The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1910-07-15
Cashier Goes to State Peniten-
tiary for Seven and One
Half Years
PRESIDENT Of OEFuNCT
BANK GETS OFF EASIER
S, stematic System Of Looting Insti-
tuition Shown-Covered . Period Of
More Than Eight Years+Amounts
Disappearing Grew in Each Year.

Lakota. N. D., July 15.-When
President F. A. Raiders and Cashier
s. A. Floren were this afternoon
sentenced bya Judge c. F. Templeton
of the district court of Nelson coun-
ty to term of years each in the
North Dakota state penitentiary, one
Of the most sensational, and at the
same time one Of the most disas-
trous bank failure cases that has
ever been brought to the public at
tention in this state was closed 80 far
as criminal prosecution Of those d.
rectly responsible for the looting of
the institution is concerned.
President Raiders was given
term Of two and half years while
Cashier Floren was sentenced to sew
tn and half years. In behalf Of the
president, whose health has been
very bad for the last two years, an
application for a parole under the
terms Of the recent state legislation
on that subject, was presented. 1t is
opposed by the prosecution.
When the doors of the Peoples
State bank of Lakota were closed
by Bank Examiner oliver Knudson on
Jan. 26, this year, there was found in
the bank an actual deficit or short
age Of $82,138.11. On the date of the
closing of the bank the liabilities of
the institution aggregated 1852 2,600.69.
while the resources at their face val
ue totaled $70,462.68.
Inner details of the looting of the
bank have not been made public
<n h,,k Do h
ders and Noren both entered their
pleas Of guilty this week, informa-
ton as to the actual conditions be-
came available. ~ ~ /. ,,.s
The Peoples State hank was Dr.
ganized at Lakota on Nov. s, 1892.
the stockholders being #. A. Raiders,
Merritt and several others closely as
ISOLATED with the former in business.
The capital stock Of the. bank was
the very small sum Of $500.
About ten years ago 8. A. Floren,
then of Minneapolis, came to Lakota
and became cashier of the bank, Mr..
Merritt Withdrawing and removing to
another state. Later the health Of
Mr. Raiders failed considerably and
the business of the bank was largely
transacted by MIR. Floren.
Upon the closing of the bank in
January of this year, action was
commenced before Judge Templeton
of the district court asking that the
institution be dissolved and that it
forfeit Its charter, and In these pro-
ceedings Judge Templeton appointed
George A. kellogg Of Lakota as re-
ceiver.
Immediately after the failure Mr..
Floren was arrested on three sep
arate charges of faleifying the rec
ords, and forgery, aid Mr. Rahders
was arrested on the charge of forg-
cry, these charges being based upon
his statements made to the state
banking board. On July additional
complaints were filed against Cashier
Floren, he being charged this time
with receiving, on three different oc-
casions, three separate deposits after
the bank became insolvent, while MIR.
Raiders was charged with one Of
fense of similar nature. Both de-
PENDANTS waived examination and at
the opening of the term of the district
court this week both entered their
pleas of guilty.
The failure of the institution was
extremely disastrous, and the depos-
itors will receive only about twenty
five per cent. The books showed that
on the day of closing there should
have been $14,467 in cash on hand,
when as a matter of fact there was
but $2,774. Further examinations of
the books showed that the process Of
looting had been ip progress for a
period of more than eight years prior
to the time its doors were closed ;
the method by which this was ac-
eomplished and concealed was syste-
0atically undertaking the liabilities
o. the bank in the footings as the
liability of the bank: the method was
exceedingly crude but served its pur-
pose in the absense of supervision by
the banking officers and directors.
In 1902 the shortage Of the bank
was first found by. the expert ac-
countants, being $2,500; in 1903 II
had increased to. $4,000; in 1904 to
$4,000; in 1905 to $1,000, and in 1907
to $4,000. The year of 1908 ended
with an increased shortage Of &c.,
900, making the total amount of the
shortage, Jan. 1. 1909. 100000. From
that time forward the increase was
rapid; on July "a. 1909. $1,000 ap-
pears to have been taken from the
vault Of the bank; on September 1C