New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-09-30

street. and had branch offices i'm Phiia-
6elphia. Boston, Providence, Chicago,
Detroit and Milwaukee.
The complaint later charges that the
defendants. by means OF advertisements,
circulars and letters. solicited customers
who desired to buy and sell stocks for
cash on margin through b. II. Scheftels
! G. Co, which was represented as doing
a brokerage business with unequalled IA
cilities for the execution of orders. 1t
| also alleges that the defendants caused
| to be sent through the mails to custom
ers a circular daily market letter pur-
porting to give information and advice
| to prospective purchasers of stocks, in
which it was represented that the COM
pany was doing business lawfully and
in good faith and that in the transac-
lions there was actual delivery of stocks.
The complaint also asserts that the de-
PENDANTS charged customers 6 per cent
interest upon funds said to be advanced
for carrying stocks on margins The
complaint reads further that the de-
PENDANTS in addition charged their Gus
toners commissions on stock transac-
tions and falsely and fraudulently appro-
priated money and collateral sent to it
| by customers without rendering any
thing of service or value in return
therefor.
Alleged Fictitious Quotations.
The defendants, 1t IS charged, con-
verted to their own use the difference
between the actual market prices CT
stocks made on the curbs and the ficd-
tious and fraudulent quotations and
prices which they put in their market
letters.
In closing the complaint it is charged
that on January the defendants
mailed a letter to Dr. D. J. Symanski, Of
No. % Broad street. in violation of Sec
ton 215 of the Federal Criminal Code.
Mr.. Grossman lays the troubles of the
! firm to an action brought against it re-
Gently by a disgruntled customer whom
he would not name. This man, he said,
who lives in Chicago, bought fifty thou
sand shares of Bovard Consolidated
Mining stock from Scheftels & Co. at 10
cents a share. Shortly afterward the
price went up to % cents, said MI
Grossman. and then a reaction set IN
When it had got down to ID cents the
lawyer said. this customer had the nrm
get him fifty thousand or one hundred
| thousand more shares of the stock on
margin. But instead of going up again
the stock continued to slump When the
customers margins were wiped out ne
! brought an action for their recovery, &C
cordinE to Mr.. Grossman, which was
dismissed Now the firm has brought
civil suit against him to recover a bal
auce alleged to be due to If on the trans
action.
Mr.. Grossman said last night that ne
would produce George Graham Rice In
court to-day. He refused to disclose his
habitat last night. he explained, be-
cause it was too late to get bail
The real head and brains Of the Schef-
lte1s firm is not B. H. Scheftels, but
George Graham Rice, as he has called
himself since he was released from Sing
Sing in 1899, where he served three
wears for forgery. His real name Is
Jacob Simon Herzig. Before going TO
Sing Sing Herzig had served two years
in the E,lnira Reformatory for larceny
He was sent there in April, 1890, and
was not released until September, 1892.
He has always when asked about MS
prison sentences, referred to them as
punishment for youthful indiscretions.
After leaving Sing Sig Herzig, or
Rice as he then called himself, became
interested in several racetrack tipping
concerns, among them being the Maxim
& GAY Company, which he organized
and Of which he was president. he is
said to have cleaned up more than 500, =
600 through that concern before q fraud
order was issued against it by the Post
| office Department. Rice then organized
| the Riley Grammar Company, also a
racetrack concern, but that, too, went
out of business Altogether he was said
tn have made more than 100000 out
of the racetrack tipping game before the
: federal authorities made it too hot Tor
him 10 continue in the business.