The Washington times., 1912-01-22
FEW SW|NDlERS
GOT $77,OOO,0OO
BY FAKE DEALS
Postal Inspectors Report
. Shows Vast Frauds Per-
petrated in 1911.

''Only the few swindling promoters
who were arrested last year by Post
ornce inspectors obtained approximately
s77.0OOO0O from the American public"
with this astonishing statement, Rob-
ert s. Sharp, chief postal inspector,
sums UP in his annual report the extent
Of the operations of the comparatively
small number of these men who have
been put out of business in the past
year.
Schemes to defraud the American
people through the mails are OF endless
variety, according to Mr.. Sharp. They
range from the simplest business trans
action to a gigantic project involving
the sale OF worthless stock in fake
mining companies and imaginary and
fictitious institutions existing only on
paper or in the minds of the promoters.
1.-THE fact has been developed that
these fraud manipulators are a distinct
class of criminals, some of them moving
in the highest social and business
circles, but nearly all having more or
less affiliations and connections with,
or are advisers of, schemes or enter
prises of illegitimate character in which
they are not known as promoters"
Mr.. Sharp recommends that this class
of cases be placed in the hands of the
Department Of Justice for Investigation
and action, because Of the loss to other
features of the postal service through
their Importance and cost to the Gov
eminent in time. money, and talent.
Prosecutions Are Successful.
THE determination to bring the pro-
moters Into court and obtain prison
sentences against them by means Of
criminal proceedings has proven ex-
ceedingly successful" Mr.. Sharp con-
tinues. las evidenced by the fact that
in no instance, as far as known, has a
person convicted on q criminal charge
of this character attempted to reorgan-
ize his scheme under a new name, as
was often the case, where fraud orders
alone were resorted 10. In a number
Of cases where arrests have been made,
it has been found advisable to ask for
fraud orders in addition, owing to the
volume of letters received daily by the
culprits.
The law compels the Government to
show intent to defraud,' and it is in
proving the intent that the time and
lahcr of the force Is taken. This work
requires skillful and patient inspectors
possessing the widest ability and
thorough, almost technical, knowledge
of evidence. General rules applicable
to all cases cannot DO laid down. The
inspectors must locate and interview
witnesses, personally examine mines,
properties. plants. plantations, and fire.
quently the books and accounting sys.
TENS Of numerous enterprises, necessi-
tating long and expensive trips. The
distant and foreign location of some of
the alleged properties renders complete
Investigation In this country lmpossi-
lie. as we'll as increases opportunity for
the porpetratiou Of imposition and
fraud.
covered condition among the swim
ding class which shows the astounding
extent of their operations and the enor-
nous amount of their ill-gotten gains.
the few swindling promoters who were
arrested last year obtained approx
mately S77,0O0,0OO There are doubtless
numerous persons operating similar
which are pouring in to the department,
the public evidently becoming more IA
miliar with their methods as a result
of the years crusade and the publicity
given cases of this character ~ the
daily press throughout the country,
which has proven of great assistance In
protecting the American public from the
illegitimate schemes Of ingenious ope-
centers of population are being received
to the effect that a number Of smaller
swtndlers have discontinued business
and their whereabouts are. unknown.
The policy of the. department in at
tempting first to crush out the strong
and powerful criminals who have grown
rich at the game has proven exceed
ingly effective in eliminating the smaller
Need Additional Legislation.
TT is essential for the further protec-
ton Of the public that some additional
l0o1slation be enacted which will pre-
vent these swindlers from carrying 'on
their operations In the borderland be-
tween legitimate undertakings and
criminal chemes.'
"A large portion of the time of the
inspectors has been practically lost in
the inv estigation of cases in which per-
sons were clearly misrepresenting facts
by the use of the mails and obtaining
large sums of money thereby, because
ss q result Of legal advice, they have
only reached the borderland between
legitimate undertakings and criminal
schemes making it difficult for the In.
pectors to prove the intent to defraud
as provided by law, although the exist.
ence of actual fraud is indisputable:"
Among the most important fraud
cases handled and successfully
concluded during the year with the con
viction of the principals, were the
United Wireless Telegraph case, and
the rounding up of the remainder of the
old John c, Mabray gang of fake race
horse and boxing promoters, whC
swindled the public out of many mil
lions of dollars. catching many prom!
nent citizens In their fraudulent
schemes.
The United Wireless Company was &
stock promoting scheme, that obtained
millions before the postal authorities
stepped In. Christopher c. Wilson, presi
dent of the company, was sentenced Il
three years in the penitentiary.
DIR. ClaxtOn Lectures