Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1906-11-19
I4ROMEOylNSURANCEFRAUD
f''r.Ct lttorney Reports to Governor O.
Mutual Life irregularities.
cHly TWO CRIMINAL CHARGES FOUND
Numerous Instances OF Graft and
Breach ot Trnst cited that
Keep Darrell, Within the
Law.

NEW YORK, Nov. iS-District Attorney
Jerome tonight made public the first report
prepared BY him upon request OF Governor
Higgins and concerning the conduct OF the
business NJ life insurance In this state
The report Is a document OF some 1900
words ana is addressed to the governor. to
whom a copy was mailed today II deals
with the affairs Of the Mutual Life Insur-
ance company. In a later report the district
attorney says that he will consider the
business methods OF the New York Life
Insurance company.
Epitomiscd che conclusion OF the district
attorney. based on an exhaustive iuvestigs-
ton of the facts and the legal rulnts In
volved. are that there is no state law under
which insurance offcials can be proceeded
against criminally for acts now or formerly
ia common practice, some OF which we're
made public during the recent legislative
inquiry, except in the cases OF two officers
of the Mutual Life, against whom specific
charges OF forgery and larceny have been
hled
Mr.. Jerome points out that while it Is in the
power OF the insurance commissioner Of
New York TO obtain a law covering the
alleged evils Of Insurance the cases under
discussion do not come within the pro-
visions Of any statute now extant
Incidents that Suggest Crime.
The district attorney sets forth that his
invsstiga alton disclosed two classes Of tram
sactions: The first, matters partly de-
velopod by the Armstrong committee to the
extent Of gravely suggesting the commits
zion OF crimes; the second, actions winch In
the light of the committees investigation,
were commonly thought to involve the COM
mission Of crimes and had many moral ele-
f,t
criminal Oftenses.
Mr.. Jerome says that he conceived il TO
be his duty to determine whether the sus-
picions falling under the first head we're
we'll founded and could be proven by legal
evidence, and regards the second class to
examine the law bearing on the facts dis
covered and to seek out any supplementary
evidences which might bring the transae-
lions disclosed within the criminal law.
At this point Mr. Jerome says:
The law does not impose any general
duties OF a visitorlal Character upon nls-
trtot attorneys IN reference 70 any class
of Corporations. The insurance law clearly
devoYes these duties upon the supern'
tonoent OF Insurance IN respect to insurance
companies.
The report gives the result Of Mr.. jerome 8
probing into the anairs Of the Mutual Life
and his conclusions under several heads.
Under the head "Exorbitant Salaries" Mr..
Jerome said that "the inference is strong
that the salary paid to the president of the
Mutual Life Insurance company prior TO
the recent fixing of It at $4,000 per annum
was grossly exorbitaut for the services
rendered and constituted q distinct abuse
on the part Of the committee on salaries
of tho power committed to it. But assum-
ing the ctnduct Of the commit. ee oAsllariei
to have been gross breach Of trust. there
IL no statute of the state which makes
their acts in this case criminal"
Nepotism and Legal Expenses.
Under the head "Nepotlsm" the report
says: -'r7
In Observation-Disclosures before the Joint com
mittee 1t appeal ed that certain relatives o.
the president Of the company were covered
to such degree that IL mas been suggested
that crime was involved. AS In the cas-
OF salaries, so In this case.
Concerning the transactions of the Mu
tual Life with Raymond & Co, It's genera
agents in New York. Mr.. Jerome concludes
after careful scrutiny, that the crimes o
larceny and conspiracy were not commit
ted. Under the head "Nepotism' as undo
the former head, "Exorbitant Salaries" h
criticises the superintendent Of Insurance.
charging him with neglect Of duty.
The companys legal expenses come mex
in the report and are dealt with at con
siderable length. The transaction in whic
Walter r. Gillette, first vice president Q
the company; the Morristown Trust com
pany OF New Jersey, the Mutual Life
committee on expenditures, l.. w. Law
renee and Andrew c. Fields were involve
i, are gone into in detail
District Attorney Jerome explains tina