The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-04-26
ACCUSE DIRECTOR
OF ELK COAL CO.
George W. Lynch Is Arrested
on Charge of Embez-
Element.
BASED ON STOCK DEAL
PROFIT ALLEGED ON PURCHASES
FOR COMPANY ACCOUNT.

When George w. Lynch, formerly a
director Of the Elk Coal company,
strolled into the Office of Judge NJ. M
Warner in the Commercial block, yes
terday morning, the lawyer telephoncd
TO the sheriff and caused the arrest of
Lynch on a charge of embeZzlement
Lynch was taken before Police Judge
Diehl, who placed him under 81 900 bail
Tor his appearance for examination on
May II. Lynch's bondsmen were w.
Il. Sherwood, the druggist, and VIII
liam e. Howard, bOOkkeeper at the
Smith drug store
1t is alleged that Lynch embezzled
SS,4OO belonging to the Elk Coal COM
pany.
The company owns about 1000 acres
of patented lands eight miles from
hemmerer, WyO. 1t also has a num-
Der of ninety-nine-year leases of coal
properties belonging to individuals. To
secure these leases, between $4,000 and
10000 shares of Elk company shares
were issued to the owners of the leased
lands.
At the time the stock was issued to
the Wyoming mine owners, the shares
were selling at par.
Some time later E. r. South, general
manager of the company, learned from
stockholders were bartering the shares,
selling them in some cases at less than
their market value.
Refuses Extra Remuneration.
After discussing the matter with Di-
rector Lynch, il is claimed, General
Manager South asked the director TO
go to Wyoming and learn what the
shares held there could be bought for.
Mr.. Lynch spent some time in the vi
entity of Kemmerer and the Elk camp
and returned TO report it is claimed,
that he could buy 5000 shares of Elk
stock for $1,000. 1t is said that he ex-
planned that three men demanded ST.
$50 each for their holdings, and that a
fourth man wanted s1,700.
General Manager South, it is claimed,
at once gave Director Lynch $3.50 and
sent him back to Wyoming, with in
structiOns to buy the shares.
1t is alleged that Lynch returned
with the stock and turned, in a bill for
his expenses. He was offered pay
ment for the time he had spent in
making the two trips to Wyoming, it is
said, but refused it, explaining that
as he was under salary as director. he
did not think that he was entitled to
additional remuneration.
The officers of the company were sat
isfied with the result of Lynchs efforts
until they learned, according to their
allegations. that the director paid only
$3.50 for the stock, instead of s., 45O
They learned, they claim, the three
men had been given $3.50 each by Lynch
and fourth man $1,000.
Charge is Embedding.
This left $1,000 which. it is claimed,
Lynch appropriated TO his own use He
is accused of embezzling $1,000 of that
amount.
AS soon as it was discovered that
Lynch had prOfited in the deal he had
made for the company, a complaint
was filed charging him with embezzle-
ment and d warrant was placed in the
hands of the sheriff.
Lynch, who is a Denver travelling
man, left Salt Lake before the warrant
was obtained. and did not return to
the city until yesterday. He learned
that a charge had been made against
him and sent in his resignation as a di-
rector.
1t is alleged that he admitted that
he had profited in the stock DEAL but
claimed that he made only the iegiti-
mate profit of a broker, insisting that
he had the right to buy the shares Of
the Wyoming holders at the lowest
possible rate and sell them to the COM
pany at a higher price.
He was in Evanston, WyO., on Fri |
day and telephOned Judge Warner,
counsel for the Elk company. He was
informed that there was trouble brew
ing for him i'm Salt Lake, and that he
should face the charges against him.
Yesterday morning he reached Salt
Lake and visited Judge Warmers Of
flee. He was soon afteTWard arrested
by Deputy Sheriffs Steele and Sperry.
The Elk company has offices In the
Hooper building The officers are as
follows: ]. NJ. Jensen, president; DR.. |
L. C. Gowans, secretary; Edgar S.
Hills, treasurer; z. r. South. general
manager; John J. Tobias, auditor; NJ. |
NJ. Warner, general manager; and
John L. Smith, George Spencer, Mr.. !
Jensen and Mr.. South, directors.
Teacher of Violin.
Helen Hartley, pupil and assistant |
Geo. E. Shelton. COZ Soouth Main.