in good standing before
the business community, firms that are doing a
large wholesale business would implicate them
selves in such frauds upon the insurance com
Panies. We have proof however, that several
such firms have so implicated themselves, and
District Attorney jerome has decided to make
examples Of them
Take one instance in which the proof is clear.
A small East Side dealers store was burned
out completely, leaving nothing by which the
extent of his loss could be determined except
insurance policies for about four times the
value or the stuff he had in his store. In collu-
sion with a fire insurance adjuster he went TO
a large manufacturing firm. from which he had
bought some Of his supplies, and asked aid in
establishing proof of loss A member of that
firm took him to a member of another firm,
whose standing has been considered good in the
business world and said the little dealer had
lost everything. and wanted certified copies of
ILLS Of sale for the goods he had bought before
the fire, the original bills having been burned.
The result was that the little dealer obtained
from both firms alleged certified copies of bills
for goods he had bought just before the fire.
but the bills were for amounts grossly in excess
Of the true amounts.
when investigation brought the fraud home
10 the little dealer he became frightened and
confessed. duplicating the members OF the two
big firms, who apparently had connived with
him out Of sympathy. When the attention of
the District Attorney called to the facts
he declared that he would permit the little
fellow turn States evidence and punish the
big fellows. because their conviction would go
further in stopping the frauds"
ADJUSTERS TAKE LIONS SHARE.
1t has come 10 light in the investigation that
some Of the fire insurance adjusters who are
responsible for frauds have obtained much more
money from the policy holders than from the in
surance companies By pretending to want
money with which to bride agents of insurance
companies TO pay claims, the adjusters have
bed some Of their victims severely. and then
have frightened them into assigning their
claims by PRETENDING that the companies have
discovered frauds. In many cases these insur-
ance harpies have absorbed the entire rightfu
claims of poor people who We're insured and
have extorted round sums in backmal in ad-
dition.
The sentencing of Max Kornfeld, who was re-
Gently convicted of presenting false claim of loss
for insurance which was set down for yesterday
morning before Recorder Golf. was adjourned
until Friday morning. II has been announced
that Kornfeld will present affidavit accusing
several fire adjusters and one or more officials
Of about four thousand fraudulent fire adjust
ments in the six years in which he has been a
public adjuster. Assistant District Attorney
Garvan said that the affidavit would not be sub
mitted until sentence was pronounced.
Mr. Garvan made public. however. the general
plan followed by several insurance adjusters and
others in committing the frauds He is now
prepared to proceed against twelve persons
These include three lawyers. besides insurance
adjusters and merchants.
The first man 10 make a confession was Jo-
seph Schnapman. who had fire at No 4 Bond
ST. over year ago and made claim for Sl6,-
600. Schnapman retained Darius ". Ettinger
public adjuster and at his suggestion put in a
proof Of loss Of 5000 for goods destroyed .'out
Of sight the technical expression for being
totally destroyed. In his confession he swore
that Ettinger instructed him TO get false bills
recepted. showing that large amounts OF goods
had been actually delivered 70 him He was
also instructed TO alter his books to show the
receipt Of the goods Schnapman says he gave
Ettnger $50 to give TO the fire patrolman on
duty at the fire Ito give the goods bath" He
also said he gave Ettinger $3.50 to be used to
smear the insurance adjuster." Schnapman
pleaded guilty to an Indictment and is now out
on $1,000 bail to await sentence.
NOW TO PUNISH THE WHOLESALERS.
Ettinger was indicted partly on the evidence Of
Schnapman and partly other evidence. He
is now held on large bail, the charge being Pre-
senting false bills Of losses"
so far the merchants who have supplied
these false bills Of goods have gone unpublished
and unprosecutec, but they have been used as
witnesses against the assured who was ac-
cused,' Mr. GarVan said. In the future We
shall prosecute them and will not accent them as
witnesses. Another thing we have discovered
was that the destruction of property was hx,
fire patrolman alone. in many cases the as
sured, the adjuster and the fire patrolman stood
in together.
John Fedelcky Of No LAB Ffrst-ave had
fire on February s. 1901. Through KornfeId,
as adjuster, the company paid S31O of y-bicb
kornfeld got Sl60 and Fedecky $50 Soma
other cases in which Kornfeld was interested
and IN which VIII withhold the names nefted
me loIio"ng sums; Kornfeld obtained $3.50
from the company Of which the assured Iot
only 500; SIS collected Of which SI5O went 10
the assured; 500 collected, Sl25 TO the assured
$500 collected. $500 to the assured: $3.50 collect
ed. $50 10 the assured; $500 collected $500 TO
the assured.