The Washington herald., 1909-07-27
INSPECTORS RAID
PROSPEROUS FIRM
Charge Fraudulent Use Of
United States Mail.
FFICES IN MUNSEY BUILDING
med Prisoners Were Milking
600 Month, with business
creasinE-GOvernment Officials
I'd Watched Accused for Several
eeIOs-WnShingtOnianE Complain.

msnt yesterday afternoon raided the Of
fees of the American Civil Service In
stitute. and placed under arrest the pro-
moters of THE enterprise, J. A. McNulty,
president, and H Van Vleet, secretary
and treasurer. on the charge Of fraudu-
lent use Of the mails.
The attention of the postal authorities
had been centered on the activities Of the
concern for the last two weeks on the
strength OF complaints which have been
coming In from persons In various parts
Of the country. They claim they have
been mulcted Of various sums which they
were inuuced TO invest in the enterprise
by the glowing promises Of the promoters.
The concern was Incorporated on April
Z, under the laws Of the State Of Della
ware. with the alleged purpose Of pre-
pairing young men 20 enter the service
OF the United States government in the
customs and internal revenue depart
ments and also the Railway Mail Service
The corporation published a glittering
prospectus. which was calculated TO catch
The eye Of the unwary.
Had Clever Scheme.
The manner OF procedure Of the pro-
moters Of the enterprise was an extreme
ly clever one, although the post-ofice in
spectors say that the scheme has been
worked many times before under various
Kuises. and always i'm different localities
The concern has been IN active opera
'ion In this city for the past two months
everal stenOgraphors had been engaged
as we'll as "a number Of clerks. and ac-
Germ was transaCting a vast amount Of
business.
The advertisement under which opera
tions were conducted was Inserted IN
nearly all Of the great newspapers OF the
country in the Help Wanted Male coll
umn. and was what Is known 20 the pos
tai authorities as a blind advertise
mCnt lt solicited the application or
bright, hustling men" IN different parts
OF the country 20 act as district super
intendents.' az a salary OF 81. 800 per year
and the guarantee Of a three-year con-
tract. In consideration Of this salary the
district superintendent was required 70
purchase 500 worth OF stock in the cor
poration as guarantee OF good faith.
The company agreed 10 refund this sum
20 the investor on the expiration OF the
contract
This clause brought an enormous. num-
Der OF applicants. many OF them coming
20 Washington IN person. Even while
the raid was in progress a man who had
come here from Philadelphia 20 invest m
The company appeared AT the Office and
was Just tn the act Of paying in his money
when the officers arrived. The man.
whose name is unknown, departed. very
little saddcr but great deal wiser
The officials Of the department decided
% act several days ago. and Inspectors
keene Koons, and Robertson were de-
tailed on the case 20 secure the neces-
sary evidence. After shadowing the pro-
moters for several days, the inspectors
decided yesterday on a raid. The three
inspectors. accompanied by Detective
Sergeant Berman, visited the Offices Of
the concern at 2 o'clock In the afternoon.
md finding the erstwhile men OF affairs
earnestly at work. placed them under ar
rest and seized all the visible property
Of the corporation pending an investiga-
hon.
Showed Bold Front.
Upon being questioned. J. A. AIcNulty
put up bold front and declared that
the business Of the concern was being
conducted on a perfectly legitimate basis
ana that $4,000 Of the stock Of the
company, which was capitalized al 500
Do0 had been paid In and was invested
In United States government bonds and
preferred stock OF the United States
Steel Corporation, which were I'm a safe
deposit box In a Washington bank, but
owing 70 the absence OF the vice presi-
dent. g. NJ YUnker. IN Baltimore he was
unable 10 get az the bonds.
q
ever McNulty was unable 10 remember
The name OF the bank In which the sa-
curiues were deposited, and II later de-
veloped that they had never existed ev-
Cept In the fertile Imagination Of thu nro-
moters themselves. The fact was also
brought 20 light that G. NJ Yunker. vics
president OF the defunct concern. had
never been actively connected with the
business, being merely a dupe Of McNul-
~ and Van Vleet. the promoters.
Both or these men have come into col
hsion with the postal authorities before
owing TO their get-rlch-quick procIivi-
ties. AS far back as May 16. 1904 a
fraud order was issued against ] A
McNulty, who at that time was president
Of the Mason Chemical Manufacturing
Company, prohibiting the further use of
the mails by the corporation. whose man
ner OF conducting their operations was
not unlike that employed by the pres
bnt company.
branches Established.
Van Vleet had been engaged for sew
eral months as solicitor OF scholarsbips
for various correspondence schools in
Philadelphia Upon an investigation Of
the books Of the concern It was found
that about $1,000 had been taken in
during the last two months and the IN
Bpectors state ti3at TIE business OF the
company was increasing by leans and
bounds II was ascertained that branches
had also been established I'm Detroit
Mich. Buffalo and Syracuse. n. Y. and
many other cities throughout the coun-
try.
James Kelby. one Of the luckless ones
who had already paid in his $780, was
found 10 be stiH In the city. and great
was his CONSERVATION when he discovered
that his money had gone glimmerinR
The sum Of 800 was returned to him
by the postal authorities out Of the cash
found In the safe of the company.
McNulty and Van Vleet were ar
raigned late yesterday afternoon before
United States Commissioner Taylor on
the charge OF fraudulent practices, and
were held under a 5000 bond each, which
was not forthcoming They were there
fore ordered 10 be confined in the Dis
trict jail pending a preliminary hearing
before Commissioner Taylor. which was
set foY. August 4