Los Angeles herald., 1910-09-30
RAID OFFICES Of
MINING BROKERS
Government Charges a Big New
York Firm with Using
Mails to Defraud
Associated PressI

NEW YORK, Sept. 29.-Following
one of the most sensational raids ever
engineered by federal authorities in
this city, directed today against the
firm of B. H. Scheftels S Co., curb
brokers on Broad street, seven mem
sbers of the company, including B. +.
Scheftels, were held in heavy bail this
evening for hearing on october on a
charge Of using the mails to defraud.
Tonight search Is being made by the
police and by government inspectors
for George Graham Rice, whose real
name is said to be Simon Herzog, the
originator of the race track bet tip
ping, who is said to be the real head
of the concern.
At the time of the raid here an
nouncement was made from Washing
ton that warrants had been issued for
the managers of the company's branch
offices in Boston, Providence, PhiladeI-
phia, Detroit, Chicago and Milwaukee.
According to agents Of the depart
ment of justice, the Scheftels COM
pany has been engaged In promoting
the sale of mining securities of doubt
full value in all parts Of the country.
Estimates of the firms dealings are
placed as high as $5,00O,OOO.
SEVEN ARRAIGNED
The Seven men arraigned are B. II.
Scheftels, Charles r. Belser, secretary
of the company; George T. Sullivan,
Clarence Mccormack, John Delaney,
William T. Seagrave and Charles b.
Stone. Warrants for sixteen men had
been issued, but the others, including
Rice and Charles H. Herzog, who Is
said to be his brother, eluded the
raiders.
Rice had been in his office earlier
in the day, but had left before the Of
ficers swooped down on the place.
A surety gave bail of $4,000 for
Scheftels, $500 for Seagrave, $4,000 for
Stone and $2500 for Delaney. Belser,
Mccormack and Sullivan were commit
ted to the Tombs, as bondsmen were
not forthcoming.
While the hearing was set for october
5, it is expected the federal grand jury
will have taken action before that time.
The firm of B. F. Scheftels & Co. was
organized about two years ago and had
conducted a large business, mainly
through an extensive advertising prop
aganda. Mining specialties were it's
chief offering to investors. A weekly
newspaper was published to reach clt-
ents, and a corps of thirty-f1ve stenog-
raphers is said to have been required
to attend to it's correspondence.
PAPERS ARE SEIZED
After the arrests today two patrol
wagon loads of papers. books ana
memoranda were seized by the inspect
ors.
Another charge against the company
by George Scarborough, the govern
ment inspector who made the COM
plant, is that 1t had resorted to what
he called a CROOKED bucket shop
scheme" He said the concern had
charged customers per cent on mar
gins and had collected commissions
without giving any service in return.
The difference between the actual
prices of stocks on the curb and ficti-
tious quotations given customers, Scar
borough alleges, was converted to the
company's use.
In his complaint the defendants are
accused of attempting to defraud Will
liam A. Childs, Charles S. Slack and
DR.. d. ]. Symanski.
The raid today was made while the
curb market was in full swing, and at
tracted much attention. Thousands
rushed to the scene, and the police had
to be called out to clear path for the
patrol wagons.