Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1911-09-26
POSTAL INSPECTORS RAID
NEW YORK BROKERS FIRM

NEW YORK, Sept as.-In q raid on
the stock investment offices Of Jared
Eaagg. on west Fortieth street today.
Flags and seven other men were ar
rested on a charge OF fraudulently us
ms the mails in 3 species OF endless
chain schemes to defraud investors
Among the prisoners we're former Unit
ed States Treasurer Daniel n. Morgan.
or Bridgeport. Conn: James K Scheck.
said to have been minister OF the
Dutch reformed church: Tennyson Nee
", formerly publisher on Fifth ave-
nue.. this city, Joshua Brown and Har-
old jackson. brokers': Alvin NJ. Wig
Gins. lawyer, and Edward L. Schiller
The prisoners pleaded not guilty. BAN
was fixed for Flagg at $4,000. assist
ant District Attorney Smith asking for
high bail because ne said ne understood
that Flag had si.000.ooo. Nelly. Nor
San and Higgins were required TO fur
nixh bail 60 the amount Of $4,000 each.
while Schiller's bah was fixed At s5.vo-,
and that OF Brown. Sheck and Jackson
~ 32.soo. They viii be given a hearing
next wednesday.
Posfonice Inspector Elmer L kincaid
made the complaint IN the case. KIN
cald stated today thousands OF custom
ers Of the Flagg enterprise had invest
e about sl.5eo.0o0 in the scheme.
Flags. It. IS charged. had claimed he
would invest their money In giit-edged
securities which would pay them high
dividends Early investors. il is salu.
we're paid their dividends from the mol
~ which came from the concern from
new customers.
LIKE MILLER SYNDICATE
According to Chief rostoffice In
Epector Warren ". Dickson. his atten,
On was drawn to Flagg's business BY
u conversation with . young woman
calling herself Lillian Gibbs Reyes, VINO
referred TO Flagg as q financial WIFE,
ard Inspectors who made a secret in
vestigation reported that Flagg was
conducttng business after the fashion
q the Miller Syndicate" They also
reported that former United States
Treasurer Morgan was interested in the
enterprise 10 the extent OF $500. 00Q- the
scheme. according 10 the authorities.
has been IN operation or more than rs
months
When arrested Flagg was defiant ana
asserted he had violated no postal law.
At : late hour tonight bail had not been
secured for any OF the prisoners ana
they were locked n the Tombs.
Flagg 1t frst refused all requests for
. statement. When asked. however, IL
he had guaranteed TO pay So per cent
year on investments he responded
quickly.
II guaranteed no percentage OF re-
turns on Investments handled by me"
he said diving into q drawer and plac-
ing pile OF blank contracts on the ia
bic. There's the contract my custom
ers signed with me. It is open and
above board and refutes the charge that
/ guaranteed fabulous interest.
Il can pay every dollar / owe"
Flagg continued. Il have handled a.
100000 during the three years or more
that have been in this business and
can account for every cent OF 1t. ev-
cry transaction. I have nothing TO
fear. This is all vile conspi1ac cook
81 up BY big brokers and Wall street
interests that are Jealous OF me-
Mr. Morgan. who is a white-haired
man. well along in years and of dlgni-
lied bearing. was greatly perturbed by
his arrest
This is an outrage" he said. 1T Is
the first time have been deprived of
ny liberty for single minute. So far
- know Mr. Flagg Is not guilty Of a
dishonest act I have known him for
three years or the amount ] have in
vested with him have not only lost
not q single penny but have received
my dividends promptly. according to
his policy. I am satisfied that the bus
mess which Mr.. klagg conducted ives
absolutely honest Had I q suspicion
otherwise. would have had nothing TO
do with it.