The San Francisco call., 1909-08-29
PRATHFR SUED FOR
USING BANK FUNDS
Receiver of Union National of
Oakland Charges EX=Presi=
dent With Illegal Acts

How the money of the ruined Union
s. national bank OF Oakland is alleged to
have been 5uggled by Thomas Prather
while president of the institution. and
the bank forced to the wall because of
his personal greed, is set forth in
suit filed against Prather in the United
states circuit court yesterday by II. NJ
Norris. receiver Of the bank.
according 10 the complaint Prather
conducted the bank without regard to
bylaws or directors, taking the finances
Of the bank into his own hands and
lending large amounts 10 those will
ing TO share with him personally the
profits on contemplated transactions
II is alleged that Prather withdrew
money under the guise Of loans made
. 10 others This money he is charged
with using in diverse business ventures,
being personally interested with those
10 whom the loans were made.
FULL ACCOUNT DEMANDED
From these transactions. il is said.
he made large profits, no part OF which
has been accounted Tor to the bank
save In some instance where he paid
the bank what he represented as in
terest. but at an unusually low rate It
is contended by Receiver Morris that al
these withdra walls were in whole or in
part, for Prather's benent. These loans
could not and would not have been
made. Morris asserts but for the con-
sent and participation OF Prather
:. Norris declares that he made de-
mand on Prather for an accounting OF
these various deals. but Prather has
" egiected and refused TO furnish the
idesired information. II is asked that
the court inquire into the methods en-
ployed by Prather and compel him to
furnish Morris complete account of
his methods while president.
into the eoraa
bankers handle the money intrusted TO
them by the unsuspecting public the
following is given as specimen of
.Prather's transactions; George Roeth
purchased for $4,000 the property To-
Gated at the intersection of Broadway
and Telegraph avenue. Oakland. Octo-
Der l3, 1903 There was an agreement.
It Is alleged. between Roeth and
Prather that they were to share the
profits Of the deal equally. To COM
piete the sum necessary to purchase
the property ROeth. by consent of
Prather, obtained from the Union Ma
.ttonal bank SIS 600. For this amount
he gave his note. Roeth bought the
Fireman's Fund building. Ninth and
Washingto streets Oakland August
80, 1906. for $4,000 cash. and under
agreement, il is contended. with
Prather for division OF the profits on
the transaction. borrowed SS172I25
or this amount he gave a promissory
made Of the loan. but on receipt of the
note caused a record Of deposit to be
issued TO Roeth for the amount The
certificate was paid September J. 1906
the amount being used by Roeth to
complete the purchase Of the Fireman's
Fund building
PROFIT MADE on SALE
Roeth sold the Fireman's Fund build
Ing October IS. 1906. for $I25,0oO cash.
rI z 10 fr-o n,
day Of the following November Roeth
and his wife executed a deed to Prather
for a -one-half undivided interest in the
, property at Broadway and Telegraph 1
avenue Later Thomas Prather con-
Veyed this One-half interest to his
brother Samuel. Then Samuel Prather
purported 10 convey the property 10
a. II Lent Norris refrains from say
ing that the transfer to Samuel from
Thomas Prather. and from Samuel TO
Lent were fraudulent. or whether sam
uel was really the owner Of the one
half interest and was entitled to the
profits derived from the transaction.
Prather had a certificate Of deposit.
issued to ]. H. Clay, contrary to hank-
ing laws. IL is alleged because tho
bank received no consideration. Clay
then purchased the northeast corner of
Thirteenth and Grove streets. Oakland
from Mrs. Lotiise ". d. Keilog paving
$4,000. To repay the $4,000 Clay
acting. il is alleged. for Thomas
Prather. borrowed $4,000 from the
Oakland Bank of Savings October 80.
1906, giving his promissory note, in
oorsed by Thomas Prather, and con-
veyed the real property to w W.
Garthwaite, agent for the bank. as Sc
cUrity for the loan II IS also alleged
that October 80 1905. acting on behalf
OF Prather. clay obtained from the
Union national bank Of Oakland the
balance necessary TO repay the SS4 600
by discounting his premissory note for
$4,000. and with this money paid the
bank $4,000. which had been previous
y and. il is alleged, UnlawfuAy drawn
from the bank
In December of the same year
Prather sold the property TO W H. Hoyt
and Adoiph Zeis and caused Garth
waite TO convey the property to them.
IN this transaction. according to Nor
ris a large profit was made, none of
which found its way into the Golfers Of
the bank.
TIDAL CANAL LAND DEAL
The Union national bank Of Oakland
in December. 1904. in order TO protect /
itself against loss purchased property
situated on the tidal canal, High street
Alameda This property belonged to
the bank. although title was taken in
the name Of r. \. McKennon, an en-
plOye Of the bank The price paid for
1908, il was worth $4,000. Or that
date Thomas Prather. without the au-
thority Of the board Of directors and in
/ violation OF his trust, Morris says.
caused the property TO be conveyed by
McKinnOn 10 W W Garthwaite for
20.00O. This sum was paid TO the bank
by Thomas Prather. who obtained the
$50 1000 from the Oakland Bank Of Saw
inEs securing the loan by the property
transferred TO Garthwaite, although
the real ownership was in the bank.
This property he caused to be con
veyed January 19, 1909. to F. W.
Schmidt for $50 00O. OF which amount
$4,000 was paid IN cash by Schmidt
to Prather. The balance. $4,000. was
secured by mortgages made January
le. 1903. and il is alleged that the net
profit TO Prather was $4,000
Property was purchased October s,
1906. al Eleventh and Franklin streets.
for which $4,000 was paid. title being
taken in the name Of J. II. Mcdonald
Prather obtained this money from the
bank by making. as president Of the
bank il is alleged. two unlawful loans
one October T. 1906. 10 J. II. McDoIi-