Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-08-06
EXCLUDEDfR0lAMA|LS
Fraud Order Against CO.
Operative Turf Association.
GRIP ON RECEIPTS
NEGLECTED TO RETURN MONEY
TO INVESTORS.
Complaints Of Those Who Lost-Evi-
dence Presented to the Post
Office Department.
GRIP ON RECEIP rs


for fraudulent purposes when he issued a
fraud order against the Cooperative Turf
Association of New Orleans. This is re-
garGed as one of the most fragrant of q
number of cases that haYe been brought to
the attention of the Post Office Department
within the past few weeks.
The fraud order against the Cooperative
company was based on evidence which
tended to show that the company, by extern
sive advertising through the malls, solicited
and received money to be bet on horse
races, receiving as it's remuneration 20 per
cent Of the winnings.
Fraudulently Diverted.
It was found by the evidence that some
of the money was not used in accordance
with the representations of the company
by wagering 1t on horse races, but was
fraudulently diverted from such channels
to the use of the company.
1t was further found that the 20 per cent
commission which the company obtained on
the winnings was money obtained liader
false and fraudulent pretenses, In that the
investor was induced to place his money
with the company because of fraudulent
representations, pretenses or promises made
by the company.
The Cooperative Turf Association, ac-
cording to the evidence, made false and
fraudulent representations, and Ia said to
have at the present time not less than
5000, 600, received from unsophisticated per-
sons throughout the United States who be-
lieved they were dealing with company
that would do as 1t agreed.
1t was shown by the evidence that In the
latter part of January the company sent
out letters to It's investors, in which it was
stated that the daily notifications would
be discontinued and statements would be
made weekly.
mid Of EHohr nv
sent out a circular letter to It's patrons
urging them to invest more money, and
assuring them that the ots.laok for large
profits was bright.
Investors Failed to Get Their Money.
Between February 10 andg4 many orders
were sent to the company by patrons. stat
ing that they wished to Withdraw their
money and have 1t sent to Them by the
company at once The compShy. according
to the evidence, adopted various means Of
delaying the return Of the moffeFs1the most
common of which was to sendsa letter ask
ing the applicant to still leave the money
with the company for investment.
If the investor still demanded his money,
an application blank, ambiguously wordeo,
was sent for him to fill out. When the ap-
plication blank was received the company
sent a notification to the person that all OF
his money had been betted on the races and
was lost.
Letters received from the company by
twelve or fifteen complainants fully sub
stantiated these facts and showed that the
company after receiving nouficat tons for
withdra wal, either used the money demand
ed for betting purposes or diverted 1t to
some other end, contrary to the representa-
tionS and promises made by tie company.
The Post Office Department. after a thor
ough consideration Of all the evidence, came
to the conclusion that the money thus al
legged to have been lost. on the races was
diverted by the company to Its own use.
The Company's Announcement.
The company In it's advertising literature
sent out a table headed: IAN. Incompatible
record Of profits made and paid on each and
every 500 in operation by our sure and
safe system" This table showed the
amount of profits paid by the company
ranging from So to $40 every week from
December l to July 13, with the exception
of two weeks, namely the week ending
February H. and the week ending February
q. The operations of the company for
those two weeks, according to the evidence,
were purposely omitted.
If they had been included in the list 1t
would have shown apparently that the
company lost every dollar that had been
invested with it. These were the weeks
in which the Arnold and Ryan Companies
failures were recorded in the prints and
caused such excitement in the country.
By this Intentional omission of very
material fact the Cooperative Turf Asso-
citation. according to the opinion Of Assist
ant Attorney General Robb. falsely and
fraudulently induced people to invest their
money in the belief that the company had
paid tremendous profits and never expe-
rienced a loss.
any time he might write to the company
that he desired his money to be remitted
to him and the company would at once
send 1T to him. The letters of the COM
MIA ante @ oil V1r = H.
did not intend that the money should be
returned as requested
Falsehoods in Advertisements.
1t was further stated by the company
that It paid dollar for dollar to every in
vestor who wished to withdraw at the time
Of the Arnold and Ryan failures'' The
letters of the complainants showed to the
entire satisfaction of the assistant attorney
general that TINS was a false and fraudu-
lent statement.
Among the statements made by the COM
pany in it's literature was the following:
The books of the association and it's af-
fairs were riAidly investigated by INSPECTOR
Hamilton of the Post Once Dapa rtmenf
who said that there was n0thing Illegal in
our advertisements or our naet haas''
The books of the company were investi-
gated by Inspector Hamilton; bat evidence
shows that he never made the statement
attributed to him, nor anyfotherastatement
giving countenance or sancfien to the busi-
ness methods of the company.
The literature of the company also con-
tanned this delightful bit: ssYour money is
as safe In our hands as in any savings
bank" The company's own statement of
its profits and losses shoNeq that within
week it lost every dollar that was invested
with it. or diverted it to some other end.
establishing the falsity of this assertion.
The Departments Intention.
The Post Office Departments is determined
to weed out all companies OF a similar ma
ture that feed on thoughtless investors The
department wishes to impress on all per.
sons the importance of weighing carefully
every scheme of the kind that is advertised
The mere fact that the department has
not found evidence to warrsnt the issuance
of a so-called fraud orderf should not be
taken as conclusive that chmpany has the
right to use the mails for false and fraud
ulent purposes. 1t should not be considered
as conclusive evidence of The legality and
legitimacy of the scheme offered. The Post
Ofice Department is doing everything with
in its power to stop the work Of these
schemers. and 1t Is anxious that the public
business.