Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-03-31
CONTRARY to the belief of most men en-

Il y
~ gagged in banking" said Edward p.
Mickey, veteran bank examiner for the Gov
crnmcnt, "the individual ledger offers a
greater possibility of looting the bank
through fraud than any other book. Why,
the largest dcfalCation that ever occurred in
a bank in this country was due to the Jug
Cling of this book on the part of mere clerks!
What is more, the bookkeepers in the bank
in question never handled dollar of the
money of the institution; at least, not when
on duty.
This was a remarkable case in many
respects. 1t was remarkable in the first
place because the guilty parties actually.
succeeded in operating for over eighteen
months without detection, and III getting a
sum of money greater than the capital stock
of the bank. 1t was remarkable because an
inspection led to the discovery that two
bookkeepers standing side by side were each
classifying the individual ledgers they kept,
each without the knowledge of the other.
1t was remarkable because of the fact that
conviction in the principal case was OBJ
tanned without any direct documentary
evidence, and purely through the deductions
of the bank examiners from the figures in
hand.
at all happened in Southern city, which
it is as we'll to refrain from mentioning, as the
stockholders of the defrauded bank made
good and the institution is today one of the
most creditable banks in the field. A direc
tor of the bank one day jotted down on pad
approximate amounts that should be to the
credit of certain depositors whom he knew
personally He turned to their accounts in
the individual ledger, and was surprised to
find that there was practically nothing to
the credit of any of these men. That night
he remained at the bank and examined the
accounts more in detail. He found six hum
dred thousand dollars missing, wired to
Washington, and closed the bank. | was
assigned to the case.
I FOUND that three bookkeepers had stood
side by side and kept the individual
ledgers in which appeared the accounts of
the depositors. Beginning with A. the first
bookkceper had third of the alphabet, a
second another third, and the other the re-
lnainder. These bookkeepers reported their
balances to the keeper of the general ledger
every night When the general ledger bal
anced, everything was regarded as being
all right. The first of the individual
bookkeepers, who may be styled LaSalle
man under suspicion. He carried on his
book the accounts of many large deposi-
tors; but, strange to say, the balances
of MANY of these had dwindled to prac-
tically nothing. There had been placed
against their accounts with wonderful regu-
larity for the year and half previous GER
tain charges; not large, but steadily accumu
lating. These were for such amounts as
$50, $435. $6l5 never in round numbers
of ffties OF hundreds, but evidently in
tended to bear the earmark of "kiting'
transactions.
"Soon after the detection of the fraud
LaSalle committed suicide. No trace of the
checks that had drawn the irregular
sums of money was to be found about
the bank or among LaSalle's effects. There
were many lottery tickets, which offered
some explanation as to where much of the
money had gone; but nothing else bearing
on the case Determining the source of
these checks was the task we set ourselves
to accomplish.
at was evident, to begin with, that this
was two-rnan game and that some depos
tor in collision with the bookkeeper had
checked out the money and that the book
keeper had then falsifed his accounts so as
to keep the general ledger balance correct.
This could really be done by charging the
false checks against the account of some
other depositor; but would place the book
keeper in very delicate position if any ex-
. au1inatiOn was made of his acrOuutc Tt