The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-11-09
MAGAZINE FRAUD ARRESTS
ORFF AND HIS LAWYER AND
LEE STDWELL ARE C4UGHT.
specific Charge Is Using the Mails to De-
fraud by Announcing n Forthcom.
Ing Dividend on Columbian sterling
stock One Arrest Made at Night.


month, and John F. b. Atkin, "A Phila-
delphia lawyer. who is alleged to have
been the legal adviser of ORA and other
associates in bringing about the forma-
tion Of the Columbian Sterling Company
last May. were arrested yesterday on
warrants sworn to by the post office
inspectors and arraignei before Federal
Commissioner Shields on the charge
OF using the mails to defraud. Neither
could pay the sl5,Ob bail upon which
the prisoners were held and each went
to the Tombs.
Later in the evening Post Office Inspec-
tors McQuillan and Mayhem went TO the
home of Lee Sidwcll. secretary Of the old
Columbian company and treasurer OF
the Columbian Sterling company who
lives at i'l West 10th street, and ar
rested him on the same charge as that
made against his associates They took
him to the West Tooth street police station.
whore he spent the night He will be ar
raignod before Commissioner Shields this
morning
Warrants are out for more men who
were connected with the old COLUMBIAN
Magazine and the Columbian 81 erling
Company. under which Hdmpiou's Udg1-
sine was merged with the Columbian.
| Two who are sought have eludel the
| post office inspectors for more than a
| month and are believed TO be beyond
the jurisdiction of the Federal courts.
| The specific charge against ORR and
Atkin is the use of the mails o disseminate
among stockholders in the Columbian
Sterling Company and IN the old Hama-
- HInRarhnraf aI "a md
with the Columbian Sterling. circulars
announcing II q. per cent. quarterly
dividend on Columbian Sterling stock
declared September /. After an exami-
nation of the books of the Columbian
Sterling Company and the old Coiumbian
Magazine the inspectors discovered that
far from having visible surplus upon
which to declare dividends the maya
zine concern had fered loss during
the first quarter of its existence Of S242 .j2i
Atkins arrest was the first uade tie
was found in the corridors Of the Federal
Building by Inspector Hugh McQui.ian.
| served with the warrant and taken i'm
mediately before Commissioner Shields
| The complaint. drawn by MCQWllan,
alleged that Atain had before September
10. 1911. devised and Intended TO devise
! a scheme and artitice for obtaining money
| from Henry Mann Of | Madison avenue
and divers other persons by means OF
falsehood and promises" by inducing Mann
and others to send money to the Column
bian- Sterling Publishing Company in
! payment for shares Of stock and 10y falsely
and fraudulently representing and promis-
ing that said Columbian-S Sterling Publish
ing Company was in good financial CON
dition and had a large surplus and would
pay a dividend out of the surplus in the
near future
ORR arrest was as big a surprise TO
the post Office men az il was TO Orf.
Several days ago when the warrants
were issued ORR could not he found at
the Holland House. which mad been his
home during his bret stay in New York.
and a copy of the warrant was sent to
ST. Louis. Yesterday Chief Inspector
W. W. Dickson received word from ST
Louis that Orff was not there. BY chance
the inspectors Office received private
tip that ORR, who is an ardent Christian
Scientist, was in the Office of the Christian
Science Publication Committee at Madl-
son avenue. Inspectors Reddy and Nc
Quillan went up there and found ORR
in the corridor of the building.
He took his arrest calmly. saying that
he would he in error II he allowed any
thing to worry him and processing his
innocence of the charge against him
When he was arraigned before the Com
missioner orr was without counsel and
without bondsman. The complaint
against him was Identical with that against
Atkin. In default of the $1,000 ban
set by the Commissioner ORR had to
follow the attorney for the Columbid
Magazine to the Tombs
Before he went away, however he said
J that v there was any wrongdolng on the
part of the officers of the Columbian
Sterling company he had had no knowl-
| edge OF it and was in no way party
to il.
! Last May he said az. B. Yates and
Samuel TildeR Aber, who were both in
, terest ed in the Columbian Magazine. came
to st. Louis and inter ested me in a plan
TO merge my Western magazines with
theirs. ! came on to New York. looked the
proposition over, liked IL and purchased
the Columbian. Later ] made arrange
ments to secure Benjamin Hamptons
controlling interest in the common stock
OF Hdmpion's Magazine and merged that
magazine with the others. ] was made
president Of the new holding company.
when some OF the officers Of the Co.
lumbian-Sterling company came TO me
and said that a dividend would be de
! clared at the end of the first quarter.
, Sept tember |. | told them would not agree
l to il unless the attorney Of the company
i said that the step was legal. 1t was rep
: resented to me that sufficient surplus
, for the declaration of a dividend was on
, hand | accepted the statement OF the
auditors AZ correct without further ques-
ton. but the attorney did not approve OF
the dividend and the proposition was re-
scinded. That is all know about II.
, The old Columbian Magazine Publish
ing Company, organized in May, 1909,
with a capital of $5O0,0OO. later increased
TO 81. 800, 600 paid four quarterly divi-
dends OF per cent. each before the merger
with Orff's Western Publishing Company
Of St. Louis on June Of this year. None
of these dividends was earned, the in
spectors say, but all paid out Of the capital.
, Joseph Brinton Haynes was president
of the old Columbian concern, Lee Sid
well secretary and treasurer, and +. B..
Yates was a director and in charge of the
. stock salesmen. The day after ORR
assumed control OF the Columbian and
Western merged companies Hampton s
Magazine was brought into the group.
So far as the books show the tangible
assets OF Orff's magazine properties in
St. Louis when he merged them with
the Columbian were represented by 500 900,
and there was just 500 900 outstanding
liabilities. But Orff's properties We're
merged at the rate OF exchange Of 582 800
shares, par at 81. with the proviso that
the Columbian Sterling company should
assume the $40, 900 liabilities of the Western
company. The Columbian company con-
tributed i,243 900 shares and for Hamp-
tons shares 657 900 shares worth dollar
apiece. were set aside from the treasury
i n 4 g..-