New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-10-01
Cites Case of "Red" Adams.


I'VE refused Red Adams bail when he
offered $1,000 cash. said Mr. Wise.
But that was a great big swinde,'' in
terposed Mr.. Grossman.
"A great big swindle? Not half so big
this If We are right" replied the United
States Attorney.
1t was finally agreed that Sulivan's bail
should be reduced from $4,000 TO $500 and
Belsers from $500 to 5000. McCormcks
bail. at $500. was not reduced but the
National Surety Company, which had bailed
Herzig. went on his bond. as we'll as on
the bonds of Sullivan ard Beser.
Sullivan. however. had no sooner been
released than he was arrested again by
Lieutenant Barney McConville. of the
Police Department. on the strength of
an indictment charging grand larceny
found against him in this county in 1901
In the complaint at the time. made by a
man named Sanford, living in Northport
Long Island, Sullivan was accused of steal
ing 100 shares Of Republic Steel stock. The
police learned Of his whereabouts only on
his arrest in the Scheftels raid, though he
had been we'll known character about the
curb for years. He was taken TO head
quarters as fugitive from justice.
agree to the reduction of Sullivan's bail
He regarded him. he said as one of the
ringleaders In the alleged conspiracy to de
fraud through use of the mails. Sullivan
got his nickname of Red Letter through
the glowing market letters he was wont to
send forth touting issues of mining stock.
/ But Mr.. Jerome contended that he was
merely a clerk for the firm, drawing a
of .,,,I r.
charge of the mailing of the firms litera-
ture to prospective Investors, working with
his hands rather than with his head. Nc
Cormick, he said, was clerk at $40
week. and Belser was assistant cashier and
Sinister Motives, Says Mr.. Jerome.
The former District Attorney told Mr.
Wise that sinister and Interior motives lay
behind the complaint against r. H. Schef-
tells & Co, and that he, Wise. had been
unwittingly deceived. The defence, he said
Courted the fullest possible investigation of
its affairs to establish the truth of this. and
would give the United States Attorney
every assistance in its power.
our contention here IS one Of entire
legal innocence" said Mr.. Jerome
Seventv-five or hundred witnesses, en-
ployes and customers of the firm. from
different parts of the country. thronged the
corridors of the Federal Building waiting to
testify before the federal grand Jury Among
these was Esther Quinn, who has obtained
a great deal OF publicity through her suit
for breach of promise against Professor
Harry ThurSton Peck. of Columbia Miss
Quinn was confidential stenographer for
George NJ. Holbrook. manager of the Bos-
ton branch OF Scheftels & Co Abel I
Smith. Assistant United States ATTORNEY.
held secret examination Of the employees
I'm his office.
All mail addressed to r II. SchefteIs &
Co. has been ordered held up by the De-
partment OF Justice pending a court order
allowing the federal investigators TO open
II and return remttanCes to the senders
These Investigators have been busy looking
for the securities which 1t is estimated
some five thousand customers have sent to
the firm as collateral to secure margins in
the purchase of mining stock. They have
unearthed only 5000 Of such collateral in
the SCheftels strong box when something
like Sl.0o0000 of it should he forthcoming
they believe The firm has no loan account
with any bank, 1t is said.
An involuntary petition in bankruptcy
was filed yesterday against r. II. Scheftels
& Co. by Leon Stern. Eugene e Cert and
Frank Herman. The claims of Stern and
Cert are Tor money due on open accounts
and amount to 81, $50. and that of Herman
for advertising. amounts to s1,130 The
creditors allege that the company is insol-
vent and owes debts of more than 81. 900.
that 1t has within the last few months
made preferential transfers of money to
various creditors and has permitted to be
concealed or removed part of its property
with intent TO hinder, delay or defraud it's
creditors The assets of the company are
said To amount to more than $4,000