The sun., 1908-02-28
BOTH THE THOMASES INDICTED
FOR USING LIFE INSURANCE CO.'S
FUNDS UNLAWFULLY.
They Plead Not Guilty and Give BAll-TwO
Bnls Against T.. n, tho Long Thomas.
and One Against o. r., the short One,
whose son Tangled Up His AMalrS.

and One Against o. F., the short Onos
whose Son Tangled Up His AmAlrS.
Edward r. Thomas and Orlando F.
Thomas, who IL not q relative but who
has been engaged with z. r. in skyrockst
financial enterprises. were indicted yes-
terday for violating the insurance law while
they were in control OF the Provident Saw
ings Life Assurance Society, which they
bought from Timothy L. Woodruff. There
are two indictments against e. r. and one
against o. F. They were fled by the special
county Grand Jury which has been investi-
eating banking cases.
They were no surprise to the Thomases.
who appeared promptly with their counsel,
ex-Justice John NJ. Davy Of Rochester.
Judge Davy said that both defendants
pleaded not guilty, but that he would like
10 have three weeks in which to withdraw
the plea, demur or make whatever motion
he thought was necessary.
Justice Dowling thought two weeks was
enough and March 10 was hxed. 1t had been
agreed that IS 900 bail on each indictment
q. +. IS 900. The bonds were furnished by
The Fidelity and Deposit Company OF Mary
land and in a very short time the Thomases
we're out of the Criminal Courts Building.
The indictments refer to loans which
we're made by the Thomases while they
had control Of the Provident Life and are
based on violations of section 80 of the in
surance law, which says that no director
or officer Of an insurance company shall
receive any money or valuable thing for
negotiating, procuring or recommending
any loan from any such corp poration or for
ceiling or aiding in the sale Of any stocks
or securities to or by such corporation.
The offence is a misdemeanor.
The first indictment against f R. Thomas
hegins as follows: THE Grand Jury Of
the county Of New York. by this indict-
ment. accuse E. r Thomas Of the crime
of unlawfully being pecuniarily interested
~ beneficiary in a loan from an insurance
company doing business in this STATE. of
which corporation he was then and there a
director"
f. r. Thomas was chairman Of the
finance committee and director, and D. f.
was a director OF the company. This in
dictment covers a loan made TO Z. R.Thomas
by the firm OF Thomas. Maclay d Co.. stock
brokers. as the firm was known In April,
1907. The Thomas OF the firm was o. F..
and the other partners were Robert Maolay
and Harold H. Weekes. E. r. Thomas had
been a customer Of the firm and was in
dsbted to it for large demand loans. He
had made the loans TO buy in securities
through the Arm on margin. But at the
same time Thomas, Maclay a Co. owed a
good deal OF money TO banks and other
financial institutions. These loans were
secured, according to the indictment. by
stocks and securities owned by Maclay q
Co.. Thomas and other customers. This
collateral. the indictmenE says, consisted
Of securities not listed on the Stock Ex-
change and was OF a questionable charac-
ter. and Thomas knew this. Tho indict-
ment then enumerates loans made by
Thomas. Maclay & Co. the payment Of
which had been guaranteed by E. r. Thomas.
The loans were as follows:
$4,000 By tho Metropolitan Trust Company on
December 20. I0Oe.
100 600 by the Metropolitan Trust Company on
February q. 1907.
100000 By the Mercantile National Bank on
December z7. 1908.
100000 by tho MercantIs National Bank on
August %. 1909
10000 BY the Mercantile National Bank On
January q. 1907
looo 900 by the Mercantile National Bank
March =. 1907.
10000 by the Bowling Trust Company on jan
uaTy -. 1907.
10000 By the Mount Norris Bank on January
-, 1900.
All Of these loans were payable on de-
nand and were outsta nding on April 2,
1907, and for the pa yment Of each Of them
the indictment says E. r. Thomas was
personally liable. On the same day Thomas.
Maclay & Co. owed the Hamilton Bank
800 900 on a demand note. This note waa
secured by collateral similar to that put
up for the other loans. The Hamilton
Bank demanded payment and it became
necessary for Thomas, Maclay & Co. either
10 borrow 500, 600 with which to pay the
note or then and there to suspend business.
II they suspended, payment Of the other
loans which had been guaranteed by E.
K. Thomas would be demanded and In
default OF payment the securities would
be sold forthwith at a loss and Thomas,
as the glarantor, would have to make good
tho loss on the securities.
After the Hamilton Bank demanded
its money the Provident Life loaned $780,
GO in the Italian American Trust Com
pany on an agreement that the 500 600
should bO turned over to Thomas. Maclay
g. Co. as a loan, which was done. Then
tho Hamilton Bank's loan was paid. This
loan made by tho Provident Life was not
made on a policy issued by the company
and therefore was a violation Of the In
surance law.
Tho second indictment against +. r.
Thomas accused him Of -unlawfully receiv-
Jag a valuable thing for procuring loan
from an insurance company in which
lao was a director The indictment says
that Thomas agreed to get his company
10 loan $4,000 to the Union Bank Of Brook
lyn IL no got loan OF 100000 from the
bank. He got the loan and according TO
contract the insurance company five days
later, on February S, 1907, made the loan Of
$50 600 to the Insurance company.
The one indictment against o. +. Thomas
says that he was q customer OF the Maclay
firm doin0 haaainaaa filak liza T. n and