Los Angeles herald., 1910-11-22


more cases In the series of NinVestiga-
tions which postal officials have been
making in their crusade against the
fraudulent use Of the mail.
S1OO,O0O,OOO IN FRAUDS
with the work accomplished today,
seventy-eight cases have been brought
to q head within a year. 1t is esti-
mated the swindling operations OF these
| seventy-eight cases have filched from
the American people in period of hve
years more than $100,0000OO.
1.-THE crusade now in progress IS tne
result of a carefully laid plan OF some
| months ago, the first step In which
was thorough reorganization of the
inspection service with the selection OF
a new postoffice inspector. When GER
tain changes and reorganizatlons were
effected instructions were issued TO
the newly assigned inspector
to take UP and prosecute vigorously all
| pending cases OF fraud.
"Owing to the extent of those cases
and the large amount of work involved,
it was necessary to detail a consider
able portion of the force of inspectors.
"In order to strike at the root OF
this evil the department directed Its
agents to go after the men higher up
in these gigantic schemes to defraud,
and to allow no influence, however
powerful, to prevent the proper punish
ment of the offenders Through the
assistance of the attorney general the
full corporation of his department was
secured in the successful carrying out
of this crusade.
VAST SYSTEM OF FRAUD
AS the work of investigation pro-
.ceeded, it became apparent the fraudu-
lent use of the mail was far more ex-
tensive than had been realized. A vast
system of fraud, as far-reaching in It's
ramifications as the postal service IT.
self, had been developed by unscrupu-
lous men, who through the grossest
forms of Misrepresentation were steal
ing from the people millions of dollars
annually.
"These fraudulent operations have
not only swindled thousands of inno-
! cent investors, but have created lack
of confidence in legitimate business en-
terprises. It is therefore as important
to the business community to nave
these frauds stopped as 1t Is to the
people whose losses are directly trace
able to them.
Formerly the procedure In such
fraud cases was entirely different. 1t
| was the practice to issue fraud order
against the guilty concern. This
method proved Ineffective; while 1T de-
prived the offending concern Of the use
of the mail, 1t was a simple matter tor
its operators to reorganize under new
name and thus evade the laws.
SEEK PRINCIPALS ARREST
"In the departments present crusade,
the practice has been to process i'm
mediately to the arrest of the pr1nci-
pals In the fraudulent enterprises, the
object being to secure prompt convic-
tion and Imprisonment.
"The results already accomplished
present only the beginning. The work
OF investigation and prosecution will
proceed with all possible vigor until
the swindling of the people through
the use of the mail ends.
The specific charge against Vaughan
set forth in the complaint of Wtlllam
B. Robinson, postal inspector, is that
on June 4, 1910, he devised a scheme
to defraud Walter N. Altman of 2OOl
Clay street, Topeka, kas.. and oiVers t,
other persons by fraudulent use of the
mall. 1t is alleged he falsely repre-
sented that the Continental wireless
was to operate and control other COM
panies, and would be in position 10
obtain immediate revenues.
Carter r. Keene, postal Inspector,
told the story of Continental wireless.
ORGANIZED IN ARIZONA
The company was organized, he said,
In Arizona on October 1, 1909 with q
capital of $5,000,0O0, but did not begin
operations on a large scale until May
of this year. o,,,
Wireless Telephone company, the IA
cffic wireless Telegraph company, the
Clark wireless Telegraph-Telephon
company and the Massie Wireless COM
pany.
was organized to market the stock, ana
an ambitious selling campaign was car
ried on all over the country.
The Collins Wireless company was
oreanized in the District of Columbia
with a capital of $1,000,000. The capi-
tai of the Clark company was $25,OOO,-
600: that of the Pacific company $lO,-
600 600 and that Of the Massie 100000.
The purpose of the consolidation, as
announced in a booklet issued by the
Continental wireless, was to give the
company a wide field of operation ana
to give investors an assured inVetls
ment In a "conservatively capitalized
corporation"
RICH MEN IN COMPANIES
The Collins company, said Inspector
Keane, had its headquarters for num-
ber Of years in Newark, n. J'', Nnette
o Frederick Collins, wireless invent
or, had his laboratory.
The Clark company was organized
and controlled by Thomas e. Clark, an
electrical engineer of Detroit
The Pacific company had ltS heao-
quarters at Los Angeles.
The Massie company was organized
by walter w. Massie, an electrical en-
gineer of Providence. r. /.
In a circular sent out from the Con-
tinental headquarters in this CITY there
were given the names of the first set OF
officers. r. r. Davis of Philadelphia
was listed as president, A. L. Vaughan
as vice president and treasurer, Massle
as director of the operating department,
G. b. Walter as secretary, clark as
general manager and Collins as tech
meal director.
Samuel d. Bradford, promoter OF
the Pacific company, was given as
manager OF the Pacific coast depart
ment. They constituted the board OF
directors. with these additions: Frank
Ford, a banker of Detroit; N. A. Haw-
kins, business manager of Detroit au-
tomobile company; A. G. Jessup, a
New York steel man; A. ]. Lauer, sec
retary of a brewing company of Au-
burn, N. Y; Fred Shoemaker of Seat
tie: Gen. Joseph e. Stepplebein of At
Ianta: Max Loewenthal of New York;
Henry w. Lee, a Chicago publisher;
Sylvester Sullivan of New York; Geo.
nj Davis of Wilmington, Del; Isaac
+ Cans OF washington and Judge Edwin
r cochran of Wilmington, Del.
Several officers resigned after the con-
Germ got under way. President Davis
was retired and was succeeded py
Rradford Vaughan. Directors Lauer,
Shoemaker and Cochran reslgneu' as
did Mr.. Massie and Mr.. Clark.