New-York tribune., 1907-12-03
FACES PERJURY TRIAL
HEGEM4N INDICTMENTS.
Seuen for Forgery in Third Degree
Dismissed By Court.

The seven indictments for forgery in the third
degree which were returned against John r
Fegeman, president of the Metropolitan Life In
surance Company last May. were quashed yes
terday by Justice Bowling In the Criminal
Branch of the Supreme Court. The three indict-
ments for perjury which grew out of false state
mants Mr.. Hegernan is alleged to have made TO
the State Banking Department were sustained
The motion to dismiss the indictments was
argued before the justice by Morgan J. O'Brien.
. John C. Milburn and Delaney Nicoll. counsel
for the life insurance president Unless an ap-
peal from Justice Dowling's decision. which it
is said will be made, Is successful Mr. Hege.nan
will have TO stand trial for perjury.
The exact nature OF the testimony that re-
suited in all ten indictments was brought out in
the opinion that Justice Bowling handed down
Yesterday In the Hughes Armstrong irvestiga-
ton Mr. Hegeman testified that the Metropoli-
tan was accustomed at the end ofeach year,
just before making its report to the State Insur-
ance Department, to sell all its collateral loans
to its officers. friends and to Vermilye & Co,
thus removing them from the books. The first
business day of each year these loans
purchased Mr. Hegeman explained that If the
company did not follow this plan Wall Street
bankers would bother him by calling up on the
telephone and trying ito borrow a million or
two"
The indictments for forgery returned be-
cause certain Of these transactions We're not In
dicated in certain books Of the company. In the
annual reports to the State Superintendent OF
Insurance for the years 1902. 1903 and 1904
which are verified by Mr.. Hegeman statements
as to the validity of these year-end transactions
are made, while any reference TO syndicate par
ticipations or loans made collateral is omit
ted These statements and omissions together
with statement at one time that there We're
no sums, except a specified amount. not drawing
interest when, in fact. there two additional
deposits OF 100000 each which interest
was being paid. constitute the grounds for the
perjury indictments. according to the opinion of
Justice bowling.
In reviewing the case the justice recognizes
that false entries made on the books but
does not find in them any intention defraud.
With regard to the indictments for forgery the
justice holds that the question to be decided is
whether the year-end transactions constituted
actual sales. and that this cannot be determined
matter OF law. And in regard to the
grounds for perjury indictments the justice
says: Whether those statements were actually
false, whether they material. and IL so
whether they were knowingly and corruptIy
made are questions that cannot be disposed of
on this motion, but must await trial"
The opinion of the justice goes at length into
the various transactions of the kind mentioned
actually made He points out that on December
80 1902, the insurance company carrying
on IT'S books actually owned 296 shares Of
Federal Trust Company stock, a temporary loan
to William A. Read of 100000, sundry syndicate
participations amounting to $1.401,94 % and
temporary loans to James p. Moran and others
aggregating s138.O55. These loans all
cured by collateral. In December. 1902 the de-
fendant gave to the company his check, drawn
on the National Shoe and Leather Bank. for
s13s055 to take up the temporary loans referred
to- The receipt of the check was entered In the
ledger and the check deposited and col
lected.
On January g. 1903, these loans were received
back by the insurance company. MT Hegeman
returned the securities and received check
from the insurance company for the same
amount as he had drawn. When this amount
was entered in the cash book 1t was entered in
the names of seven different people who had re-
ceiyed the various temporary loans rms
formed the basis for one indictment
on December 80 Of this same year the fnsur-
Continued on third page.