Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1910-10-01
CURB BROKERS ARRESTED
Sensational Raid Made by Federal
Authorities in New York.
USED THE MAILS TO DEFRAUD
Firm Estimated to Have Filched Five
Millions from Investors All over
world-sIxteen warrants
Are Issued

NEW YORK, Sept. SO.-FoIlowing one Of
the most sensational raids ever engi-
neered by federal authorities in this city,
directed today against the firm Of b. II.
Scheftels a Co., curb brokers in Broad
street, seven members Of the company, In
GLIDING B. H. Scheftels, its president, were
held in heavy bail this evening by United
States Commissioner Shields for hearing in
october on a charge of using the malls to
defraud.
Tonight search is being made by the po-
lice and by government inspectors for
George Graham Rice, whose real name Is
said to be Simon Herzig, the originator Of
the race track bet tipping system, who is
declared to be the real head Of the con-
Germ.
At the time Of the raid here announce
ment was made from washington that war
rants had been issued for the managers Of
the companys branch offices in Boston,
Providence, Philadelphia, Detroit Chicago
and Milwaukee.
sold Mining Securities.
According to agents of the Department of
Justice, the Scheftels company has been en-
gagged In promoting the sale OF mining Sc
curities Of doubtful value in all parts of the
country. Estimates Of the firms dealings
are placed as nlEn as fOVVO,VUU
The seven men arraisned here are B. H.
Scheftels Charles F. Relzer, secretary Of
the company; George T. Sullivan, Clarence
Mccormack, John Delaney, William T. Sea-
grave and Charles B. Stone. Warrants for
sixteen men had been issued, but the 9TH
ers, including Rice and Charles S. Herzig,
who is said to be his brother, eluded the
raiders. Rice had been in his offices earlier
in the day, but left before the officers
swooped down on the place.
A surety company gave bail in $1,000 for
Scheftels, $500 for Seagrave. $500 for
stone and $500 fer Delaney. Belzer Nc
Cermack and Sullivan were committed to
the Tombs, as bondsmen were not forth
coming. While the hearing was set for
October 5, 1t is expected the federal grand
jury will have taken action before that
time.
Dealings Were Large.
The firm of b. H. Scheftels & Co. was
organized about two years ago ana had
conducted large business, mainly through
an extensive advertising propaganda. Min
ing specaltes were it's chief offering to in
vestors A weekly newspaper was pub.
lished to reach clients and corps Of thirty,
five stenographers is said to have been re-
quired to attend to its correspondence.
After the arrests today two patrol wager
loads Of papers, books and memoranda were
| seized by the inspectors. %
Another charge against the company by
George Scarborough, the government IN
spector who made the complaint is that il
had resorted to what is called a CROOKED
bucketshop scheme" He said the concern
had charged customers per cent on mar,
| gins and had collected commissions with.
out giving any service in return. The diff
ference between the actual prices of stock,
| on the curb market and fictitious quota
tons given customers, Scarborough also al
| leges. were also converted to the company'i
use. AZ
IN his complaint the defendants are &C,
cused Of attempting to defraud william A
Chiids, Charles H. II. Slack and DR.. d. ]
Hymanski. The raid was made today wher
the curb market was in full swing and at
tracted much attention. Thousands rushed
to the scene and police reserves had to b,
| called out to clear a path for the patro
wagons.