The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-03-09
INSURANCE MEN INDICTED.
GRAND JURY FINDS AGAINST
MUTUAL RESERVE OFFICERS.

A0NN @AAA TO-
Larceny and Fargery-Rand Asks to
he Heard on Jerome's Presentment,
Frederick A. Burnham, president Of the
Mutual Reserve Life Insurance Company;
his brother, George Burnham, Jr,, and
George D. Eldridge, vice-president Of the
company, were indicted yesterday for
grand larceny and forgery. There are
five indictments against each.
They appeared before Judge o'sullivan
in General Sessions and each was held In
SIP, 500 bail, which was furnished by Richard
Deeves, a builder at $50 Broadway. The
Indictments were the result of an investiga-
ton that has been going on in the District
Attorneys office for several months.
The two Burnhams and Eldridge are
charged with having Incorporated the
funds Of the Mutual Reserve Fund Life
Association, which was the name Of the
Mutual Reserve in 1901. 1t Is charged that
they took the money to settle private claims,
and that false entries were made in the
books of the company under their direc-
ton to cover the outlay. The larceny in.
dictments charge the embezzlement of
$500 and 81. 500. The forgery indictments
set forth that entries we're ma de in the books
Of the company in order to cover these
thefts.
1t Is charged that on October "a, 1901,
81, 500 was paid to Nichols 4 Bacon, at
torneys for F. B. Armstrong. On the
books of the company it was represented
as a payment on a contract between ARM
strong and the company, when as a matter
of fact it was in settlement of a suit brought
by j. Douglas Wells against Frederick A.
Burnham individually.
One Of the forgery charges sets forth
that on October "a, 1901, 81 500 was paid
to James, Schell & Ekus, which was entered
on the company's books as payment for
legal services, when really the money was
to be turned over TO Wells to reimburse
him for the expenses incurred by him In
bringing suit a gainst Burnham n Eldridge.
1t is also alleged that $1,000 was paid to
James, Schell d Elkus, ostensibly on the
books for legal services. when it was handed
over to Baldwin & White, lawyers, who
represented j. Thompson Patterson. The
money was paid to the lawyers, according
to the indictment, in settlement OF a suit
brought by Patterson against F. A. Burn.
ham and Edridge. +,
Patterson was an assistant secretary OF
the Mutual Reserve company I'M Arm
strong was an agent and policyholder.
They and Wells left the company about the
same time. Soon after there appeared
certain statements in an insurance paper
charging the Burnhams and Eldridge with
Incorporating funds of the company.
Specific instances were cited where It
was alleged that the Burnhams and Edridge
had taken money of the company for their
own use. Suits were instituted by the
Burnhams and Eldridge against Patterson
and Armstrong. They brought counter
suits. In q short time Patterson was ar
rested for criminal libel, but before either
the civil OF the criminal actions came to
trial the suits were settled n there were
no proceedings against either Armstrong
or Patterson.
1t had been arranged that the Burnhams
and Eldridge should appear before Judge
O'Sullivan at $50, and they we're on hand.
represented by William Rand, Jr., who
was District Attorney Jerome's chief Of
staff up to the first of the year, Mr.. Jerome
was in court with Assistant District Attorney
Mott. Mr.. Jerome asked for SO, 1000 bail on
each indictment, but Mr.. Rand protested
that it was too high, and there was a little
byplay between them. Finally Judge
O'Sullivan ixed the bail at 81, 500 on each
indictment.
When the question Of bail had been dis
posed Of Mr.. Rand said that while IN court
he would like to know If Judge O'Sullivan
would hear argument from him on the
presentment of the Grand Jury concerning
political contributions by insurance COM
panies. Mr.. Jerome asked to be heard on
that proposition. He said:
Il think Mr.. Rand's statement is a per-
fectly correct one. Think this is a matter Of
the greatest Importance and the utmost
care. When it comes to a consideration Of
the authorities on the subject, it seems to,
me that light on the matter will be welcome
from any source.
"The inquiry does not concern alone the
life insurance companies, but it is broad
enough to take in every corporation, for It is
pretty we'll known that they all have been
contributing to the political parties.
Now. are these men felons or not? That
is the question before the court. / think
that the question should be discussed to the
fullest extent, but / think counsel should dis
close the parties whom they represent
For obvious reasons, Mr.. Rand said, he
could not name his client. He did not
persist In his motion for a hearing.
Judge O'Sullivan agreed with Mr.. Jerome.
He said that the doors shouldn't be thrown
wide open.
at seems to me" he said, shat the TN
usual proceeding proposed here would rather
tend to endanger the privacy and secrecy
of the inquiry. 1t might have the effect
of tainting the proceedings of the Grand
Jury from the very start"
That ended that part Of the discussion.
On the advice Of Mr.. Rand, the Burnhams
and Mr.. Eldridge refused to make any state.
ment about their indictment.